EXHIBIT 10.a
CREDIT AGREEMENT
Dated as of March 30, 1998
among
SUNBEAM CORPORATION,
The SUBSIDIARY BORROWERS referred to herein,
The LENDERS party hereto,
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Syndication Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
-------------------------------------------
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Arranger
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINED TERMS.....................................1
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS...........28
SECTION 1.03. TERMS GENERALLY..................................28
SECTION 1.04. ACCOUNTING TERMS; GAAP...........................29
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS......................................29
SECTION 2.02. LOANS AND BORROWINGS.............................30
SECTION 2.03. REQUESTS FOR BORROWINGS..........................30
SECTION 2.04. LETTERS OF CREDIT................................31
SECTION 2.05. FUNDING OF BORROWINGS............................36
SECTION 2.06. INTEREST ELECTIONS...............................37
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS.........38
SECTION 2.08. MATURITY OF LOANS; EVIDENCE OF DEBT..............39
SECTION 2.09. MANDATORY REPAYMENT AND PREPAYMENT OF LOANS AND
REDUCTION OF COMMITMENTS..................................40
SECTION 2.10. OPTIONAL PREPAYMENT OF LOANS.....................45
SECTION 2.11. FEES.............................................45
SECTION 2.12. INTEREST.........................................47
SECTION 2.13. ALTERNATE RATE OF INTEREST.......................48
SECTION 2.14. INCREASED COSTS .................................48
SECTION 2.15. BREAK FUNDING PAYMENTS...........................50
SECTION 2.16. TAXES............................................50
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT;
SHARING OF SET-OFFS.......................................51
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS...53
SECTION 2.19. SUBSIDIARY BORROWINGS............................54
SECTION 2.20. COMPETITIVE BID AMENDMENT........................55
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. ORGANIZATION; POWERS.............................55
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY....................56
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS.............56
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE..56
SECTION 3.05. PROPERTIES.......................................57
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.............57
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS..............58
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS............58
SECTION 3.09. TAXES............................................58
SECTION 3.10. ERISA............................................58
SECTION 3.11. DISCLOSURE.......................................59
SECTION 3.12. GUARANTORS.......................................59
SECTION 3.13. COLLATERAL DOCUMENTS.............................59
SECTION 3.14. ACQUISITION DOCUMENTS............................59
SECTION 3.15. SOLVENCY.........................................59
SECTION 3.16. OUTSTANDING INDEBTEDNESS.........................59
ARTICLE 4
CONDITIONS
SECTION 4.01. EFFECTIVE DATE...................................60
SECTION 4.02. TRANCHE A EFFECTIVE DATE.........................60
SECTION 4.03. TRANCHE B EFFECTIVE DATE.........................60
SECTION 4.04. EACH CREDIT EVENT................................61
ARTICLE 5
AFFIRMATIVE COVENANTS
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION.......61
SECTION 5.02. NOTICES OF MATERIAL EVENTS.......................63
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS...................64
SECTION 5.04. PAYMENT OF OBLIGATIONS...........................64
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE.............64
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS.............64
SECTION 5.07. COMPLIANCE WITH LAWS AND CONTRACTS...............64
SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT............65
SECTION 5.09. FURTHER ASSURANCES...............................65
SECTION 5.10. APPROVED HEDGING AGREEMENTS......................67
SECTION 5.11. LIENS ON ASSETS..................................67
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SECTION 5.12. REPAYMENT OF OUTSTANDING INDEBTEDNESS............67
SECTION 5.13. YEAR 2000 COMPATIBILITY..........................67
ARTICLE 6
NEGATIVE COVENANTS
SECTION 6.01. INDEBTEDNESS.....................................68
SECTION 6.02. LIENS............................................69
SECTION 6.03. FUNDAMENTAL CHANGES; ASSET SALES.................70
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS..............................................71
SECTION 6.05. HEDGING AGREEMENTS...............................71
SECTION 6.06. RESTRICTED PAYMENTS; VOLUNTARY PAYMENTS..........72
SECTION 6.07. TRANSACTIONS WITH AFFILIATES.....................72
SECTION 6.08. RESTRICTIVE AGREEMENTS...........................73
SECTION 6.09. MODIFICATION OF CERTAIN DOCUMENTS................73
SECTION 6.10. ACCOUNTING CHANGES...............................74
SECTION 6.11. CAPITAL EXPENDITURES.............................74
SECTION 6.12. LEVERAGE RATIO...................................74
SECTION 6.13. INTEREST COVERAGE RATIO..........................75
SECTION 6.14. FIXED CHARGE COVERAGE RATIO......................75
SECTION 6.15. EBITDA CALCULATIONS..............................75
ARTICLE 7
EVENTS OF DEFAULT
ARTICLE 8
THE ADMINISTRATIVE AGENT
SECTION 8.01. APPOINTMENT, POWERS AND IMMUNITIES...............78
SECTION 8.02. RELIANCE BY ADMINISTRATIVE AGENT.................79
SECTION 8.03. APPOINTMENT OF SUB-AGENTS........................80
SECTION 8.04. SUCCESSOR ADMINISTRATIVE AGENTS..................80
SECTION 8.05. NON-RELIANCE ON ADMINISTRATIVE AGENT AND
OTHER LENDERS.............................................80
SECTION 8.06. OTHER AGENTS.....................................81
ARTICLE 9
GUARANTY
SECTION 9.01. THE GUARANTY.....................................81
SECTION 9.02. GUARANTY UNCONDITIONAL...........................81
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SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL;
REINSTATEMENT IN CERTAIN CIRCUMSTANCES....................82
SECTION 9.04. WAIVER BY THE PARENT.............................82
SECTION 9.05. SUBROGATION......................................82
SECTION 9.06. STAY OF ACCELERATION.............................83
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. NOTICES.........................................83
SECTION 10.02. WAIVERS; AMENDMENTS.............................84
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER..............85
SECTION 10.04. SUCCESSORS AND ASSIGNS..........................87
SECTION 10.05. SURVIVAL........................................89
SECTION 10.06. COUNTERPARTS; INTEGRATION.......................90
SECTION 10.07. SEVERABILITY....................................90
SECTION 10.08. RIGHT OF SETOFF.................................90
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS........................................91
SECTION 10.10. WAIVER OF JURY TRIAL............................91
SECTION 10.11. HEADINGS........................................92
SECTION 10.12. CONFIDENTIALITY.................................92
SECTION 10.13. INTEREST RATE LIMITATION........................93
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SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.01(a) -- Domestic Subsidiaries
Schedule 3.01(b) -- Foreign Subsidiaries
Schedule 3.03 -- Defaults and Required Payments
Schedule 3.06 -- Litigation and Environmental Matters
Schedule 3.16 -- Outstanding Indebtedness
Schedule 4.01 -- Conditions to the Effective Date
Schedule 4.02 -- Conditions to Tranche A Effective Date
Schedule 4.03 -- Conditions to Tranche B Effective Date
Schedule 5.08 -- Refinanced Indebtedness
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Parent Pledge and Security Agreement
Exhibit C -- Form of Subsidiary Guarantee
Exhibit D -- Form of Subsidiary Pledge and Security Agreement
Exhibit E -- Form of Opinion of Counsel for Obligors
Exhibit F -- Form of Opinion of Special Counsel for the Agents
Exhibit G -- Form of Subsidiary Borrowing Agreement
Exhibit H -- Form of Subsidiary Borrower Pledge and Security Agreement
Exhibit I -- Form of Opinion of Counsel for Subsidiary Borrower
Exhibit J -- Form of Opinion of Special Counsel for the Agents
Exhibit K -- Form of Opinion of Counsel for Subsidiary Guarantor
Exhibit L -- Form of Notice of Account Designation
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CREDIT AGREEMENT dated as of March 30, 1998, among SUNBEAM CORPORATION,
the SUBSIDIARY BORROWERS referred to herein, the LENDERS party hereto, XXXXXX
XXXXXXX SENIOR FUNDING, INC., as Syndication Agent, BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Documentation Agent, and FIRST UNION NATIONAL
BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ACQUISITION" means, collectively, the Coleman Acquisition, the First
Alert Acquisition and the Signature Acquisition.
"ACQUISITION DOCUMENTS" means , collectively, the Coleman Acquisition
Documents, the First Alert Acquisition Documents and the Signature Acquisition
Documents.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means First Union National Bank, in its capacity as
administrative agent for the Lenders under the Loan Documents, and any successor
appointed pursuant to the provisions of Section 8.04.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENTS" means the Administrative Agent, the Documentation Agent and the
Syndication Agent listed on the cover page of this Agreement, and "Agent" means
any of them, as the context may require.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE LEVERAGE RATIO" means, for any Performance Period (or portion
thereof), the Leverage Ratio on the last day of the most recently ended fiscal
quarter of the Parent for which the Parent has delivered to the Administrative
Agent and the Lenders the financial statements required to be delivered by the
Parent pursuant to Sections 5.01(a) or 5.01(b), as the case may be; PROVIDED
that if the Parent shall not have timely delivered any such financial
statements, and the Required Lenders shall not have agreed otherwise, the
Applicable Leverage Ratio for the portion of such Performance Period from and
including the day on which such financial statements are required to be
delivered to but excluding the day on which such financial statements are
delivered shall be deemed to be greater than 5.25 to 1.
"APPLICABLE PERCENTAGE" means, with respect to any Lender with a
Commitment of any Class, the percentage of the total Commitments of such Class
represented by such Lender's Commitment of such Class. If the Commitments of
such Class have terminated or expired, the Applicable Percentages with respect
to the Commitments of such Class shall be determined based upon the Commitments
of such Class most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means, for any day during any Performance Period (or
portion thereof), with respect to any ABR Loan or Eurodollar Loan, with respect
to any commitment fee payable hereunder, or with respect to any participation
fee related to any Letter of Credit, as the case may be, the applicable rate per
annum set forth below under the caption "ABR SPREAD","EURODOLLAR SPREAD",
"COMMITMENT FEE RATE" or "LETTER OF CREDIT FEE RATE", as the case may be, based
upon the Applicable Leverage Ratio for such Performance Period (or portion
thereof):
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REVOLVING LOANS AND TRANCHE A TERM LOANS
ABR EURODOLLAR COMMITMENT LETTER OF CREDIT
APPLICABLE LEVERAGE RATIO: SPREAD SPREAD FEE RATE FEE RATE
------------------------------------------------- ------ ------ -------- --------
/greater than/5.25 TO 1 0.500% 1.750% 0.500% 1.500%
/greater than/ 4.75 TO 1 AND /less than/ 5.25 TO 1 0.250% 1.500% 0.375% 1.250%
or equal to
/greater than/ 4.25 TO 1 AND /less than/ 4.75 TO 1 0% 1.250% 0.375% 1.000%
or equal to
/greater than/ 3.75 TO 1 AND /less than/ 4.25 TO 1 0% 1.125% 0.300% 1.000%
or equal to
/greater than/ 3.25 TO 1 AND /less than/ 3.75 TO 1 0% 1.000% 0.300% 0.750%
or equal to
/greater than/ 2.75 TO 1 AND /less than/ 3.25 TO 1 0% 0.750% 0.250% 0.500%
or equal to
/less than/ 2.75 TO 1 0% 0.625% 0.200% 0.500%
or equal to
TRANCHE B TERM LOANS
APPLICABLE LEVERAGE RATIO: ABR SPREAD EURODOLLAR SPREAD
-------------------------------------------------- ---------- -----------------
/greater than/ 5.25 TO 1 0.750% 2.000%
/greater than/ 3.75 TO 1 AND /less than/ 5.25 TO 1 0.500% 1.750%
or equal to
/less than/ 3.75 TO 1 0.250% 1.500%
or equal to
"ASSET SALE" means any sale, lease, license or other disposition
(including any such transaction effected by way of merger or consolidation) by
the Parent or any of its Subsidiaries of any asset, including without limitation
any sale-leaseback transaction, whether or not involving a capital lease, or any
sale of the stock of any Subsidiary, but excluding (i) dispositions of cash,
cash equivalents and other cash management investments, and obsolete, unused or
3
unnecessary equipment, in each case in the ordinary course of business, (ii)
dispositions of inventory in the ordinary course of business, (iii) dispositions
to the Parent or any Subsidiary Guarantor and (iv) dispositions of any Margin
Stock for fair value. The description of any transaction as not constituting an
"Asset Sale" does not affect any limitation on such transaction imposed by
Articles 5 and 6 of this Agreement, it being understood that the limitations set
forth in Section 6.03(c) relate only to "Asset Sales" as set forth in this
definition.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BORROWER" means the Parent or any Subsidiary Borrower, as the context may
require, and their respective successors and "Borrowers" means all of the
foregoing. When used in connection with a specific Loan or Loans, the term
"Borrower" means the borrower (or proposed borrower) of such Loan or Loans. When
used in connection with a specific Letter of Credit or Letters of Credit the
term "Borrower" means the account party (or proposed account party) of such
Letter of Credit or Letters of Credit. As the context may permit, the terms
"Borrower" and "Borrowers" include the Parent in its capacity as guarantor of
the obligations of the Subsidiary Borrowers hereunder.
"BORROWING" means Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"BORROWING REQUEST" means a request by a Borrower for a Borrowing in
accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City or Charlotte, North Carolina are
authorized or required by law to remain closed; PROVIDED that, when used in
connection with a Eurodollar Loan, the term "BUSINESS DAY" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
4
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Parent; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Parent by Persons who were neither (i) nominated by the board of directors of
the Parent nor (ii) appointed by directors so nominated; (c) the acquisition of
direct or indirect Control of the Parent by any Person or group; or (d) the
occurrence of a "Fundamental Change" (as defined in the Indenture).
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Tranche A Term
Loans, Tranche B Term Loans or Revolving Loans.
"CLN" means Xxxxxxx Holdings Inc., a Delaware corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLEMAN" means The Xxxxxxx Company, Inc., a Delaware corporation.
"COLEMAN ACQUISITION" means the transactions contemplated by the Coleman
Acquisition Documents, which, if consummated, will result in the Parent and its
Subsidiaries owning, collectively, 100% of the issued and outstanding shares of
common stock of CLN and at least 77% of the issued and outstanding shares of
common stock of Coleman.
5
"COLEMAN ACQUISITION DOCUMENTS" means (i) the Agreement and Plan of Merger
dated as of February 27, 1998 among the Parent, Laser Acquisition Corp., CLN and
Coleman (Parent) Holdings Inc, (ii) the Agreement and Plan of Merger dated as of
February 27, 1998 among the Parent, Camper Acquisition Corp. and Coleman and
(iii) each other document executed and delivered at the closing of the Coleman
Acquisition, each as in effect on the Effective Date and substantially in the
form provided to Lenders on or prior to the Effective Date and as further
amended from time to time in accordance with Section 6.09.
"COLLATERAL" means, collectively, all of the "Collateral" under the
Collateral Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to such term in the Parent
Pledge and Security Agreement.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreements, and any
additional pledge agreements, security agreements or mortgages required to be
delivered pursuant to the Loan Documents (including without limitation pursuant
to Section 5.09 of this Agreement) and any other instruments or agreements
executed pursuant to any of the foregoing.
"COMMITMENT" means a Tranche A Term Commitment, a Tranche B Term
Commitment or a Revolving Commitment, and "COMMITMENTS" means all or any
combination of them, as the context may require.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the additions
to property, plant and equipment and other capital expenditures of the Parent
and its Consolidated Subsidiaries for such period, as the same are or would be
set forth in a consolidated statement of cash flows of the Parent and its
Consolidated Subsidiaries for such period, including in any event the capital
portion of lease payments made in respect of Capital Lease Obligations, but
excluding expenditures for the restoration or replacement of assets to the
extent financed by the proceeds of an insurance policy described in clause (i)
of the definition of "MAJOR CASUALTY PROCEEDS."
"CONSOLIDATED CURRENT ASSETS" means at any date the consolidated current
assets of the Parent and its Consolidated Subsidiaries determined as of such
date.
"CONSOLIDATED CURRENT LIABILITIES" means at any date (i) the consolidated
current liabilities of the Parent and its Consolidated Subsidiaries PLUS (ii)
the current liabilities of any Person (other than the Parent or any of its
6
Consolidated Subsidiaries) which are Guaranteed by the Parent or a Consolidated
Subsidiary, all determined as of such date.
"CONSOLIDATED EBITDA" means, for any period, the sum of:
(1) consolidated net income of the Parent and its Consolidated
Subsidiaries for such period (exclusive of (x) the portion of net
income allocable to minority interests in unconsolidated Persons to
the extent that cash distributions have not actually been received
from such Persons and (y) the effect of any extraordinary or non
recurring gain or loss), PLUS
(2) to the extent deducted in determining such consolidated
net income, the aggregate amount of (i) Consolidated Interest
Expense, (ii) income tax expense and (iii) depreciation and
amortization (including without limitation amortization of debt
issuance costs) and other similar non-cash charges, PLUS
(3) for any period ending prior to April 1, 1999, to the
extent deducted in determining such consolidated net income, (i) all
non-cash special charges during such period and (ii) cash special
charges not to exceed $150,000,000 during such period.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of (i) the
aggregate principal amount of scheduled amortization of Consolidated
Indebtedness during such period, (ii) the aggregate amount by which the
Revolving Commitments have been reduced during such period to the extent that
Revolving Loans have been concurrently repaid in corresponding amounts, (iii)
Consolidated Interest Expense for such period, (iv) cash taxes actually paid or
required to be paid by the Parent and its Consolidated Subsidiaries, determined
on a consolidated basis for such period, (v) Consolidated Capital Expenditures
for such period and (vi) cash dividends actually paid or required to be paid by
the Parent and its Consolidated Subsidiaries during such period.
"CONSOLIDATED INDEBTEDNESS" means, at any date, the Indebtedness of the
Parent and its Consolidated Subsidiaries determined on a consolidated basis as
of such date.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, including in any event the interest portion
of payments under Capital Lease Obligations, but excluding (i) any amortization
of debt issuance costs and (ii) to the extent included in interest expense in
7
accordance with Financial Accounting Standards Board Statements Nos. 87 and 106,
deferred payment obligations with respect to pension plans and post retirement
benefits.
"CONSOLIDATED NET WORKING INVESTMENT" means at any date Consolidated
Current Assets (exclusive of cash and cash equivalents) MINUS Consolidated
Current Liabilities (exclusive of Indebtedness).
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders' equity of the Parent and its Consolidated Subsidiaries determined
as of such date.
"CONSOLIDATED RENTAL EXPENSE" means, for any period, the aggregate rental
expense of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis for such period.
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Parent in
its consolidated financial statements if such statements were prepared as of
such date.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"ELIGIBLE SUBSIDIARY" means any of Coleman, First Alert or Signature, and
their respective successors, at any time that such Person is a Subsidiary.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
8
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Parent or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Parent, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "REPORTABLE EVENT", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "ACCUMULATED FUNDING DEFICIENCY" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Parent or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Parent or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Parent or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Parent or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Parent or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
9
"EVENT OF DEFAULT" has the meaning assigned to such term in Article VII.
"EXCESS CASH FLOW" means, for any period, the excess (if any), determined
without duplication, of:
the sum of (i) Consolidated EBITDA for such fiscal period, (ii) cash
interest income and extraordinary cash income of the Parent and its
Consolidated Subsidiaries for such fiscal period (to the extent not
included in Consolidated EBITDA) and (iii) any decrease in Consolidated
Net Working Investment between the beginning and the end of such period;
MINUS
the sum of (i) Consolidated Capital Expenditures made in cash in
accordance with Section 6.11 during such period, (ii) cash interest
expense and extraordinary cash expense of the Parent and its Consolidated
Subsidiaries for such period (to the extent not included in Consolidated
EBITDA), (iii) any increase in Consolidated Net Working Investment between
the beginning and the end of such period, (iv) mandatory reductions of
long-term Indebtedness of the Parent and its Consolidated Subsidiaries
during such period (adjusted to eliminate the effect of prepayments on
account of Excess Cash Flow for a prior period), (v) repayments during
such period of the revolving credit loans and short-term Indebtedness of
the Parent and its Consolidated Subsidiaries which were not made with the
proceeds of other Indebtedness and which repaid amounts cannot be
reborrowed or redrawn under the instruments evidencing such loans and
short-term Indebtedness, (vi) optional repayments during such period of
long-term Indebtedness, including Term Loans, of the Parent and its
Consolidated Subsidiaries which were not made with the proceeds of other
Indebtedness and which repaid amounts cannot be reborrowed under the
instrument evidencing such long-term Indebtedness, and (vii) cash payments
with respect to taxes made during such period;
PROVIDED that Consolidated Net Working Investment at the beginning of such
period shall be determined on a pro forma basis adjusted to give effect (as if
such event had occurred on the first day of such period) to each Permitted
Acquisition made in accordance with Section 6.04 during such period.
"EXCHANGE ACT" has the meaning set forth in Section 5.01(a).
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
10
on account of any obligation of a Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which a Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.18(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.16(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from a Borrower with respect to such withholding tax pursuant to Section
2.16(a).
"EXISTING BANTSA LETTER OF CREDIT" means Letter of Credit No. C7285660
issued by Bank of American National Trust and Savings Association for the
benefit of National Union Fire Insurance Company of Pittsburgh, Pennsylvania in
the maximum stated amount of $13,275,000 having an expiry date of November 3,
1998, as the same may be terminated in accordance with the provisions thereof.
"EXISTING CORESTATES LETTERS OF CREDIT" means the trade letters of credit
issued by CoreStates Bank, N.A. or its subsidiaries for the account of Xxxxxxx
or any of its subsidiaries up to an aggregate maximum stated amount of
$60,000,000, each of which shall expire no later than July 31, 1998.
"EXISTING RECEIVABLES PROGRAM" means the accounts receivable sales program
established pursuant to (i) the Receivables Sale and Contribution Agreement
dated as of December 4, 1997 between Sunbeam Products, Inc. and Sunbeam Asset
Diversification, Inc. and (ii) the Receivables Purchase and Servicing Agreement
dated as of December 4, 1997 by and among Llama Retail Funding, L.P., Capital
USA, L.L.C., Sunbeam Asset Diversification, Inc. and Sunbeam Products, Inc.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received
11
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Parent.
"FIRST ALERT" means First Alert, Inc., a Delaware corporation.
"FIRST ALERT ACQUISITION" means the collective transactions contemplated
by the First Alert Acquisition Documents, which, if consummated, will result in
the Parent and its Subsidiaries owning, collectively, at least 50.1% of the
issued and outstanding shares of common stock of First Alert.
"FIRST ALERT ACQUISITION DOCUMENTS" means (i) the Agreement and Plan of
Merger dated as of February 28, 1998 by and among the Parent, Sentinel
Acquisition Corp. and First Alert and (ii) each other document executed and
delivered at the closing of the First Alert Acquisition, each as in effect on
the Effective Date and substantially in the form provided to the Lenders on or
prior to the Effective Date and as further amended from time to time in
accordance with Section 6.09.
"FIXED CHARGE COVERAGE RATIO" means, at the last day of any fiscal
quarter, the ratio of (i) Consolidated EBITDA for the period of four consecutive
fiscal quarters then ended to (ii) Consolidated Fixed Charges for the same
four-quarter period.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United States
of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other
12
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guarantee issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guarantee and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result
13
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor. For the avoidance of doubt, it is expressly agreed that the
sale, transfer or other disposition of accounts receivable shall be treated, for
all purposes of this Agreement, as an Asset Sale.
"INDEBTEDNESS INCURRENCE" means any incurrence by the Parent or any of its
Subsidiaries of any Indebtedness, other than Indebtedness permitted under
Section 6.01(a) through (g), inclusive.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY PROCEEDS" means any amounts constituting indemnity payments
received by the Parent or any of its Subsidiaries pursuant to indemnity
provisions contained in the Acquisition Documents.
"INDENTURE" means the Indenture dated as of March 25, 1998 between the
Parent and The Bank of New York, as Trustee, as amended from time to time in
accordance with Section 6.09.
"INTEREST COVERAGE RATIO" means, at the last day of any fiscal quarter,
the ratio of (i) Consolidated EBITDA for the period of four consecutive fiscal
quarters then ended to (ii) Consolidated Interest Expense for the same
four-quarter period.
"INTEREST ELECTION REQUEST" means a request by a Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.06.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, three or six months
thereafter, as a Borrower may elect, PROVIDED, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end
14
on the next preceding Business Day, (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period, and (iii) if any Interest
Period pertaining to a Eurodollar Term Loan includes a date on which a scheduled
payment of principal of the Term Loans included in such Borrowing is required to
be made under Section 2.09(a) but does not end on such date, then (a) the
principal amount of each Eurodollar Term Loan required to be repaid on such date
shall have an Interest Period ending on such date and (b) the remainder (if any)
of each such Eurodollar Term Loan shall have an Interest Period determined as
set forth above. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, thereafter, shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"ISSUING BANK" means (i) in the case of the Existing BANTSA Letter of
Credit, Bank of America National Trust and Savings Association, (ii) in the case
of the Existing CoreStates Letters of Credit, CoreStates Bank, N.A. or its
subsidiaries and (iii) in all other cases, First Union National Bank, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.04(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "ISSUING BANK" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"LC DISBURSEMENT" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit, the Existing BANTSA Letter of
Credit and the Existing CoreStates Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of a Borrower at such time. The LC Exposure of any Lender at any time
shall be its Applicable Percentage (determined on the basis of the Revolving
Commitments) of the total LC Exposure at such time.
"LC REIMBURSEMENT ACCOUNT" has the meaning set forth in the Parent Pledge
and Security Agreement.
"LENDERS" means the Persons listed on Schedule 2.01 under the heading
"LENDERS" and any other Person that shall have become a party hereto as a Lender
pursuant to an Assignment and Acceptance, other than any such Person that
15
ceases to be a party hereto as a Lender pursuant to an Assignment and
Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant to this
Agreement.
"LEVERAGE RATIO" means, at the last day of any fiscal quarter, the ratio
of (i) Consolidated Indebtedness on such day (other than Indebtedness consisting
of contingent obligations with respect to letters of credit and letters of
guarantee) to (ii) Consolidated EBITDA for the period of four consecutive fiscal
quarters ended on such day. For purposes of determining Consolidated EBITDA at
any time during the fiscal quarter in which a Permitted Acquisition has been
made and the three fiscal quarters immediately succeeding such fiscal quarter,
Consolidated EBITDA shall be increased for any fiscal quarter which began prior
to such Permitted Acquisition by the amount of Consolidated EBITDA which the
Parent shall determine would have been attributable to the acquired assets for
the fiscal quarter most recently ended on or prior to the date of such Permitted
Acquisition; PROVIDED that (i) the Administrative Agent shall have consented to
the calculation on the basis of which the Parent determined such amount to be so
attributed and (ii) for the fiscal quarter in which the Permitted Acquisition
has occurred, such increase shall be prorated to reflect only the days during
such fiscal quarter prior to the consummation of the Permitted Acquisition.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale
16
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" means this Agreement, the Letters of Credit, the
Subsidiary Guarantees, the Collateral Documents and any Subsidiary Borrowing
Agreement executed pursuant to Section 2.19.
"LOANS" means Term Loans or Revolving Loans or any combination thereof, as
the context may require.
"MAJOR CASUALTY AND INDEMNITY PROCEEDS ACCOUNT" has the meaning set forth
in the Parent Pledge and Security Agreement.
"MAJOR CASUALTY PROCEEDS" means (i) the aggregate insurance proceeds
received from a Person other than the Parent or any of its Subsidiaries in
connection with one or more related events by the Parent or any of its
Subsidiaries under any insurance policy maintained by the Parent or any of its
Subsidiaries covering losses with respect to tangible real or personal property
or improvements or (ii) any award or other compensation with respect to any
condemnation of property (or any transfer or disposition of property in lieu of
condemnation) received by the Parent or any of its Subsidiaries, in either case
only if the amount of such aggregate proceeds or award or other compensation
exceeds $10,000,000, in each case less any taxes actually paid or to be payable
by the Parent or any of its Subsidiaries (as estimated by a Financial Officer,
giving effect to the overall tax position of the Parent) in respect of receipt
of such insurance proceeds or award or other compensation, as the case may be.
"MARGIN STOCK" has the meaning ascribed to such term in Regulations G and
U of the Board, as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Parent and the Subsidiaries taken as a whole, (b) the ability of any
Borrower to perform any of its obligations under the Loan Documents or (c) the
ability of the Lenders or the Administrative Agent to practically realize the
rights and benefits, taken as a whole, intended to be afforded to the Lenders or
the Administrative Agent, as the case may be, under the Loan Documents.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Parent and its Subsidiaries in an aggregate principal
17
amount exceeding $25,000,000. For purposes of determining Material Indebtedness,
the "PRINCIPAL AMOUNT" of the obligations of the Parent or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Parent or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"MATERIAL SUBSIDIARY" means (i) any Subsidiary Borrower, (ii) as of any
date, any other Subsidiary that meets or that, had it then been a Subsidiary,
would have met the definition of "significant subsidiary" contained as of the
date hereof in Regulation S-X of the Securities and Exchange Commission as of
the last day of the fiscal year of the Parent ending on (or most recently ended
prior to) such date; PROVIDED THAT, for purposes of this definition of "Material
Subsidiary", all references in Regulation S-X to "10 percent" shall be deemed to
be references to "5 percent", (iii) any other Subsidiary of the Parent from time
to time designated by the Parent as a "Material Subsidiary" for purposes of this
Agreement and (iv) any Subsidiary that directly or indirectly owns common stock
of a Material Subsidiary; and PROVIDED FURTHER that, for the period from the
Effective Date until December 31, 1998, the determination of whether a
Subsidiary constitutes a Material Subsidiary within the meaning of the foregoing
shall be made on a pro forma basis taking into account the Acquisition.
Notwithstanding the foregoing, if the combined assets of all Subsidiaries that
are not Material Subsidiaries under the preceding sentence equals or exceeds 10%
of the consolidated total assets of the Parent and its Consolidated
Subsidiaries, or if the combined income (before taxes, extraordinary items and
the cumulative effect of a change in accounting principle) of all Subsidiaries
that are not Material Subsidiaries under the preceding sentence equals or
exceeds 10% of such income of the Parent and its Consolidated Subsidiaries, then
one or more of such non-Material Subsidiaries designated by the Parent (or, if
the Parent shall make no designation, then one or more of such subsidiaries in
descending order based on their respective contributions to consolidated total
assets or combined income, as determined by the Administrative Agent) shall be
deemed for purposes of this Agreement to be Material Subsidiaries to the extent
necessary to eliminate such excess.
"MATURITY DATE" means (i) with respect to the Revolving Loans and the
Tranche A Term Loans, March 30, 2005 and (ii) with respect to the Tranche B Term
Loans, September 30, 2006.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means, with respect to any Indebtedness Incurrence or
Asset Sale, an amount equal to the cash proceeds received by the Parent or any
18
of its Subsidiaries therefrom or in respect thereof (including any cash proceeds
received as income or other cash proceeds of any noncash proceeds of any Asset
Sale, but only as and when received), less (x) any expenses reasonably incurred
by such Person in respect thereof and (y) solely with respect to any Asset Sale,
(i) the amount of any Indebtedness secured by a Lien on any asset disposed of in
such Asset Sale and required to be discharged from the proceeds thereof and (ii)
any taxes actually paid or to be payable by such Person (as estimated by a
Financial Officer, giving effect to the overall tax position of the Parent) in
respect of such Asset Sale.
"NOTICE OF ACCOUNT DESIGNATION" means the notice of account designation
substantially in the form of Exhibit L delivered by the Parent to the
Administrative Agent.
"OBLIGOR" means each of the Parent, the Subsidiary Borrowers and the
Subsidiary Guarantors.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, the Loan Documents.
"PARENT" means Sunbeam Corporation, a Delaware corporation, and its
successors.
"PARENT PLEDGE AND SECURITY AGREEMENT" means the pledge and security
agreement substantially in the form of Exhibit B between the Parent and the
Administrative Agent entered into as of the Effective Date, as amended from time
to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERFORMANCE PERIOD" shall mean each of the periods commencing after June
30, 1998 on the day that is five Business Days following the day that a complete
set of all financial statements required to be delivered to the Administrative
Agent under Section 5.01(a) or 5.01(b), as the case may be, is received by it
and ending on a day immediately preceding the day that is five Business Days
following the day on which the next subsequent complete set of all the financial
statements required to be delivered to the Administrative Agent under Section
5.01(a) or 5.01(b), as the case may be, is received by it.
19
"PERMITTED ACQUISITION" means any acquisition (other than the
Acquisition), whether in a single transaction or series of related transactions,
by the Parent or any one or more Subsidiaries, or any combination thereof, of
(i) all or a substantial part of the assets, or a going concern business or
division, of any Person, whether through purchase of assets or securities, by
merger or otherwise, (ii) control of securities of an existing corporation or
other Person having ordinary voting power (apart from rights accruing under
special circumstances) to elect a majority of the board of directors of such
corporation or other Person or (iii) control of a greater than 50% ownership
interest in any existing partnership, joint venture or other Person, PROVIDED
that:
(w) both before and immediately after giving effect to such
acquisition, no Default shall have occurred and be continuing;
(x) the Person whose assets, securities or equity interests are
being acquired is engaged in businesses of the type conducted by the
Parent and its Subsidiaries and businesses reasonably related thereto or
to the sale and distribution of household consumer products;
(y) the Parent shall be in compliance with Sections 6.12, 6.13, and
6.14, after the Leverage Ratio, Interest Coverage Ratio, Fixed Charges
Coverage Ratio and Consolidated EBITDA are each adjusted with respect to
such acquisition on the date of consummation or proposed consummation
thereof (the "Transaction Date") as follows: in calculating Consolidated
EBITDA, Consolidated Interest Expense and Consolidated Rental Expense, (1)
the incurrence of any Indebtedness in connection with such acquisition and
the application of the proceeds therefrom shall be assumed to have
occurred on the first day of the period of four consecutive fiscal
quarters (or other period) for which such amounts are required to be
determined in accordance with the definitions of Leverage Ratio, Interest
Coverage Ratio and Fixed Charges Coverage Ratio (the "Reference Period"),
(2) pro forma effect shall be given to any acquisition (including
adjustments to operating results required to be made in accordance with
GAAP) which occurs during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date as if such acquisition
had occurred on the first day of the Reference Period, (3) the incurrence
of any Indebtedness during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date and the application of
the proceeds therefrom shall be assumed to have occurred on the first day
of such Reference Period and (4) Consolidated Interest Expense
attributable to any Indebtedness (whether existing or being incurred)
bearing a floating interest rate shall be computed on a pro forma basis as
if the rate in effect on the date of computation had been the applicable
rate
20
for the entire period, unless such Person or any of its Subsidiaries is a
party to an interest party swap or cap or similar agreement (which shall
remain in effect for the twelve month period after the Transaction Date)
which has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be
used; and
(z) at least thirty days prior to the closing date for any such
acquisition (or, in the case of any acquisition that occurs within 30 days
after the Effective Date, within such time as the Parent and the
Administrative Agent agree), the Parent shall have delivered to the
Administrative Agent (1) a compliance certificate certifying the Parent's
compliance with the provisions of this Agreement, including, without
limitation, Sections 6.12, 6.13 and 6.14, after giving effect on a pro
forma basis to such acquisition and (2) a report of the chief financial
officer or chief accounting officer of the Parent, in a form and providing
sufficient detail and justification for the information provided therein,
including assumptions, as shall be found to be reasonable by the
Administrative Agent in its good faith discretion after completion of
reasonable due diligence, establishing (A) the basis for such
certification and (B) that after giving effect to such acquisition and the
financing therefor, the Parent shall be in compliance on a pro forma basis
until the end of the fiscal year immediately following the fiscal year in
which such acquisition is proposed to be consummated with the covenants
contained in Sections 6.12, 6.13 and 6.14.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like Liens imposed by law, arising in the ordinary course of business or
with respect to obligations that are being contested in compliance with Section
5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
and
21
(e) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Parent or any Subsidiary;
PROVIDED that the term "PERMITTED ENCUMBRANCES" shall not include any Lien
securing Indebtedness (other than the Loans and reimbursement obligations in
respect of LC Disbursements).
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, a rating of at least A-1 from Standards & Poor's Rating
Group or at least P-1 from Xxxxx'x Investor Service Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
and entered into with a financial institution satisfying the
criteria described in clause (c) above; and
(e) investments in money market funds which invest
substantially all of their assets in securities of the types
described in the foregoing clauses (a) through (d).
"PERMITTED LIENS" means any Lien permitted under Section 6.02.
22
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Parent or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "EMPLOYER" as defined in Section 3(5) of ERISA.
"PLAN REVERSION PROCEEDS" means the aggregate amount of payments received
by the Parent or any of its Subsidiaries from the termination of a Plan.
"PLEDGE AND SECURITY AGREEMENT" means the Parent Pledge and Security
Agreement, the Subsidiary Pledge and Security Agreement or the Subsidiary
Borrower Pledge and Security Agreement, as the context may require, and "PLEDGE
AND SECURITY AGREEMENTS" means all of the foregoing.
"PREPAYMENT ACCOUNT" has the meaning set forth in the Parent Pledge and
Security Agreement.
"PRIME RATE" means the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in effect at its
principal office; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"REDUCTION PERCENTAGE" means (i) in the case of Excess Cash Flow, 50%
prior to the Trigger Date and 25% thereafter and (ii) in all other cases, 100%.
For the purpose of this definition, "Trigger Date" means the first day of the
next succeeding fiscal quarter of the Parent following delivery of financial
statements pursuant to Section 5.01 for the immediately preceding fiscal quarter
demonstrating a Leverage Ratio of less than 2.75 to 1.0.
"REFINANCED INDEBTEDNESS" means the Indebtedness to be refinanced in
connection with the transactions contemplated hereunder as set forth on Schedule
5.08.
"REGISTER" has the meaning set forth in Section 10.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
23
"REQUIRED LENDERS" means, at any time, Lenders having in the aggregate at
least 51% of the sum of (i) Revolving Credit Exposures and unused Revolving
Commitments at such time, (ii) the principal amount of Tranche A Term Loans and
unused Tranche A Term Commitments at such time and (iii) the principal amount of
Tranche B Loans and unused Tranche B Term Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of the Parent or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of the Parent or any option,
warrant or other right to acquire any such shares of capital stock of the
Parent.
"REVOLVING COMMITMENT" means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans and to acquire participations in Letters
of Credit hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Revolving Credit Exposure hereunder, as such commitment
may be (x) reduced from time to time pursuant to Section 2.07(c) and (y) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Revolving
Commitment is set forth on Schedule 2.01 under the heading "REVOLVING
COMMITMENT", or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $600,000,000.
"REVOLVING CREDIT AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of (i) the Maturity Date and
(ii) the date of termination of the Revolving Commitments.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure at such time.
"REVOLVING LOAN" means a loan made pursuant to Section 2.01(c).
"SIGNATURE" means Signature Brands USA, Inc., a Delaware corporation.
"SIGNATURE ACQUISITION" means the collective transactions contemplated
by the Signature Acquisition Documents, which, if consummated, will result in
24
the Parent and its Subsidiaries owning, collectively, at least 51% of the issued
and outstanding shares of common stock of Signature.
"SIGNATURE ACQUISITION DOCUMENTS" means (i) the Agreement and Plan of
Merger dated as of February 28, 1998 between the Parent, Java Acquisition Corp.
and Signature and (ii) each other document executed and delivered at the closing
of the Signature Acquisition, each as in effect on the Effective Date and as
further amended from time to time in accordance with Section 6.09.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurodollar funding (currently referred to as "EURODOLLAR LIABILITIES" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurodollar funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"SUBORDINATED NOTES" means the Zero Coupon Convertible Senior Subordinated
Notes Due 2018 issued by the Parent pursuant to the Indenture.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Parent.
25
"SUBSIDIARY BORROWER" means at any time, any Eligible Subsidiary of the
Parent designated as a Subsidiary Borrower by the Parent pursuant to Section
2.19 that has not ceased to be a Subsidiary Borrower pursuant to such Section.
"SUBSIDIARY BORROWER PLEDGE AND SECURITY AGREEMENT" means a pledge and
security agreement substantially in the form of Exhibit H between a Subsidiary
Borrower and the Administrative Agent, as amended from time to time.
"SUBSIDIARY BORROWING AGREEMENT" means a subsidiary borrowing agreement
substantially in the form of Exhibit G among the Parent, an Eligible Subsidiary
and the Administrative Agent, as amended from time to time.
"SUBSIDIARY GUARANTEE" means a guarantee agreement substantially in the
form of Exhibit D executed by each Subsidiary Guarantor for the benefit of the
Administrative Agent, as amended from time to time.
"SUBSIDIARY GUARANTORS" means each Material Subsidiary identified on
Schedule 3.01(a) and Schedule 3.01(b) and each other Person who becomes a party
to the Subsidiary Guarantee pursuant to Section 5.09.
"SUBSIDIARY PLEDGE AND SECURITY AGREEMENT" means the pledge and security
agreement substantially in the form of Exhibit E among each Subsidiary Guarantor
and the Administrative Agent, as amended from time to time.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM COMMITMENTS" means Tranche A Term Commitments and Tranche B Term
Commitments, or any combination thereof, as the context may require.
"TERM LOANS" means Tranche A Term Loans and Tranche B Term Loans, or any
combination thereof, as the context may require.
"TRANCHE A AVAILABILITY PERIOD" means the period from and including the
Tranche A Effective Date to but excluding the earlier of (i) June 30, 1998 and
(ii) the date of termination of the Tranche A Term Commitments.
"TRANCHE A EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.02 are satisfied (or waived in accordance with Section
10.02).
26
"TRANCHE A TERM COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Tranche A Term Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Tranche A
Term Loans hereunder, as such commitment may be (x) reduced from time to time
pursuant to Sections 2.07(c) and 2.09(b) and (y) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 10.04.
The initial amount of each Lender's Tranche A Term Commitment is set forth on
Schedule 2.01 under the heading "TRANCHE A TERM COMMITMENT", or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche A Term Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche A Term Commitments is $900,000,000.
"TRANCHE A TERM LOAN" means a loan made pursuant to Section 2.01(a).
"TRANCHE B EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.03 are satisfied (or waived in accordance with Section
10.02).
"TRANCHE B AVAILABILITY PERIOD" means the period from and including the
Tranche B Effective Date to but excluding the earlier of (i) May 15, 1998 and
(ii) the date of termination of the Tranche B Term Commitments.
"TRANCHE B TERM COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Tranche B Term Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Tranche B
Term Loans hereunder, as such commitment may be (x) reduced from time to time
pursuant to Section 2.07(c) and 2.09(b) and (y) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 10.04.
The initial amount of each Lender's Tranche B Term Commitment is set forth on
Schedule 2.01 under the heading "TRANCHE B TERM COMMITMENT", or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche B Term Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche B Term Commitments is $500,000,000.
"TRANCHE B TERM LOAN" means a loan made pursuant to Section 2.01(b).
"TRANSACTIONS" means the execution, delivery and performance by the
Borrowers of the Loan Documents, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
27
"TYPE", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation or other similar legal entity, directors' qualifying shares or
shares held by residents of the jurisdiction in which such corporation or other
similar legal entity is organized as required by the law of such jurisdiction)
are directly or indirectly owned or controlled by the Parent or one or more
Wholly Owned Subsidiaries or by the Parent and one or more Wholly Owned
Subsidiaries of the Parent.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (E.G., a "REVOLVING
LOAN") or by Type (E.G., a "EURODOLLAR LOAN") or by Class and Type (E.G., a
"EURODOLLAR REVOLVING LOAN"). Borrowings also may be classified and referred to
by Class (E.G., a "REVOLVING BORROWING") or by Type (E.G., a "EURODOLLAR
BORROWING") or by Class and Type (E.G., a "EURODOLLAR REVOLVING BORROWING").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "INCLUDE", "INCLUDES" and "INCLUDING" shall
be deemed to be followed by the phrase "WITHOUT LIMITATION". The word "WILL"
shall be construed to have the same meaning and effect as the word "SHALL".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "HEREIN", "HEREOF" and "HEREUNDER", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"ASSET" and "PROPERTY" shall
28
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time (subject to
Section 6.10; PROVIDED that, if the Parent notifies the Administrative Agent
that the Parent requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Parent that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS. (a) TRANCHE A TERM LOANS. Subject to the terms
and conditions set forth herein, each Lender agrees to make loans to any
Borrower on not more than four dates during the Tranche A Availability Period in
an aggregate principal amount that will not result in such Lender's Tranche A
Term Loans to all Borrowers exceeding such Lender's Tranche A Term Commitment.
Loans made pursuant to this paragraph are not revolving in nature and amounts of
such loans repaid or prepaid may not be reborrowed.
(b) TRANCHE B TERM LOANS. Subject to the terms and conditions set forth
herein, each Lender agrees to make a single loan to any Borrower during the
Tranche B Availability Period in a principal amount that will not result in such
Lender's Tranche B Term Loans to all Borrowers exceeding such Lender's Tranche B
Term Commitment. Loans made pursuant to this paragraph are not revolving in
nature and amounts of such loans repaid or prepaid may not be reborrowed.
(c) REVOLVING LOANS. Subject to the terms and conditions set forth herein,
each Lender agrees to make loans to any Borrower from time to time during the
Revolving Credit Availability Period in an aggregate principal amount
that will not result in such Lender's Revolving Credit Exposure to all Borrowers
29
exceeding such Lender's Revolving Commitment; PROVIDED that, prior to the
Tranche B Term Loan Borrowing, the aggregate amount of the Revolving Credit
Exposure of all of the Lenders shall not exceed $100,000,000. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans of the relevant Class made by the Lenders
ratably in accordance with their respective Commitments of such Class. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
PROVIDED that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $500,000 and not less than $1,000,000; PROVIDED that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.04(e).
Borrowings of more than one Type and Class may be outstanding at the same time;
PROVIDED that there shall not at any time be more than a total of twelve
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing of any Class if the Interest Period requested with respect thereto
would end after the Maturity Date for the relevant Class.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Charlotte,
North
30
Carolina time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 10:00 a.m., Charlotte, North
Carolina, on the same Business Day of the proposed Borrowing; PROVIDED that any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e), may be given not later than
9:00 a.m., Charlotte, North Carolina time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
(i) the identity of the Borrower and the aggregate amount of the
requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Tranche A Term Borrowing, a
Tranche B Term Borrowing, or a Revolving Borrowing;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "INTEREST PERIOD"; and
(vi) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender with a Commitment of the relevant
Class of the details thereof and of the amount of such Lender's Loan to be made
as part of the requested Borrowing.
SECTION 2.04. LETTERS OF CREDIT. (a) Subject to the terms and conditions
set forth herein, a Borrower may request the issuance of Letters of Credit for
its own account, in a form reasonably acceptable to the Administrative Agent and
the Issuing Bank, at any time and from time to time during the Revolving Credit
Availability Period. In the event of any inconsistency between the terms and
31
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by a Borrower to, or entered
into by a Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), a Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (at least three Business Days before the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $200,000,000 and (ii) the total Revolving Credit Exposures shall not
exceed the total Revolving Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
thirty Business Days prior to the Maturity Date for Revolving Loans.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage (if any) of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
(if any) of each LC Disbursement made by the Issuing Bank and not reimbursed on
the
32
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded for any reason. Each Lender acknowledges and
agrees that its obligation to acquire participations in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, Charlotte, North Carolina time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Charlotte, North Carolina time, on such date,
or, if such notice has not been received by the Borrower prior to such time on
such date, then not later than 12:00 noon, Charlotte, North Carolina time, on
(i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 10:00 a.m., Charlotte, North Carolina time, on the day of
receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; PROVIDED that, if such LC Disbursement is not less than
$500,000, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with an ABR Revolving Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender with a
Revolving Commitment of the applicable LC Disbursement, the payment then due
from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each such Lender shall pay
to the Administrative Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.05 with respect
to Loans made by such Lender (and Section 2.05 shall apply, MUTATIS MUTANDIS, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans
33
as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. Each Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement or any other Loan Document, or any term or provision
therein, (ii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the Issuing
Bank under a Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit, or (iv) any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. None of the Administrative Agent, the Lenders
or the Issuing Bank, or any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; PROVIDED that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
34
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; PROVIDED that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; PROVIDED that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.12(c) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced at
any time by written agreement among the Parent, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Parent shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "ISSUING BANK" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that a Borrower receives notice from the
35
Administrative Agent or the Lenders with LC Exposure representing at least 51%
of the total LC Exposure demanding the deposit of cash collateral pursuant to
this paragraph, such Borrower shall deposit in the LC Reimbursement Account
established pursuant to Section 6(C) of the Parent Pledge and Security Agreement
an amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; PROVIDED that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default described in clause (h) or (i) of Article
7. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrowers for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with LC Exposure representing at least 51% of the total LC
Exposure), be applied to satisfy other obligations of the Borrowers under this
Agreement. If a Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to such Borrower within
three Business Days after all Events of Default have been cured or waived.
(k) EXISTING CORESTATES LETTERS OF CREDIT. The parties hereto agree that,
as of May 15, 1998 (or such later date on which the merger of CoreStates Bank,
N.A. and First Union National Bank is consummated), the Existing CoreStates
Letters of Credit shall be deemed to have been issued pursuant to this Agreement
and all provisions hereof shall apply thereto as if such CoreStates Letters of
Credit were issued hereunder on such date.
SECTION 2.05. FUNDING OF BORROWINGS. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Charlotte, North Carolina time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent
and designated by the Borrower in the Notice of Account Designation; PROVIDED
that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.04(e) shall be remitted by the Administrative Agent to
the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
36
Borrowing (if any), the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.06. INTEREST ELECTIONS. (a) Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to
37
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "INTEREST
PERIOD".
If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Parent, then, so long as an Event of
Default is continuing, (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, the Tranche A Commitments shall terminate on the last day
of the Tranche A Availability Period; the Tranche B Commitments shall terminate
on the Tranche B Effective Date simultaneous with the funding of the Loans made
under the Tranche B Commitments on the Tranche B Effective Date; and the
Revolving Commitments shall terminate on the last day of the Revolving Credit
Availability Period.
(b) (i) The Parent may at any time terminate, or from time to time reduce,
the Commitments of any class; PROVIDED that (A) each reduction of the
38
Commitments shall be in an amount that is an integral multiple of $500,000 and
not less than $1,000,000 and (B) the Parent shall not terminate or reduce the
Revolving Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.10, the total Revolving Credit Exposures
would exceed the total Revolving Commitments.
(ii) The Tranche A Commitments shall be reduced by (A) $180,000,000 if
the First Alert Acquisition is not consummated on or prior to the last day
of the Tranche A Availability Period and (B) $275,000,000 if the Signature
Acquisition is not consummated on or prior to the last day of the Tranche A
Availability Period.
(c) The Parent shall notify the Administrative Agent of any election to
terminate or reduce the Commitments of any Class under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders having Commitments of the affected Class of the
contents thereof. Each notice delivered by the Parent pursuant to this Section
shall be irrevocable; PROVIDED that a notice of termination of the Commitments
delivered by the Parent may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Parent (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments shall be permanent. Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in accordance
with their respective Commitments of such Class.
SECTION 2.08. MATURITY OF LOANS; EVIDENCE OF DEBT. (a) Each Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender to such Borrower on the relevant Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
39
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. MANDATORY REPAYMENT AND PREPAYMENT OF LOANS AND REDUCTION OF
COMMITMENTS. (a) REPAYMENT. Each Borrower hereby unconditionally promises to pay
to the Administrative Agent for the account of each Lender having Term Loans, on
each date set forth below, an aggregate principal amount of such Loans made to
such Borrower so that the aggregate principal amount of all Loans being repaid
by all of the Borrowers on such date is equal to the amount set forth below for
such Class opposite such date (as such amount may be reduced pursuant to
paragraph (b)(iv) below or Section 2.10(c)):
TRANCHE-A-TERM TRANCHE B TERM
DATE LEANS AMOUNT LOANS AMOUNT
------------------ ----------------- ---------------
September 30, 1998 $ 0 $ 2,500,000
March 31, 1999 $ 0 $ 2,500,000
September 30, 1999 $ 75,000,000 $ 2,500,000
March 31, 2000 $ 75,000,000 $ 2,500,000
September 30, 2000 $ 75,000,000 $ 2,500,000
March 31, 2001 $ 75,000,000 $ 2,500,000
September 30, 2001 $ 75,000,000 $ 2,500,000
March 31, 2002 $ 75,000,000 $ 2,500,000
September 30, 2002 $ 75,000,000 $ 2,500,000
March 31, 2003 $ 75,000,000 $ 2,500,000
00
XXXXXXX-X-XXXX XXXXXXX X TERM
DATE LEANS AMOUNT LOANS AMOUNT
------------------ ----------------- ---------------
September 30, 2003 $ 75,000,000 $ 2,500,000
March 31, 2004 $ 75,000,000 $ 2,500,000
September 30, 2004 $ 75,000,000 $ 2,500,000
March 31, 2005 $ 75,000,000 $ 2,500,000
September 30, 2005 $ 0 $ 157,500,000
March 31, 2006 $ 0 $ 157,500,000
September 30, 2006 $ 0 $ 150,000,000
(b) PREPAYMENT AND REDUCTION. (i) In addition, the Parent shall prepay or
cause a Subsidiary Borrower to prepay Term Loans (or the Term Commitments shall
be reduced) as follows:
(x) on the date which the Parent or any of its Subsidiaries shall
receive any Net Cash Proceeds with respect to (1) any Asset Sale made
in any fiscal year, but solely if, and solely to the extent that, the
aggregate Net Cash Proceeds from such Asset Sale, when combined with
all other Asset Sales previously made during such fiscal year,
exceeds $15,000,000 or (2) any Indebtedness Incurrence, the Parent
shall prepay, or cause a Subsidiary Borrower to prepay, Term Loans
(or, if Term Commitments are outstanding, the Term Commitments shall
be reduced until the Term Commitments have been reduced to zero), in
the aggregate, by an amount equal to the Reduction Percentage of such
Net Cash Proceeds; PROVIDED that (A) if the Net Cash Proceeds are
less than $5,000,000, such prepayment or reduction shall be made upon
receipt of proceeds such that, together with all other such amounts
not previously applied, aggregate Net Cash Proceeds are equal to at
least $5,000,000; (B) the Parent or the Subsidiary Borrower receiving
the Net Cash Proceeds shall not be required to apply to such
prepayment or reduction up to $50,000,000 of Net Cash Proceeds of
Asset Sales which would otherwise be required to be applied to such
prepayment or reduction, to the extent such Net Cash Proceeds are
reinvested within 365 days of such Asset Sales in productive assets
of a kind used or usable in the business of the Parent or such
Subsidiary; and (C) such prepayment shall not be required with
respect to Net Cash Proceeds from Asset Sales consisting of sales of
accounts receivables by the Parent or any of its Subsidiaries,
whether pursuant to the Existing Receivables Program or otherwise, to
the extent that the aggregate principal amount to be recovered from
the sales of such accounts receivables shall not exceed at any time
outstanding $100,000,000.
41
(y) on or before the 95th day after the end of each fiscal year
beginning with the fiscal year ending in 1998, the Parent shall
prepay, or cause a Subsidiary Borrower to prepay, Term Loans by an
amount equal to the Reduction Percentage of Excess Cash Flow for such
fiscal year.
(ii) In addition, promptly following receipt by the Parent or any of
its Subsidiaries of any Major Casualty Proceeds or Indemnity Proceeds, the
Parent shall deposit in the Major Casualty and Indemnity Proceeds Account
established pursuant to Section 6(A) of the Parent Pledge and Security
Agreement an amount of cash equal to the amount of such Major Casualty
Proceeds or Indemnity Proceeds, as the case may be. So long as no Default
has occurred and is continuing, an amount equal to the aggregate amount of
such cash proceeds which such Person has expended or committed to expend
for the restoration, replacement or environmental remediation of the asset
in respect of which such Major Casualty Proceeds payment was made or to
remedy the event giving rise to such Indemnity Proceeds payment, shall be
released by the Administrative Agent to the Parent; PROVIDED that if
within 180 days of receipt of such payment such Person shall not have
expended or committed to expend an equivalent amount for the restoration,
replacement or environmental remediation of the asset in respect of which
such Major Casualty Proceeds payment was made, or to remedy the event
giving rise to such Indemnity Proceeds payment, the excess of the amount
of such payment over the amount of such expenditures and commitments shall
be applied to prepay the Term Loans (or, if Term Commitments are
outstanding, reduce the Term Commitments until the Term Commitments have
been reduced to zero) on such 180th day.
(iii) The Parent shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment or reduction under this
paragraph not later than 11:00 a.m., Charlotte, North Carolina time, three
Business Days before the date of prepayment or reduction, as the case may
be (or, solely if such prepayment will be a prepayment of ABR Loans only,
no later than 11:00 a.m., Charlotte, North Carolina time, one Business Day
before the date of such prepayment). Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of each
Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
prepayment is given in connection with a conditional notice of termination
of the Commitments as contemplated by Section 2.07, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07. Each prepayment of Loans of any Class made
pursuant to this Section shall be applied to such Borrowing or Borrowings
of such Class as the Parent may designate in the
42
notice of prepayment delivered with respect thereto (or, failing such
designation, as determined by the Administrative Agent), and shall be
applied to repay ratably the Loans of such Class of the several Lenders
included in such Borrowing or Borrowings. Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall
advise the affected Lenders of the contents thereof. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12 and
shall be subject to the provisions of Section 2.15.
(iv) The amount of any prepayment of the Term Loans made pursuant to
clauses (i) or (ii) of this paragraph shall be applied to reduce ratably
the amount of each subsequent scheduled repayment of the Term Loans to be
made by the Borrowers pursuant to paragraph (a) of this Section.
(c) OPTION OF TRANCHE B LENDERS NOT TO ACCEPT PREPAYMENTS. (i) The Parent
shall (x) at least one Business Day prior to any date (an "UNSCHEDULED
PREPAYMENT DATE") on which any prepayment of the Tranche B Term Loans (an
"UNSCHEDULED PREPAYMENT"), other than a prepayment of such Loans in whole,
would, but for the provisions of this paragraph (c), otherwise have been made
pursuant to this Section or Section 2.10, deliver a notice conforming to the
requirements set forth below (a "PREPAYMENT NOTICE") to the Administrative Agent
and (y) on or prior to such Unscheduled Prepayment Date, deposit in the
Prepayment Account established pursuant to Section 6(D) of the Parent Pledge and
Security Agreement an amount equal to the principal amount that would have been
payable pursuant to this Section or Section 2.10 on such Unscheduled Prepayment
Date in respect of such Unscheduled Prepayment. Such Unscheduled Prepayment
shall not occur on such Unscheduled Prepayment Date but shall instead be
deferred as hereinafter provided in this paragraph (c). Upon receipt of any
Prepayment Notice, the Administrative Agent shall promptly notify each affected
Lender of the contents hereof. Amounts on deposit in the Prepayment Account
shall be deemed to reduce the aggregate principal amount of Loans outstanding as
if applied to the repayment thereof, but only with respect to calculations made
for purposes of determining compliance with the covenants set forth in Sections
6.12, 6.13, and 6.14.
(ii) Each Prepayment Notice shall be in writing, shall refer to this
paragraph (c) and shall (w) set forth the amount of the Unscheduled
Prepayment and the prepayment that the applicable Term Lender will be
entitled to receive if it accepts prepayment of its Tranche B Term Loans
in accordance with this subsection, (x) contain an offer to prepay on a
specified date (each such date, a "DEFERRED UNSCHEDULED PREPAYMENT DATE"),
which shall not be less than 20 days or more than 25 days after the date
of such Prepayment Notice, the Tranche B Term Loans of such
43
Lender by an aggregate principal amount equal to such Lender's ratable
share of such Unscheduled Prepayment (determined by reference to the
outstanding principal amount of such Lender's Tranche B Term Loan as a
proportion of the aggregate outstanding principal amount of the Tranche B
Term Loans of all of the Lenders), (y) request such Lender to notify the
Parent and the Administrative Agent in writing, no later than the fifth
Business Day prior to the Deferred Unscheduled Prepayment Date, of such
Lender's acceptance or rejection (in each case, in whole and not in part)
of such offer of prepayment and (z) inform such Lender that the failure by
such Lender to reject such offer in writing on or before the fifth day
prior to such Deferred Unscheduled Prepayment Date shall be deemed an
acceptance of such prepayment offer. Each Prepayment Notice shall be given
by telecopy, confirmed hand delivery or overnight courier service, in each
case addressed to the Administrative Agent and each affected Lender as
provided in Section 10.01.
(iii) On each Deferred Unscheduled Prepayment Date, the
Administrative Agent shall withdraw from the Prepayment Account the
aggregate amount required to prepay the Tranche B Term Loans of each of
the Lenders that shall have accepted (or been deemed to have accepted)
prepayment in accordance with the related Prepayment Notice (each, an
"ACCEPTING LENDER") and shall cause such amount to be applied to prepay
the outstanding Tranche B Term Loans of the Accepting Lenders.
(iv) Any amount remaining in the Prepayment Account on any Deferred
Unscheduled Prepayment Date after giving effect to the prepayments
required by clause (iii) above (exclusive of any interest or profits with
respect to amounts held in the Prepayment Account) shall be withdrawn and
applied by the Administrative Agent (x) to prepay the principal of the
then outstanding Tranche A Term Loans ratably in proportion to their then
outstanding principal amounts, and/or (y) after all Term Loans have been
repaid, or all Tranche B Lenders having Tranche B Term Loans outstanding
have declined to accept prepayments, to reduce the Commitments, all in
accordance with paragraph (b) above or Section 2.10, as applicable.
SECTION 2.10. OPTIONAL PREPAYMENT OF LOANS. (a) Each Borrower shall have
the right at any time and from time to time to prepay any Borrowing of any Class
in whole or in part, subject to prior notice in accordance with paragraph (b) of
this Section.
(b) A Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
44
time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.
(c) Each prepayment of the Term Loans made pursuant to this Section shall
be allocated pro rata on the basis of principal amount among the then
outstanding Tranche A Term Loans and Tranche B Term Loans. The amount of any
prepayment of the Term Loans made by a Borrower pursuant to this Section shall
be applied to reduce ratably the amount of each subsequent scheduled repayment
of the Term Loans in order of maturity to be made by the Borrowers pursuant to
Section 2.09(a).
SECTION 2.11. FEES. (a) The Parent agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue (i)
during the period from and including the Effective Date to but excluding the
first day of the initial Performance Period, at the rate of .375% per annum and
(ii) during the period from and including the first day of the initial
Performance Period to but excluding the date on which the last Commitment
terminates, at the Applicable Rate, in each case on the daily aggregate unused
amount of the Commitments of such Lender; PROVIDED that, if such Lender
continues to have any Revolving Credit Exposure after its Revolving Commitment
terminates, then such commitment fee shall continue to accrue on the daily
amount of such Lender's Revolving Credit Exposure from and including the date on
which its Revolving Commitment terminates to but excluding the date on which
such Lender ceases to have any Revolving Credit Exposure. Accrued commitment
fees shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the relevant Commitments
terminate, commencing on the first such date to occur after the date hereof;
PROVIDED that any commitment fees accruing after the date on which the Revolving
Commitments terminate shall be payable on demand. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
45
(b) The Parent agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue (x) during the period from and including
the Effective Date to but excluding the first day of the initial Performance
Period, at the rate of 1.25% per annum and (y) during the period from and
including the first day of the initial Performance Period to but excluding the
later of the date on which such Lender's Revolving Commitment terminates and the
date on which such Lender ceases to have any LC Exposure, at the Applicable
Rate, in each case on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of
1/4% per annum on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Accrued participation fees and fronting fees
shall be payable on the last day of March, June, September and December of each
year and on the later of the date on which the Revolving Commitments terminate
and the date on which the Lenders cease to have any LC Exposure, commencing on
the first such date to occur after the Effective Date; PROVIDED that any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to the Issuing Bank pursuant to
this paragraph shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Parent agrees to pay to each Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Parent and such Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to each of the
other Agents and the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the
relevant Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.12. INTEREST. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus (i) for each day during the period
from and including the Effective Date to but excluding the first day of the
initial Performance Period, the rate of .25% per annum (with respect to
Revolving
46
Loans and Tranche A Term Loans) or .75% per annum (with respect to Tranche B
Term Loans) and (ii) thereafter, the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
(i) for each day during the period from and including the Effective Date to but
excluding the first day of the initial Performance Period, the rate of 1.50% per
annum (with respect to Revolving Loans and Tranche A Term Loans) or 2.00% per
annum (with respect to Tranche B Term Loans) and (ii) thereafter, the Applicable
Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable hereunder is not paid when due, whether
at stated maturity, upon acceleration or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; PROVIDED that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Loan prior to the end of the Revolving Credit Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
47
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Parent and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Parent and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
(ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing.
SECTION 2.14. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Parent will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
the
48
Loan Documents or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Parent will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Parent shall be conclusive absent
manifest error. The Parent shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; PROVIDED
that the Parent shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Parent of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.10(b) and is revoked in accordance therewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by a Borrower pursuant to Section 2.18, then,
in any such event, the Parent shall compensate each Lender for the loss, cost
and expense attributable to such event. Such loss, cost or expense to any Lender
shall be deemed to include an amount determined by such Lender to be the excess,
if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such
49
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the Parent
and shall be conclusive absent manifest error. The Parent shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.16. TAXES. (a) Any and all payments by or on account of any
obligation of any Borrower under the Loan Documents shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that
if any Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of such Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
50
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by a Borrower to a Governmental Authority, such Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by such Borrower as will permit such payments to be made
without withholding or at a reduced rate.
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-
OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Sections 2.14, 2.15 or 2.16, or
otherwise) prior to 12:00 noon, Charlotte, North Carolina time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at Charlotte, North
Carolina, except payments to be made directly to the Issuing Bank as expressly
provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16
and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
51
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans of any Class or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans of such Class or participations in LC
Disbursements and accrued interest thereon than the proportion received by any
other Lender with respect to its Loans of the relevant Class or participations
in LC Disbursements and accrued interest thereon, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans of the relevant Class and participations in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans of such Class and
participations in LC Disbursements; PROVIDED that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by a Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to a Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if such Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of
52
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(d) or 2.04(e), 2.05(b) or 2.17(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If any
Lender requests compensation under Section 2.14, or if any Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16 as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. Each Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then such
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
and the other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
PROVIDED that (i) such Borrower or the Parent shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Commitment is
being assigned, the Issuing Bank), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or such Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16,
53
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling a Borrower to require such assignment and delegation
cease to apply.
SECTION 2.19. SUBSIDIARY BORROWINGS. Subject to the prior or concurrent
satisfaction of each of the following conditions, any Eligible Subsidiary may be
designated by the Parent as a Subsidiary Borrower hereunder following the
acquisition of Control of such Eligible Subsidiary by the Parent, entitled to
the rights and subject to the obligations incident thereto:
(a) The Administrative Agent (or its counsel) shall have received from the
Parent and such Subsidiary Borrower a counterpart of a Subsidiary Borrowing
Agreement signed on behalf of such party or written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page) that such party has signed a counterpart thereof.
(b) The Administrative Agent (or its counsel) shall have received from
such Subsidiary Borrower a counterpart of a Subsidiary Borrower Pledge and
Security Agreement signed on behalf of such party or written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page) that such party has signed a
counterpart thereof.
(c) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
date that such Borrowing Subsidiary is making its Initial Borrowing) of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Subsidiary Borrower,
substantially in the form of Exhibit I, and of Xxxxx Xxxx & Xxxxxxxx, special
counsel for the Agents, substantially in the form of Exhibit J, and each
covering such other matters relating to the Obligors, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request.
(d) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence, good standing and solvency of such
Subsidiary Borrower, the authorization of the Transactions and any other legal
matters relating to any of the foregoing, all in form and substance satisfactory
to the Administrative Agent and its counsel.
SECTION 2.20. COMPETITIVE BID AMENDMENT. As promptly as practicable
following (i) the date on which the Parent's long-term Indebtedness is assigned
an investment grade rating by Standard & Poor's Rating Group or Xxxxx'x Investor
Service Inc. or (ii) if the Parent's long-term Indebtedness is not rated, the
date on
54
which the Parent delivers financial statements pursuant to Section 5.01
demonstrating that the Leverage Ratio for the immediately preceding four fiscal
quarters is equal to or less than 2.0 to 1, this Agreement shall be amended in a
manner reasonably satisfactory to the Parent and the Required Lenders to provide
that Loans may be made to the Parent bearing interest at a rate based on
competitive bids by the Lenders.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each of the Parent and each Subsidiary Borrower (to the extent applicable
to such Subsidiary Borrower) represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. (a) Each of the Obligors and its
Material Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required. Schedule 3.01(a) identifies each Material Subsidiary organized under
the laws of the United States of America or any State thereof.
(b) Schedule 3.01(b) lists each Material Subsidiary organized under the
laws of any jurisdiction outside of the United States of America.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are within
each Obligor's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. Each Loan Document has been duly
executed and delivered by each Obligor party thereto and constitutes a legal,
valid and binding obligation of such Obligor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Parent or any of its Material Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Parent or any of its Material
Subsidiaries or its assets,
55
or give rise to a right thereunder to require any payment to be made by the
Parent or any of its Material Subsidiaries (other than as set forth in Schedule
3.03), and (d) will not result in the creation or imposition of any Lien on any
asset of the Parent or any of its Material Subsidiaries (other than the Liens
created by the Collateral Documents).
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The
Parent has heretofore furnished to the Lenders (i) its consolidated statements
of operations, stockholders equity and cash flows as of and for each of the
fiscal years ended December 28, 1997, December 29, 1996 and December 31, 1995
and (ii) its consolidated balance sheets as of and for each of the fiscal years
ended December 28, 1997 and December 29, 1996, reported on by Xxxxxx Xxxxxxxx
LLP, independent public accountants. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Parent and its consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP.
(b) Since December 28, 1997, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of the Parent and its Subsidiaries, taken as a whole.
(c) The Parent has heretofore furnished to the Lenders the pro forma
balance sheet of the Parent as of December 28, 1997 certified by one of its
Financial Officers. Such balance sheet presents fairly, in all material
respects, the financial position of the Parent and its Consolidated Subsidiaries
as of December 28, 1997 in accordance with GAAP on a pro forma basis, adjusted
to give effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisition, (ii) the Transactions contemplated to occur in
connection therewith (including without limitation the making of Loans), (iii)
the application of the proceeds therefrom as contemplated by the Acquisition
Documents and the Loan Documents and (iv) the payment of all legal, accounting
and other fees related thereto to the extent known at the time of the
preparation of such balance sheet. As of the date of such balance sheet and the
Effective Date, the Parent had and has no material liabilities, contingent or
otherwise, including liabilities for taxes, long-term leases or forward or
long-term commitments, which are not properly reflected on such balance sheet.
SECTION 3.05. PROPERTIES. (a) Each of the Parent and its Material
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
56
(b) Each of the Parent and its Material Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Parent and its
Material Subsidiaries does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) Other than as set
forth on Schedule 3.06, there are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Parent, threatened against or affecting the Parent or any of its Material
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect,
considering, among other things, reserves established by the Parent or its
applicable Material Subsidiaries, or (ii) that involve the Loan Documents, or
the Transactions, the Acquisition Documents or the Acquisition.
(b) Except as set forth on Schedule 3.06, neither the Parent nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability which, in each case, could not reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect, considering, among
other things, reserves established by the Parent or its applicable Material
Subsidiaries.
(c) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.06 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Parent and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Parent
nor any of its Subsidiaries is (a) an "INVESTMENT COMPANY" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
57
"HOLDING COMPANY" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. TAXES. Each of the Parent and its Material Subsidiaries has
timely filed or caused to be filed all tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the Parent or such Subsidiary, as applicable, has set
aside on its books adequate reserves.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. DISCLOSURE. The Parent has disclosed to the Lenders all
material agreements, instruments and corporate or other restrictions to which
it, any of its Material Subsidiaries or any of Xxxxxxx, First Alert, Signature
or any Subsidiary of Xxxxxxx, First Alert or Signature is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information (taken as a whole) furnished by or
on behalf of any Obligor to the Administrative Agent or any Lender in connection
with the negotiation of the Loan Documents or delivered thereunder (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED that, with respect to projected financial
information, the Parent represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. GUARANTORS. The Subsidiary Guarantors are all of the
Material Subsidiaries (other than Subsidiaries organized under the laws of any
jurisdiction outside the United States of America), and each Subsidiary
Guarantor is a wholly-owned Subsidiary.
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SECTION 3.13. COLLATERAL DOCUMENTS. Each of the representations and
warranties made by the Obligors in the Collateral Documents is true and correct.
SECTION 3.14. ACQUISITION DOCUMENTS. As of each of the Effective Date, the
Tranche A Effective Date and the Tranche B Effective Date, each of the
representations and warranties made in the Acquisition Documents by the Parent
is true and correct in all material respects.
SECTION 3.15. SOLVENCY. As of each of the Effective Date, the Tranche A
Effective Date and the Tranche B Effective Date, after giving effect to the
transactions contemplated hereby to occur on such date: (i) the aggregate fair
market value of the assets of each of the Parent and the other Obligors will
exceed its liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), (ii) each of the Parent and the other Obligors will
be able to pay its debts as they mature and (iii) each of the Parent and the
other Obligors will not have unreasonably small capital for the business in
which it is engaged.
SECTION 3.16. OUTSTANDING INDEBTEDNESS. Schedule 3.16 identifies all
outstanding Indebtedness (other than intercompany Indebtedness), as of the
Effective Date, of any of the Parent, CLN, Xxxxxxx, First Alert or Signature or
any of their respective subsidiaries.
ARTICLE 4
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The Effective Date hereunder shall occur on
the first date on which each of the conditions set forth in Schedule 4.01 is
satisfied (or waived in accordance with Section 10.02), it being understood that
with respect to the conditions set forth in clauses (e) and (h) of Schedule
4.01, each Lender shall be deemed to have determined that such conditions shall
have been satisfied unless the Administrative Agent shall have received notice
from such Lender prior to the Effective Date that such Lender does not consider
such conditions to have been satisfied (or, solely with respect to the
conditions set forth in clause (e), the Lenders shall not have received any
documents referred to therein).
The Administrative Agent shall notify the Parent and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the conditions set forth in Schedule 4.01 is satisfied (or waived pursuant to
59
Section 10.02) at or prior to 3:00 p.m., New York City time, on April 15, 1998
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. TRANCHE A EFFECTIVE DATE. The Tranche A Effective Date shall
occur hereunder on the first date on which each of the conditions set forth in
Schedule 4.02 is satisfied (or waived in accordance with Section 10.02). The
Administrative Agent shall notify the Parent and the Lenders of the Tranche A
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Tranche A Term Loans shall
not become effective unless each of the conditions set forth in Schedule 4.02 is
satisfied (or waived in accordance with Section 10.02) at or prior to 3:00 p.m.,
New York City time, on June 30, 1998 (and, in the event such conditions are not
so satisfied or waived, the Tranche A Commitments shall terminate at such time).
SECTION 4.03. TRANCHE B EFFECTIVE DATE. The Tranche B Effective Date shall
occur hereunder on the first date on which each of the conditions set forth in
Schedule 4.03 is satisfied (or waived in accordance with Section 10.02). The
Administrative Agent shall notify the Parent and the Lenders of the Tranche B
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Tranche B Term Loans shall
not become effective unless each of the conditions set forth in Schedule 4.03 is
satisfied (or waived in accordance with Section 10.02) at or prior to 3:00 p.m.,
New York City time, May 15, 1998 (and, in the event such conditions are not so
satisfied or waived, the Tranche B Commitments shall terminate at such time).
SECTION 4.04. EACH CREDIT EVENT. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) The Effective Date shall have occurred and, in the case of any Tranche
A Term Loans, the Tranche A Effective Date shall have occurred, and, in the case
of any Tranche B Term Loans, the Tranche B Effective Date shall have occurred.
(b) The representations and warranties of the Obligors set forth in the
Loan Documents shall be true and correct on and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable.
(c) At the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
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Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and warranty by
the Parent and each Subsidiary Borrower on the date thereof as to the matters
specified in paragraphs (b) and (c) of this Section.
ARTICLE 5
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees and other amounts payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Parent
covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Parent will
furnish to the Administrative Agent:
(a) within 90 days after the end of each fiscal year of the Parent, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year (which
may be on Form 10-K, so long as the Parent is subject to periodic reporting
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")), setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Xxxxxx Xxxxxxxx LLP or other
independent public accountants of recognized national standing (without a "GOING
CONCERN" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Parent and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Parent, its consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the fiscal
year (which may be on Form 10-Q, so long as the Parent is subject to the
periodic reporting requirements of the Exchange Act), setting forth in each case
in comparative form the figures for the corresponding period or periods of (or,
in the case of the balance sheet, as of the end of) the previous fiscal year,
all certified by one of its Financial Officers as presenting fairly in all
material respects the financial
61
condition and results of operations of the Parent and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements under clause
(a) or (b) above, a certificate of a Financial Officer (i) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.01 and 6.11 through 6.15, inclusive and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Parent or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Parent to its shareholders generally, as the case may be;
(f) prior to the end of each fiscal year of the Parent, copies of an
operating plan and financial forecast for the next fiscal year, by the
management of the Parent for internal use;
(g) promptly following the delivery thereof to the Parent or its board of
directors or management, a copy of any management letter or written report by
independent public accountants with respect to the policies and procedures of
the Parent and its Subsidiaries that notes a "reportable condition"; and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the Parent
or any Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Parent will furnish to the
Administrative Agent prompt written notice of the following:
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(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the Parent
or any Affiliate thereof that could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Parent and its Subsidiaries in an aggregate amount exceeding
$25,000,000; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Parent
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS. The Parent will, and will
cause each of its Material Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; PROVIDED that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04. PAYMENT OF OBLIGATIONS. The Parent will, and will cause each
of its Material Subsidiaries to, pay its obligations, including liabilities for
Taxes, that, if not paid, could result in a Material Adverse Effect before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Parent or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Parent will, and
will cause each of its Material Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies or through programs of self-insurance
(including levels of self-insured retention), insurance in such amounts and
against such risks and, in the case of self-insurance, at such levels and in
such amounts
63
(including without limitation comprehensive general liability insurance, workers
compensation insurance, product liability insurance, business interruption
insurance and environmental insurance) as are customarily maintained by
companies engaged in the same or similar businesses operating in the same or
similar locations.
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Parent will, and
will cause each of its Material Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Parent will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.07. COMPLIANCE WITH LAWS AND CONTRACTS. (a) The Parent will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
(b) The Parent will, and will cause each of its Material Subsidiaries to,
comply with all provisions of all contracts to which the Parent or such
Subsidiary, as the case may be, is a party, except where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of the
Revolving Loans will be used only (i) to consummate the Acquisition, (ii) to
repay certain of the Refinanced Indebtedness, (iii) to pay related fees and
expenses, (iv) to finance Consolidated Capital Expenditures and Permitted
Acquisitions permitted hereunder, and (v) for general corporate purposes
(including without limitation the making of intercompany loans to Subsidiaries,
the proceeds of which loans will be used by such Subsidiaries for general
corporate purposes). The proceeds of the Tranche A Term Loans will be used to
repay certain of the Refinanced Indebtedness. The proceeds of the Tranche B Term
Loans will be used (i) to consummate the Acquisition and (ii) to repay certain
of the Refinanced Indebtedness. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations G, U and X.
Letters of Credit will be issued only to support obligations of the Parent and
its Subsidiaries incurred in the ordinary course of business and will not be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations G, U and X. No
part of the proceeds of any
64
Loan will be used, whether directly or indirectly, in connection with the
initiation or participation by the Parent or any of its Subsidiaries as a member
of a "group" (as that term is used for the purposes of Section 13(d)(3) of the
Exchange Act or the rules and regulations thereunder) or as a "PARTICIPANT" or a
"PARTICIPANT IN A SOLICITATION" (as defined in Rule 14a-11 under the Exchange
Act) in (i) a tender offer for the securities of any Person, if the board of
directors (or similar body) of such Person recommends, in a Schedule 14D-9 filed
under the Exchange Act or otherwise, that holders of securities of such Person
not tender their securities pursuant to such tender offer or (ii) in any
solicitation of any proxy, consent or authorization for the purpose of opposing
the board of directors (or other similar body) of any Person.
SECTION 5.09. FURTHER ASSURANCES. (a) The Parent will, and will cause each
Material Subsidiary to, at the Parent's sole cost and expense, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment and transfers as the Administrative Agent
shall from time to time reasonably request, which may be necessary or desirable
(in the reasonable judgment of the Administrative Agent or the Required Lenders)
from time to time to assure, perfect, convey, assign and transfer to the
Administrative Agent the property and rights conveyed or assigned pursuant to
the Collateral Documents.
(b) The Parent will:
(i) cause (A) each Person (other than Xxxxxxx, First Alert or
Signature) which becomes a Material Subsidiary (other than a Subsidiary
organized under the laws of any jurisdiction outside of the United States)
after the Effective Date and (B) each of Xxxxxxx, First Alert and
Signature (in each case after the date on which such entity becomes a
Wholly Owned Subsidiary) to become a party to the Subsidiary Guarantee as
guarantor by executing the Subsidiary Guarantee or a supplement thereof in
form and substance satisfactory to the Administrative Agent; and
(ii) pledge, or cause to be pledged, pursuant to the Parent Pledge
and Security Agreement or the Subsidiary Pledge and Security Agreement (or
another pledge agreement in form and substance satisfactory to the
Administrative Agent) all of the capital stock or other equity interests
(or, in the case of Material Subsidiaries organized under the laws of any
jurisdiction outside of the United States, 66% of such capital stock or
other equity interests) owned directly or indirectly by the Parent of (A)
each Person (other than Xxxxxxx, First Alert and Signature) which becomes
a Material Subsidiary after the Effective Date, (B) Xxxxxxx, First Alert
and Signature, in each case after the date on which such entity becomes a
65
Wholly Owned Subsidiary, and (C) any joint venture in which the Parent or
any Subsidiary has an ownership interest.
The Parent shall cause each Person described in clause (i) or (ii) above
to take such actions as may be necessary or desirable to effect the foregoing
within 30 days after such Person becomes a Material Subsidiary or, in the case
of Xxxxxxx, First Alert and Signature, a Wholly Owned Subsidiary, including
without limitation causing such Person to (1) execute and deliver to the
Administrative Agent such number of copies as the Administrative Agent may
specify of such supplements and security and pledge agreements and other
documents creating security interests and (2) deliver such certificates,
evidences of corporate action or other documents as the Administrative Agent may
reasonably request, all in form and substance satisfactory to the Administrative
Agent, relating to the satisfaction of the Parent's obligations under this
Section.
(c) The Parent will take all actions necessary to ensure that each of
First Alert and Signature becomes a Wholly Owned Subsidiary on or before June
30, 1998 and that Xxxxxxx becomes a Wholly Owned Subsidiary on or before August
15, 1998.
(d) Concurrently with any Person becoming party to the Subsidiary
Guarantee, the Parent will cause such Person to deliver to the Administrative
Agent a legal opinion of counsel substantially in the form of Exhibit K, and
covering such other matters relating to the Subsidiary Guarantor, the Loan
Documents or the Transactions as the Required Lenders shall reasonably request.
SECTION 5.10. APPROVED HEDGING AGREEMENTS. Not later than 60 days after
the Effective Date, the Parent shall have entered into and thereafter maintain
in full force and effect Hedging Agreements providing for a fixed rate of
interest for at least 50% of Consolidated Indebtedness and otherwise on terms
and conditions satisfactory to the Agents.
SECTION 5.11. LIENS ON ASSETS. The Required Lenders shall have the right
from time to time to require the Parent, pursuant to a written request from the
Administrative Agent, to provide, or to cause any Subsidiary Guarantor to
provide, Liens upon such assets as may be specified in such request to secure
the obligations of the Parent and such Subsidiary Guarantor hereunder and under
the Subsidiary Guaranty. Any such request shall be made by the Required Lenders
in the good faith exercise of their discretion. Within 30 days after any such
request, the Parent shall and shall cause the appropriate Subsidiary Guarantor
of the Parent to, (i) execute and deliver to the Administrative Agent such
number of copies as the Administrative Agent may specify of documents creating
such Liens and (ii) do all other things which may be necessary or which the
Administrative Agent may reasonably request in order to confer upon and confirm
to the Lenders the
66
benefits of such security. Within 45 days after a request for security pursuant
hereto, the Parent shall, and shall cause the appropriate Subsidiary Guarantor
of the Parent to, deliver such legal opinions, certificates, evidences of
corporate action or other documents as the Administrative Agent may reasonably
request, all in form and substance satisfactory to the Administrative Agent,
relating to the satisfaction of the Parent's obligations under this Section.
SECTION 5.12. REPAYMENT OF OUTSTANDING INDEBTEDNESS. The Parent shall
repay, or shall cause a Subsidiary Borrower to repay or defease, on or before
June 15, 1998, each item of outstanding Indebtedness listed on Schedule 5.08.
SECTION 5.13. YEAR 2000 COMPATIBILITY. The Parent shall take all action
necessary to ensure that the computer based systems of the Parent and its
Material Subsidiaries are able to operate and effectively process data including
dates on or after January 1, 2000. At the request of the Administrative Agent,
the Parent shall provide assurance reasonably acceptable to the Administrative
Agent of the year 2000 compatibility of the Parent and its Material
Subsidiaries.
ARTICLE 6
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees and other amounts payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Parent covenants and agrees with
the Lenders that:
SECTION 6.01. INDEBTEDNESS. The Parent will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01
and (except with respect to (i) the item of Indebtedness identified as the
"Xxxxxx Contingent Debt", (ii) the Existing BANTSA Letter of Credit, (iii) the
Existing CoreStates Letters of Credit and (iv) the item of Indebtedness
identified as the CoreStates Bankers' Acceptances) extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof;
67
(c) Indebtedness of the Parent to any Subsidiary and of any Subsidiary to
the Parent or any other Subsidiary;
(d) Guarantees by the Parent of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Parent or any other Subsidiary;
(e) Indebtedness of the Parent or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; PROVIDED that (i) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) shall not exceed $25,000,000 at any time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after the date
hereof; PROVIDED that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (ii) the aggregate principal amount
of Indebtedness permitted by this clause (f) shall not exceed $25,000,000 at any
time outstanding;
(g) Indebtedness of foreign Subsidiaries for borrowings in local currency
in an amount not to exceed $40,000,000; and
(h) other unsecured Indebtedness in an aggregate principal amount not
exceeding 5% of Consolidated Net Worth at any time outstanding.
SECTION 6.02. LIENS. The Parent will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Parent or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02; PROVIDED that (i)
such Lien shall not apply to any other property or asset of the Parent or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
68
(c) any Lien existing on any property or asset prior to the acquisition
thereof by the Parent or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; PROVIDED that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Parent or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by
the Parent or any Subsidiary; PROVIDED that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 80% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Parent or any Subsidiary;
(e) any Lien on Margin Stock, if and to the extent the value of all Margin
Stock owned by the Parent and its Subsidiaries exceeds 25% of the value of the
total assets subject to this Section;
(f) Liens consisting of security interests in accounts receivable (and in
property securing or otherwise supporting such accounts receivable) in
connection with agreements for limited recourse sales by the Parent or any of
its Subsidiaries for cash of such accounts receivable; and
(g) Liens arising under the Collateral Documents.
SECTION 6.03. FUNDAMENTAL CHANGES; ASSET SALES. (a) The Parent will not,
and will not permit any Material Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets, or all or
substantially all of the stock (other than Margin Stock that is disposed of for
fair value) of any of its Material Subsidiaries (in each case, whether now owned
or hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Material Subsidiary may merge into the Parent
in a transaction in which the Parent
69
is the surviving corporation, (ii) any Material Subsidiary may merge into any
Material Subsidiary in a transaction in which the surviving entity is a
Subsidiary Guarantor and (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Parent or to a Subsidiary Guarantor;
PROVIDED that any such merger involving a Person that is not a Wholly Owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(b) The Parent will not, and will not permit any of its Material
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Parent and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto or to
the sale and distribution of household consumer products.
(c) The Parent will not, and will not permit any of its Subsidiaries to,
make any Asset Sale other than (i) Asset Sales consisting of sales of accounts
receivable by the Parent or any of its Subsidiaries whether pursuant to the
Existing Receivables Program or otherwise; PROVIDED that (x) the consideration
received therefor shall be cash and (y) the aggregate principal amount to be
received from the sales of such accounts receivable shall not exceed at any time
outstanding $250,000,000 and (ii) other Asset Sales the fair market value of
which, when combined with all other such Asset Sales previously made since the
date of this Agreement in reliance on this clause (ii), does not exceed
$400,000,000. The Parent will not, and will not permit any of its Subsidiaries
to, make any Asset Sale unless at least 80% of the consideration received in
connection therewith consists of cash payable at the closing thereof.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Parent will not, and will not permit any of its Material Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit (any of the foregoing, an
"Investment"), except:
(a) Permitted Investments;
(b) investments by the Parent in the capital stock of, and capital
contributions to, its Material Subsidiaries;
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(c) loans or advances made by the Parent to any Subsidiary and made by any
Subsidiary to the Parent or any other Subsidiary;
(d) Guarantees constituting Indebtedness permitted by Section 6.01;
(e) the Acquisition; and
(f) Permitted Acquisitions.
SECTION 6.05. HEDGING AGREEMENTS. The Parent will not, and will not permit
any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Parent or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
SECTION 6.06. RESTRICTED PAYMENTS; VOLUNTARY PAYMENTS. (a) The Parent will
not, and will not permit any of its Subsidiaries to, declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment, except that, so
long as no Default has occurred and is continuing, (i) the Parent may declare
and pay dividends with respect to its capital stock payable solely in additional
shares of its common stock, (ii) the Parent may declare and pay dividends with
respect to its common stock in cash in an aggregate amount not in excess of
$15,000,000 with respect to any fiscal year of the Parent, (iii) Subsidiaries
may declare and pay dividends ratably with respect to their capital stock, (iv)
the Parent may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans or employment arrangements for management or
employees of the Parent and its Subsidiaries, (v) the Parent may purchase common
stock of the Parent from any employee of the Parent in connection with the
termination of such employee's employment so long as the aggregate amount paid
in respect of such purchases during the term of this Agreement does not exceed
$10,000,000, (vi) the Parent may purchase shares of its common stock for
consideration, not exceeding $10,000,000 in any fiscal year and (vii) so long as
the Leverage Ratio at the last day of the most recently ended fiscal quarter is
less than 2.75 to 1 (adjusted to give effect to the Restricted Payments referred
to in this clause), the Parent may make Restricted Payments from Excess Cash
Flow after the application of such funds pursuant to Section 2.09 (and to the
extent such funds are not expended pursuant to Section 6.11).
(b) The Parent will not, and will not permit any of its Subsidiaries to,
directly or indirectly, optionally redeem, retire, purchase, acquire, defease or
otherwise make any payment other than required interest payments in respect of
any Indebtedness which is subordinated in right of payment to the Indebtedness
of the Parent or such Subsidiary (including, without limitation, the
Subordinated Notes) under the Loan Documents; provided that, with respect to the
purchase of
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Subordinated Notes at the option of any holder thereof, the Parent may pay the
purchase price thereof with its common stock.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. The Parent will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) to the extent otherwise permitted under this Agreement,
but only if such transaction is in the ordinary course of business at prices and
on terms and conditions not less favorable to the Parent or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Parent and its Wholly Owned Subsidiaries not
involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.06.
SECTION 6.08. RESTRICTIVE AGREEMENTS. The Parent will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Parent or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets or
perform any of its obligations under Section 5.09, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Parent or any
other Subsidiary or to Guarantee Indebtedness of the Parent or any other
Subsidiary; PROVIDED that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (ii) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment thereof.
SECTION 6.09. MODIFICATION OF CERTAIN DOCUMENTS. Without the consent of
the Required Lenders, the Parent will not, and will not permit any of its
Subsidiaries to, (i) consent to or solicit or enter into any amendment or
supplement to, or any waiver or other modification of, the Acquisition Documents
which would impair materially the benefit to the Parent or any of its
Subsidiaries of such agreement or arrangements or (ii) consent to or solicit or
enter into any amendment or supplement to, or any waiver or other modification
of, the
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certificate of incorporation or bylaws of the Parent or any of its Subsidiaries,
or the Indenture or any other agreement or instrument governing the terms of the
Subordinated Notes or of any other Indebtedness which by its terms is expressly
subordinated in right of payment to the Loans and the reimbursement obligations
with respect to LC Disbursements, which amendment, supplement, waiver or
modification, as the case may be, could reasonably be expected to have an
adverse effect on the rights of the Lenders or the Administrative Agent under
the Loan Documents.
SECTION 6.10. ACCOUNTING CHANGES. The Parent will not change its fiscal
year from a fiscal year ending on the Sunday closest to December 31, other than
to a fiscal year ending on December 31. The Parent will not adopt any
non-mandatory change in GAAP or the application thereof without 30 days' prior
notice to the Administrative Agent, accompanied, in the case of any material
change, by evidence of concurrence in such change by the public accounting firm
regularly employed by the Parent.
SECTION 6.11. CAPITAL EXPENDITURES. Consolidated Capital Expenditures for
any fiscal year of the Parent will not exceed the sum of:
(i) the Base Amount for such fiscal year, plus
(ii) the amount of Excess Cash Flow not required to be applied to
prepay Term Loans, or applied to make Restricted Payments, during such
fiscal year, plus
(iii) an amount equal to the excess (if any) of (A) the aggregate
amount of Consolidated Capital Expenditures permitted by clauses (i) and
(ii) above for all fiscal years of the Parent ending prior to such fiscal
year over (B) the aggregate amount of Consolidated Capital Expenditures
made in such prior fiscal years.
For purposes of this Section, "BASE AMOUNT" means, (i) for each fiscal
year of the Parent ending on or prior to December 31, 1999, 6%, and (ii) for
each fiscal year thereafter, 5%, in each case of the Parent's consolidated gross
sales for the previous fiscal year. For purposes of determining the Parent's
consolidated gross sales for any fiscal year ending on or prior to December 31,
1998, the amount shall be based on pro forma calculations (giving effect to the
consummation of the Acquisition) that are reasonably satisfactory to the
Administrative Agent.
SECTION 6.12. LEVERAGE RATIO. At the last day of any fiscal quarter of the
Parent ending during any period set forth below, the Leverage Ratio will not
exceed the ratio set forth below opposite such period:
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PERIOD RATIO
------ -----
Effective Date - September 30, 1998 5.75:1
October 1, 1998 - September 30, 1999 5.25:1
October 1, 1999 - September 30, 2000 4.00:1
October 1, 2000 - September 30, 2001 3.00:1
On or after October 1, 2001 2.00:1
SECTION 6.13. INTEREST COVERAGE RATIO. At the last day of any fiscal
quarter of the Parent ending during any period set forth below, the Interest
Coverage Ratio will not be less than the ratio set forth below opposite such
period:
PERIOD RATIO
------ -----
Effective Date - September 30, 1998 2.5:1
October 1, 1998 - September 30, 1999 3.0:1
October 1, 1999 - September 30, 2000 4.0:1
October 1, 2000 - September 30, 2001 5.0:1
On or after October 1, 2001 6.0:1
SECTION 6.14. FIXED CHARGE COVERAGE RATIO. At the last day of any fiscal
quarter of the Parent, the Fixed Charge Coverage Ratio will not be less than
1.05 to 1.
SECTION 6.15. EBITDA CALCULATIONS. (a) For purposes of determining
compliance with the covenants set forth in Sections 6.12, 6.13 and 6.14 during
any period ending on or prior to March 30, 1999, the calculation of Consolidated
EBITDA shall include $60,000,000 in respect of the Parent's good faith estimate
of the value of synergies associated with consummation of the Acquisition.
(b) For purposes of calculating compliance with the covenants set forth in
Sections 6.12, 6.13 and 6.14 in the case of any four fiscal quarter period ended
prior to April 1, 1999, each of Consolidated EBITDA, Consolidated Fixed Charges
and Consolidated Interest Expense shall equal Consolidated EBITDA, Consolidated
Fixed Charges and Consolidated Interest Expense, respectively, for the period
beginning April 1, 1998 and ending on the last day of such four fiscal quarter
period (an "ANNUALIZED PERIOD"), multiplied by a fraction, the numerator of
which is 12 and the denominator of which is the number of months included in
such Annualized Period.
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ARTICLE 7
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any fee
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three Business Days,
or any Borrower shall fail to pay any other amount (other than an amount
referred to in clause (a) of this Article or interest on any Loan) payable under
this Agreement, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of 15 days;
(c) any representation or warranty made or deemed made by or on behalf of
any Obligor in or in connection with the Loan Documents or any amendment or
modification thereof or waiver hereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with the Loan Documents or any amendment or modification thereof or waiver
hereunder, shall prove to have been materially incorrect when made or deemed
made;
(d) the Parent shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.03 (with respect to the Parent's
existence) or 5.08, Article VI or Section 9.01 of this Agreement, or in
provisions substantially similar to the foregoing set forth in any other
Collateral Document to which the Parent is a party;
(e) any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in the Loan Documents (other than those specified in clause
(a), (b) or (d) of this Article), and such failure shall continue unremedied for
a period of 30 days after notice thereof from the Administrative Agent to the
Parent (which notice will be given at the request of any Lender);
(f) the Parent or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable and such failure
constitutes a default under such Material Indebtedness;
75
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Parent or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent or any Material Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(i) the Parent or any Material Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent or any Material Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Parent or any Material Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $25,000,000 shall be rendered against the Parent, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Parent or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Parent and its
76
Subsidiaries in an aggregate amount exceeding $25,000,000 during the term of
this Agreement;
(m) a Change in Control shall occur;
(n) any Lien created by any of the Collateral Documents shall at any time
fail to constitute a valid and (to the extent required by the Collateral
Documents) perfected first priority Lien on the Collateral securing the
obligations purported to be secured thereby, or any party shall so assert in
writing; or
(o) the Subsidiary Guarantee shall at any time fail to constitute a valid
and binding agreement of each Subsidiary Guarantor, or any party shall so assert
in writing;
then, and in every such event (other than an event with respect to any
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Parent, take
either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of each Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower; and in case of any event with respect to any Borrower described
in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of each Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower.
ARTICLE 8
THE ADMINISTRATIVE AGENT
SECTION 8.01. APPOINTMENT, POWERS AND IMMUNITIES. Each of the Lenders and
the Issuing Bank hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative
77
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
(a) The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Parent or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
(b) The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Parent or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by a Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with the Loan
Documents, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth therein, (iv) the validity, enforceability, effectiveness or genuineness
of the Loan Documents or any other agreement, instrument or document, (v) the
existence or the value of any of the Collateral or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere herein or in any other Loan
Document, other than to confirm receipt of items expressly required to be
delivered to, and make determinations expressly required to be made by, the
Administrative Agent.
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SECTION 8.02. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for any
Obligor), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
SECTION 8.03. APPOINTMENT OF SUB-AGENTS. The Administrative Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
subagent and to the Related Parties of the Administrative Agent and any such
subagent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
SECTION 8.04. SUCCESSOR ADMINISTRATIVE AGENTS. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this
paragraph, the Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Parent. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Parent, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent, which shall be a bank with an
office in the United States, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by any Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between such Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related
79
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.
SECTION 8.05. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon the Loan Documents, any related agreement or
any document furnished thereunder.
SECTION 8.06. OTHER AGENTS. Neither Xxxxxx Xxxxxxx Senior Funding, Inc.
nor Bank of America National Trust and Savings Association shall have any
responsibility, obligation or liability under the Loan Documents in their
respective capacities as Syndication Agent and Documentation Agent.
ARTICLE 9
GUARANTY
SECTION 9.01. THE GUARANTY. The Parent hereby unconditionally guarantees
the full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on each Loan made to any Subsidiary
Borrower pursuant to this Agreement, and the full and punctual payment of all
other amounts payable by any Subsidiary Borrower under this Agreement. Upon
failure by any Subsidiary Borrower to pay punctually any such amount, the Parent
shall forthwith on demand pay the amount not so paid at the place and in the
manner specified in this Agreement.
SECTION 9.02. GUARANTY UNCONDITIONAL. The obligations of the Parent
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of any Subsidiary Borrower under this Agreement, by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this Agreement;
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(c) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of any Subsidiary Borrower under this
Agreement;
(d) any change in the corporate existence, structure or ownership of any
Subsidiary Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any Subsidiary Borrower or its assets or any
resulting release or discharge of any obligation of any Subsidiary Borrower
contained in this Agreement;
(e) the existence of any claim, set-off or other rights which the Parent
may have at any time against any Subsidiary Borrower, any Agent, any Lender, the
Issuing Bank or any other Person, whether in connection with this Agreement or
any unrelated transactions, PROVIDED that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
Subsidiary Borrower for any reason of this Agreement, or any provision of
applicable law or regulation purporting to prohibit the payment by any
Subsidiary Borrower of the principal of or interest on any Loan or any other
amount payable by any Subsidiary Borrower under this Agreement; or
(g) any other act or omission to act or delay of any kind by any
Subsidiary Borrower, any Agent, any Lender, the Issuing Bank or any other Person
or any other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of or defense to the
Parent's obligations hereunder.
SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. The Parent's obligations hereunder shall remain in full
force and effect until the principal of and interest on the Loans and all other
amounts payable by each Subsidiary Borrower under this Agreement shall have been
paid in full or assumed by the Parent pursuant to an instrument acceptable to
the Administrative Agent. If at any time any payment of the principal of or
interest on any Loan or any other amount payable by any Subsidiary Borrower
under this Agreement is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of such Subsidiary Borrower or
otherwise, the Parent's obligations hereunder with respect to such payment shall
be reinstated as though such payment had been due but not made at such time.
SECTION 9.04. WAIVER BY THE PARENT. The Parent irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
81
herein, as well as any requirement that at any time any action be taken by any
Person against any Subsidiary Borrower or any other Person.
SECTION 9.05. SUBROGATION. Upon making full payment with respect to any
obligation of any Subsidiary Borrower hereunder, the Parent shall be subrogated
to the rights of the payee against such Subsidiary Borrower with respect to such
obligation; PROVIDED that the Parent shall not enforce any payment by way of
subrogation so long as (i) any Lender has any Commitment hereunder or (ii) any
amount payable by such any Subsidiary Borrower hereunder remains unpaid.
SECTION 9.06. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by any Subsidiary Borrower under this Agreement is
stayed upon the insolvency, bankruptcy or reorganization of any Subsidiary
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the Parent hereunder forthwith on
demand by the Administrative Agent made at the request of the Required Lenders.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to a Borrower, to it at Sunbeam Corporation, 0000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000, Attention of Treasurer (Telecopy No.
000-000-0000]);
(b) if to the Administrative Agent, to First Union National Bank, 000
Xxxxx Xxxxxxx Xxxxxx, Xxx Xxxxx Xxxxx Xxxxxx XX-00, Xxxxxxxxx, XX 00000-0000,
Attention of Xxx Xxxxxxx (Telecopy No. (000) 000-0000);
(c) if to the Issuing Bank, to it at First Union National Bank, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxx Xxxxx Xxxxx Xxxxxx XX-00, Xxxxxxxxx, XX 00000-0000,
Attention of Xxx Xxxxxxx (Telecopy No. (000) 000-0000); and
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(d) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders under
the Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Parent and the Required Lenders or by the Parent and the
Administrative Agent with the consent of the Required Lenders; PROVIDED that no
such agreement shall
(i) unless signed by all the Lenders with a Commitment of a Class,
increase or decrease the Commitments of such Class (except for a ratable
decrease in all the Commitments of such Class), or postpone the date fixed
for the scheduled termination of any Commitment of such Class;
(ii) unless signed by all Lenders holding Loans of any Class, reduce
the principal of or (except as expressly provided in the definition of
"Applicable Leverage Ratio") rate of interest on any Loans of, or fees
with respect to, such Class, postpone the date fixed for any scheduled
payment of such fees or the principal of or interest on any such Loans, or
decrease
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the aggregate amount by which such Loans are required to be repaid on any
date scheduled pursuant to Section 2.09(a) or postpone any date for such
repayment;
(iii) unless signed by all Lenders with Revolving Commitments, reduce
the amount of any LC Disbursement or of any interest thereon or any fees
payable with respect to the Letters of Credit hereunder, postpone the date
fixed for any payment of any LC Disbursement or any interest thereon or
any fees payable with respect to the Letters of Credit hereunder or
(except as expressly provided in Section 2.04) the expiry date of any
Letter of Credit;
(iv) unless signed by all the Lenders, change any of the provisions of
this Section or the definition of "REQUIRED LENDERS" or any other
provision hereof specifying the number or percentage of Lenders required
to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder; or
(v) unless signed by all the Lenders, change Section 2.17(b) or 2.17(c)
in a manner that would alter the pro rata sharing of payments required
thereby; and
PROVIDED FURTHER that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the Issuing Bank hereunder
without the prior written consent of the Administrative Agent or the Issuing
Bank, as the case may be.
(c) Neither any Collateral Document nor the Subsidiary Guarantee nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Obligors party thereto
and the Administrative Agent with the consent of the number or percentage of
Lenders set forth therein.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Parent shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated thereby
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by
the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii)
all out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank or any Lender,
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including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b) The Parent shall indemnify the Administrative Agent, the Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of the Loan
Documents or any agreement or instrument contemplated thereby, the performance
by the parties thereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated thereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Parent or any of its Subsidiaries, or any Environmental
Liability related in any way to the Parent or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; PROVIDED
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Parent fails to pay any amount required to be
paid by it to the Administrative Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
PROVIDED that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Issuing Bank in its capacity as such.
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(d) To the extent permitted by applicable law, no Borrower shall assert,
and each Borrower hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, the Loan Documents or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that a
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder to any Person other than the Parent without the prior written consent
of each Lender (and any attempted assignment or transfer by a Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment of any Class and the Loans of such Class and, if applicable, the
related participations in LC Disbursements and Letters of Credit); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
the Administrative Agent (and, in the case of an assignment of all or a portion
of a Revolving Commitment or any Lender's obligations in respect of its LC
Exposure, the Issuing Bank and, after the Agents have notified the Parent that
primary syndication has been completed, the Parent) must give prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitments, the amount of the Commitments of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Parent and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
86
obligations under this Agreement with respect to the Commitment or Loans (and,
if applicable, the related participations in LC Disbursements and Letters of
Credit) of the relevant Class, (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,000 (which shall be reduced to
$1,500 in the case of an assignment to another Lender, and shall not be payable
during primary syndication or in the case of an assignment to an Affiliate of
the assigning Lender), and (v) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire; and
PROVIDED FURTHER that any consent of the Parent otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VII has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 10.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and each Borrower, the Administrative Agent, the Issuing Bank and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by any Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
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this Section and any written consent to such assignment required by paragraph(b)
of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment of any Class and the Loans of such Class and, if applicable, the
related participations in LC Disbursements and Letters of Credit); PROVIDED that
(i) such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Administrative
Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, each Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph(b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Parent's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Parent
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Parent, to comply with Section 2.16(e) as though
it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; PROVIDED that no such pledge or assignment of a security
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interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 10.05. SURVIVAL. All covenants, agreements, representations and
warranties made by any Borrower herein and in the certificates or other instru
ments delivered in connection with or pursuant to the Loan Documents shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. The Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any Borrower
against any of and all
89
the obligations of any Borrower now or hereafter existing under the Loan
Documents held by such Lender or any of its Affiliates, irrespective of whether
or not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Borrower or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY
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APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. CONFIDENTIALITY. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to the Loan Documents, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to the Loan Documents or the enforcement of rights
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under the Loan Documents, (g) with the consent of the Parent or (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) becomes available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis from a source other
than a Borrower. For the purposes of this Section, "INFORMATION" means all
information received from a Borrower relating to such Borrower or its business,
other than any such information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
such Borrower; PROVIDED that, in the case of information received from a
Borrower after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain
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the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13. INTEREST RATE LIMITATION. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SUNBEAM CORPORATION
By /s/ XXXXX X. XXXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
and General Counsel
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
individually and as Syndication Agent
By /s/ XXXXXXX X. XXXX
---------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Principal
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
individually and as Documentation Agent
By /s/ XXXXXXX X. XXXXXX, XX.
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By /s/ XXXXXX X. XXXXXXX
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
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SCHEDULE 4.01
CONDITIONS TO EFFECTIVE DATE
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto a counterpart of this Agreement signed on behalf of such party
or written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent (or its counsel) shall have received (i) from
each party to each Collateral Document a counterpart of such Collateral Document
signed on behalf of such party or written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page) that such party has signed a counterpart of such Collateral
Document and (ii) duly executed financing statements on Form UCC-1 in quantity
sufficient for filing in all jurisdictions in which such filing is necessary or
desirable to perfect the Liens created by the Collateral Documents.
(c) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for
the Obligors and of Xxxxx Xxxxxx, Esq., associate general counsel for the
Obligors, collectively addressing the matters set forth in Exhibit E and of
Xxxxx Xxxx & Xxxxxxxx, special counsel for the Agents, substantially in the form
of Exhibit F, and each covering such other matters relating to the Obligors, the
Loan Documents or the Transactions as the Required Lenders shall reasonably
request.
(d) The Lenders shall have received all the financial statements referred
to in Sections 3.04(a) and 3.04(c).
(e) The Administrative Agent shall have received insurance certificates
setting forth the insurance programs maintained (i) with respect to the Parent
and its Material Subsidiaries and (ii) with respect to any joint venture to
which the Parent or any of its Material Subsidiaries are a party, all in form
and substance, and from Persons, reasonably satisfactory to the Administrative
Agent.
(f) In the judgment of the Lenders, there shall be no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or threatened against or affecting the Parent or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the
aggregate, to result in a Material Adverse Effect or (ii) that involve the Loan
Documents, the Transactions, the Acquisition Documents or the Acquisition.
(g) The Administrative Agent shall have received evidence satisfactory to
it that the outstanding obligations of the Parent and its Subsidiaries under the
agreements and instruments specified in Schedule 5.08 to be repaid or defeased
on the Effective Date (including without limitation principal and interest with
respect to any loans and all accrued fees and expenses) shall have been paid in
full or otherwise discharged, all commitments thereunder shall have been
terminated and all Liens securing such obligations and all Guarantees thereof
shall have been released (or arrangements satisfactory to the Administrative
Agent, including without limitation the giving of notice of prepayment,
redemption or defeasance, to effect the foregoing shall have been made).
(h) The aggregate amount of funds required by the Parent with respect to
the Acquisition (including without limitation for the payment of fees,
commissions and expenses) shall not exceed $2,250,000,000 and the sources and
uses of such funds (and the assumptions relating thereto) shall be as agreed
upon between the Parent and the Lenders prior to the Effective Date.
(i) The Xxxxxxx Acquisition Documents shall be in full force and effect,
and all consents, approvals, registrations, or other actions to be obtained,
made or taken in connection with the consummation of the Xxxxxxx Acquisition and
the Transactions to be consummated on the Effective Date (including without
limitation any consents or approvals to be obtained from the board of directors
of the Parent, the shareholders of the Parent and any consents, approvals,
registrations or other actions to be obtained from, made with or taken by any
Governmental Authority) shall have been obtained, made or taken and shall be in
full force and effect.
(j) The Administrative Agent shall have received evidence satisfactory to
it, which may include a certificate of the Parent, that (i) all conditions to
the consummation of the transactions contemplated by the Xxxxxxx Acquisition
Documents to be consummated on the Effective Date as set forth in the Xxxxxxx
Acquisition Documents shall have been satisfied (without waiver of any material
condition, unless such waiver is approved by the Required Lenders), (ii) all
such transactions will take place prior to or simultaneously with the
transactions contemplated hereby to take place on the Effective Date and (iii)
the consummation of all such transactions and all transactions contemplated
hereby to take place on the Effective Date shall not violate any applicable law
or regulation (including without limitation any of the Regulations of the Board,
including Regulations G, U and X).
4.01-2
(k) The Administrative Agent shall have received evidence satisfactory to
it that the Liens created by the Collateral Documents constitute perfected first
priority Liens on the Collateral.
(l) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Parent, confirming compliance with the conditions set forth in
paragraphs (b) and (c) of Section 4.04.
(m) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Parent hereunder.
(n) The Administrative Agent shall have received a certificate of a
Financial Officer of the Parent to the effect that the Parent shall have (i)
received net cash proceeds of at least $726,600,000 from the issuance of the
Subordinated Notes and (ii) issued 14,099,749 shares of its common stock
(including treasury shares) as partial consideration for the Xxxxxxx
Acquisition.
(o) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence, good standing and solvency of the
Parent, the authorization of the Transactions and any other legal matters
relating to any of the foregoing, all in form and substance satisfactory to the
Administrative Agent and its counsel.
4.01-3
SCHEDULE 4.02
CONDITIONS TO TRANCHE A EFFECTIVE DATE, FIRST ALERT ACQUISITION DATE
AND SIGNATURE ACQUISITION DATE
(a) Each of the Effective Date and the Tranche B Effective Date shall have
occurred.
(b) In the judgment of the Lenders, there shall be no actions, suits or
proceedings by or before any arbitrator or governmental authority pending
against or threatened against or affecting the Parent or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect or (ii) that involve
the Loan Documents, the Transactions, the Acquisition Documents or the
Acquisition.
(c) The Administrative Agent shall have received evidence satisfactory to
it that the outstanding obligations of the Parent and its Subsidiaries under the
agreements and instruments specified in Schedule 5.08 to be repaid or defeased
with the proceeds of the Tranche A Term Loans (including without limitation
principal and interest with respect to any loans and all accrued fees and
expenses) shall have been paid in full or otherwise discharged, all commitments
thereunder shall have been terminated and all Liens securing such obligations
and all Guarantees thereof shall have been released (or arrangements
satisfactory to the Administrative Agent, including without limitation the
giving of notice of prepayment, redemption or defeasance, to effect the
foregoing shall have been made).
(d) The Administrative Agent shall have received a certificate, dated the
Tranche A Effective Date and signed by the President, a Vice President or a
Financial Officer of the Parent, confirming compliance with the conditions set
forth in paragraphs (b) and (c) of Section 4.04.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Tranche A Effective Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Parent hereunder.
(f) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence, good standing and solvency of each
Obligor, the authorization of the Transactions and any other legal matters
relating to any of the foregoing, all in form and substance satisfactory to the
Administrative Agent and its counsel.
If any of the proceeds of the Tranche A Term Loans are to be used in connection
with the First Alert Acquisition, the following additional conditions will apply
on the date of the consummation thereof (the "FIRST ALERT ACQUISITION DATE"):
(i) The First Alert Acquisition Documents shall be in full force and
effect, and all consents, approvals, registrations, or other actions to be
obtained, made or taken in connection with the consummation of the First
Alert Acquisition and the Transactions to be consummated on the First
Alert Acquisition Date (including without limitation any consents or
approvals to be obtained from the board of directors of the Parent, the
shareholders of the Parent and any consents, approvals, registrations or
other actions to be obtained from, made with or taken by any Governmental
Authority) shall have been obtained, made or taken and shall be in full
force and effect; and
(ii) The Administrative Agent shall have received evidence
satisfactory to it, which may include a certificate of the Parent, that
(i) all conditions to the consummation of the transactions contemplated by
the First Alert Acquisition Documents to be consummated on the First Alert
Acquisition Date as set forth in the First Alert Acquisition Documents
shall have been satisfied (without waiver of any material condition,
unless such waiver is approved by the Required Lenders), (ii) all such
transactions will take place prior to or simultaneously with the
transactions contemplated hereby to take place on the First Alert
Acquisition Date and (iii) the consummation of all such transactions and
all transactions contemplated hereby to take place of the First Alert
Acquisition Date shall not violate any applicable law or regulation
(including without limitation any of the Regulations of the Board,
including Regulations G, U and X).
If any of the proceeds of the Tranche A Term Loans are to be used in connection
with the Signature Acquisition, the following additional conditions will apply
on the date of the consummation thereof (the "SIGNATURE ACQUISITION DATE"):
(i) The Signature Acquisition Documents shall be in full force and
effect, and all consents, approvals, registrations, or other actions to be
obtained, made or taken in connection with the consummation of the
Signature Acquisition and the Transactions to be consummated on the
Signature Acquisition Date (including without limitation any consents or
approvals to be obtained from the board of directors of the Parent, the
shareholders of the Parent and any consents, approvals, registrations or
other actions to be obtained from, made with or taken by any Governmental
Authority) shall have been obtained, made or taken and shall be in full
force and effect; and
4.02-2
(ii) The Administrative Agent shall have received evidence
satisfactory to it, which may include a certificate of the Parent, that
(i) all conditions to the consummation of the transactions contemplated by
the Signature Acquisition Documents to be consummated on the Signature
Acquisition Date as set forth in the Signature Acquisition Documents shall
have been satisfied (without waiver of any material condition, unless such
waiver is approved by the Required Lenders) (ii) all such transactions
will take place prior to or simultaneously with the transactions
contemplated hereby to take place on the Signature Acquisition Date and
(iii) the consummation of all such transactions and all transactions
contemplated hereby to take place of the Signature Acquisition Date shall
not violate any applicable law or regulation (including without limitation
any of the Regulations of the Board, including Regulations G, U and X).
4.02-3
SCHEDULE 4.03
CONDITIONS TO TRANCHE B EFFECTIVE DATE, FIRST ALERT ACQUISITION DATE
AND SIGNATURE ACQUISITION DATE
(a) The Effective Date shall have occurred.
(b) In the judgment of the Lenders, there shall be no actions, suits or
proceedings by or before any arbitrator or governmental authority pending
against or threatened against or affecting the Parent or any of its Material
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or (ii)
that involve the Loan Documents, the Transactions, the Acquisition Documents or
the Acquisition.
(c) The Administrative Agent shall have received evidence satisfactory to
it that all outstanding obligations of the Parent and its Subsidiaries under the
agreement and instruments specified in Schedule 5.08 to be repaid or defeased
with the proceeds of the Tranche B Term Loans (including without limitation
principal and interest with respect to any loans and all accrued fees and
expenses) shall have been paid in full or otherwise discharged, all commitments
thereunder shall have been terminated and all Liens securing such obligations
and all Guarantees thereof shall have been released (or arrangements
satisfactory to the Administrative Agent, including without limitation the
giving of notice of prepayment, redemption or defeasance, to effect the
foregoing shall have been made).
(d) The Administrative Agent shall have received a certificate, dated the
Tranche B Effective Date and signed by the President, a Vice President or a
Financial Officer of the Parent, confirming compliance with the conditions set
forth in paragraphs (a), (b) and (c) of Section 4.04.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Tranche B Effective Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Parent hereunder.
(f) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence, good standing and solvency of each
Obligor, the authorization of the Transactions and any other legal matters
relating to any of the foregoing, all in form and substance satisfactory to the
Administrative Agent and its counsel.
If any of the proceeds of the Tranche B Term Loans are to be used in connection
with the First Alert Acquisition, the following additional conditions will apply
on the date of the consummation thereof (the "FIRST ALERT ACQUISITION DATE"):
(i) The First Alert Acquisition Documents shall be in full force and
effect, and all consents, approvals, registrations, or other actions to be
obtained, made or taken in connection with the consummation of the First
Alert Acquisition and the Transactions to be consummated on the First
Alert Acquisition Date (including without limitation any consents or
approvals to be obtained from the board of directors of the Parent, the
shareholders of the Parent and any consents, approvals, registrations or
other actions to be obtained from, made with or taken by any Governmental
Authority) shall have been obtained, made or taken and shall be in full
force and effect; and
(ii) The Administrative Agent shall have received evidence
satisfactory to it, which may include a certificate of the Parent, that
(i) all conditions to the consummation of the transactions contemplated by
the First Alert Acquisition Documents to be consummated on the First Alert
Acquisition Date as set forth in the First Alert Acquisition Documents
shall have been satisfied (without waiver of any material condition,
unless such waiver is approved by the Required Lenders), (ii) all such
transactions will take place prior to or simultaneously with the
transactions contemplated hereby to take place on the First Alert
Acquisition Date and (iii) the consummation of all such transactions and
all transactions contemplated hereby to take place of the First Alert
Acquisition Date shall not violate any applicable law or regulation
(including without limitation any of the Regulations of the Board,
including Regulations G, U and X).
If any of the proceeds of the Tranche B Term Loans are to be used in connection
with the Signature Acquisition, the following additional conditions will apply
on the date of the consummation thereof (the "SIGNATURE ACQUISITION DATE"):
(i) The Signature Acquisition Documents shall be in full force and
effect, and all consents, approvals, registrations, or other actions to be
obtained, made or taken in connection with the consummation of the
Signature Acquisition and the Transactions to be consummated on the
Signature Acquisition Date (including without limitation any consents or
approvals to be obtained from the board of directors of the Parent, the
shareholders of the Parent and any consents, approvals, registrations or
other actions to be obtained from, made with or taken by any Governmental
Authority) shall have been obtained, made or taken and shall be in full
force and effect; and
4.03-2
(ii) The Administrative Agent shall have received evidence
satisfactory to it, which may include a certificate of the Parent, that
(i) all conditions to the consummation of the transactions contemplated by
the Signature Acquisition Documents to be consummated on the Signature
Acquisition Date as set forth in the Signature Acquisition Documents shall
have been satisfied (without waiver of any material condition, unless such
waiver is approved by the Required Lenders) (ii) all such transactions
will take place prior to or simultaneously with the transactions
contemplated hereby to take place on the Signature Acquisition Date and
(iii) the consummation of all such transactions and all transactions
contemplated hereby to take place of the Signature Acquisition Date shall
not violate any applicable law or regulation (including without limitation
any of the Regulations of the Board, including Regulations G, U and X).
4.03-3
