Exhibit 10.2
EXECUTION COPY
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$170,000,000
CREDIT AGREEMENT
among
PLAYTEX PRODUCTS, INC.,
as the Borrower
The Several Lenders
from Time to Time Parties Hereto,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent
and
XXXXX FARGO BANK, N.A.,
as the Administrative Agent
Dated as of July 21, 1997
Arranged By
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
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(Credit Agreement)
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................. 2
1.1 Defined Terms................................................ 2
1.2 Other Definitional Provisions................................ 24
SECTION 2. AMOUNT AND TERMS OF WORKING CAPITAL REVOLVING
CREDIT COMMITMENTS.......................................... 24
2.1 Working Capital Revolving Credit Commitments................. 24
2.2 Procedure for Working Capital Revolving Credit Borrowing..... 25
2.3 Termination or Reduction of Working Capital Revolving Credit
Commitments.................................................. 26
2.4 Swing Line Commitment........................................ 26
SECTION 3. LETTERS OF CREDIT............................................ 29
3.1 L/C Commitment............................................... 29
3.2 Procedure for Issuance of Letters of Credit.................. 30
3.3 L/C Participations........................................... 30
3.4 Reimbursement Obligation of the Borrower..................... 31
3.5 Obligations Absolute......................................... 31
3.6 Letter of Credit Payments.................................... 32
3.7 Application.................................................. 32
SECTION 4. AMOUNT AND TERMS OF ACQUISITION REVOLVING
CREDIT COMMITMENTS.......................................... 32
4.1 Acquisition Revolving Credit Commitments..................... 32
4.2 Procedure for Acquisition Revolving Credit Borrowing......... 33
4.3 Termination or Reduction of Acquisition Revolving Credit
Commitments.................................................. 34
SECTION 5. TERM A LOANS................................................. 34
5.1 Term A Loans................................................. 34
5.2 Procedure for Term A Loan Borrowing.......................... 35
SECTION 6. GENERAL PROVISIONS........................................... 35
6.1 Fees......................................................... 35
6.2 Repayment of Loans; Evidence of Debt......................... 36
6.3 Optional and Mandatory Prepayment............................ 38
6.4 Conversion and Continuation Options.......................... 41
6.5 Maximum Number of Interest Periods........................... 42
(Credit Agreement)
i
Page
6.6 Interest Rates and Payment Dates............................. 42
6.7 Computation of Interest and Fees............................. 43
6.8 Inability to Determine Interest Rate......................... 43
6.9 Pro Rata Treatment and Payments.............................. 44
6.10 Illegality................................................... 47
6.11 Requirements of Law.......................................... 47
6.12 Taxes........................................................ 49
6.13 Indemnity.................................................... 53
6.14 Replacement of Lender........................................ 53
SECTION 7. REPRESENTATIONS AND WARRANTIES............................... 54
7.1 Financial Condition.......................................... 54
7.2 No Change.................................................... 55
7.3 Corporate Existence; Compliance with Law..................... 55
7.4 Corporate Authorization; Enforceable Obligations............. 55
7.5 No Legal Bar................................................. 56
7.6 No Material Litigation....................................... 56
7.7 No Default................................................... 56
7.8 Ownership of Property; Liens................................. 57
7.9 Intellectual Property........................................ 57
7.10 No Burdensome Restrictions................................... 57
7.11 Taxes........................................................ 57
7.12 Federal Regulations.......................................... 57
7.13 ERISA........................................................ 58
7.14 Investment Company Act; Other Regulations.................... 58
7.15 Subsidiaries................................................. 58
7.16 Purpose of Loans............................................. 58
7.17 Environmental Matters........................................ 59
7.18 Senior Indebtedness.......................................... 60
7.19 Disclosure................................................... 61
7.20 Collateral Documents......................................... 61
SECTION 8. CONDITIONS PRECEDENT......................................... 62
8.1 Conditions to Effectiveness.................................. 62
8.2 Conditions to Each Extension of Credit....................... 67
SECTION 9. AFFIRMATIVE COVENANTS........................................ 68
9.1 Financial Statements......................................... 68
9.2 Certificates; Other Information.............................. 69
9.3 Payment of Obligations....................................... 70
9.4 Conduct of Business and Maintenance of Existence............. 70
9.5 Maintenance of Property; Insurance........................... 70
(Credit Agreement)
ii
Page
9.6 Inspection of Property, Books and Records; Discussion........ 70
9.7 Notices...................................................... 71
9.8 Environmental Laws........................................... 72
SECTION 10. NEGATIVE COVENANTS........................................... 72
10.1 Financial Condition Covenants................................ 72
10.2 Limitation on Indebtedness................................... 74
10.3 Limitation on Liens.......................................... 76
10.4 Limitation on Guarantee Obligations.......................... 78
10.5 Limitation on Fundamental Changes............................ 79
10.6 Limitation on Sale of Assets................................. 79
10.7 Limitation on Dividends...................................... 80
10.8 Limitation on Capital Expenditures........................... 81
10.9 Limitation on Investments, Loans and Advances................ 81
10.10 Certain Provisions Relating to Other Debt Instruments........ 82
10.11 Limitation on Transactions with Affiliates................... 83
10.12 Limitation on Sales and Leasebacks........................... 84
10.13 Limitation on Changes in Fiscal Year......................... 84
10.14 Limitation on Negative Pledge Clauses........................ 84
10.15 Amendment of Articles of Incorporation....................... 84
SECTION 11. EVENTS OF DEFAULT............................................ 84
SECTION 12. THE AGENTS................................................... 87
12.1 Appointment.................................................. 87
12.2 Delegation of Duties......................................... 88
12.3 Exculpatory Provisions....................................... 88
12.4 Reliance by Agents........................................... 88
12.5 Notice of Default............................................ 89
12.6 Non-Reliance on Agents and Other Lenders..................... 89
12.7 Indemnification.............................................. 90
12.8 Agent in Its Individual Capacity............................. 90
12.9 Successor Agents............................................. 90
12.10 Intercreditor Agreement and Collateral Documents............. 91
12.11 Other Titles................................................. 92
12.12 Xxxxx Fargo as Issuer of Letters of Credit................... 92
SECTION 13. MISCELLANEOUS................................................ 92
13.1 Amendments and Waivers....................................... 92
13.2 Notices...................................................... 93
13.3 No Waiver; Cumulative Remedies............................... 94
13.4 Survival of Representations and Warranties................... 94
(Credit Agreement)
iii
13.5 Payment of Expenses and Taxes................................ 95
13.6 Successors and Assigns; Participations and Assignments....... 96
13.7 Adjustments; Set-off......................................... 98
13.8 Release of New Subsidiary Guarantees......................... 99
13.9 Modification of Schedules....................................100
13.10 Counterparts.................................................100
13.11 Severability.................................................100
13.12 Integration..................................................100
13.13 GOVERNING LAW................................................100
13.14 Submission To Jurisdiction; Waivers..........................100
13.15 Acknowledgments..............................................101
13.16 WAIVERS OF JURY TRIAL........................................101
13.17 Confidentiality..............................................101
(Credit Agreement)
iv
SCHEDULES
1.1 Addresses for Notice, Commitments
3.1 Existing Letters of Credit
6.2 Term A Loan Amortization
7.1 Financial Condition
7.2 No Change
7.5 No Legal Bar
7.6 Material Litigation
7.9 Intellectual Property Claims
7.15 Subsidiaries
7.17 Environmental Matters
7.20 UCC filing jurisdictions
9.8 Environmental Laws
10.2(d) Existing Indebtedness
10.3(f) Existing Liens
10.4(a) Existing Guarantees
10.11 Existing Affiliate Transactions
EXHIBITS
A-1 Working Capital Revolving Credit Note
A-2 Acquisition Revolving Credit Note
A-3 Term A Loan Note
A-4 Swing Line Note
B-1 Borrower Security Agreement
X-0 Xxxxxxxx Xxxxx Xxxxxx Xxxxxxxxx
X-0 Subsidiary Security Agreement
B-4 Subsidiary Stock Pledge Agreement
C Subsidiary Guarantee
D Borrowing Certificate
E-1 Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
E-2 Opinion of Xxxxxxxx & Xxxxxxxx
E-3 Opinion of Xxxx X. Xxxxxxxxxxx
E-4 Opinion of Xxxxxx, Xxxxxxxxx & Xxxxxxxxx
E-5 Opinion of Xxxxxxxxx, Xxxxx & Xxxxxx, LLP
F Assignment and Acceptance
G Swing Line Loan Participation Certificate
H Trademark Subsidiary Agreement
I Intercreditor Agreement
(Credit Agreement)
v
CREDIT AGREEMENT, dated as of July 21, 1997, is among (a) PLAYTEX
PRODUCTS, INC., a Delaware corporation (the "BORROWER"), (b) the several banks
and other financial institutions from time to time parties to this Agreement
(the "LENDERS"), (c) DLJ CAPITAL FUNDING, INC. ("DLJ"), as syndication agent (in
such capacity, the "SYNDICATION AGENT") and (d) Xxxxx Fargo Bank, N.A. ("XXXXX
FARGO"), as agent for the Lenders hereunder (in such capacity, the
"ADMINISTRATIVE AGENT").
WHEREAS, the Borrower, the several lenders parties thereto and The
Chase Manhattan Bank, as agent, are parties to a Credit Agreement, dated as of
June 6, 1995 (as amended, supplemented or otherwise modified to the Closing Date
(this and other capitalized terms used in these recitals without definition
being used as defined in subsection 1.1), the "EXISTING CREDIT AGREEMENT");
WHEREAS, the Borrower proposes to prepay all of its outstanding
indebtedness under the Existing Credit Agreement on the Closing Date and
terminate any commitments thereunder; and
WHEREAS, in order to finance (i) the prepayment of approximately
$391,900,000 in aggregate principal amount of existing indebtedness under the
Existing Credit Agreement and accrued and unpaid interest thereon, and (ii) the
payment of up to $10,000,000 in Transaction Costs, the Borrower proposes to
issue the Senior Notes under the Senior Note Indenture for aggregate gross
proceeds of not less than $150,000,000 and borrow Term Loans under the Term Loan
Agreement in an aggregate principal amount of $150,000,000, and the Lenders have
agreed, subject to the terms and conditions set forth herein, to make the Term A
Loans under this Agreement to the Borrower in the aggregate amount of
$55,000,000 and to make the initial Revolving Credit Loans under this Agreement
in the aggregate approximately amount of up to $46,900,000.
NOW THEREFORE, in consideration of the premises, the Borrower, the
Agents and the Lenders agree as follows:
(Credit Agreement)
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, terms defined in the
preamble or recitals hereto are used as so defined and the following terms shall
have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by Xxxxx Fargo as its prime
rate in effect at its principal office in San Francisco (the Prime Rate
not being intended to be the lowest rate of interest charged by Xxxxx
Fargo in connection with extensions of credit to debtors); "BASE CD RATE"
shall mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b) the
C/D Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall mean, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the week following
such day), or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for the
day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate, the Base CD Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate, the Base CD Rate or
the Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
(Credit Agreement)
2
"ACQUISITION REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender to make Acquisition Revolving Credit Loans to
the Borrower in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on Schedule
1.1 under the heading "Acquisition Revolving Credit Commitment", as such
amount may be reduced from time to time in accordance with the provisions
of this Agreement.
"ACQUISITION REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any
Lender at any time, the percentage which such Lender's Acquisition
Revolving Credit Commitment then constitutes of the aggregate Acquisition
Revolving Credit Commitments (or, at any time after the Acquisition
Revolving Credit Commitments shall have expired or been terminated, the
percentage which the aggregate principal amount of such Lender's
Acquisition Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Acquisition Revolving Credit Loans then
outstanding).
"ACQUISITION REVOLVING CREDIT COMMITMENT PERIOD": the period from
and including the Closing Date to but not including the Acquisition
Revolving Credit Termination Date or such earlier date on which the
Acquisition Revolving Credit Commitments terminate as provided herein.
"ACQUISITION REVOLVING CREDIT LOANS": as defined in subsection 4.1.
"ACQUISITION REVOLVING CREDIT NOTE": as defined in subsection
6.2(e).
"ACQUISITION REVOLVING CREDIT TERMINATION DATE": June 15, 2003.
"ACQUISITION SUBORDINATED INDEBTEDNESS": any unsecured Indebtedness
of the Borrower incurred to finance an acquisition permitted under
subsection 10.9(h): no part of the principal of which is required to be
paid (whether by way of mandatory sinking fund, mandatory redemption,
mandatory prepayment or otherwise) prior to December 31, 2003; the payment
of the principal of and interest on which and other obligations of the
Borrower in respect thereof are subordinated to the prior payment in full
of the principal of and interest (including post-petition interest) on the
Notes and all other obligations and liabilities of the Borrower to the
Agents and the Lenders hereunder on terms and conditions at least as
favorable to the Agents and the Lenders as the Senior Subordinated Notes;
and all the negative covenants and events of default of which are at least
as favorable to the Borrower and to the Agents and the Lenders as the
Senior Subordinated Notes or are otherwise reasonably acceptable to the
Agents and the Required Lenders.
"ADMINISTRATIVE AGENT": as defined in the introduction to this
Agreement and also means and includes any successor administrative agent
appointed pursuant to subsection 12.9.
(Credit Agreement)
3
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or, in the case of any
Lender which is an investment fund, any other fund which is managed by the
same investment advisor or an Affiliate thereof; PROVIDED that a Person
shall not be deemed an Affiliate of another Person solely by reason of an
individual serving as an officer or director of such Person. For purposes
of this definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (b)
direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"AGENTS": the Administrative Agent and the Syndication Agent, and
for the purposes of Section 12 only, the Collateral Agent, as applicable.
"AGGREGATE OUTSTANDING WORKING CAPITAL REVOLVING EXTENSIONS OF
CREDIT": as to any Lender at any time, an amount equal to the sum of (a)
the aggregate principal amount of all Working Capital Revolving Credit
Loans made by such Lender then outstanding and (b) such Lender's Working
Capital Revolving Credit Commitment Percentage of the L/C Obligations then
outstanding.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"APPAREL NOTES": the Junior Subordinated Notes dated December 28,
1988 issued by the Borrower in the approximate original aggregate
principal amount of $38,350,000, the outstanding principal amount of which
as of March 31, 1997, was approximately $78,400,000, and additional notes
in the form thereof issued in lieu of cash interest, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"APPLICABLE ABR MARGIN": as of any date of determination, a
percentage per annum equal to 0.0%.
"APPLICABLE COMMITMENT FEE PERCENTAGE": as at any date of
determination, a percentage per annum determined by the Funded Debt Ratio
set forth on the most recent Level Determination Certificate as shown
below; PROVIDED that until January 18, 1998, the Applicable Commitment Fee
Percentage shall be deemed to be 0.375% per annum:
(Credit Agreement)
4
Commitment
FUNDED DEBT RATIO FEE PERCENTAGE
Greater than or equal
to 4.5:1.0 0.375%
Less than 4.5:1.0 0.250%
"APPLICABLE EURODOLLAR MARGIN": as of any date of determination, a
percentage per annum determined by the Funded Debt Ratio set forth on the
most recent Level Determination Certificate as shown below; PROVIDED that
until January 18, 1998, the Applicable Eurodollar Margin shall be deemed
to be 1.25% per annum:
Eurodollar
FUNDED DEBT RATIO MARGIN
Greater than or equal
to 5.5:1.0 1.250%
Greater than or equal
to 4.5:1.0, less than 5.5:1.0 1.000%
Less than 4.5:1.0 0.750%
"APPLICATION": an application, in such form as the Issuing Bank may
specify from time to time, requesting the Issuing Bank to open a Letter of
Credit.
"ARRANGER": Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as
the arranger of the credit facilities described herein.
"ASSIGNEE": as defined in subsection 13.6(c).
"AVAILABLE ACQUISITION REVOLVING CREDIT COMMITMENT": as to any
Lender at any time, an amount equal to the excess, if any, of (a) the
amount of such Lender's Acquisition Revolving Credit Commitment at such
time over (b) such Lender's outstanding Acquisition Revolving Credit
Loans.
"AVAILABLE WORKING CAPITAL REVOLVING CREDIT COMMITMENT": as to any
Lender at any time, an amount equal to the excess, if any, of (a) the
amount of such Lender's Working Capital Revolving Credit Commitment at
such time over (b) the sum of (i) such Lender's Aggregate Outstanding
Working Capital Revolving Extensions of Credit and (ii) an amount equal to
such Lender's Working Capital Revolving Credit Commitment Percentage of
the aggregate unpaid principal amount at such time of all Swing Line Loans
(PROVIDED that for
(Credit Agreement)
5
purposes of calculating Available Working Capital Revolving Credit
Commitments pursuant to subsection 6.1(a) such amount referred to in
clause (ii) shall be zero).
"BANKRUPTCY CODE": Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BOARD": the Board of Governors of the Federal Reserve System (or
any successor thereto).
"BORROWER": as defined in the introduction to this Agreement.
"BORROWER SECURITY AGREEMENT": the Security Agreement to be executed
and delivered by the Borrower, substantially in the form of Exhibit B-1,
as the same may be amended, supplemented or otherwise modified from time
to time.
"BORROWER SECURITY DOCUMENTS": the collective reference to the
Borrower Security Agreement and the Borrower Stock Pledge Agreement.
"BORROWER STOCK PLEDGE AGREEMENT": the Pledge Agreement to be
executed and delivered by the Borrower, substantially in the form of
Exhibit B-2, as the same may be amended, supplemented or otherwise
modified from time to time.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2, 2.4, 4.2 or 5.2 as a date on which the Borrower requests
the Lenders to make Loans hereunder.
"BUSINESS": as defined in subsection 7.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or San Francisco are authorized or
required by law to close.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency or instrumentality thereof, (b)
certificates of deposit, time deposits, overnight bank deposits, bankers'
acceptances and repurchase agreements of any commercial bank which has
capital and surplus in excess of $500,000,000 having maturities of one
year or less from the date of acquisition, (c) commercial paper of an
issuer rated at least A-1 by Standard and Poor's
(Credit Agreement)
6
Ratings Group or P-1 by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of the
two named rating agencies cease publishing ratings of investments having
maturities of nine months or less from the date of acquisition, (d)
securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States or by any political subdivision or taxing
authority of any such state, commonwealth or territory, the securities of
which state, commonwealth, territory, political subdivision or taxing
authority (as the case may be) are rated at least A by Standard & Poor's
Ratings Group or A by Xxxxx'x Investors Services, Inc., (e) securities
with maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, or (f)
shares of money market accounts or funds which invest only in the types of
securities described in (a) through (e) above.
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. ss. 327.3(d) (or any
successor provision) to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
such Board) in respect of new non-personal time deposits in Dollars having
a maturity of 30 days or more.
"CHANGE OF CONTROL": (i) The failure at any time of the Permitted
Holders collectively to beneficially own and control, directly or
indirectly, 25% of the outstanding Capital Stock having ordinary voting
power in the election of directors of the Borrower, or (ii) any Person or
"group" (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended), other than any such group that includes
the Permitted Holders, (x) shall have acquired beneficial ownership of (A)
Capital Stock of the Borrower representing 33-1/3% or more of the
outstanding Capital Stock having ordinary voting power in the election of
directors of the Borrower and (B) more of such Capital Stock than is owned
by the Permitted Holders, or (y) shall obtain the power (whether or not
exercised) to elect a majority of the members of the Borrower's Board of
Directors.
(Credit Agreement)
7
"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 8.1 shall be satisfied, PROVIDED that such date shall be no
later than August 31, 1997.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COLLATERAL AGENT": Xxxxx Fargo acting in its capacity as collateral
agent under the applicable Security Documents on behalf of the Lenders and
the Persons party to the Intercreditor Agreement (other than the
Borrower).
"COMMERCIAL LETTER OF CREDIT": as defined in subsection 3.1(b)(i).
"COMMITMENTS": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitment and the Term A Loan Commitments.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of
the Code.
"CONSOLIDATED CAPITAL EXPENDITURES": of any Person for any period,
the amount of expenditures of such Person, determined on a consolidated
basis in accordance with GAAP, for such period in respect of the purchase
or other acquisition of fixed or capital assets (excluding (i) any such
asset acquired in connection with normal replacement and maintenance
programs properly charged to current operations, (ii) any such asset
purchased with the net cash proceeds of the sale or disposition of assets
within 12 months after such sale or disposition in accordance with
subsection 10.6(d), (iii) any such asset acquired in connection with a
business acquisition permitted by subsection 10.9(h) or (iv) any
expenditures from the proceeds of casualty insurance used to repair or
replace the assets affected by such casualty loss).
"CONSOLIDATED EBITDA": of any Person for any period, Consolidated
Net Income of such Person for such period PLUS, without duplication and to
the extent reflected as a charge in the statement of such Consolidated Net
Income, the sum of (a) total income and franchise tax expense, (b)
interest expense net of any payments or receipts under any Interest Rate
Agreements, amortization or writeoff of debt discount and debt issuance
costs and commissions and discounts and other fees and charges associated
with Indebtedness, (c) depreciation and amortization expense, (d) the
expenses associated with amortization of intangibles
(Credit Agreement)
8
(including, but not limited to, goodwill) and organization costs, (e)
writeoff of goodwill and other non cash charges, (f) any extraordinary and
unusual losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income, losses on
the sales of assets outside the ordinary course of business) and (g) any
similar non-cash charges, MINUS any extraordinary and unusual gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income, gains on the sales of assets
outside of the ordinary course of business); PROVIDED, that for purposes
of subsection 10.1(b) and the definition of Funded Debt Ratio only, if a
business acquisition or investment permitted by subsection 10.9(h) occurs
during any period, Consolidated EBITDA of the Borrower for such period
shall include the pro forma Consolidated EBITDA for such period of the
business acquired or investment made after giving effect to management's
reasonable estimate of the performance of such business or investment as
if such business had been acquired or investment made as of the beginning
of such period.
"CONSOLIDATED FUNDED INDEBTEDNESS": of any Person, as of the date of
determination, all Indebtedness hereunder and under the Notes and all
other Indebtedness (other than under any Interest Rate Agreement and, in
the case of the Borrower, the Apparel Notes) of such Person and its
Subsidiaries which other Indebtedness by its terms matures more than one
year after the date of calculation, and any such Indebtedness maturing
within one year from such date which is renewable or extendable at the
option of the obligor to a date more than one year from such date
including, in any event, the Aggregate Outstanding Working Capital
Revolving Extensions of Credit of all Lenders, the outstanding Acquisition
Revolving Credit Loans of all Lenders and the outstanding Swing Line
Loans.
"CONSOLIDATED INTEREST EXPENSE": of any Person for any period, the
amount of interest expense payable in cash (excluding any amounts paid or
payable in additional securities of such Person) net of (i) any payments
or receipts under any Interest Rate Agreements of such Person and (ii) any
consolidated interest income of such Person, determined on a consolidated
basis in accordance with GAAP (but excluding the amortization of deferred
financing costs), for such period on the aggregate principal amount of its
Indebtedness.
"CONSOLIDATED NET INCOME": of any Person for any period, net income
of such Person, determined on a consolidated basis in accordance with
GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
(Credit Agreement)
9
"DEFAULT": any of the events specified in Section 11, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DLJ": as defined in the introduction to this Agreement.
"DOLLARS" and "$": dollars in lawful currency of the United States
of America.
"DOMESTIC SUBSIDIARY": a Subsidiary of the Borrower which is
incorporated in a state of the United States or in the District of
Columbia.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health
(as a result of exposure to Materials of Environmental Concern) or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such system.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the average of the respective rates notified to the Administrative
Agent by each of the Reference Lenders as the rate at which such Reference
Lender is offered Dollar deposits at or about 10:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount
of its Eurodollar Loans to be outstanding during such Interest Period.
(Credit Agreement)
10
"EURODOLLAR LOANS": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
EURODOLLAR BASE RATE
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 11,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"EXCESS AMOUNT": as defined in subsection 6.3(h).
"EXISTING CREDIT AGREEMENT": as defined in the recitals to this
Agreement.
"EXISTING LENDERS": as defined in subsection 8.1(p).
"EXISTING LETTERS OF CREDIT": the Letters of Credit described on
Schedule 3.1 issued by the issuing bank under the Existing Credit
Agreement which shall for all purposes of the Loan Documents be deemed to
be Letters of Credit hereunder issued on the Closing Date.
"EXISTING LOAN DOCUMENTS": the "Loan Documents" under the Existing
Credit Agreement.
"EXISTING REVOLVING CREDIT LOANS": the revolving credit loans and
swing line loans outstanding under the Existing Credit Agreement on the
Closing Date.
"EXISTING TERM LOANS": the term loans outstanding under the Existing
Credit Agreement on the Closing Date.
"FACILITY MANAGER": Xxxxx Fargo, in its capacity as facility manager
under the Term Loan Agreement.
(Credit Agreement)
11
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FUNDED DEBT RATIO": with respect to any Test Period, the ratio of
(i) Consolidated Funded Indebtedness of the Borrower on the last day of
such Test Period MINUS (x) up to $30,000,000 in aggregate principal amount
of Working Capital Revolving Credit Loans which constitute seasonal
borrowings outstanding on the last day of such Test Period, as reduced by
the aggregate amount of Unrestricted Cash held by the Borrower on the last
day of such Test Period, MINUS (y) without duplication, the aggregate
amount of Unrestricted Cash held by the Borrower on the last day of such
Test Period to (ii) Consolidated EBITDA for such Test Period.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time or, in the case of
compliance with subsection 10.1, consistent with those utilized in
preparing the audited financial statements referred to in subsection 7.1.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such
primary obligation or (y) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and
(Credit Agreement)
12
(b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"GUARANTEE": the reference to the Subsidiaries Guarantee.
"GUARANTOR": any Person delivering a Guarantee or a supplement
thereto pursuant to this Agreement.
"HW&P": Xxxx Wheat & Partners Incorporated.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities and accrued
expenses incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases, (d)
all obligations of such Person in respect of banker's acceptances issued
or created for the account of such Person and (e) all liabilities secured
by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof (it
being understood that Indebtedness shall not include (i) any obligations
under any Interest Rate Agreement and (ii) any Guarantee Obligation). For
purposes of any calculation hereunder, the amount of any Indebtedness
outstanding at any time, except Indebtedness under clause (e) of this
definition, shall be deemed to be equal to the then outstanding principal
amount of such Indebtedness (including, with respect to Financing Leases,
the implied principal amount thereof calculated in accordance with GAAP)
and the amount of any Indebtedness outstanding at any time under clause
(e) of this definition shall be equal to the lesser of (i) the then
outstanding principal amount of, and all accrued and unpaid interest on,
the liability secured by the applicable property and (ii) the then fair
market value of such property.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": as defined in subsection 7.9.
(Credit Agreement)
13
"INTERCREDITOR AGREEMENT": the intercreditor agreement dated as of
July 21, 1997, by and among the Borrower, the other Loan Parties, the
Collateral Agent, the Administrative Agent and the Facility Manager,
substantially in the form of Exhibit I annexed hereto, as such
Intercreditor Agreement may hereafter be amended, supplemented or modified
from time to time.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the first day of
each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months or a whole multiple thereof after the first
day of such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or nine months (or, if
available, twelve months) thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six or nine months (or, if
available, twelve months) thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period for any Loans that would otherwise
extend beyond the date final payment is due on such Loans shall end
on such date of final payment;
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which
(Credit Agreement)
14
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INTEREST RATE AGREEMENT": with respect to any Person, any interest
rate swap agreement, interest rate future, interest rate option, interest
rate cap or other interest rate hedge arrangement, to or under which such
Person is a party or a beneficiary.
"INVESTORS": HWH Capital Partners, L.P., HWH Valentine Partners,
L.P. and HWH Surplus Valentine Partners, L.P.
"ISSUING BANK": Xxxxx Fargo, in its capacity as issuer of any Letter
of Credit.
"JHIRMACK BUSINESS": the assets and liabilities of the Borrower and
its Subsidiaries relating to Jhirmack hair care products, including the
Capital Stock of any Subsidiary, substantially all of the assets and
liabilities of which relate to Jhirmack hair care products.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters
of Credit which have not then been reimbursed pursuant to subsection
3.4(a).
"L/C PARTICIPANTS": the collective reference to all the Lenders
holding Working Capital Revolving Credit Commitments other than the
Issuing Bank.
"LETTERS OF CREDIT": as defined in subsection 3.1(a).
"LEVEL DETERMINATION CERTIFICATE": a certificate of the chief
financial officer of the Borrower in form and substance satisfactory to
the Agents delivered pursuant to subsection 9.2(c) setting forth in
reasonable detail the Funded Debt Ratio which is applicable as of the date
on which such certificate is delivered.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever which makes
any property or asset available for the payment or performance of any
liability in priority to the payment or performance of ordinary, unsecured
creditors (including, without
(Credit Agreement)
15
limitation, any conditional sale or other title retention agreement and
any Financing Lease having substantially the same economic effect as any
of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, any Notes, the Applications, the
Letters of Credit, the Trademark Subsidiary Agreement, the Guarantee, the
Intercreditor Agreement and the Security Documents.
"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower
which is a party to a Loan Document.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement, any Application or any of
the other Loan Documents or the rights or remedies of the Agents, the
Collateral Agent or the Lenders hereunder or thereunder.
"MATERIAL ASSET SALE": any sale, transfer or other disposition
(including any sale and leaseback of assets) by the Borrower or any of its
Subsidiaries of any property of the Borrower or any such Subsidiary
(including property subject to any Lien under any Security Document),
other than as permitted pursuant to subsection 10.6(a), (b), (c), (d),
(g), (h), (i) (to the extent in excess of $20,000,000 in the aggregate) or
(j).
"MATERIAL ENVIRONMENTAL AMOUNT": an amount payable by the Borrower
and/or its Subsidiaries in excess of $10,000,000 for remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties
or any combination thereof.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Material Asset Sale,
the cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such
(Credit Agreement)
16
Material Asset Sale net of all reasonable attorneys' fees, consulting
fees, accountants' fees, investment banking fees, brokerage commissions,
survey costs, title insurance premiums, recording and transfer tax
expense, required debt payments (other than pursuant hereto), amounts
required to be paid to any Person (other than the Borrower and its
Subsidiaries) owning a beneficial interest in the assets subject to such
Material Asset Sale, reasonable amounts to be provided by the Borrower or
any of its Subsidiaries, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Material Asset
Sale and retained by the Borrower or such Subsidiary, as the case may be
(provided, that, if any amount of such reserve shall be released or
reversed, the amount of such release or reversal shall be "Net Cash
Proceeds"), and other customary fees and expenses actually incurred and
satisfactorily documented in connection therewith and net of federal,
state, local and foreign taxes paid or payable as a result thereof and net
of purchase price adjustments reasonably expected to be payable in
connection therewith and (b) in connection with any issuance of any debt
securities or instruments or the incurrence of loans, the cash proceeds
(including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received)
received from such issuance, net of all reasonable investment banking
fees, legal fees, consulting fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses, actually
incurred and satisfactorily documented in connection therewith.
"NEW SUBSIDIARY": any wholly-owned Subsidiary of the Borrower formed
subsequent to May 1, 1995 which (a) is a Guarantor or has become a
Guarantor by means of a supplement to the Guarantee in form and substance
satisfactory to the Agents (unless, in each case, released from such
Guarantee pursuant to subsection 13.8), (b) all of the Capital Stock of
which is pledged to the Collateral Agent, as collateral security for the
Obligations (as defined in the Borrower Pledge Agreement), pursuant to the
Borrower Pledge Agreement or a supplement thereto in form and substance
satisfactory to the Agents and (c) if not in existence on the Closing
Date, has delivered to the Agents such legal opinions, secretary's
certificates, resolutions and other customary documents in connection with
the supplements referred to in (a) and (b) above as the Agents may
reasonably request.
"NON-EXCLUDED TAXES": as defined in subsection 6.12.
"NOTES": the collective reference to the Acquisition Revolving
Credit Notes, the Working Capital Revolving Credit Notes, the Swing Line
Note and the Term A Loan Notes.
"NOTIFYING LENDER": any Lender that gives written irrevocable notice
to the Administrative Agent, on or prior to the date on which such Lender
becomes a
(Credit Agreement)
17
party to this Agreement, to the effect that it will not request that any
promissory note be issued to it pursuant to subsection 6.2(e), and any
direct or indirect Assignee of such Lender, in its capacity as such an
Assignee.
"OLD PLAYTEX PRODUCTS SUBORDINATED DEBT": the $105,000,000 in
aggregate principal amount of 15% Subordinated Notes issued by the
Borrower and originally due December 31, 2000, which was redeemed in full
on March 4, 1994.
"PAP": Playtex Apparel Partners, L.P.
"PAP DEBENTURE": the Debentures dated December 28, 1988 issued by
PAP in the original aggregate principal amount of $40,000,000, including
accrued interest thereon, as the same may be amended, supplemented or
otherwise modified from time to time.
"PARTICIPANT": as defined in subsection 13.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any successor thereto.
"PERMITTED HOLDERS": each of HW&P and the Investors and any of their
respective Affiliates, and upon a distribution by an Investor of all or
any of the stock of the Borrower, the limited partners of such Investor.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PROPERTIES": as defined in subsection 7.17(a).
"REFERENCE LENDERS": Xxxxx Fargo and two other Lenders or lenders
under the Term Loan Agreement to be appointed with the consent of the
Agents and the Borrower.
"REFUNDED SWING LINE LOANS": as defined in subsection 2.4(c).
"REGISTER": as defined in subsection 13.6(d).
(Credit Agreement)
18
"REGISTRATION RIGHTS AGREEMENT": the Registration Rights Agreement,
dated as of July 21, 1997, between the Borrower and the initial purchaser
of the Senior Notes for the benefit of the holders of the Senior Notes.
"REGULATION U": Regulation U of the Board as in effect from time to
time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection 3.4(a) for amounts drawn
under Letters of Credit.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the 30-day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
2615.
"REQUIRED LENDERS": at any time, Lenders holding at least 51% of the
sum of (a) the Working Capital Revolving Credit Commitments in effect at
such time (or, if the Working Capital Revolving Credit Commitments have
then terminated or are no longer in effect, the then outstanding principal
amount of the Working Capital Revolving Credit Loans and the then
outstanding participations, or potential participations, in the
outstanding Swing Line Loans (including, in the case of the Swing Line
Lender, its remaining direct interest therein) and in the outstanding L/C
Obligations (including, in the case of the Issuing Bank, its remaining
direct interest therein)) plus (b) the Acquisition Revolving Credit
Commitments in effect at such time (or, if the Acquisition Revolving
Credit Commitments have then terminated or are no longer in effect, the
then outstanding Acquisition Revolving Credit Loans) plus (c) the then
outstanding principal amount of the Term A Loans (or, prior to the Closing
Date, the Term A Loan Commitments).
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer or the president
of the Borrower or, with respect to financial matters, the chief financial
officer or the vice president-finance of the Borrower.
(Credit Agreement)
19
"REVOLVING CREDIT COMMITMENTS": as to any Lender at any time, the
reference to such Lender's Acquisition Revolving Credit Commitment or
Working Capital Revolving Credit Commitment or both, as the case may be.
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender at any
time, the reference to such Lender's Acquisition Revolving Credit
Commitment Percentage or Working Capital Revolving Credit Commitment
Percentage, as the case may be.
"REVOLVING CREDIT LOANS": as to any Lender at any time, the
reference to such Lender's Acquisition Revolving Credit Loans or Working
Capital Revolving Credit Loans, as the case may be.
"SECURITIES ACT": the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITY DOCUMENTS": the collective reference to the Borrower
Security Agreement, the Stock Pledge Agreements, the Subsidiary Security
Agreements and all other security documents hereafter delivered to the
Collateral Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrower hereunder and under
any of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"SENIOR NOTE INDENTURE": the Indenture dated as of July 21, 1997 by
and between the Borrower, as issuer, and Marine Midland Bank, as trustee,
as the same may be amended, supplemented or otherwise modified from time
to time, except as prohibited by the terms hereof.
"SENIOR NOTES": the 8 7/8% Senior Notes Due 2004 issued by the
Borrower in the aggregate original amount of $150,000,000 pursuant to the
Senior Note Indenture, together with such new senior notes issued by the
Borrower subsequent to the Closing Date in exchange for any or all of the
Senior Notes pursuant to the terms of the Registration Rights Agreement in
the aggregate principal amount equal to the aggregate principal amount of
the Senior Notes so exchanged, which new senior notes shall be registered
under the Securities Act.
"SENIOR SUBORDINATED INDENTURE": the Indenture dated as of February
2, 1994 between the Borrower, as issuer, and IBJ Xxxxxxxx Bank & Trust
Company, as trustee, as the same has been and may be amended, supplemented
or otherwise modified from time to time, except as prohibited by the terms
hereof.
"SENIOR SUBORDINATED NOTES": the Senior Subordinated Notes of the
Borrower issued pursuant to the Senior Subordinated Indenture.
(Credit Agreement)
20
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"STANDBY LETTER OF CREDIT": as defined in paragraph 3.1(b)(i).
"STOCK PLEDGE AGREEMENTS": the collective reference to the Borrower
Stock Pledge Agreement and the Subsidiary Stock Pledge Agreements.
"STOCK PURCHASE AGREEMENT": the Stock Purchase Agreement, dated as
of March 17, 1995, among the Borrower and the Investors, as amended to the
Closing Date and as the same may be amended, supplemented or otherwise
modified from time to time.
"SUBSIDIARIES GUARANTEE": the Guarantee to be made by the Domestic
Subsidiaries listed as Subsidiary Guarantors on Schedule 7.15,
substantially in the form of Exhibit C, as the same may be amended,
supplemented or otherwise modified from time to time.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"SUBSIDIARY SECURITY AGREEMENT": each Subsidiary Security Agreement
to be executed and delivered by each Domestic Subsidiary, in substantially
the form of Exhibit B-3, as the same may be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY STOCK PLEDGE AGREEMENT": each Pledge Agreement to be
executed and delivered by each Domestic Subsidiary, substantially in the
form of Exhibit B-4, as the same may be amended, supplemented or otherwise
modified from time to time.
"SWING LINE COMMITMENT": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 2.4.
"SWING LINE LENDER": Xxxxx Fargo in its capacity as provider of the
Swing Line Loans.
(Credit Agreement)
21
"SWING LINE LOAN PARTICIPATION CERTIFICATE": a certificate in
substantially the form of Exhibit G.
"SWING LINE LOANS": as defined in subsection 2.4(a).
"SWING LINE NOTE": as defined in subsection 2.4(b).
"SYNDICATION AGENT": as defined in the introduction to this
Agreement and also means and includes any successor syndication agent
appointed pursuant to subsection 12.9.
"TERM A LOAN": as defined in subsection 5.1.
"TERM A LOAN COMMITMENT": as to any Lender, the obligation of such
Lender to make a Term A Loan to the Borrower on the Closing Date in a
principal amount not to exceed the amount set forth opposite such Lender's
name on Schedule 1.1 under the heading "Term A Loan Commitment".
"TERM A LOAN MATURITY DATE": June 15, 2003.
"TERM A LOAN NOTE": as defined in subsection 6.2(e).
"TERM LOAN AGREEMENT": the Term Loan Agreement dated as of July 21,
1997, by and among the Borrower, the several lenders from time to time
parties thereto, DLJ Capital Funding, Inc., as Syndication Agent, and the
Facility Manager, as the same may be amended, supplemented or otherwise
modified from time to time, except as prohibited by the terms hereof.
"TERM LOANS": the senior secured term loans of the Borrower under
the Term Loan Agreement in the original principal amount of $150,000,000.
"TEST PERIOD": as defined in subsection 10.1(b).
"TRADEMARK SUBSIDIARY AGREEMENT": the Trademark Subsidiary
Agreement, dated the Closing Date, made by the Borrower and Playtex
Marketing Corporation in favor of the Collateral Agent, substantially in
the form of Exhibit H, as the same may be amended, supplemented or
otherwise modified from time to time.
"TRANSACTION COSTS": the fees, costs and expenses paid or payable by
any Loan Party pursuant hereto on the Closing Date and other fees, costs,
premiums and expenses paid or payable by any Loan Party in connection with
the Transactions.
(Credit Agreement)
22
"TRANSACTIONS": the transactions contemplated under this Agreement
and the other Loan Documents on the Closing Date, the repayment of the
Borrower's indebtedness under the Existing Credit Agreement, the issuance
of the Senior Notes, the borrowing of the Term Loans and other
transactions related to any of the foregoing.
"TRANSFERABLE ASSETS": as defined in subsection 10.5.
"TRANSFEREE": as defined in subsection 13.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"UNRESTRICTED CASH": Cash or Cash Equivalents of Borrower which are
not subject to any Lien or other charge or encumbrance of any kind
whatsoever other than in favor of Collateral Agent pursuant to the
Security Documents.
"XXXXX FARGO": as defined in the introduction to this Agreement.
"WORKING CAPITAL REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender to make Working Capital Revolving Credit Loans
to and/or issue or participate in Letters of Credit issued on behalf of
the Borrower hereunder and/or to participate in Swing Line Loans in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule 1.1 under the
heading "Working Capital Revolving Credit Commitment", as such amount may
be reduced from time to time in accordance with the provisions of this
Agreement.
"WORKING CAPITAL REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any
Lender at any time, the percentage which such Lender's Working Capital
Revolving Credit Commitment then constitutes of the aggregate Working
Capital Revolving Credit Commitments (or, at any time after the Working
Capital Revolving Credit Commitments shall have expired or been
terminated, the percentage which the aggregate principal amount of such
Lender's Working Revolving Credit Loans then outstanding constitutes of
the aggregate principal amount of the Working Capital Revolving Credit
Loans then outstanding).
"WORKING CAPITAL REVOLVING CREDIT COMMITMENT PERIOD": the period
from and including the Closing Date to but not including the Working
Capital Revolving Credit Termination Date or such earlier date on which
the Working Capital Revolving Credit Commitments shall terminate as
provided herein.
(Credit Agreement)
23
"WORKING CAPITAL REVOLVING CREDIT LOANS": as defined in subsection
2.1.
"WORKING CAPITAL REVOLVING CREDIT NOTE": as defined in subsection
6.2(e).
"WORKING CAPITAL REVOLVING CREDIT TERMINATION DATE": June 15, 2003.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Note or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Note, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified and references to Schedules to this Agreement are references
to such Schedules as amended, supplemented, or otherwise modified from time to
time in accordance with the terms hereof.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF WORKING CAPITAL REVOLVING
CREDIT COMMITMENTS
2.1 WORKING CAPITAL REVOLVING CREDIT COMMITMENTS. (a) Subject to the
terms and conditions hereof, each Lender having a Working Capital Revolving
Credit Commitment severally agrees to make revolving credit loans ("WORKING
CAPITAL REVOLVING CREDIT LOANS") to the Borrower from time to time during the
Working Capital Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Working
Capital Revolving Credit Commitment Percentage of the then outstanding L/C
Obligations and Swing Line Loans, does not exceed the amount of such Lender's
Working Capital Revolving Credit Commitment. During the Working Capital
Revolving Credit Commitment Period the Borrower may use the Working Capital
Revolving Credit Commitments by borrowing, prepaying the Working Capital
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The Working Capital Revolving Credit Loans may from time to time
be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
(Credit Agreement)
24
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 2.2 and 6.4, PROVIDED that no Working Capital
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Working Capital Revolving Credit Termination Date.
(c) The proceeds of the Working Capital Revolving Credit Loans shall
be used by the Borrower (i) on the Closing Date, together with other funds
available to the Borrower, including, without limitation, the proceeds of the
Senior Notes, the Term A Loans and the Term Loans, to refinance in full the
Existing Term Loans and any Existing Revolving Credit Loans and to pay the
Transaction Costs in an aggregate amount not exceeding $10,000,000 and (ii)
thereafter to provide for the general corporate requirements of the Borrower and
its Subsidiaries including permitted acquisitions and investments.
2.2 PROCEDURE FOR WORKING CAPITAL REVOLVING CREDIT BORROWING. The
Borrower may borrow under the Working Capital Revolving Credit Commitments
during the Working Capital Revolving Credit Commitment Period on any Business
Day, PROVIDED that the Borrower shall give the Administrative Agent, except as
expressly set forth in subsection 6.8, irrevocable notice (which notice must be
received by the Administrative Agent prior to 1:00 P.M., New York City time, (a)
3 Business Days prior to the requested Borrowing Date, if all or any part of the
requested Working Capital Revolving Credit Loans are to be initially Eurodollar
Loans or (b) one Business Day prior to the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Each borrowing
under the Working Capital Revolving Credit Commitments shall be in an amount
equal to (other than Refunded Swing Line Loans) $5,000,000 or a whole multiple
of $1,000,000 in excess thereof (or, if the then aggregate Available Working
Capital Revolving Credit Commitments are less than $5,000,000, such lesser
amount). Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender having a Working Capital Revolving
Credit Commitment thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified in subsection
13.2 prior to 11:00 A.M., New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent,
PROVIDED that, if the Closing Date is a Borrowing Date, on such date each Lender
shall make such funds available to the Administrative Agent prior to 10:00 A.M.,
New York City time. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
(Credit Agreement)
25
2.3 TERMINATION OR REDUCTION OF WORKING CAPITAL REVOLVING CREDIT
COMMITMENTS. The Borrower shall have the right, upon not less than five Business
Days' notice to the Administrative Agent, to terminate the Working Capital
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Working Capital Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple thereof and shall reduce
permanently the Working Capital Revolving Credit Commitments then in effect,
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Working Capital Revolving
Credit Loans and Swing Line Loans made on the effective date thereof, the
aggregate principal amount of the Working Capital Revolving Credit Loans and
Swing Line Loans then outstanding, when added to the then outstanding L/C
Obligations, would exceed the Working Capital Revolving Credit Commitments then
in effect.
2.4 SWING LINE COMMITMENT. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (individually, a
"SWING LINE LOAN"; collectively, the "SWING LINE LOANS") to the Borrower from
time to time during the period from the Closing Date through the fifth Business
Day preceding the Working Capital Revolving Credit Termination Date in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000, PROVIDED that at no time may the sum of the Swing Line Loans, the
Working Capital Revolving Credit Loans and the outstanding L/C Obligations
exceed the Working Capital Revolving Credit Commitments. During the Working
Capital Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, prepaying the Swing Line Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. All Swing
Line Loans shall be made as ABR Loans and shall not be entitled to be converted
into Eurodollar Loans. The Borrower shall give the Swing Line Lender irrevocable
notice (which notice must be received by the Swing Line Lender prior to 1:00
p.m., New York City time) on the requested Borrowing Date specifying the amount
of the requested Swing Line Loan which shall be in an aggregate minimum amount
of $100,000 or a whole multiple thereof (except with respect to deemed Swing
Line Loans under subsection 3.4). The proceeds of the Swing Line Loan will be
made available by the Swing Line Lender to the Borrower at the office of the
Swing Line Lender by 3:00 p.m. on the Borrowing Date by crediting the account of
the Borrower at such office with such proceeds, PROVIDED that, with respect to
deemed Swing Line Loans under subsection 3.4, the Swing Line Lender will
transmit the proceeds of such Swing Line Loans directly to the Issuing Bank. The
Borrower may at any time and from time to time, prepay the Swing Line Loans, in
whole or in part, without premium or penalty, by notifying the Swing Line Lender
prior to 1:00 p.m. on any Business Day of the date and amount of prepayment. If
any such notice is given, the amount specified in such notice shall be due and
payable by 3:00 p.m. on such date on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof.
(Credit Agreement)
26
(b) The Swing Line Loans shall be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit A-4, with appropriate
insertions (the "SWING LINE NOTE"), payable to the order of the Swing Line
Lender and representing the obligation of the Borrower to pay the amount of the
Swing Line Commitment or, if less, the unpaid principal amount of the Swing Line
Loans, with interest thereon as prescribed in subsection 6.6. The Swing Line
Lender is hereby authorized to record the Borrowing Date, the amount of each
Swing Line Loan and the date and amount of each payment or prepayment of
principal thereof, on the schedule annexed to and constituting a part of the
Swing Line Note and any such recordation shall constitute PRIMA FACIE evidence
of the accuracy of the information so recorded, PROVIDED that the failure by the
Swing Line Lender to make any such recordation or any error in any such
recordation shall not affect any of the obligations of the Borrower under such
Swing Line Note or this Agreement. The Swing Line Note shall (i) be dated the
Closing Date, (ii) be stated to mature on the fifth Business Day preceding the
Working Capital Revolving Credit Termination Date and (iii) bear interest for
the period from the date thereof until paid in full on the unpaid principal
amount thereof from time to time outstanding at the applicable interest rate per
annum determined as provided in, and payable as specified in, subsection 6.6.
(c) The Swing Line Lender, at any time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the
Swing Line Lender to act on its behalf) request each Lender including the Swing
Line Lender, to make a Working Capital Revolving Credit Loan in an amount equal
to such Lender's Working Capital Revolving Credit Commitment Percentage of the
amount of the Swing Line Loans outstanding on the date such notice is given (the
"REFUNDED SWING LINE LOANS"). Unless any of the events described in paragraph
(f) of Section 11 shall have occurred with respect to the Borrower (in which
event the procedures of paragraph (e) of this subsection 2.4 shall apply) each
Lender shall make the proceeds of its Working Capital Revolving Credit Loan
available to the Administrative Agent for the account of the Swing Line Lender
at the office of the Administrative Agent specified in Section 13.2 prior to
12:00 Noon (New York City time) in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such Working
Capital Revolving Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans. Effective on the day such Working Capital Revolving
Credit Loans are made, the portion of the Swing Line Loans so paid shall no
longer be outstanding as Swing Line Loans, shall no longer be due under the
Swing Line Note and shall be due under the respective Working Capital Revolving
Credit Notes issued to the Lenders in accordance with their respective Working
Capital Revolving Credit Commitment Percentages. The Borrower authorizes the
Swing Line Lender to charge the Borrower's accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swing Line Loans to the extent amounts received
from the Working Capital Revolving Credit Lenders are not sufficient to repay in
full such Refunded Swing Line Loans. The Swing Line Lender agrees to notify the
Borrower after any such application made by such
(Credit Agreement)
27
Swing Line Lender, provided that the failure to give such notice shall not
affect the validity of such application.
(d) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not be obligated to make any Swing Line Loans if the conditions set
forth in subsection 8.2 have not been satisfied.
(e) If prior to the making of a Working Capital Revolving Credit
Loan pursuant to paragraph (c) of subsection 2.4 one of the events described in
paragraph (f) of Section 11 shall have occurred and be continuing with respect
to the Borrower, each Lender will, on the date such Working Capital Revolving
Credit Loan was to have been made pursuant to the notice in subsection 2.4(c),
purchase an undivided participating interest in the Refunded Swing Line Loans in
an amount equal to (i) its Working Capital Revolving Credit Commitment
Percentage TIMES (ii) the aggregate principal amount of Swing Line Loans then
outstanding which were to have been repaid with such Working Capital Revolving
Credit Loans. Each Lender will immediately transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation, and upon receipt
thereof the Swing Line Lender will deliver to such Lender a Swing Line Loan
Participation Certificate dated the date of receipt of such funds and in such
amount.
(f) Whenever, at any time after any Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); PROVIDED, HOWEVER, that in
the event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it.
(g) Each Lender's obligation to make the Loans referred to in
subsection 2.4(c) and to purchase participating interests pursuant to subsection
2.4(e) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender or the Borrower may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the Borrower; (iv) any breach of this Agreement or any other Loan Document by
the Borrower, any Subsidiary or any other Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing;
provided no Lender shall have any obligation to make the Loans referred to in
subsection 2.4(c) or to purchase participating interests pursuant to subsection
2.4(e) with respect to Swing Line Loans made at a time when (x) the conditions
in subsection 8.2 are not satisfied and (y) such Lender has notified the Swing
Line Lender that it will not make such Loans or purchase such participations
with
(Credit Agreement)
28
respect to Swing Line Loans made after the date of such notice due to the
failure of such conditions to be satisfied.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Bank, in reliance on the agreements of the other Lenders set forth
in subsection 3.3(a) agrees to issue letters of credit (together with the
Existing Letters of Credit, "LETTERS OF CREDIT") for the account of the Borrower
on any Business Day during the Working Capital Revolving Credit Commitment
Period in such form as may be approved from time to time by the Issuing Bank;
PROVIDED that the Issuing Bank shall not issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed $15,000,000
or (ii) the aggregate Available Working Capital Revolving Credit Commitments of
all Lenders would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars, be in a minimum amount of at
least $20,000 and shall be either (x) a standby letter of credit issued to
support obligations of the Borrower and its Subsidiaries, contingent or
otherwise, not prohibited hereunder (a "STANDBY LETTER OF CREDIT"), or (y)
a commercial letter of credit issued in respect of the purchase of good or
services by the Borrower and its Subsidiaries in the ordinary course of
business (a "COMMERCIAL LETTER OF CREDIT"); and
(ii) expire no later than the earlier of (x) 180 days after
its issuance (or, 365 days in the case of a Standby Letter of Credit) and
(y) the Working Capital Revolving Credit Termination Date; PROVIDED that
the immediately preceding clause (x) shall not prevent the Issuing Bank
from agreeing that a Standby Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each
unless the Issuing Bank elects not to extend for any such additional
period; PROVIDED FURTHER that the Issuing Bank shall deliver a written
notice to the Administrative Agent setting forth the last day on which the
Issuing Bank may give notice that it will not extend such Standby Letter
of Credit (the "NOTIFICATION DATE") at least ten Business Days prior to
such Notification Date; and PROVIDED FURTHER that the Issuing Bank shall
give notice that it will not extend such Standby Letter of Credit if has
knowledge that an Event of Default has occurred and is continuing on such
Notification Date, unless such Event of Default has been waived in
accordance with subsection 13.1.
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(Credit Agreement)
29
(d) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower may
from time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank may request. Upon receipt of any Application, the Issuing Bank will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Bank be required to issue any Letter
of Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Bank and
the Borrower. The Issuing Bank shall furnish a copy of such Letter of Credit to
the Borrower promptly following the issuance thereof.
3.3 L/C PARTICIPATIONS. (a) The Issuing Bank irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters to Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's Working
Capital Revolving Credit Commitment Percentage in the Issuing Bank's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Bank thereunder. Each L/C Participant unconditionally
and irrevocably agrees with the Issuing Bank that, if a draft is paid under any
Letter of Credit for which the Issuing Bank is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Bank upon demand at the Issuing Bank's address for
notices specified herein an amount equal to such L/C Participant's Working
Capital Revolving Credit Commitment Percentage of the amount of such draft, or
any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to subsection 3.3(a) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
paid to the Issuing Bank within three Business Days after the date such payment
is due, such L/C Participant shall pay to the Issuing Bank on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate (as defined in the definition of ABR in subsection 1.1)
during the period from and including the date such payment is required to the
date on which such payment is immediately available to
(Credit Agreement)
30
the Issuing Bank, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to subsection
3.3(a) is not in fact made available to the Issuing Bank by such L/C Participant
within 3 Business Days after the date such payment is due, the Issuing Bank
shall be entitled to recover from such L/C Participant, on demand, such amount
with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans hereunder. A certificate of the Issuing Bank submitted
to any L/C Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 3.3(a), the Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
under the Intercreditor Agreement or otherwise), or any payment of interest on
account thereof, the Issuing Bank will distribute to such L/C Participant its
pro rata share thereof; PROVIDED, HOWEVER, that in the event that any such
payment received by the Issuing Bank shall be required to be returned by the
Issuing Bank, such L/C Participant shall return to the Issuing Bank the portion
thereof previously distributed by the Issuing Bank to it.
3.4 REIMBURSEMENT OBLIGATION OF THE BORROWER. (a) The Borrower
agrees to reimburse the Issuing Bank on each date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Bank for the amount of (i) such draft
so paid and (ii) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Bank in connection with such payment. Each such payment shall be
made to the Issuing Bank at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds. Each
drawing honored by the Issuing Bank, to the extent of the availability under the
Swing Line Commitment, shall constitute a request to the Swing Line Lender to
make a Swing Line Loan for the amount of such drawing. Subject to the
satisfaction or waiver of the terms and conditions hereof, the Swing Line Lender
will make a Swing Line Loan in the amount of such drawing on the date thereof.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which would be payable on any outstanding ABR Loans which
were then overdue.
3.5 OBLIGATIONS ABSOLUTE. (a) The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank or any beneficiary of a
Letter of Credit.
(Credit Agreement)
31
(b) The Borrower also agrees with the Issuing Bank that the Issuing
Bank shall not be responsible for, and the Borrower's Reimbursement Obligations
under subsection 3.4(a) shall not be affected by, among other things, (i) the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or (ii)
any dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred, or
(iii) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee, or (iv) any inability or failure of the
Swing Line Lender to make a deemed Swing Line Loan pursuant to subsection
3.4(a).
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Bank to the Borrower.
3.6 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Bank shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing Bank
to the Borrower in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly provided
for in such Letter of Credit, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment are in conformity with such Letter of Credit.
3.7 APPLICATION. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. AMOUNT AND TERMS OF ACQUISITION REVOLVING
CREDIT COMMITMENTS
4.1 ACQUISITION REVOLVING CREDIT COMMITMENTS. (a) Subject to the
terms and conditions hereof, each Lender having an Acquisition Revolving Credit
Commitment severally agrees to make revolving credit loans ("ACQUISITION
REVOLVING CREDIT LOANS") to the Borrower from time to time during the
Acquisition Revolving Credit Commitment Period in an aggregate principal amount
at any one time
(Credit Agreement)
32
outstanding which does not exceed the amount of such Lender's Acquisition
Revolving Credit Commitment. During the Acquisition Revolving Credit Commitment
Period the Borrower may use the Acquisition Revolving Credit Commitments by
borrowing, prepaying the Acquisition Revolving Credit Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions hereof.
(b) The Acquisition Revolving Credit Loans may from time to time be
(i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 4.2 and 6.4, PROVIDED that no Acquisition Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Acquisition Revolving Credit Termination Date.
(c) The proceeds of the Acquisition Revolving Credit Loans shall be
used by the Borrower to finance permitted acquisitions and investments and to
provide for the general corporate requirements of the Borrower and its
Subsidiaries.
4.2 PROCEDURE FOR ACQUISITION REVOLVING CREDIT BORROWING. The
Borrower may borrow under the Acquisition Revolving Credit Commitments during
the Acquisition Revolving Credit Commitment Period on any Business Day, PROVIDED
that the Borrower shall give the Administrative Agent, except as expressly set
forth in subsection 6.8, irrevocable notice (which notice must be received by
the Administrative Agent prior to 1:00 P.M., New York City time, (a) 3 Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Acquisition Revolving Credit Loans are to be initially Eurodollar Loans or (b)
one Business Day prior to the requested Borrowing Date, otherwise), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof
and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Acquisition
Revolving Credit Commitments shall be in an amount equal to $5,000,000 or a
whole multiple of $1,000,000 in excess thereof (or, if the then aggregate
Available Acquisition Revolving Credit Commitments are less than $5,000,000,
such lesser amount). Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender having an Acquisition
Revolving Credit Commitment thereof. Each Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
subsection 13.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent, PROVIDED that, if the Closing Date is a Borrowing Date, on such date each
Lender shall make such funds available to the Administrative Agent prior to
10:00 A.M., New York City time. Such borrowing will then be made available to
the Borrower by the Administrative Agent crediting the account of the Borrower
on the books of such office with the aggregate of the amounts made available
(Credit Agreement)
33
to the Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
4.3 TERMINATION OR REDUCTION OF ACQUISITION REVOLVING CREDIT
COMMITMENTS. (a) The Borrower shall have the right, upon not less than five
Business Days' notice to the Administrative Agent, to terminate the Acquisition
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Acquisition Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple thereof and shall reduce
permanently the Acquisition Revolving Credit Commitments then in effect,
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Acquisition Revolving Credit
Loans made on the effective date thereof, the aggregate principal amount of the
Acquisition Revolving Credit Loans would exceed the Acquisition Revolving Credit
Commitments then in effect.
(b) The aggregate Acquisition Revolving Credit Commitments shall be
automatically and permanently reduced on the following dates in the amounts set
forth opposite such dates:
Date of Amount of Aggregate Reduction of
Reduction Acquisition Revolving Credit Commitments
--------- ----------------------------------------
December 15, 2000 $5,000,000
June 15, 2001 5,000,000
December 15, 2001 7,000,000
June 15, 2002 7,000,000
December 15, 2002 8,000,000
June 15, 2003 8,000,000
SECTION 5. TERM A LOANS
5.1 TERM A LOANS. (a) Subject to the terms and conditions hereof,
each Lender having a Term A Loan Commitment severally agrees to make a tranche A
term loan (a "TERM A LOAN"; collectively, the "TERM A LOANS") to the Borrower on
the Closing Date in an amount not to exceed the amount of the Term A Loan
Commitment of such Lender.
(b) The Term A Loans may from time to time be (i) Eurodollar Loans,
(ii) ABR Loans or (iii) a combination thereof, as determined by the Borrower and
notified to the Administrative Agent in accordance with subsections 5.2 and 6.4.
(Credit Agreement)
34
(c) The proceeds of the Term A Loans shall be used on the Closing
Date, together with other funds available to the Borrower, including, without
limitation, the proceeds of the Senior Notes, the Term Loans and the Working
Capital Revolving Credit Loans, to refinance in full the Existing Term Loans and
the Existing Revolving Credit Loans and to pay the Transaction Costs in an
aggregate amount not exceeding $10,000,000.
5.2 PROCEDURE FOR TERM A LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 1:00 P.M., New York City time, (a) 3 Business Days
prior to the Closing Date, if all or any part of the Term A Loans are to be
initially Eurodollar Loans, or (b) one Business Day prior to the Closing Date,
otherwise) requesting that the Lenders make the Term A Loans on the Closing Date
and specifying (i) the amount to be borrowed, (ii) whether the Term A Loans are
to be initially Eurodollar Loans, ABR Loans or a combination thereof, and (iii)
if the Term A Loans are to be entirely or partly Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Upon receipt of such notice the
Administrative Agent shall promptly notify each Lender having a Term A Loan
Commitment thereof. Not later than 10:00 A.M. on the Closing Date each Lender
shall make available to the Administrative Agent at its office specified in
subsection 13.2 the amount of such Lender's pro rata share of its Term A Loans
in immediately available funds. The Administrative Agent shall on such date
credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
SECTION 6. GENERAL PROVISIONS
6.1 FEES. (a)(i) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender having a Working Capital Revolving Credit
Commitment a commitment fee for the period from and including the Closing Date
to but not including the Working Capital Revolving Credit Commitment Termination
Date, in an amount equal to the average daily amount of the Available Working
Capital Revolving Credit Commitment of such Lender during the period for which
payment is made MULTIPLIED BY, the Applicable Commitment Fee Percentage then in
effect, such commitment fee to be payable quarterly in arrears on the first day
of each March, June, September and December and on the Working Capital Revolving
Credit Commitment Termination Date and (ii) the Borrower agrees to pay to the
Administrative Agent for the account of each Lender having an Acquisition
Revolving Credit Commitment a commitment fee for the period from and including
the Closing Date to but not including the Acquisition Revolving Credit
Commitment Termination Date, in an amount equal to the average daily amount of
the Available Acquisition Revolving Credit Commitment of such Lender during the
period for which payment is made MULTIPLIED BY the Applicable Commitment Fee
Percentage then in effect, such commitment fee to be payable
(Credit Agreement)
35
quarterly in arrears on the first day of each March, June, September and
December and on the Acquisition Revolving Credit Commitment Termination Date.
Upon receipt of the Level Determination Certificate by the Agents pursuant to
subsection 9.2(c), the Applicable Commitment Fee Percentage shall automatically
be adjusted in accordance with the Funded Debt Ratio set forth in such Level
Determination Certificate, such adjustment to become effective on the next
succeeding Business Day after the receipt by the Agents of such Level
Determination Certificate; PROVIDED that if a Level Determination Certificate is
not delivered at the time required pursuant to subsection 9.2(c), the Applicable
Commitment Fee Percentage shall be 0.375% per annum from such time until
delivery of such Level Determination Certificate; PROVIDED FURTHER that if a
Level Determination Certificate erroneously indicates margin more favorable to
the Borrower than should be afforded by the actual calculation of the Funded
Debt Ratio, the Borrower shall promptly pay additional interest, commitment fees
and letter of credit fees to correct for such error.
(b) The Borrower agrees to pay to the Administrative Agent (i) for
the account of each L/C Participant and the Issuing Bank a letter of credit fee
on such Lender's Working Capital Revolving Credit Commitment Percentage of the
daily average undrawn amount of each outstanding Letter of Credit, computed at a
rate per annum equal to the Applicable Eurodollar Margin, payable quarterly in
arrears on the first day of each March, June, September and December and on the
Working Capital Revolving Credit Commitment Termination Date, (ii) for the
account of the Issuing Bank a letter of credit fronting fee on the daily average
undrawn amount of each outstanding Letter of Credit, computed at a rate per
annum of .25%, payable quarterly in arrears on the first day of each March,
June, September and December and on the Working Capital Revolving Credit
Commitment Termination Date and (iii) for the account of the Issuing Bank such
normal and customary costs and expenses as are incurred or charged by the
Issuing Bank in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit; PROVIDED that the issuance fee for each
Letter of Credit shall be at least $300.
(c) The Borrower agrees to pay to the Arranger and the Syndication
Agent such other fees in the amounts and at the times as have been separately
agreed upon among the Borrower, the Arranger and the Syndication Agent. After
receipt of such other fees from the Borrower, the Arranger and the Syndication
Agent, as the case may be, agree to pay to each Lender such portion of such
other fees in the amounts and at the times as have been separately agreed upon
in writing among the Arranger, the Syndication Agent and such Lender.
(d) The Borrower agrees to pay to the Administrative Agent for its
own account the annual administrative fee agreed upon by the Administrative
Agent, the Arranger and the Borrower.
6.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each
(Credit Agreement)
36
Lender (i) the then unpaid principal amount of each Working Capital Revolving
Credit Loan of such Lender, on the Working Capital Revolving Credit Termination
Date (or such earlier date on which the Working Capital Revolving Credit Loans
become due and payable pursuant to Section 11), (ii) the then unpaid principal
amount of each Acquisition Revolving Credit Loan of such Lender, on the
Acquisition Revolving Credit Termination Date (or such earlier date on which the
Acquisition Revolving Credit Loans become due and payable pursuant to Section
11) and (iii) the principal amount of the Term A Loans of such Lender, in 16
quarterly installments, commencing September 15, 1999, each such installment in
an amount equal to such Lender's pro rata share of the respective amounts set
forth for the Term A Loans in Schedule 6.2 for such installment (or the then
unpaid principal amount of such Term A Loan, on the date that the Term A Loans
become due and payable pursuant to Section 11). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in subsection 6.6.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain the Register pursuant to subsection 13.6(d), and a
subaccount therein for each Lender, in which shall be recorded (i) the amount of
each Working Capital Revolving Credit Loan, Acquisition Revolving Credit Loan
and Term A Loan made hereunder, the Type thereof and, in the case of Eurodollar
Loans, each Interest Period applicable thereto, (ii) each continuation thereof
and each conversion of all or a portion thereof to another Type, (iii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iv) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 6.2(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded: PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, as the case may be, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay (with applicable interest)
the Loans made to such Borrower by such Lender in accordance with the terms of
this Agreement.
(e) The Borrower agrees that, upon request to the Administrative
Agent by any Lender (other than a Notifying Lender), the Borrower will execute
and deliver to such Lender (i) a promissory note of the Borrower evidencing the
Working Capital Revolving Credit Loans of such Lender, substantially in the form
of Exhibit A-1, with
(Credit Agreement)
37
appropriate insertions as to date and principal amount (a "WORKING CAPITAL
REVOLVING CREDIT NOTE"), payable to the order of such Lender and representing
the obligation of the Borrower to pay a principal amount equal to the amount of
the Working Capital Revolving Credit Commitment of such Lender or, if less, the
aggregate unpaid principal amount of all Working Capital Revolving Credit Loans
of such Lender, with interest on the unpaid principal amount thereof from time
to time outstanding under such Working Capital Revolving Credit Note as set
forth in subsection 6.6, (ii) a promissory note of the Borrower evidencing the
Acquisition Revolving Credit Loans of such Lender, substantially in the form of
Exhibit A-2, with appropriate insertions as to date and principal amount (an
"ACQUISITION REVOLVING CREDIT NOTE"), payable to the order of such Lender and
representing the obligation of the Borrower to pay a principal amount equal to
the amount of the Acquisition Revolving Credit Commitment of such Lender or, if
less, the aggregate unpaid principal amount of all Acquisition Revolving Credit
Loans of such Lender, with interest on the unpaid principal amount thereof from
time to time outstanding under such Acquisition Revolving Credit Note as set
forth in subsection 6.6 and (iii) a promissory note of the Borrower evidencing
the Term A Loan of such Lender, substantially in the form of Exhibit A-3, with
appropriate insertions as to date and principal amount (a "TERM A LOAN NOTE"),
payable to the order of such Lender and representing the obligation of the
Borrower to pay a principal amount equal to the amount of the Term A Loan of
such Lender, with interest on the unpaid principal amount thereof from time to
time outstanding under such Term A Loan Note as set forth in subsection 6.6.
Each Lender is hereby authorized to record the date, Type and amount of each
Loan made by such Lender, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
repayment of principal thereof and, in the case of Eurodollar Loans, the length
of each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of any Note requested by it to evidence such Loan, and any
such recordation shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded, PROVIDED that the failure by any Lender to make any
such recordation or any error in any such recordation shall not affect any of
the obligations of the Borrower.
6.3 OPTIONAL AND MANDATORY PREPAYMENT. (a) The Borrower may at any
time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon at least three Business Days' in the case of Eurodollar
Loans, or one Business Day's in the case of ABR Loans, irrevocable notice to the
Administrative Agent, specifying the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof and,
if of a combination thereof, the amount allocable to each. Upon receipt of any
such notice the Administrative Agent shall promptly notify each affected Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with any amounts
payable pursuant to subsection 6.13 and, in the case of prepayments of the Term
A Loans only, accrued interest to such date on the amount prepaid. Partial
prepayments of the Term A Loans shall be applied to the remaining installments
of principal thereof in direct order of their scheduled maturities. Amounts
prepaid on account of the Term A Loans may not be reborrowed. Partial voluntary
(Credit Agreement)
38
prepayments shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
(b) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall incur any Indebtedness other than any Indebtedness permitted
pursuant to subsection 10.2 as in effect on the Closing Date, 100% of the Net
Cash Proceeds of any such incurrence of Indebtedness shall on the third Business
Day after receipt, be applied toward the prepayment of the Term A Loans and,
from and after December 15, 2000, the permanent reduction of the Acquisition
Revolving Credit Commitments as set forth in subsection 6.3(d).
(c) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Material Asset Sale, such
Net Cash Proceeds shall, on the third Business Day after receipt, be applied, on
a pro rata basis with the Term Loans under the Term Loan Agreement, toward the
prepayment of the Term A Loans and, from and after December 15, 2000, the
permanent reduction of the Acquisition Revolving Credit Commitments as set forth
in subsection 6.3(d). If the Borrower is required to apply any portion of any
Net Cash Proceeds to prepay any Indebtedness evidenced by the Senior
Subordinated Notes, the Senior Notes or the Term Loans (under the terms of the
Senior Subordinated Indenture, the Senior Note Indenture or the Term Loan
Agreement, respectively), then notwithstanding anything contained in this
Agreement to the contrary, the Borrower shall apply such Net Cash Proceeds, on a
pro rata basis with the Term Loans under the Term Loan Agreement, toward the
prepayment of the Term A Loans as provided in this subsection 6.3(c) so as to
eliminate any obligation to prepay such other Indebtedness.
(d) All mandatory prepayments of the Term A Loans and, from and
after December 15, 2000, the permanent reduction of the Acquisition Revolving
Credit Commitments shall be applied to the remaining installments of the Term A
Loans together with, from and after December 15, 2000, the remaining scheduled
reductions of the Acquisition Revolving Credit Commitments equally and within
each such installment and reduction date ratably according to the amounts
thereof. The application of prepayments referred to in the preceding sentence
shall be made first to ABR Loans and second to Eurodollar Loans. Mandatory
prepayments of the Term A Loans may not be reborrowed.
(e) If at any time the sum of the Working Capital Revolving Credit
Loans, Swing Line Loans and the L/C Obligations exceeds the Working Capital
Revolving Credit Commitments, the Borrower shall make a payment in the amount of
such excess which payment shall be applied FIRST, to payment of the Swing Line
Loans then outstanding, SECOND, to payment of the Working Capital Revolving
Credit Loans then outstanding, THIRD, to payment of any Reimbursement
Obligations then outstanding and LAST, to cash collateralize any outstanding
Letter of Credit, such amount to be held by the Collateral Agent in a collateral
account opened by the Collateral Agent under the Intercreditor Agreement.
Amounts held in such cash collateral account shall be applied
(Credit Agreement)
39
by the Collateral Agent to the payment of drafts drawn under the Letters of
Credit, and the unused portion thereof after all Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied in accordance with
the Intercreditor Agreement. After all Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations and liabilities under this Agreement shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower. The application of prepayments of Working Capital
Revolving Credit Loans referred to in the first sentence of this subsection
6.3(e) shall be made first to ABR Loans and second to Eurodollar Loans.
(f) If at any time the sum of the Acquisition Revolving Credit Loans
exceeds the Acquisition Revolving Credit Commitments (including, without
limitation, following a reduction in the Acquisition Revolving Credit
Commitments pursuant to subsection 4.3(b) or 6.3(b) or (c)), the Borrower shall
make a payment in the amount of such excess which payment shall be applied to
payment of the Acquisition Revolving Credit Loans then outstanding. The
application of prepayments of Acquisition Revolving Credit Loans referred to in
the preceding sentence shall be made first to ABR Loans and second to Eurodollar
Loans.
(g) On the date which is the earlier of (x) 30 days after the date
on which a "change of control" (as defined in any of the Senior Subordinated
Indenture, the Senior Note Indenture or the Term Loan Agreement) occurs and (y)
the date on which the Borrower shall have offered to repurchase or shall be
required to prepay, as the case may be, the Senior Subordinated Notes, the
Senior Notes or the Term Loans as a result of such change of control, the
Borrower shall (i) prepay in full the Term A Loans, (ii) terminate the Working
Capital Revolving Credit Commitments and Acquisition Revolving Credit
Commitments and prepay in full any Working Capital Revolving Credit Loans,
Acquisition Revolving Credit Loans and Swing Line Loans then outstanding, (iii)
repay any Reimbursement Obligations then outstanding and (iv) cash collateralize
any outstanding L/C Obligations on terms reasonably satisfactory to the
Collateral Agent.
(h) In the event the amount of any prepayment of Loans required to
be made under this subsection 6.3 (other than subsection 6.3(g)) shall exceed
the aggregate principal amount of such Loans which are ABR Loans (the amount of
any such excess being called the "EXCESS AMOUNT"), the Borrower shall have the
right, in lieu of making such prepayment in full, to prepay all such outstanding
ABR Loans when due and to deposit on the date of the required prepayment an
amount equal to the Excess Amount with the Collateral Agent in a cash collateral
account maintained by and in the sole dominion and control of the Collateral
Agent. Any amounts so deposited shall be held by the Collateral Agent as
collateral security for the Obligations (as defined in the Borrower Security
Agreement) and applied to the prepayment of the applicable Eurodollar Loans at
the end of the current Interest Periods applicable thereto. On any Business Day
on which (A) collected amounts remain on deposit in or to the credit of
(Credit Agreement)
40
such cash collateral account after giving effect to the payments made on such
day pursuant to this subsection 6.3(h) and (B) the Borrower shall have delivered
to the Collateral Agent a written request or a telephonic request (which shall
be promptly confirmed in writing) that such remaining collected amounts be
invested in the Cash Equivalents specified in such request, the Collateral Agent
shall invest such remaining collected amounts in such Cash Equivalents on an
overnight basis; PROVIDED, HOWEVER, that the Collateral Agent shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account. Any such deposited amounts so
invested (together with any interest thereon) shall be deposited in such cash
collateral account not later then 11:30 a.m. on the next succeeding Business
Day.
6.4 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, PROVIDED that any such conversion may only be made on the last
day of an Interest Period with respect thereto. The Borrower may elect from time
to time to convert ABR Loans to Eurodollar Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of such election.
Any such notice of conversion to Eurodollar Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Administrative Agent shall promptly notify each affected Lender
thereof. All or any part of outstanding Eurodollar Loans and ABR Loans may be
converted as provided herein, PROVIDED that (i) no Loan may be converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the date of the final
payment of such class of Loans.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
PROVIDED that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month prior to the date of the final payment of
principal of such class of Loans and PROVIDED, FURTHER that if the Borrower
shall fail to give such notice or if such continuation is not permitted such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
(c) Notwithstanding anything herein to the contrary, no Loan shall
be made as, or converted to, a Eurodollar Loan with an Interest Period longer
than one month prior to 30 days following the Closing Date or such earlier date
as the
(Credit Agreement)
41
Administrative Agent shall notify the Borrower that Loans may be made as or
converted to Eurodollar Loans with Interest Periods longer than one month.
6.5 MAXIMUM NUMBER OF INTEREST PERIODS. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be made pursuant to such elections so that, after giving effect
thereto, the aggregate number of Interest Periods in effect shall not exceed
eight.
6.6 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the sum of the Eurodollar Rate determined for such day
plus the Applicable Eurodollar Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the sum of ABR plus the Applicable ABR Margin.
(c) If all or a portion of (i) the principal amount of any Loan or
any Reimbursement Obligation, (ii) any interest payable thereon or (iii) any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is (x) in the case of
overdue principal, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this subsection plus 2% or (y) in the case of
overdue interest, commitment fee or other amount, the rate described in
subsection 6.6(b) plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to subsection 6.6(c) shall be
payable from time to time on demand.
(e) If any Reference Lender shall resign as such, such Reference
Lender shall thereupon cease to be a Reference Lender, and the Borrower and the
Administrative Agent (after consultation with the Lenders) shall, by notice to
the Lenders, designate another Lender as a Reference Lender so that there shall
at all times be at least two Reference Lenders.
(f) Each Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If a
Reference Lender shall be unable or shall otherwise fail to supply such rates to
the Administrative Agent upon its request, the rate of interest shall be
determined on the basis of the quotations of the remaining Reference Lenders or
Reference Lender.
(g) Upon delivery of the Level Determination Certificate by the
Borrower to the Agents pursuant to subsection 9.2(c), the Applicable Eurodollar
Margin and the Applicable ABR Margin shall automatically be adjusted in
accordance with the
(Credit Agreement)
42
Funded Debt Ratio in effect as determined by such Level Determination
Certificate, such adjustment to become effective on the next succeeding Business
Day after the receipt by the Agents of such Level Determination Certificate;
PROVIDED that if a Level Determination Certificate is not delivered at the time
required pursuant to subsection 9.2(c), the Applicable ABR Margin shall be 0.0%
per annum and the Applicable Eurodollar Margin shall be 1.250% per annum, from
such time until delivery of such Level Determination Certificate; PROVIDED
FURTHER that if a Level Determination Certificate erroneously indicates margin
more favorable to the Borrower than should be afforded by the actual calculation
of the Funded Debt Ratio, the Borrower shall promptly pay additional interest,
commitment fees and letter of credit fees to correct for such error.
6.7 COMPUTATION OF INTEREST AND FEES. (a) Whenever the ABR is
calculated on the basis of the Prime Rate, interest shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest and fees shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 6.6(a) or (b).
6.8 INABILITY TO DETERMINE INTEREST RATE. (a) If prior to the first
day of any Interest Period:
(i) the Administrative Agent shall have determined (which
determination, in the absence of manifest error, shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(ii) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
(Credit Agreement)
43
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans (PROVIDED that prior to 1:00 p.m. on
the Business Day preceding the first day of such Interest Period the Borrower
may revoke its notice of borrowing, in which case no such Loans shall be made),
(y) any Loans that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be converted to or continued as ABR Loans and
(z) any outstanding Eurodollar Loans that were to be continued as such for such
Interest Period, shall be converted on such first day to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert ABR Loans to Eurodollar Loans. The Administrative Agent agrees to
withdraw any such notice as soon as reasonably practicable after the
Administrative Agent is notified of a change in circumstances which makes such
notice inapplicable.
(b) If prior to the first day of any Interest Period of nine months
or more in length, the Administrative Agent shall have received notice from any
Lender that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lender (as
conclusively certified by such Lender) of making or maintaining its affected
Loans during such Interest Period, the Administrative Agent shall give telecopy
or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given, subject to the provisions
hereof in subsections 2.2 or 4.2 (as the case may be) and 6.4 allowing the
Borrower to select Interest Periods of a different length, (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as ABR Loans (PROVIDED that prior to 1:00 pm. on the Business Day preceding
the first day of such Interest Period the Borrower may revoke its notice of
borrowing, in which case no such Loans shall be made), (y) any Loans that were
to have been converted on the first day of such Interest Period to Eurodollar
Loans for such Interest Period shall be converted to or continued as ABR Loans
and (z) any outstanding Eurodollar Loans that were to be continued as such for
such Interest Period shall be converted, on the first day of such Interest
Period, to ABR Loans. Until such notice has been withdrawn by such Lender (which
each Lender agrees to do when the circumstances that prompted the delivery of
such notice no longer exist), no further Eurodollar Loans having an Interest
Period of nine months or more shall be made or continued as such, nor shall the
Borrower have the right to convert ABR Loans to Eurodollar Loans having an
Interest Period of nine months or more.
6.9 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of any Loans
by the Borrower from the Lenders hereunder (other than any Swing Line Loans),
and each payment by the Borrower on account of any Working Capital Revolving
Credit Loans or of any Acquisition Revolving Credit Loans or of any Term A Loans
or of any commitment fees hereunder and any reduction of the Working Capital
Revolving Credit Commitments or Acquisition Revolving Credit Commitments of the
Lenders shall be
(Credit Agreement)
44
made pro rata according to the respective share of the Lenders in the relevant
Loan or Commitments, as the case may be.
(b) Whenever (i) any payment received by the Administrative Agent
under this Agreement or any Note or (ii) any other amounts received by the
Administrative Agent for or on behalf of the Borrower (including, without
limitation, proceeds of collateral or payments under any guarantee pursuant to
the Intercreditor Agreement) is insufficient to pay in full all amounts then due
and payable to the Agents and the Lenders under this Agreement and under the
other Loan Documents, such payment shall be, subject to the provisions of the
Intercreditor Agreement, distributed by the Administrative Agent and applied by
the Administrative Agent and the Lenders in the following order: FIRST, to the
payment of fees and expenses due and payable to the Agents under and in
connection with this Agreement; SECOND, to the payment of all expenses due and
payable under subsection 13.5, ratably among the Agents and the Lenders in
accordance with the aggregate amount of such payments owed to the Agents and
each such Lender; THIRD, to the payment of fees due and payable under
subsections 6.1(a) and (c), ratably among the Lenders in accordance with the
amounts of such fees due each Lender and, in the case of the Issuing Lender, the
amount retained by the Issuing Lender for its own account pursuant to subsection
6.1(c)(ii); FOURTH, to the payment of interest then due and payable hereunder,
ratably in accordance with the aggregate amount of interest owed to each such
Lender; and FIFTH, to the payment of the principal amount of the Loans and the
L/C Obligations then due and payable and, in the case of proceeds of collateral
or payments under any guarantee, to the payment of any other obligations to any
Lender not covered in First through Fourth above ratably secured by such
collateral or ratably guaranteed under any such guarantee, ratably among the
Lenders in accordance with the aggregate principal amount and, in the case of
proceeds of Collateral or payments under any guarantee, the obligations secured
or guaranteed thereby owed to each such Lender.
(c) If any Lender (a "NON-FUNDING LENDER") has (i) failed to make a
Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan or (ii) given notice to the Administrative Agent with a
copy to the Borrower that it will not make, or that it has disaffirmed or
repudiated any obligation to make, any Revolving Credit Loans, in each case by
reason of the provisions of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 or otherwise, any payment made on account of the
principal of the Revolving Credit Loans outstanding shall be made as follows:
(x) in the case of any such payment made on any date when and
to the extent that, in the determination of the Administrative Agent, the
Borrower would be able, under the terms and conditions hereof, to reborrow
the amount of such payment under the Revolving Credit Commitments and to
satisfy any applicable conditions precedent set forth in Section 8.2 to
such reborrowing, such payment shall be made on account of the outstanding
Revolving Credit Loans
(Credit Agreement)
45
held by the Lenders other than the Non-Funding Lender PRO RATA according
to the respective outstanding principal amounts of the Revolving Credit
Loans of such Lenders;
(y) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans PRO RATA according to the respective
Revolving Credit Commitment Percentages; and
(z) any payment made on account of interest on the Revolving
Credit Loans shall be made PRO RATA according to the respective amounts of
accrued and unpaid interest due and payable on the Revolving Credit Loans
with respect to which such payment is being made.
The Borrower agrees to give the Administrative Agent such assistance in making
any determination pursuant to this subsection as the Administrative Agent may
reasonably request. Any such determination by the Administrative Agent shall be
conclusive and binding on the Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
subsection 13.2, in Dollars and in immediately available funds. Any payment
received by the Administrative Agent after such time shall be deemed to have
been received on the next Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day (and interest thereon shall be
payable at the then applicable rate during such extension) unless the result of
such extension would be to extend such payment into another calendar month, in
which event such payment shall be made on the immediately preceding Business
Day.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Revolving Credit or Term A Loan Commitment
Percentage, as applicable, of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing
(Credit Agreement)
46
Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average Federal
Funds Effective Rate (as defined in the definition of ABR in subsection 1.1) for
the period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this subsection 6.9 shall be
conclusive in the absence of manifest error. If such Lender's Revolving Credit
or Term A Loan Commitment Percentage, as applicable, of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Borrower.
6.10 ILLEGALITY. (a) Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (i) such Lender shall
promptly after becoming aware thereof notify the Administrative Agent and the
Borrower thereof, (ii) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and (iii) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to subsection
6.13. If circumstances subsequently change so that it is no longer unlawful for
an affected Lender to make or maintain Eurodollar Loans as contemplated
hereunder, such Lender will, as soon as reasonably practicable after such Lender
becomes aware of such change in circumstances, notify the Borrower and the
Administrative Agent, and upon receipt of such notice, the obligations of such
Lender to make or continue Eurodollar Loans or to convert ABR Loans into
Eurodollar Loans shall be reinstated.
(b) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of subsection 6.10(a) with respect to such Lender, it
will, if requested by the Borrower and to the extent permitted by law or by the
relevant Governmental Authority, endeavor in good faith to change the lending
office at which it books its Eurodollar Loans hereunder if such change would
make it lawful for such Lender to continue to make or maintain Eurodollar Loans
as contemplated hereunder, PROVIDED, HOWEVER, that such change can be made in
such a manner that such Lender, in its sole determination, suffers no increased
cost or economic, legal or regulatory disadvantage.
6.11 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any
(Credit Agreement)
47
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 6.12, changes in taxes imposed on
the overall net income of such Lender or changes in franchise taxes
(including branch profit taxes and taxes computed under alternate methods,
at least one of which is computed on overall net income) applicable to
such Lender) (each tax to which this subsection 6.11(a)(i) applies being
referred to as a "COVERED TAX");
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of funds
by, any office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, (A) such Lender shall promptly notify the
Administrative Agent and the Borrower in writing of the occurrence of such
event, (B) such Lender shall promptly deliver to the Administrative Agent and
the Borrower a certificate describing in reasonable detail the change which has
occurred, the net amount of such increased cost to such Lender (to the extent
such cost has not been recovered through a corresponding increase in the
interest rate otherwise chargeable with respect to the Loans) to the date of
such certificate, and the method by which such amount has been calculated, and
(C) the Borrower shall pay to the Administrative Agent for the account of such
Lender, within thirty days after delivery of the certificate referred to in
clause (B) above, such amounts as will compensate such Lender for such increased
cost or reduced amount receivable. Each Lender shall allocate such additional
costs among its customers in good faith and on an equitable basis.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter
(Credit Agreement)
48
of Credit to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
Notwithstanding any other provision of this subsection 6.11, no Lender shall
demand compensation for any increased cost or reduction referred to above if it
shall not at the time be the general policy or practice of such Lender to demand
such compensation in similar circumstances under comparable provisions of other
credit agreements, if any.
(c) A certificate as to any additional amounts payable pursuant to
this subsection 6.11 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
6.12 TAXES. (a) All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings
(collectively, "TAXES"), now or hereafter imposed, levied, collected, withheld
or assessed by any Governmental Authority, excluding (i) Taxes on net income and
franchise Taxes (including without limitation branch profit Taxes, minimum Taxes
and Taxes computed under alternate methods, at least one of which is computed on
net income) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such Tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement) and any withholding of tax under Section
3406 of the Code or (ii) any Taxes to the extent that they are in effect and
would apply as of the date any person becomes a Transferee, or as of the date
the Lender changes its applicable lending office, to the extent such Taxes
become applicable as a result of such change, other than a change in the
applicable lending office made pursuant to subsection 6.12(e) below. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, PROVIDED,
HOWEVER, that the Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the United
(Credit Agreement)
49
States of America or a state thereof if such Lender fails to comply with the
requirements of subsection 6.12(b) or 6.12(c), as the case may be. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt, to the extent such a receipt is received by the
Borrower, or other written proof of payment showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this subsection 6.12(a) shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is a "bank" under Section 881(c)(3)(A) of the
Code and that is not incorporated or organized under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent on or
before the date on which it becomes a Lender (A) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal Revenue Service
Form W-8 or W-9, or successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred after the date such Lender becomes a
party to this Agreement (in the event of any change in treaty, law or
regulation) and prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent. Such Lender
shall certify (x) in the case of a Form 1001 or 4224 or successor applicable
form, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (y) in
the case of a Form W-8 or W-9 or successor applicable form, that it is entitled
to an exemption from United States backup withholding tax.
(Credit Agreement)
50
(c) Each Lender that is not a "bank" under Section 881(c)(3)(A) of
the Code and that is not incorporated or organized under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent on or
before the date on which it becomes a Lender, either (1) (x) a statement
under penalties of perjury that such Lender (A) is not a "bank" under
Section 881(c)(3)(A) of the Code, is not subject to regulatory or other
legal requirements as a bank in any jurisdiction, and has not been treated
as a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to a
rating agency or qualification for any exemption from tax, securities law
or other legal requirements, (B) is not a 10-percent shareholder within
the meaning of Section 881(c)(3)(B) of the Code, (C) is not a controlled
foreign corporation receiving interest from a related person within the
meaning of Section 881(c)(3)(C) of the Code, and (D) is not receiving
payments under this Agreement that are effectively connected with the
conduct of a trade or business within the United States and (y) an
Internal Revenue Service Form W-8 or successor applicable form, or (2) (x)
two duly completed copies of United States Internal Revenue Service Form
4224, or successor applicable form, and (y) Internal Revenue Service Form
W-8 or W-9 as the case may be, or successor applicable form;
(ii) deliver to the Borrower and the Administrative Agent
further copies of said forms, or any successor applicable forms or other
manner of certification on or before the date that any such form or
certification expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms and certifications
previously delivered by such Lender, and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may be reasonably requested by
the Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred after the date such Lender becomes a
party to this Agreement (in the event of any change in treaty, law or
regulation) and prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent. Such Lender
shall certify in the case of a Form W-8 that it is entitled to an exemption from
United States backup withholding tax and in the case of any other form required
to be delivered pursuant to this subsection 6.12(c) that it is entitled to
receive payments under this Agreement without deduction of any United States
federal income withholding tax or is exempt from United States backup
withholding tax according to the requirements of such form.
(Credit Agreement)
51
(d) Each Lender that is incorporated or organized under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent, on
or before the date on which it becomes a Lender, two duly completed copies
of Form W-9 or successor applicable form;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of said Form W-9 or any successor applicable form or other
manner of certification on or before the date that such Form W-9 expires
or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by such Lender; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
law or regulation) has occurred after the date such Lender becomes a party to
this Agreement (in the event of any change in law or regulation) and prior to
the date on which any such delivery would otherwise be required which renders
such form inapplicable or which would prevent such Lender from duly completing
and delivering such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Such Lender shall certify in the case of
such form that it is exempt from United States backup withholding tax according
to the requirements of such form.
(e) Any Lender claiming additional amounts pursuant to subsection
6.11(a)(i) or 6.12 shall use its reasonable efforts (consistent with internal
policy and applicable legal and regulatory restrictions) to take such action, as
requested by the Borrower in writing, including, without limitation, changing
its applicable lending office to another existing office of such Lender, if the
taking of such action would avoid the need for or reduce the amount of any such
additional amounts and would not, in the judgment of such Lender, be otherwise
materially adverse to such Lender.
(f) If the Borrower determines in good faith that a reasonable basis
exists for contesting a Covered Tax or Non-Excluded Tax, the relevant Lender or
the Administrative Agent, as applicable, shall cooperate with the Borrower in
challenging such Covered Tax or Non-Excluded Tax at the Borrower's expense if
requested by the Borrower (it being understood and agreed that neither the
Administrative Agent nor any Lender shall have any obligation to contest, or any
responsibility for contesting, any Covered Tax or Non-Excluded Tax). If any
Lender or the Administrative Agent, as applicable, receives a refund (whether by
way of a direct payment or by offset) of any Covered Tax or Non-Excluded Tax for
which a payment has been made pursuant to subsections 6.11(a)(i) or 6.12 or
claims any credit or other tax benefit as a result of the payment of such
Covered Tax or Non-Excluded Tax by the Borrower, which refund or
(Credit Agreement)
52
credit in the good faith judgment of such Lender or the Administrative Agent, as
the case may be, is allocable to such payment made under subsections 6.11(a)(i)
or 6.12, the amount of such refund or credit (together with any interest
received thereon) shall be paid to the Borrower to the extent payment has been
made in full by the Borrower pursuant to subsections 6.11(a)(i) or 6.12.
(g) Each Person that shall become a Lender or a Participant pursuant
to subsection 13.6 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms and statements required pursuant to this
subsection 6.12, provided that in the case of a Participant such Participant
shall furnish all such required forms and statements to the Lender from which
the related participation shall have been purchased.
6.13 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Eurodollar Margin or Applicable
ABR Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
6.14 REPLACEMENT OF LENDER. If the Borrower becomes obligated to pay
additional amounts described in subsections 6.10, 6.11 or 6.12 as a result of
any condition described in such subsections and payment of such amount is
demanded by any Lender, then the Borrower may, on ten Business Days' prior
written notice to the Administrative Agent and such Lender, cause such Lender to
(and such Lender shall) assign pursuant to subsection 13.6(c) all of its rights
and obligations under this Agreement to a Lender or other entity selected by the
Borrower for a purchase price equal to the outstanding principal amount of such
Lender's Loans and all accrued interest and fees and losses and expenses of the
types referred to in subsection 6.13 and all other amounts due to such Lender
hereunder, PROVIDED that in no event shall the assigning Lender be required to
(Credit Agreement)
53
pay or surrender to such purchasing Lender or other entity any of the fees
received by such assigning Lender pursuant to this Agreement; PROVIDED, FURTHER,
that such assigning Lender shall continue to be entitled to the benefits of
subsection 13.5 hereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to the Agents and each Lender that:
7.1 FINANCIAL CONDITION. (a) The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 28, 1996 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by KPMG Peat Marwick LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheets of the Borrower and its consolidated Subsidiaries as
at March 29, 1997 and June 28, 1997 and the related unaudited consolidated
statements of income and of cash flows for the three-month period ended on each
such date, in each case certified by a Responsible Officer, copies of which have
heretofore been furnished to the Agents, present fairly in all material respects
the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such dates, and the consolidated results of their operations
and their consolidated cash flows for the three-month periods then ended
(subject to changes resulting from audit and normal year-end adjustments).
(b) The unaudited PRO FORMA consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of March 29, 1997 after giving
effect to the borrowing of Loans under this Agreement on the Closing Date, the
issuance of the Senior Notes, the borrowing of the Term Loans and other
Transactions to be consummated on or prior to the Closing Date, certified by a
Responsible Officer, copies of which have heretofore been furnished to the
Agents, presents fairly in all material respects on a PRO FORMA basis the
estimated financial position of the Borrower and its consolidated Subsidiaries
as at such date, after giving effect to such events as if such events had
occurred on such date.
(c) All such financial statements referred to in subsection 7.1(a),
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein).
(d) Except as set forth on Schedule 7.1, neither the Borrower nor
any of its consolidated Subsidiaries had, at June 28, 1997, any Guarantee
Obligation, contingent
(Credit Agreement)
54
liability or liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is not reflected in the
foregoing statements or in the notes thereto and which would be reasonably
likely to have a Material Adverse Effect. Except as set forth on Schedule 7.1,
during the period from December 28, 1996 to and including the Closing Date there
has been no sale, transfer or other disposition by the Borrower or any of its
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person other than a New Subsidiary) material in
relation to the consolidated financial condition of the Borrower and its
consolidated Subsidiaries at December 28, 1996.
7.2 NO CHANGE. Except as set forth on Schedule 7.2, since December
28, 1996 (a) there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect and (b) no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
the Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by the Borrower or any of its
Subsidiaries.
7.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (other than Inter Stretch Ltd.) (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to be
so qualified and in good standing would not be reasonably likely to have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.4 CORPORATE AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Borrower
and each of its Subsidiaries has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party. The Borrower has the corporate power and authority, and the legal right,
to borrow hereunder and has taken all necessary corporate action to authorize
the borrowings on the terms and conditions of this Agreement and any Notes. The
Borrower and each of its Subsidiaries has taken all necessary corporate action
to authorize the execution, delivery and performance of the Loan Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or in connection with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which the Borrower or any of its Subsidiaries is a party or the
consummation of the Transactions other than (i) any filings required in order to
perfect
(Credit Agreement)
55
and/or insure the priority of Liens created pursuant to the Security Documents
and (ii) those the failure to obtain or make would not be reasonably likely to
have a Material Adverse Effect. This Agreement has been duly executed and
delivered on behalf of the Borrower. Each Loan Document to which the Borrower or
any of its Subsidiaries is a party has been duly executed and delivered on
behalf of each such Loan Party. This Agreement and each other Loan Document to
which it is a party constitutes a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) and an
implied covenant of good faith and fair dealing. Each Loan Document to which any
of the Subsidiaries is a party constitutes a legal, valid and binding obligation
of such Subsidiary enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) and an
implied covenant of good faith and fair dealing.
7.5 NO LEGAL BAR. Except as set forth on Schedule 7.5, the
execution, delivery and performance of the Loan Documents to which the Borrower
or any of its Subsidiaries is a party, the borrowings hereunder and the use of
the proceeds thereof and the consummation of the Transactions will not violate
any Requirement of Law or Contractual Obligation of the Borrower or of any of
its Subsidiaries except for violations in the aggregate which would not be
reasonably likely to have a Material Adverse Effect and will not result in, or
require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens (i) created or permitted by the
Security Documents and (ii) which in the aggregate would not reasonably be
expected to have a Material Adverse Effect).
7.6 NO MATERIAL LITIGATION. Except as set forth on Schedule 7.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents, the Senior Note Indenture, the Term Loan Agreement or the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
7.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
(Credit Agreement)
56
7.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold or subleasehold interest in, all its other property (other than
Intellectual Property), and none of such property is subject to any Lien except
as permitted by subsection 10.3.
7.9 INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "INTELLECTUAL
PROPERTY"). Except as set forth on Schedule 7.9, no claim has been asserted and
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower know of any valid basis for any such claim
which, in either case, could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 7.9, the use of such Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
7.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
7.11 TAXES. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all material tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all material taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its property and all other material taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority that if not filed or paid,
as the case may be, could reasonably be expected to have a Material Adverse
Effect (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries, as the case may be); no tax Lien has been filed that could
reasonably be expected to have a Material Adverse Effect, and, to the knowledge
of the Borrower, no claim is being asserted, with respect to any such tax, fee
or other charge.
7.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used (i) for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U if such use
would result in a violation of Regulation U, (ii) in any manner which would
violate the provisions of Regulation G, T, U or X of the Board or (iii) to
finance the acquisition of any "margin stock" in connection with a tender offer
for such stock which has not been approved by the board of directors of the
issuer of such stock. If requested by any Lender or the Administrative
(Credit Agreement)
57
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.
7.13 ERISA. No "accumulated funding deficiency" (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred with respect to
any Plan that remains outstanding in any respect and that could reasonably be
expected to have a Material Adverse Effect. No Reportable Event has occurred,
each Plan has complied in all respects with the applicable provisions of ERISA
and the Code and no termination of a Single Employer Plan has occurred except
where such Reportable Event, noncompliance or termination could not reasonably
be expected to have a Material Adverse Effect. No Lien in favor of the PBGC or a
Plan has arisen that remains outstanding in any respect. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits, except where any
such excess could not reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made, and no such
Multiemployer Plan is in Reorganization or is Insolvent, except in each instance
where such withdrawal, liability, Reorganization or Insolvency could not
reasonably be expected to have a Material Adverse Effect.
7.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness.
7.15 SUBSIDIARIES. All of the Subsidiaries of the Borrower at the
date hereof are set forth on Schedule 7.15. All Subsidiaries of the Borrower
which have guaranteed the Senior Notes or the Senior Subordinated Notes are
parties to the Guarantee.
7.16 PURPOSE OF LOANS. (a) The proceeds of the Term A Loans shall be
used on the Closing Date, together with other funds available to the Borrower,
including, without limitation, the proceeds of the Senior Notes, the Term Loans
and the Revolving Credit Loans, to refinance in full the Existing Revolving
Credit Loans and Existing Term Loans and to pay the Transaction Costs in an
aggregate amount not exceeding $10,000,000.
(Credit Agreement)
58
(b) The proceeds of the Working Capital Revolving Credit Loans shall
be used by the Borrower (i) on the Closing Date, together with other funds
available to the Borrower, including, without limitation, the proceeds of the
Senior Notes, the Term A Loans and the Term Loans, to refinance in full the
Existing Revolving Credit Loans and Existing Term Loans and to pay the
Transaction Costs in an aggregate amount not exceeding $10,000,000 and (ii)
thereafter to provide for the general corporate requirements of the Borrower and
its Subsidiaries including permitted acquisitions and investments.
(c) The proceeds of the Acquisition Revolving Credit Loans shall be
used by the Borrower to finance permitted acquisitions and investments and to
provide for the general corporate requirements of the Borrower and its
Subsidiaries.
7.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 7.17:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its
Subsidiaries (the "PROPERTIES") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii)
could reasonably be expected to give rise to liability under, any
applicable Environmental Law except in either case insofar as such
violation or liability, or any aggregation thereof, is not reasonably
likely to result in the payment of a Material Environmental Amount.
(b) To the best knowledge of the Borrower, the Properties and all
operations at the Properties are in compliance, and have in the last 5
years been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any applicable Environmental Law with respect
to the Properties or the business operated by the Borrower or any of its
Subsidiaries (the "BUSINESS") except in either case with respect to any
instances of non-compliance or violation which individually or in the
aggregate would not be reasonably likely to result in the payment of a
Material Environmental Amount.
(c) Neither the Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve
a matter or matters that is or are reasonably likely to result in the
payment of a Material Environmental Amount.
(d) To the best knowledge of the Borrower, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation
(Credit Agreement)
59
of, or in a manner or to a location which could reasonably be expected to
give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under,
any applicable Environmental Law except insofar as any such violation or
liability referred to in this subsection, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material Environmental
Amount.
(e) No judicial or governmental or administrative action is pending
or, to the knowledge of the Borrower, threatened, under any Environmental
Law to which the Borrower or any Subsidiary is or, to the knowledge of the
Borrower, will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Properties or the Business except insofar as such proceeding,
action, decree, order or other requirement, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material Environmental
Amount.
(f) To the best knowledge of the Borrower, there has been no release
of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in connection
with the Business, violation of or in amounts or in a manner that could
reasonably give rise to liability to the Borrower or its Subsidiaries
under applicable Environmental Laws except insofar as any such violation
or liability referred to in this paragraph, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material Environmental
Amount.
7.18 SENIOR INDEBTEDNESS. The obligations of the Borrower under this
Agreement and the Loan Documents constitute "Senior Indebtedness" and
"Designated Senior Indebtedness", as such terms are defined in the Senior
Subordinated Indenture; and the obligations of the Borrower under the Apparel
Notes are subordinated in right of payment to all amounts payable by the
Borrower under this Agreement and the Loan Documents and under any refinancing
of such amounts (unless such refinancing is not entitled to be "Senior Debt" as
such term is defined in the Indenture relating to the Old Playtex Products
Subordinated Debt). This Agreement constitutes a "Credit Agreement" as defined
in the Senior Subordinated Indenture, including without limitation for purposes
of clauses (i) and (ii) of the definition of "Permitted Indebtedness" and the
definitions of "Senior Indebtedness" and "Designated Senior Indebtedness"; and
the security granted by the Borrower's Subsidiaries to the Collateral Agent for
the benefit of the Lenders under the Security Documents constitutes either
security permitted to be granted by Subsidiaries for purposes of clause
(c)(y)(1)(B) of Section 1013 of the Senior Subordinated Indenture or a
refinancing of permitted Liens pursuant to clauses (ii) and
(Credit Agreement)
60
(xiii) of the definition of "Permitted Indebtedness" under the Senior
Subordinated Indenture, and the Guarantee executed by the Borrower's
Subsidiaries constitutes either guarantees permitted to be granted by
Subsidiaries for purposes of clause (c)(y)(2)(iv) of Section 1013 of the Senior
Subordinated Indenture or a refinancing of permitted guarantees pursuant to
clauses (ii) and (xiii) of the definition of "Permitted Indebtedness" under the
Senior Subordinated Indenture. This Agreement constitutes a "Credit Agreement"
as defined in the Senior Note Indenture, including without limitation for
purposes of clauses (i) and (ii) of the definition of "Permitted Indebtedness"
and clause (i) of the definition of "Permitted Liens" and the Guarantee and the
Liens granted by the Borrower's Subsidiaries in favor of the Collateral Agent
for the benefit of the Lenders constitute permitted guarantees and Liens under
clause (ii) of the definition of "Permitted Indebtedness" under the Senior Note
Indenture.
7.19 DISCLOSURE. No statement or information (other than projections
and PRO FORMA financial information) contained in this Agreement, any other Loan
Document, the Offering Memorandum relating to the Senior Notes or any other
document, certificate or written statement furnished to the Agents or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement or any other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Offering Memorandum, as of
the Closing Date) any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
materially misleading. The projections and PRO FORMA financial information
contained in the materials referenced above were prepared in good faith, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth thereto by a material amount. As of the Closing
Date, there is no fact known to any Loan Party and not previously disclosed to
the Agents and the Lenders in writing prior to the date hereof (other than
general economic conditions, which conditions are commonly known and affect
businesses generally) which has, or which could reasonably be expected to have,
in the reasonable judgment of such Loan Party, a Material Adverse Effect.
7.20 COLLATERAL DOCUMENTS. Each of the Security Documents is
effective to create in favor of the Collateral Agent for the ratable benefit of
the Lenders and the lenders under the Term Loan Agreement, a legal, valid and
enforceable security interest in the Collateral described therein and when (i)
UCC financing statements have been filed in the offices listed on Schedule 7.20,
(ii) the Borrower Security Agreement and the Subsidiary Security Agreement have
been filed with the United States Patent and Trademark Office, (iii) the
Collateral Agent has possession of all Pledged Stock (as defined in the Pledge
Agreements) and (iv) the Existing Credit Agreement, the other Existing Loan
Documents and all filings made in connection therewith have been duly
terminated, such security interests will (except with respect to Inventory
located outside of the United States) constitute perfected liens on, and
security interests in, all right, title
(Credit Agreement)
61
and interest of the Loan Party party thereto in the Collateral described
therein, subject only to Liens permitted to exist pursuant to this Agreement.
SECTION 8. CONDITIONS PRECEDENT
8.1 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
and the agreement of each Lender to make the initial Loans requested to be made
by it is subject to the satisfaction, immediately prior to or substantially
concurrently with the making of such Loan on the Closing Date, of the following
conditions precedent:
(a) LOAN DOCUMENTS AND RELATED DOCUMENTS. The Syndication Agent
shall have received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for each Lender,
(ii) the Senior Note Indenture, executed and delivered by a duly
authorized officer of the Borrower, (iii) the Term Loan Agreement,
executed by a duly authorized officer of the Borrower, (iv) the Guarantee,
executed and delivered by a duly authorized officer of each Domestic
Subsidiary, (v) the Subsidiary Security Agreements executed and delivered
by a duly authorized officer of each Domestic Subsidiary, (vi) the
Subsidiary Stock Pledge Agreements executed by a duly authorized officer
of each Domestic Subsidiary, together with an Acknowledgment and Consent
thereto executed by a duly authorized officer of the Issuer (as defined
therein), (vii) the Borrower Security Agreement, executed by a duly
authorized officer of the Borrower, (viii) the Borrower Stock Pledge
Agreement, executed by a duly authorized officer of the Borrower, together
with an Acknowledgment and Consent thereto executed by a duly authorized
officer of Playtex Beauty Care, Inc., Playtex Investment Corp., Playtex
International Corp., Playtex Manufacturing, Inc., Playtex Sales &
Services, Inc., Smile Tote, Inc., Sun Pharmaceuticals Corp. and TH
Marketing Corp., (ix) the Trademark Subsidiary Agreement, executed and
delivered by a duly authorized officer of each party thereto, (x) the
Intercreditor Agreement, executed and delivered by a duly authorized
officer of each party thereto, and (xi) for each Lender requesting the
same pursuant to subsection 6.2(e), its Notes executed by a duly
authorized officer of the Borrower.
(b) EXISTING RELATED AGREEMENTS. The Syndication Agent shall have
received, with a copy for each Lender, true and correct copies, certified
as to authenticity by the Borrower, of the Trademark Licenses (as defined
in the Borrower Security Agreement), the Apparel Notes and such other
documents or instruments as may be reasonably requested by any Agent,
including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Borrower, or its
Subsidiaries may be a party.
(c) BORROWING CERTIFICATE. The Syndication Agent shall have received
a certificate of the Borrower, dated the Closing Date, substantially in
the form of Exhibit D, with appropriate insertions and attachments,
satisfactory in form and
(Credit Agreement)
62
substance to the Syndication Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of the Borrower.
(d) CORPORATE PROCEEDINGS OF THE LOAN PARTIES. The Syndication Agent
shall have received a copy of the resolutions, in form and substance
satisfactory to the Syndication Agent, of the Board of Directors of each
Loan Party authorizing (i) the execution, delivery and performance of the
Loan Documents to which it is a party, (ii) in the case of the Borrower,
the borrowings contemplated hereunder and (iii) the granting by it of the
Liens created pursuant to the Security Documents to which it is a party,
certified by the Secretary or an Assistant Secretary of such Loan Party as
of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Syndication Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(e) INCUMBENCY CERTIFICATES. The Syndication Agent shall have
received a certificate of each Loan Party, dated the Closing Date, as to
the incumbency and signature of the officers of such Loan Party executing
any Loan Document on the Closing Date, satisfactory in form and substance
to the Syndication Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Loan Party.
(f) CORPORATE DOCUMENTS. The Syndication Agent shall have received
true and complete copies of the certificate of incorporation and by-laws
of each Loan Party, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant Secretary of such
Loan Party.
(g) CONSENTS, AUTHORIZATIONS AND FILINGS. The Syndication Agent
shall have received a certificate of a Responsible Officer of the Borrower
(i) attaching copies of all consents, authorizations and filings referred
to in subsection 7.4, and (ii) stating that such consents, authorizations
and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance reasonably
satisfactory to the Syndication Agent.
(h) FEES AND EXPENSES. The Agents, the Arranger and the Lenders
shall have received the fees and expenses required to be received by it on
the Closing Date referred to in subsection 6.1.
(i) LEGAL OPINIONS. The Syndication Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx, counsel to the Borrower and the other Loan
Parties, substantially in the form of Exhibit E-1 and the executed
legal opinions of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, with
respect to each of (1) the
(Credit Agreement)
63
Senior Notes and the Senior Note Indenture and (2) the Term Loans
and the Term Loan Agreement, together with a reliance letter
authorizing the Administrative Agent, the Syndication Agent and the
Lenders to rely on such opinions as though addressed to them;
(ii) the executed legal opinion of Xxxxxxxx and Xxxxxxxx,
X.X., special local counsel to the Borrower, substantially in the
form of Exhibit E-2;
(iii) the executed legal opinion of Xxxx X. Xxxxxxxxxxx,
General Counsel of the Borrower, substantially in the form of
Exhibit E-3;
(iv) the executed legal opinion of Xxxxxx, Xxxxxxxxx &
Xxxxxxxxx, special counsel to the Borrower with respect to
intellectual property matters, substantially in the form of Exhibit
E-4; and
(v) the executed legal opinion of Xxxxxxxxx, Xxxxx & Xxxxxx,
LLP, special local counsel to Smile Tote, Inc., substantially in the
form of Exhibit E-5.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Syndication Agent may
reasonably require.
(j) PLEDGED STOCK; STOCK POWERS. The Syndication Agent shall have
received stock certificates for each share of Capital Stock pledged
pursuant to the Borrower Pledge Agreement and pursuant to the Subsidiary
Stock Pledge Agreements, together with a blank undated stock power for
each such certificate signed by the pledgor of such certificate.
(k) ACTIONS TO PERFECT LIENS. The Syndication Agent shall have
received (i) UCC-1 Financing Statements in form and substance satisfactory
to the Syndication Agent and the Arranger for each jurisdiction listed on
Schedule III to the Borrower Security Agreement and Schedule III to the
Subsidiary Security Agreement and all other agreements, documents and
instruments that may be necessary or desirable in order to create in favor
of the Collateral Agent, for the benefit of the Lenders, a valid and
perfected first priority security interest in the Collateral, and (ii)
UCC-3 Termination Statements in respect of each UCC-I Financing Statement
filed with respect to collateral securing the Existing Credit Agreement or
any guaranty obligations in connection therewith and any other agreements,
documents and instruments that may be necessary to terminate the security
interest granted to the agent under the Existing Credit Agreement
(including, without limitation, any termination statements to be filed
with the U.S.
Patent and Trademark Office).
(Credit Agreement)
64
(l) LIEN SEARCHES. The Syndication Agent shall have received the
results of a recent search by a Person satisfactory to the Syndication
Agent of Uniform Commercial Code filings which may have been filed with
respect to personal property of the Borrower and its material domestic
Subsidiaries, and the results of such search shall be satisfactory to the
Syndication Agent.
(m) INSURANCE. The Syndication Agent shall have received evidence in
form and substance satisfactory to it that all of the requirements of
subsection 9.5 shall have been satisfied.
(n) ISSUANCE OF SENIOR NOTES AND THE BORROWING OF TERM LOANS. (1) On
or prior to the Closing Date, (a) the Borrower and the other parties
thereto shall have executed and delivered the Senior Notes and the Senior
Note Indenture, in each case all of the terms and conditions (including
without limitation with respect to interest rates, amortization, maturity,
representations and warranties, covenants, remedies and events of default)
of which, and all of the exhibits of which, shall be in form and substance
satisfactory to the Syndication Agent and the Arranger, (b) all conditions
precedent to the issuance of the Senior Notes shall have been satisfied
or, with the consent of the Syndication Agent and the Arranger, waived,
(c) the Senior Notes shall have been issued under the Senior Note
Indenture in an aggregate principal amount of $150,000,000 and (d) the
Borrower shall have received gross proceeds from the issuance thereof in
an aggregate amount equal to $150,000,000. The Borrower shall have
delivered to the Syndication Agent a fully executed or conformed copy of
the Senior Note Indenture (including all exhibits and schedules thereto)
and a specimen copy of the Senior Notes.
(2) On or prior to the Closing Date, (a) the Borrower and the other
parties thereto shall have executed and delivered the Term Loan Agreement,
the promissory notes evidencing the Term Loans and the Intercreditor
Agreement, in each case all of the terms and conditions (including without
limitation with respect to interest rates, amortization, maturity,
representations and warranties, covenants, remedies and events of default)
of which, and all of the exhibits of which, shall be in form and substance
satisfactory to the Syndication Agent and the Arranger, (b) all conditions
precedent to the borrowing of the Term Loans shall have been satisfied or,
with the consent of the Syndication Agent and the Arranger, waived and (c)
the Borrower shall have received gross proceeds from the borrowing of the
Term Loans under the Term Loan Agreement in an aggregate amount equal to
$150,000,000. The Borrower shall have delivered to the Syndication Agent a
fully executed or conformed copy of the Term Loan Agreement (including all
exhibits and schedules thereto), copies of the promissory notes evidencing
the Term Loans and the Intercreditor Agreement.
(o) TRANSACTION COSTS. The Transaction Costs shall not exceed
$10,000,000.
(Credit Agreement)
65
(p) REFINANCING OF EXISTING LOANS. The Syndication Agent shall have
received evidence satisfactory to it that (i) all Existing Revolving
Credit Loans and Existing Term Loans will be refinanced in full as
contemplated by subsection 7.16, (ii) if applicable, the agent under the
Existing Credit Agreement will receive from the Borrower for the account
of the lenders under the Existing Credit Agreement (the "Existing
Lenders") (w) all accrued and unpaid interest under the Existing Credit
Agreement, (x) any costs payable to any Existing Lender pursuant to the
Existing Credit Agreement as a result of the refinancing of such Existing
Lender's Existing Term Loans or Existing Revolving Credit Loans, (y) all
accrued and unpaid fees (including letter of credit commissions and
commitment fees) owing under the Existing Credit Agreement and (z) any
other amounts owing to any Existing Lender under the Existing Credit
Agreement notified in writing to the Borrower by the existing agent or any
Existing Lender and (iii) the commitments to lend under the Existing
Credit Agreement will be terminated. The Borrower shall have delivered to
the Syndication Agent all termination statements, satisfactions and
releases as to any financing statements which shall release all liens
securing any and all indebtedness under the Existing Credit Agreement and
other releases relating to any guarantees executed in connection
therewith. The Borrower shall have furnished to the Syndication Agent
copies of all Existing Letters of Credit and all amendments to such
Existing Letters of Credit. The Borrower shall have paid to the Existing
Lenders with respect to such Existing Letters of Credit all fees and other
amounts owing with respect thereto but excluding the Closing Date.
(q) FINANCIAL STATEMENTS.
(a) The Syndication Agent shall have received from the
Borrower (i) audited financial statements of the Borrower and its
consolidated Subsidiaries for fiscal years 1994, 1995 and 1996,
consisting of consolidated balance sheets and the related
consolidated statements of income and cash flows for such fiscal
years, and (ii) unaudited financial statements of the Borrower and
its consolidated Subsidiaries as at March 29, 1997 and June 28,
1997, each consisting of a consolidated balance sheet and the
related consolidated statements of income and cash flows for the
three-month period ending on such date, all in reasonable detail and
certified by a Responsible Officer of the Borrower that they fairly
present in material respects the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at the dates
indicated and the consolidated results of their operations and their
cash flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments.
(b) The Syndication Agent shall have received the PRO FORMA
balance sheet of the Borrower and its Subsidiaries referred to in
subsection 7.1(b), which shall be in form and substance satisfactory
to the Syndication Agent.
(Credit Agreement)
66
(r) NO MATERIAL ADVERSE CHANGE. Since December 28, 1996, or the date
of the audited financial statements most recently filed with the
Securities and Exchange Commission or other appropriate government agency,
no Material Adverse Effect shall have occurred.
(s) LITIGATION. There shall exist no pending or threatened material
litigation, proceedings or investigations which (x) would contest the
consummation of any of the Transactions or (y) could reasonably be
expected to have a Material Adverse Effect.
(t) TRANSACTIONS. The Syndication Agent and the Arranger shall be
reasonably satisfied that the aggregate sources of proceeds are sufficient
to consummate the Transactions.
(u) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Syndication
Agent and the Arranger, and the Syndication Agent and the Arranger shall
have received such other documents in respect of any aspect or consequence
of the transactions contemplated hereby or thereby as it shall reasonably
request.
8.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower and each other Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date, other than
representations and warranties that relate solely to an earlier date which
shall be true and correct in all material respects as of such earlier
date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) LETTER OF CREDIT APPLICATION. With respect to the issuance of
any Letter of Credit (other than the deemed issuance of the Existing
Letters of Credit on the Closing Date), the Issuing Bank shall have
received an Application, completed to its reasonable satisfaction and duly
executed by a Responsible Officer.
(Credit Agreement)
67
Each borrowing by and each Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such Loan or issuance that the conditions contained in this
subsection 8.2 have been satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitments remain
in effect, any Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender or the Agents hereunder, the Borrower shall and
(except in the case of delivery of financial information, reports and notices)
shall cause each of its Subsidiaries to:
9.1 FINANCIAL STATEMENTS. Furnish to the Agents:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by KPMG Peat Marwick
or other independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form
the corresponding figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein) and except that the quarterly financial statements
provided pursuant to subsection 9.1(b) shall only be required to include
footnotes to the extent such footnotes would be required to be included on Form
10-Q filed with the Securities and Exchange Commission.
(Credit Agreement)
68
9.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Agents:
(a) concurrently with the delivery of the financial statements
referred to in subsection 9.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 9.l(a) and (b), a certificate of a Responsible
Officer stating that, to the best of such Officer's knowledge, the
Borrower during such period has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents, to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate;
(c) not later than 45 days following the end of each fiscal quarter
of the Borrower, the Borrower shall deliver (i) a Level Determination
Certificate for such fiscal quarter and (ii) a certificate of a
Responsible Officer describing in reasonable detail any asset sales made
pursuant to subsections 10.6(d), (e), (f) and (i) during such fiscal
quarter and the derivation and intended application of the Net Cash
Proceeds thereof;
(d) not later than 40 days after the end of each fiscal year of the
Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Subsidiaries for the
succeeding fiscal year prepared on a quarterly basis, such projections to
be accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared in good faith on the basis of
reasonable assumptions and that such Officer has no reason to believe they
are incorrect or misleading in any material respect;
(e) within five days after the same are sent, (i) copies of all
financial statements and reports which the Borrower sends to its
stockholders, and (ii) within five days after the same are filed, copies
of all financial statements and reports which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(f) promptly, such additional financial and other information as the
Agents or any Lender may from time to time reasonably request; PROVIDED
that any such information specifically requested by any Lender shall be
delivered to such Lender directly by the Borrower.
(Credit Agreement)
69
9.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
9.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except (a) if (i) in the
reasonable business judgment of the Borrower or such Subsidiary, as the case may
be, it is in its best economic interest not to preserve and maintain such
rights, privileges or franchises, and (ii) such failure to preserve and maintain
such rights, privileges or franchises would not, in the aggregate, be reasonably
likely to have a Material Adverse Effect and (b) as otherwise permitted pursuant
to subsection 10.5, comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect; and, with
respect to the Borrower on a consolidated basis, continue to engage in the
consumer products and related or incidental consumer services business and in
extensions of the Borrower's existing business and product lines.
9.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful and
necessary in its business in good working order and condition (normal wear and
tear excepted), except to the extent that the failure to do so with respect to
any such property would not individually or in the aggregate be reasonably
likely to have a Material Adverse Effect; maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general geographic area by companies engaged in the same or
a similar business (or, in lieu of or supplemental to such insurance, adopt such
other plan or method of protection, whether by the establishment of an insurance
fund or reserve to be held and applied to make good losses from casualties or
liabilities, or otherwise, and consistent with sound business practice, as may
be determined by the Board of Directors of the Borrower); and furnish to the
Agents and each Lender, upon written request, full information as to the
insurance carried.
9.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS; DISCUSSION. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Agent or Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time on any Business Day and as often as may reasonably be
desired and to discuss the business, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the
(Credit Agreement)
70
Borrower and its Subsidiaries and with its independent certified public
accountants; PROVIDED that such Agent or Lender shall notify the Borrower prior
to any contact with such accountants and shall give the Borrower the opportunity
to participate in such discussions.
9.7 NOTICES. Promptly give notice to the Agents of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $5,000,000 or more and
not covered by insurance or which would be reasonably likely to have a
Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contributor to a Plan, the
creation of any Lien (within the meaning of Section 4068 with respect to a
Plan) in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Single Employer Plan or
Multiemployer Plan;
(e) any development or event which would be reasonably likely to
have a Material Adverse Effect; and
(f) no later than two Business Days prior to the making thereof, any
offer by the Borrower to purchase or any repayment of, as the case may be,
any Senior Subordinated Notes, Senior Notes or Term Loans pursuant to the
Senior Subordinated Indenture, Senior Note Indenture or Term Loan
Agreement, respectively, in connection with the occurrence of a "change of
control" (as defined in the Senior Subordinated Indenture, Senior Note
Indenture or Term Loan Agreement, respectively).
(Credit Agreement)
71
Each notice pursuant to this subsection 9.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
The Administrative Agent shall deliver to Lenders any and all
financial statements, certificates, notices, other information and documents
provided by the Borrower pursuant to the provisions of subsections 9.1, 9.2 and
9.7 promptly upon its receipt thereof. Notwithstanding anything to the contrary
stated in this Agreement, upon the occurrence and during the continuance of an
Event of Default, any financial statements, certificates, notices, other
information or documents required to be delivered to the Agents by the Borrower
pursuant to the provisions of subsections 9.1, 9.2 and 9.7 shall be delivered
directly by the Borrower to the Agents and each Lender within the time period
required thereunder.
9.8 ENVIRONMENTAL LAWS. (a) Except as set forth on Schedule 9.8,
comply with, and use its reasonable best efforts to ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in an material respects with and maintain, and use its
reasonable best efforts to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
SECTION 10. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitments remain
in effect, or any Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender or the Agents hereunder, the Borrower shall not
and (except with respect to subsection 10.1) shall not permit any of its
Subsidiaries to, directly or indirectly:
10.1 FINANCIAL CONDITION COVENANTS.
(a) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending on or about any "Test Date" set forth below the
ratio (the "INTEREST COVERAGE RATIO") of (i) Consolidated EBITDA of the
Borrower LESS Consolidated Capital Expenditures of the Borrower for such
period to
(Credit Agreement)
72
(ii) Consolidated Interest Expense of the Borrower for such period to be
less than the ratio set forth opposite such period below:
TEST DATE INTEREST COVERAGE RATIO
September 30, 1997 1.55 to 1.00
December 31, 1997 1.55 to 1.00
March 31, 1998 1.55 to 1.00
June 30, 1998 1.55 to 1.00
September 30, 1998 1.60 to 1.00
December 31, 1998 1.65 to 1.00
March 31, 1999 1.70 to 1.00
June 30, 1999 1.80 to 1.00
September 30, 1999 1.80 to 1.00
December 31, 1999 1.85 to 1.00
March 31, 2000 1.90 to 1.00
June 30, 2000 1.95 to 1.00
September 30, 2000 2.00 to 1.00
December 31, 2000 2.00 to 1.00
March 31, 2001 2.00 to 1.00
June 30, 2001 2.05 to 1.00
September 30, 2001 2.10 to 1.00
December 31, 2001 2.15 to 1.00
March 31, 2002 2.20 to 1.00
June 30, 2002 2.25 to 1.00
September 30, 2002 2.30 to 1.00
December 31, 2002 2.35 to 1.00
March 31, 2003 2.35 to 1.00
June 30, 2003 2.40 to 1.00
(b) FUNDED DEBT RATIO. Permit for any period of four consecutive
fiscal quarters ending on or about any "Test Date" set forth below (a
"TEST PERIOD") the Funded Debt Ratio to be greater than the ratio set
forth opposite such period below:
(Credit Agreement)
73
TEST DATE FUNDED DEBT RATIO
September 30, 1997 6.55 to 1.00
December 31, 1997 6.50 to 1.00
March 31, 1998 6.50 to 1.00
June 30, 1998 6.40 to 1.00
September 30, 1998 6.20 to 1.00
December 31, 1998 5.80 to 1.00
March 31, 1999 5.60 to 1.00
June 30, 1999 5.40 to 1.00
September 30, 1999 5.30 to 1.00
December 31, 1999 5.20 to 1.00
March 31, 2000 5.00 to 1.00
June 30, 2000 4.90 to 1.00
September 30, 2000 4.75 to 1.00
December 31, 2000 4.65 to 1.00
March 31, 2001 4.65 to 1.00
June 30, 2001 4.50 to 1.00
September 30, 2001 4.40 to 1.00
December 31, 2001 4.30 to 1.00
March 31, 2002 4.15 to 1.00
June 30, 2002 4.05 to 1.00
September 30, 2002 4.00 to 1.00
December 31, 2002 4.00 to 1.00
March 31, 2003 4.00 to 1.00
June 30, 2003 4.00 to 1.00
10.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Loan Parties under this Agreement and the
other Loan Documents;
(b) Indebtedness of (i) the Borrower to any Subsidiary and (ii) of
any Subsidiary, which is a party to a Subsidiary Guarantee and the Capital
Stock of which is pledged to the Collateral Agent, to the Borrower or to
any other Subsidiary;
(Credit Agreement)
74
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets or
additions thereto (whether pursuant to a loan, a Financing Lease or
otherwise) in an aggregate principal amount not exceeding as to the
Borrower and its Subsidiaries $25,000,000 at any time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 10.2(d) and any renewals, extensions, refundings or refinancings
of such Indebtedness, PROVIDED the interest rate or amount thereof is not
increased and the maturity of any installment of principal thereof is not
shortened;
(e) (x) Acquisition Subordinated Indebtedness of the Borrower
incurred to finance a business acquisition permitted by subsection 10.9(h)
and (y) Indebtedness assumed (provided such Indebtedness was not created
in contemplation of such acquisition) in connection with a business
acquisition or investment permitted by subsection 10.9(h), PROVIDED that,
after giving effect to such acquisition or investment and the incurrence
of such Indebtedness, (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Borrower shall be in compliance
with subsections 10.1(a) and (b) on a pro forma basis assuming that (A)
such Indebtedness had been incurred on the first day of the period of four
fiscal quarters ending on the last day of the most recently ended Test
Period and (B) Consolidated EBITDA of the Borrower for the period of four
fiscal quarters ending on the last day of such Test Period included
Consolidated EBITDA of the business to be acquired;
(f) Indebtedness of the Borrower not to exceed $25,000,000 in the
aggregate incurred in connection with sale and leaseback transactions,
PROVIDED the first $20,000,000 of Net Cash Proceeds from such sale and
leaseback transactions are applied as Material Asset Sale proceeds in
accordance with subsection 6.3;
(g) additional Indebtedness of the Borrower (not otherwise permitted
hereunder) not exceeding $25,000,000 in aggregate principal amount at any
one time outstanding;
(h) Indebtedness with respect to any surety bonds required in the
ordinary course of business of the Borrower and its Subsidiaries, provided
that such Indebtedness shall not at any time exceed $250,000 in the
aggregate;
(i) Apparel Notes;
(j) Indebtedness of the Borrower in respect of the Senior
Subordinated Indenture and the Senior Subordinated Notes;
(Credit Agreement)
75
(k) Indebtedness of the Borrower in respect of the Senior Notes
and the Senior Note Indenture; and
(l) Indebtedness of the Borrower in respect of the Term Loan Notes
and the Term Loan Agreement.
10.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens, assessments and other government charges for taxes not
yet due or which are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) suppliers', carriers', warehousemen's, mechanics',
materialmen's, repairmen's, landlords' or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits in connection with workers' compensation, unemployment insurance
and other social security legislation and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) leases, subleases, easements, rights-of-way, encroachments and
other survey defects, restrictions and other similar encumbrances incurred
in the ordinary course of business which are not substantial in amount and
which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
10.3(f), securing Indebtedness permitted by subsection 10.2(d) and
replacement Liens securing any Indebtedness refinanced as permitted by
subsection 10.2(d) and Liens securing Indebtedness permitted under
subsection 10.2(f), PROVIDED that no such Lien (or replacement Lien) is
spread to cover any additional property and that the amount of
Indebtedness secured thereby is not increased;
(Credit Agreement)
76
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 10.2(c) incurred to finance the acquisition of
fixed or capital assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed
100% of the original purchase price of such property at the time it was
acquired;
(h) Liens on Indebtedness permitted by subsection 10.2(e)(y) in
existence at the time such Indebtedness is assumed, PROVIDED such Liens
were not created in contemplation of such assumption and such Liens are
not expanded to cover any other property;
(i) Liens on property other than the Collateral (not otherwise
permitted hereunder) which secure obligations not exceeding (as to the
Borrower and all Subsidiaries) $25,000,000 in aggregate amount at any time
outstanding;
(j) Liens created pursuant to the Security Documents in favor of the
Collateral Agent for the benefit of the Lenders and/or the lenders under
the Term Loan Agreement securing the Borrower's obligations under this
Agreement, the Term Loan Agreement or under Interest Rate Agreements with
any such Lenders and/or lenders; PROVIDED that such Liens for the benefit
of the Term Loan Lenders shall at all times secure the Indebtedness under
this Agreement;
(k) attachment or judgment liens (other than any Liens described in
subsection 10.3(l)) individually or in the aggregate not in excess of
$2,000,000 (exclusive of (i) any amounts that are duly bonded to the
reasonable satisfaction of the Administrative Agent or (ii) any amount
adequately covered by insurance as to which the insurance company has not
disclaimed or disputed in writing its obligations for coverage);
(l) any Lien arising pursuant to any order of attachment, distraint
or other legal process in connection with court or arbitration proceedings
so long as the execution or other enforcement thereof is effectively
stayed, the claims secured thereby are being contested in good faith by
appropriate proceedings, adequate reserves have been established with
respect to such claims in accordance with GAAP and no Event of Default
would occur as a result thereof; and
(m) Liens arising under licensing agreements entered into by the
Borrower or any Subsidiary in the ordinary course of business for the use
of Intellectual Property or other intangible assets of the Borrower or
such Subsidiary, and settlements, permissions, consents to use, and other
similar agreements
(Credit Agreement)
77
concerning Intellectual Property or judgments adjudicating rights in
Intellectual Property.
If the Borrower or any of its Subsidiaries shall create or assume
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than the Liens excepted by the provisions of clauses (a) through
(m) above, it shall make or cause to be made effective provision whereby the
obligations of the Borrower and the Subsidiaries under the Loan Documents will
be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; PROVIDED
that, notwithstanding the foregoing, this provision shall not be construed as a
consent by the Lenders to the creation or assumption of any such Lien not
permitted by the provisions of clauses (a) through (m) above.
10.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 10.4(a) and any renewals, extensions or modifications thereof;
(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $25,000,000 at any one time outstanding;
(c) the Guarantee Obligations under the Guarantee in favor of the
Collateral Agent for the benefit of the Lenders and/or the lenders under
the Term Loan Agreement;
(d) Guarantee Obligations in respect of Letters of Credit;
(e) Guarantee Obligations assumed (provided such Guarantee
Obligations were not created in contemplation of such acquisition) in
connection with a business acquisition permitted by subsection 10.9(h),
PROVIDED that, after giving effect to such acquisition and the incurrence
of such Guarantee Obligation, (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Borrower shall be in
compliance with subsections 10.1(a) and (b) on a pro forma basis assuming
that (x) such acquisition had occurred on the first day of the period of
four fiscal quarters ending on the last day of the most recently ended
Test Period and (y) Consolidated EBITDA of the Borrower for the period of
four fiscal quarters ending on the last day of such Test Period included
Consolidated EBITDA of the business to be acquired;
(f) subordinated Guarantee Obligations of the Senior Subordinated
Notes by the Subsidiaries which are also Guarantors under the Guarantee;
(Credit Agreement)
78
(g) Guarantee Obligations of the Borrower in respect of obligations
of New Subsidiaries incurred in the ordinary course of business and not
prohibited hereunder; and
(h) Guarantee Obligations of the Senior Note Indenture by the
Subsidiaries which are also Guarantors under the Guarantee.
10.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except (a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more wholly
owned Subsidiaries of the Borrower (PROVIDED that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation), (b) any
Subsidiary may sell, lease, assign, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor and (c) the Borrower may transfer (i) Intellectual Property
created or acquired after the Closing Date, property, plant and equipment and
receivables (collectively, "TRANSFERABLE ASSETS") and (ii) sales, marketing,
manufacturing and administrative activities to any New Subsidiary.
10.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale, abandonment or other disposition of obsolete or worn
out property in the ordinary course of business;
(b) the sale or other disposition of any property (other than
inventory or other tangible assets which the Borrower and its Subsidiaries
customarily replace periodically with substitute assets (including,
without limitation, vehicles) or obsolete or worn out property in the
ordinary course of business) in the ordinary course of business, PROVIDED
that the aggregate book value of all assets so sold or disposed of shall
not exceed $1,500,000 in any year;
(c) the sale or return of inventory or other tangible assets which
the Borrower and its Subsidiaries customarily replace periodically with
substitute assets (including, without limitation, vehicles) in the
ordinary course of business;
(d) in addition to the transactions permitted by the preceding para-
graphs (a) through (c), the sale or other disposition of assets in an
aggregate
(Credit Agreement)
79
amount for cash proceeds not to exceed $65,000,000, provided the net cash
proceeds thereof are either (i) reinvested in the Borrower's business or
businesses reasonably related thereto within 12 months of the effective
date of such sale or disposition and/or (ii) used to prepay the Loans and
the Term Loans as provided in subsection 6.3(c) within 12 months of the
effective date of such sale or disposition;
(e) the sale or disposition of the Jhirmack Business in an
arms-length transaction for at least the fair market value thereof as
determined by the Borrower's Board of Directors;
(f) Material Asset Sales (in addition to those permitted by
subsections (e) above and (h) below) in amounts not to exceed $15,000,000
in any fiscal year and $40,000,000 in the aggregate;
(g) as permitted by subsection 10.5(b);
(h) transfers constituting advances, loans, extensions of credit,
capital contributions, purchases, investments and the like permitted by
subsection 10.9;
(i) sales or dispositions constituting sale leaseback transactions
aggregate amount not to exceed $25,000,000; and
(j) so long as immediately after giving effect thereto no Default or
Event of Default shall have occurred and be continuing, the transfer or
sale by the Borrower of Transferable Assets to any New Subsidiary;
; PROVIDED that the Borrower shall not sell, transfer or otherwise dispose of
any shares of any class of Capital Stock of Playtex Marketing Corporation or any
trademark license granted to it by Playtex Marketing Corporation. The Borrower
agrees to promptly notify the Agents and the Lenders of each sale or other
disposition by the Borrower or any such Subsidiary of any property permitted
pursuant to subsection 10.6(d), the net cash proceeds received in respect of
such sale or disposition and each reinvestment of such net cash proceeds
(together with a description of the asset in which such net cash proceeds are so
reinvested).
10.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower or, with respect
to any pay-in-kind preferred stock, in additional shares of such preferred
stock) on, or make any payment on account of, or set apart assets for a sinking
or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Capital Stock of the Borrower
or any warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of the
Borrower or any Subsidiary, except that the Borrower may (i) repurchase its
(Credit Agreement)
80
Capital Stock owned by management employees or (ii) make payments to management
employees upon termination of employment in connection with the exercise of
stock options, stock appreciation rights or similar equity incentives or equity
based incentives pursuant to management incentive plans in an aggregate amount
for (i) and (ii) per year not to exceed $5,000,000.
10.8 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make any
Consolidated Capital Expenditure except for expenditures in the ordinary course
of business not exceeding $20,000,000 in the aggregate for the Borrower and its
Subsidiaries during any fiscal year; PROVIDED that any portion of such
$20,000,000 not expended in any fiscal year (up to a maximum of $10,000,000 for
such fiscal year) may be carried forward into the next succeeding fiscal year.
10.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to officers, directors and other employees of
the Borrower or its Subsidiaries for (i) commissions and travel and
entertainment expenses in the ordinary course of business and (ii) relocation
expenses and other similar expenses in an aggregate amount for the Borrower and
its Subsidiaries not to exceed $5,000,000 in the aggregate at any one time
outstanding;
(d) loans by the Borrower to its employees or employees of its
Subsidiaries in connection with management incentive plans in an amount not to
exceed $5,000,000 in the aggregate at any one time outstanding;
(e) investments by the Borrower and its Subsidiaries in existence on
the date hereof in non-Domestic Subsidiaries and other investments, loans and
advances in existence on the date hereof in an aggregate amount not exceeding
$1,000,000, and extensions, renewals, modifications or restatements thereof;
(f) if in the reasonable judgment of the Borrower or any of its
Subsidiaries, any customer is deemed to be in a reorganization or unable to make
a timely cash payment on indebtedness of such customer owing to it, each of the
Borrower and its Subsidiaries may invest in securities issued by such customer
or any affiliate thereof in lieu of cash payments; PROVIDED that the Borrower or
such Subsidiary, as the case may be, has paid no new consideration (other than
forgiveness of Indebtedness or other obligations) therefor;
(Credit Agreement)
81
(g) (i) investments by the Borrower in its Subsidiaries which are
or, immediately after giving effect thereto, become parties to the Subsidiaries
Guarantee and the Capital Stock of which is pledged to the Collateral Agent to
secure the Borrower's obligations hereunder and under the other Loan Documents,
(ii) investments by Subsidiaries which are not parties to the Subsidiaries
Guarantee in other Subsidiaries, (iii) investments by the Borrower and its
Subsidiaries in non-Domestic Subsidiaries; PROVIDED that the aggregate amount of
such investments, together with (without duplication) the aggregate amount of
investments in non-Domestic Subsidiaries permitted under subparagraph 10.9(h)
below, shall not exceed $35,000,000 in the aggregate, and (iv) investments by
Subsidiaries which are parties to the Subsidiaries Guarantee in the Borrower and
in other Subsidiaries which are parties to the Subsidiaries Guarantee and the
Capital Stock of which is pledged to the Collateral Agent to secure the
Borrower's obligations hereunder and under the Loan Documents;
(h) so long as after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, acquisitions of, or investments
in, one or more businesses or lines of business, in an aggregate amount (which
amount shall include Indebtedness assumed as permitted by subsection 10.2(e)(y))
not to exceed $150,000,000 in the aggregate; PROVIDED that the aggregate amount
of such acquisitions and investments in non-Domestic Subsidiaries, together with
(without duplication) the aggregate amount of investments in non-Domestic
Subsidiaries permitted under subsection 10.9(g)(iii) above, shall not exceed
$35,000,000 in the aggregate; and PROVIDED, FURTHER, that if any such
acquisition or investment results in the creation or acquisition of a
Subsidiary, 100%, or in the case of a non-Domestic Subsidiary 65%, of the
Capital Stock of such Subsidiary owned directly or indirectly by the Borrower
shall be pledged to the Collateral Agent to secure the Borrower's obligations
hereunder and under the other Loan Documents, such Subsidiary (if a Domestic
Subsidiary) shall become a party to the Guarantee and shall execute and deliver
to the Agents a Subsidiary Security Agreement and the Subsidiary Stock Pledge
Agreement, together with such financing statements and other documents and
instruments as may be required by the Agents to create and perfect a Lien in the
Collateral under such Subsidiary Security Agreement and the Subsidiary Stock
Pledge Agreement;
(i) any redemption or repurchase by the Borrower of any of the
Senior Subordinated Notes or the Senior Notes in accordance with subsection
10.10(a); and
(j) other investments, loans or advances in an aggregate amount not
exceeding $10,000,000.
10.10 CERTAIN PROVISIONS RELATING TO OTHER DEBT INSTRUMENTS. (a)
Make any optional payment or optional prepayment on or redemption or purchase of
any Indebtedness (other than the Loans and the Reimbursement Obligations and the
Term Loans to the extent not prohibited under this Agreement) or pay any
interest on any Indebtedness in cash which may in accordance with the terms
thereof be paid by the issuance of additional Indebtedness or offer to do any of
the foregoing, except that
(Credit Agreement)
82
(i) the Borrower may redeem or purchase any of the Senior Subordinated Notes or
the Senior Notes with 50% of the Net Cash Proceeds from any offering of Capital
Stock of the Borrower subsequent to the Closing Date (other than any such
offering to the extent the Net Cash Proceeds of which are used to make an
investment or acquisition permitted by subsection 10.9(h)), and (ii) the
Borrower may pay interest in cash on the Apparel Notes on each scheduled
interest payment date therefor so long as (x) no Default or Event of Default has
occurred and is continuing or would result therefrom, (y) the amount of such
payment is net of all interest accrued and unpaid on the PAP Debenture for the
same period as the Borrower's cash interest payment on the Apparel Notes and (z)
the net cash payment by the Borrower does not exceed $150,000 in any fiscal
year; (b) amend, modify or change, or consent or agree to any such amendment,
modification or change in any material respect to, any of the terms of any such
Indebtedness (other than the Indebtedness with respect to the Term Loan
Agreement), including, without limitation, the Senior Subordinated Note
Indenture and the Senior Note Indenture (other than any such amendment,
modification or change which would extend the maturity or reduce the amount of
any payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon); or (c) amend, modify or change, or
consent or agree to any such amendment, modification or change in any material
respect to any of the provisions of the Term Loan Agreement that would have the
effect of (i) shortening the maturity of or requiring the earlier payment of any
principal of any Term Loan, (ii) changing the definition of "Required Lenders"
in the Term Loan Agreement, or (iii) changing any mandatory prepayments pursuant
to an "Asset Sale" (as such term is defined in the Term Loan Agreement) in a
manner that disproportionately disadvantages the Lenders relative to the lenders
under the Term Loan Agreement, without the prior written consent of the Required
Lenders under this Agreement. The Borrower hereby designates all of its
obligations under this Agreement and the other Loan Documents as "Designated
Senior Indebtedness" for purposes of the Senior Subordinated Note Indenture.
10.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, except that the foregoing
restrictions shall not apply to (i) any transaction with an officer or member of
the Board of Directors of the Borrower entered into in the ordinary course of
business (including compensation and employee benefit arrangements), (ii)
transactions and agreements in existence on the date hereof and described on
Schedule 10.11, (iii) directors' fees, (iv) employment agreements and
arrangements (including, without limitation, benefits) approved by the Board of
Directors of the Borrower, (v) loans to employees not exceeding $5,000,000 in
the aggregate outstanding at any time, (vi) any employee benefit plan available
to employees of the Borrower generally, (vii) the payment of management,
consulting and other fees to HW&P, the Investors or their respective Affiliates
in
(Credit Agreement)
83
accordance with the terms of the Stock Purchase Agreement or as otherwise
approved by a majority of the Disinterested Directors (as defined in the Stock
Purchase Agreement) and (viii) any other transaction or series of related
transactions which have been approved by a majority of the Disinterested
Directors (as defined in the Stock Purchase Agreement).
10.12 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary, except as permitted by
subsection 10.6(i).
10.13 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year
of the Borrower to end on a day other than the last Saturday in December of each
calendar year.
10.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES. On or after the date
hereof, enter into with any Person any agreement, other than (a) this Agreement,
(b) the Senior Subordinated Indenture, the Senior Note Indenture and the Term
Loan Agreement and (c) any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed thereby), which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
10.15 AMENDMENT OF ARTICLES OF INCORPORATION. Amend its Articles of
Incorporation, in any manner which could reasonably be expected to have a
Material Adverse Effect.
SECTION 11. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five days after any such interest
or other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement
(Credit Agreement)
84
furnished by it at any time on or after the Closing Date under or in
connection with this Agreement or any such other Loan Document shall prove
to have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 10, or in
Section 4 of the Borrower Security Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in Section
11(a) through (c)), and such default shall continue unremedied for a
period of 30 days from the earlier of (i) the date any Responsible Officer
obtains or should have obtained knowledge of such default and (ii) the
date the Borrower receives notice of such default from the Administrative
Agent or any Lender; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, in either case in an
aggregate outstanding principal amount in excess of $5,000,000 beyond the
period of grace (not to exceed 60 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created, after giving effect to any consents or waivers
relating thereto; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable in an aggregate amount exceeding $5,000,000;
or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (w) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (x) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding
(Credit Agreement)
85
or other action of a nature referred to in clause (i) above which (y)
results in the entry of an order for relief or any such adjudication or
appointment or (z) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in
the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, or
(v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $7,500,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof; or
(i)(i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(Credit Agreement)
86
(j) Any Guarantee shall for any reason, to be in full force and
effect (except as permitted under subsection 10.5(a) or 13.8 hereof) or
any Guarantor shall so assert; or
(k) Any of the subordination provisions in Article Twelve of the
Senior Subordinated Indenture shall cease, for any reason, to be in full
force and effect, or the Borrower or any other party to the Senior
Subordinated Indenture or any holder of the Senior Subordinated Notes
shall so assert; or
(l) a Change of Control shall have occurred;
then, and in any such event, (1) if such event is an Event of Default specified
in clause (i) or (ii) of Section 11(f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) shall immediately become due
and payable, and (2) if such event is any other Event of Default, either or both
of the following actions may be taken: (A) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (B) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to the preceding
sentence, the Borrower shall at such time deposit in the L/C Collateral Account
(as defined in the Intercreditor Agreement) opened by the Collateral Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in the L/C Account shall be applied by the Collateral
Agent in accordance with the terms of the Intercreditor Agreement.
Except as expressly provided above in this Section 11, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 12. THE AGENTS
12.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints Xxxxx Fargo as the Administrative Agent of such Lender under this
Agreement
(Credit Agreement)
87
and the other Loan Documents, and each Lender hereby irrevocably designates and
appoints DLJ as the Syndication Agent under this Agreement and the other Loan
Documents. Each Lender hereby confirms the appointment by the Administrative
Agent of Xxxxx Fargo as the Collateral Agent under the Intercreditor Agreement.
Each Lender irrevocably authorizes each Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to such
Agent by the terms of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. As between the Lenders
and the Agents, notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein or in other Loan Documents, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent. The
provisions of this Section 12 are solely for the benefit of each Agent, and the
Lenders and the Borrower shall have no rights as a third party beneficiary of
any of the provisions thereof.
12.2 DELEGATION OF DUTIES. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
12.3 EXCULPATORY PROVISIONS. None of the Agents or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agents, under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. No Agent shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower.
12.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been
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signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Agents.
Each Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent, which shall promptly
forward such notice to other Agents. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents, in the case of
the Agent other than the Collateral Agent, in accordance with a request of the
Required Lenders (unless the consent of all Lenders is expressly required under
subsection 13.1) or, in the case of the Collateral Agent, in accordance with the
Intercreditor Agreement, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
12.5 NOTICE OF DEFAULT. No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that any Agent receives such a
notice, such Agent shall give notice thereof to the Lenders and the other
Agents. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders (unless the consent of all Lenders is expressly required under
subsection 13.1); PROVIDED that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
12.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender expressly
acknowledges that none of the Agents or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by such Agent to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon such Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action
(Credit Agreement)
89
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by any Agent hereunder, no Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of any Agent or any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
12.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) and their respective
Affiliates and their respective directors, officers, employees and agents,
ratably according to their respective pro rata shares of the aggregate Revolving
Credit Commitments and the aggregate outstanding Term A Loans in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Commitments shall have terminated and the Loans shall
have been paid in full, ratably in accordance with their pro rata shares of the
aggregate Revolving Credit Commitments and the aggregate outstanding Term A
Loans immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way relating to
or arising out of this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's contractual breach, gross negligence
or willful misconduct. The agreements in this subsection 12.7 shall survive the
payment of the Loans and all other amounts payable hereunder.
12.8 AGENT IN ITS INDIVIDUAL CAPACITY. Any Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though such Agent were not an Agent hereunder and
under the other Loan Documents. With respect to its Loans made by it and with
respect to any Letter of Credit issued or participated in by it, if any, such
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include such Agent in its
individual capacity.
12.9 SUCCESSOR AGENTS. The Syndication Agent may resign at any time
upon ten Business Days' notice thereof to the Borrower and other Agents. The
Administrative Agent may resign as Administrative Agent upon 30 days' notice to
the
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90
other Agents and the Lenders. If the Administrative Agent or the Syndication
Agent shall resign as an Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall, unless an Event of
Default has occurred and is continuing, be approved by the Borrower, whereupon
such successor agent shall succeed to the rights, powers, and duties of the
Administrative Agent or the Syndication Agent, as the case may be, and the term
"Administrative Agent" or "Syndication Agent" shall mean such successor agent
effective upon such appointment and approval, and the former Administrative
Agent's or Syndication Agent's rights, powers and duties as Administrative Agent
or Syndication Agent, as the case may be, shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or
Syndication Agent or any of the parties to this Agreement. After any retiring
Administrative Agent's or Syndication Agent's resignation, the provisions of
this Section 12 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent or Syndication Agent, as the
case may be, under this Agreement and the other Loan Documents. The terms of the
resignation of the Collateral Agent shall be as set forth in the Intercreditor
Agreement.
12.10 INTERCREDITOR AGREEMENT AND COLLATERAL DOCUMENTS.
(a) Each Lender hereby authorizes the Administrative Agent to enter
into the Intercreditor Agreement on behalf of and for the benefit of such
Lender, and agrees to be bound by the terms of the Intercreditor Agreement;
PROVIDED that the Administrative Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any provision contained in the
Intercreditor Agreement without the prior consent of Required Lenders. Each
Lender hereby authorizes the Collateral Agent to enter into the Guarantee and
the Security Documents and to take all action contemplated by the Intercreditor
Agreement; PROVIDED that the Collateral Agent shall not enter into or consent to
any amendment, modification, termination or waiver of any provision contained in
the Guarantee or Security Document without the prior consent of Required
Lenders. Each Lender agrees that no Lender shall have any right individually to
seek or to enforce the Guarantee or to realize upon the security granted by any
Security Document, it being understood and agreed that such rights and remedies
may be exercised by the Collateral Agent for the benefit of Lenders and the
parties to the Intercreditor Agreement upon the terms of the Guarantee, the
Security Documents and the Intercreditor Agreement. Each Lender and Agent hereby
authorizes the Collateral Agent to release any Collateral as permitted or
required under this Agreement, the Security Documents and the Intercreditor
Agreement, and agrees that a certificate executed by the Collateral Agent
evidencing the release of such Collateral shall be conclusive evidence of such
release as to any third party.
(b) If there is any conflict between this Agreement and any other
Loan Document, except the Intercreditor Agreement, this Agreement and such other
Loan Document shall be interpreted and construed, if possible, so as to avoid or
minimize such conflict but, to the extent (and only to the extent) of such
conflict, this Agreement
(Credit Agreement)
91
shall prevail and control. If there is any conflict between the Intercreditor
Agreement and any Loan Document, including this Agreement, the Intercreditor
Agreement and such Loan Document shall be interpreted and construed, if
possible, so as to avoid or minimize such conflict but, to the extent (and only
to the extent) of such conflict, the Intercreditor Agreement shall prevail and
control.
12.11 OTHER TITLES. None of the Lenders identified on the facing
page or signature pages of this Agreement as an "arranger" or other similar
title or capacity shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as an "arranger" or other similar title or capacity shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or taking or not taking
action hereunder.
12.12 XXXXX FARGO AS ISSUER OF LETTERS OF CREDIT. Each Lender
holding a Working Capital Revolving Credit Commitment hereby acknowledges that
the provisions of this Section 12 shall apply to Xxxxx Fargo, in its capacity as
issuer of the Letters of Credit, in the same manner as such provisions are
expressly stated to apply to the Administrative Agent.
SECTION 13. MISCELLANEOUS
13.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified, except in accordance with the provisions of this subsection 13.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
PROVIDED HOWEVER, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Commitments, in each case without the consent of each Lender affected
thereby (provided that with the consent of Lenders holding 80% of the
outstanding Term A Loans the date of any scheduled installment of the Term A
Loans may be extended to a date not later than June 15, 2003), (ii) amend,
modify or waive any provision of this subsection 13.1 or the last proviso of
subsection 10.6 (with respect to sales, transfers, or other dispositions
referred
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92
to therein to a Person other than a Subsidiary) or reduce the percentage
specified in the definition of Required Lenders, or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents or release a material portion of the
Collateral (an increase in the amount of any Indebtedness of the Borrower
secured ratably by the Collateral shall not be deemed to be a release of
Collateral) or any Guarantee other than as provided for herein, in each case
without the written consent of all the Lenders, or (iii) amend, modify or waive
any provision of Section 12 without the written consent of the Agents and the
Collateral Agent or Section 3 without the consent of the Issuing Bank or
subsection 2.4 without the consent of the Swing Line Lender. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the Agents and
the Collateral Agent. In the case of any waiver, the Borrower, the Lenders, the
Agents and the Collateral Agent shall be restored to their former positions and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any or other Default or Event of Default, or impair any
right consequent thereon. Each Lender agrees that, in the event of any
amendment, supplement or modification to or waiver of any of the terms of this
Agreement that would cause any Note that might be issued to it under subsection
6.2(e) after such amendment, supplement, modification or waiver to be different
from any Note held by it, such Lender will promptly endorse such Note held by it
to reflect such amendment, supplement, modification or waiver.
13.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or 3 days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrower and the
Agents, the Issuing Bank and the Swing Line Lender, and as set forth in Schedule
1.1 in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective pages hereto:
The Borrower: Playtex Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy: 000-000-0000
With a copy to: Xxxx Wheat & Partners Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Xxxxxxx X. Xxxxx
Telecopy: 000-000-0000
(Credit Agreement)
00
Xxxx, Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telecopy: 212-757-3990
The Administrative Agent, Xxxxx Fargo Bank, N.A.
the Issuing Bank and 000 Xxxxxxxxxx Xxxxxx
the Swing Line 9th Floor
Lender: Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telecopy: 000-000-0000
With a copy to: Xxxxx Fargo Bank, N.A.
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy: 000-000-0000
The Syndication Agent: DLJ Capital Funding, Inc.
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Xxxxx Xxxxx
Telecopy: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the Agents or the Lenders
pursuant to subsection 2.2, 2.3, 4.2, 4.3, 5.2, 6.3, 6.4 or 6.8 shall not be
effective until received.
13.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
13.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
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13.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees, without
duplication of any amounts payable pursuant to subsection 6.1(c) or (d), (a) to
pay or reimburse the Arranger and the Syndication Agent for all of their
respective out-of-pocket costs and expenses (including all out-of-pocket costs
and expenses arising in connection with the syndication of the Loans and any due
diligence investigation performed by the Arranger or the Syndication Agent)
incurred in connection with the development, negotiation, preparation, execution
and delivery of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, whether or not any of the Transactions has
been consummated, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the fees and
disbursements of counsel to the Arranger and the Syndication Agent, and to pay
or reimburse each Agent and the Collateral Agent for any such fees, costs and
expenses related to periods subsequent to the Closing Date, (b) to pay or
reimburse the Agents, the Collateral Agent and the Arranger and, from and after
the occurrence of a Default or an Event of Default, each Lender, for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable and documented fees and
disbursements of counsel to the Agents, the Collateral Agent, the Arranger and
each Lender, (c) to pay, indemnify, and hold each Lender, each Agent, the
Collateral Agent, the Arranger and their respective Affiliates and their
respective directors, officers, employees and agents and each other Person
controlling any of the foregoing within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended, harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, each Agent, the
Collateral Agent, the Arranger and their respective Affiliates and their
respective directors, trustees, officers, employees and agents and each other
Person controlling any of the foregoing within the meaning of either Section 15
of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended, harmless from and against any and all other
claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents, or the use of the
proceeds of the Loans and the Letters of Credit and any such other documents,
including without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower, any of its Subsidiaries or any of the Properties
(all the foregoing in this clause (d), collectively, the "INDEMNIFIED
LIABILITIES") (including all legal and other expenses incurred in connection
with investigation, defending or participating in any action or proceeding
relating to any indemnified
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liabilities (whether or not such Person is a party to any such action or
proceeding), PROVIDED that the Borrower shall have no obligation hereunder to
any Person with respect to indemnified liabilities arising from the contractual
breach, gross negligence or willful misconduct of such Person as determined by a
final judgment of a court of competent jurisdiction. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder and, in the case of any Lender that may assign any interest in its
Commitments, Loans, Letters of Credit or participations in Letters of Credit
hereunder, shall (to the extent arising out of such time as it was a Lender)
survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a party hereto.
13.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Agents and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks, financial
institutions, or other entities ("PARTICIPANTS") participating interests in any
Loan owing to such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, PROVIDED that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 13.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 6.11, 6.12, 6.13 and 13.5 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender, PROVIDED that, in the case of subsection 6.12, such
Participant shall have complied with the requirements of said subsection and
PROVIDED, FURTHER, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred. Participants (other than an
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Affiliate of the Lender granting such participation) shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
portion of the principal amount of or the postponement of the date of payment of
interest on any Loan allocated to such Participant (it being understood that
changes in interim amortization amounts are not extensions of scheduled final
maturity dates), or the extension of the expiration date beyond the Working
Capital Revolving Credit Commitment Termination Date of any Letter of Credit
allocated to such Participant, or (ii) a reduction of the principal amount of or
the rate of interest payable on any Loan allocated to such Participant (other
than any waiver of any increase in the interest rate applicable to Loans
pursuant to subsection 6.6(c)).
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to any
Lender or any Affiliate thereof or, with the consent of the Borrower and, in the
case of assignments by Lenders other than the Syndication Agent, the
Administrative Agent (which in each case shall not be unreasonably withheld), to
an additional bank or financial institution or other entity (an "ASSIGNEE") all
or any part of its rights and obligations (in minimum amounts equal to at least
$5,000,000 of the aggregate Commitments and outstanding Term A Loans in the case
of an Assignee that is not then a Lender or an Affiliate thereof unless such
assignment is of all of a Lender's interest hereunder) under this Agreement and
the other Loan Documents pursuant to an Assignment and Acceptance, substantially
in the form of Exhibit F, executed by such Assignee, such assigning Lender (and,
in the case of an Assignee that is not then a Lender or an Affiliate thereof, by
the Borrower and the Administrative Agent) and delivered to the Administrative
Agent for its acceptance and recording in the Register. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (i) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments as set
forth therein, and (ii) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto,
except that it shall (to the extent arising out of such time as it was a Lender)
remain entitled to the benefit of the indemnities and other rights stated to
survive the termination hereof).
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at its address referred to in subsection 13.2 a
copy of each Assignment and Acceptance delivered to it and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive and the Borrower,
the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of
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97
the Loan recorded therein for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent in accordance with the provisions of subsection 10.6(c)) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. No assignment shall be
effective unless it has been recorded in the Register as provided in this
subsection 13.6(e).
(f) Subject to the provisions of subsection 13.17, the Borrower
authorizes each Lender to disclose to any Participant or Assignee (each, a
"TRANSFEREE") and any prospective Transferee any and all information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law or any pledge or
assignment of any Loan or Note by a Lender that is an investment fund to its
trustee in support of its obligations to its trustee, without notice to or
consent of the Borrower or the Agents; PROVIDED HOWEVER that any assignment by
such trustee shall be subject to the provisions of subsection 13.6(c) hereof.
13.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans or any
Reimbursement Obligation owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 11(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
the Reimbursement Obligation owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any
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portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application.
(c) The Borrower, the Lenders and the Administrative Agent hereby
acknowledge and agree that the provisions of this subsection 13.7 are subject to
the provisions of the Intercreditor Agreement. To the extent that any Lender is
required pursuant to the provisions of the Intercreditor Agreement to turn over
to the Collateral Agent any payments otherwise subject to the provisions of this
subsection 13.7, such payments shall not be subject to the provisions of this
subsection 13.7.
13.8 RELEASE OF NEW SUBSIDIARY GUARANTEES. (a) If on the last day of
any fiscal period of the Borrower the financial statements of the Borrower
delivered pursuant to subsection 9.1 for such fiscal period show that the
Interest Coverage Ratio was greater than 3.00 to 1.00 for the period ending on
such last day, then upon written request of the Borrower the Collateral Agent
shall release each New Subsidiary requested to be released from the Guarantee,
PROVIDED that prior to or concurrently with such release, any guarantee by such
New Subsidiary of the Senior Subordinated Notes, the Senior Notes and the Term
Loan Agreement is released; and PROVIDED FURTHER that the foregoing provisions
shall be subject to the terms of the Intercreditor Agreement.
(b) If (i) in connection with the dissolution or liquidation of any
New Subsidiary permitted hereunder or (ii) with respect to any New Subsidiary
which does not have any assets other than DE MINIMIS assets, the Borrower
requests the Collateral Agent to release such New Subsidiary from the Guarantee,
the Collateral Agent shall so release such New Subsidiary PROVIDED that prior to
or concurrently with such release, any guarantee by such New Subsidiary of the
Senior Subordinated Notes, the Senior Notes and the Term Loans is released; and
PROVIDED FURTHER that the foregoing provisions shall be subject to the terms of
the Intercreditor Agreement.
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13.9 MODIFICATION OF SCHEDULES. The Borrower may, from time to time,
amend, supplement or otherwise modify any of the Schedules to this Agreement by
delivering a copy of such amended, supplemented or modified Schedule to the
Agents (which schedule the Administrative Agent shall deliver a copy to each
Lender) in accordance with the provisions of subsection 13.2 and such Schedule
as amended, supplemented or modified shall be deemed to replace and supersede
the existing Schedule unless objected to in writing by the Agents or the
Required Lenders within 10 days after receipt thereof by the Lenders.
13.10 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
13.11 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the removing provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.12 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agents and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agents or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or the other Loan
Documents.
13.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
13.14 SUBMISSION TO JURISDICTION; WAIVERS. (a) The Borrower hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the nonexclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of
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100
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 13.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(b) Each of the Borrower, the Administrative Agent and the Lenders
hereby irrevocably and unconditionally waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this subsection any special, exemplary, punitive or
consequential damages.
13.15 ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) none of the Agents, the Collateral Agent or any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Agents, the Collateral Agent or any Lender, on
one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
13.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
13.17 CONFIDENTIALITY. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this Agreement
and each other Loan Document that is designated by the Borrower in writing
confidential; PROVIDED that nothing herein shall prevent any Lender from
disclosing any such
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information (a) to the Agents or any other Lender, (b) to any Transferee which
receives such information having been made aware of the confidential nature
thereof or to any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors provided
that such contractual counterparties or their professional advisors agree to
handle the above-described confidential information in accordance with safe and
sound practices which are substantially the same as those followed by banking
institutions, (c) to its employees, directors, agents, attorneys, accountants
and other professional advisors, (d) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender (provided that
notice of such request or demand shall be furnished to the Borrower unless such
notice is legally prohibited or such Governmental Authority requests that such
notice not be furnished to the Borrower or such request is in connection with
normal oversight activities by such Governmental Authority), (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law (provided that notice of such order
or requirement shall be furnished to the Borrower unless such notice is legally
prohibited or such court or Governmental Authority requests that such notice or
requirement not be furnished to the Borrower), (f) which has been publicly
disclosed other than in breach of this Agreement, or (g) in connection with the
exercise of any remedy hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER: PLAYTEX PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Title: Executive Vice President and
--------------------------------
Chief Financial Officer
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LENDERS:
XXXXX FARGO BANK, N.A.,
individually and as Administrative Agent
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Title: Vice President
--------------------------------
(Credit Agreement)
S-2
DLJ CAPITAL FUNDING, INC.,
individually and as the Syndication
Agent
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Managing Director
--------------------------------
(Credit Agreement)
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