EXECUTION COPY
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RESTATED CREDIT AGREEMENT
dated as of August 16, 2004,
among
JAFRA COSMETICS INTERNATIONAL, INC.,
DISTRIBUIDORA COMERCIAL JAFRA, S.A. DE C.V.,
JAFRA WORLDWIDE HOLDINGS (LUX) S.AR.L.,
as Guarantor and Parent of the Borrowers,
THE LENDERS NAMED HEREIN
and
THE BANK OF NEW YORK,
as Administrative Agent
--------------------
BNY CAPITAL MARKETS, INC.
as Lead Arranger and Book Runner
CITY NATIONAL BANK
as Syndication Agent
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Table of Contents
Page
Article I Definitions....................................................................................................... 2
Section 1.01 Defined Terms............................................................................................. 2
Section 1.02 Terms Generally........................................................................................... 25
Section 1.03 Exchange Rates............................................................................................ 25
Section 1.04 Classification of Loans and Borrowings.................................................................... 25
Article II The Credits...................................................................................................... 26
Section 2.01 Commitments............................................................................................... 26
Section 2.02 Loans..................................................................................................... 26
Section 2.03 Borrowing Procedure....................................................................................... 28
Section 2.04 Evidence of Debt; Repayment of Loans...................................................................... 29
Section 2.05 Fees...................................................................................................... 30
Section 2.06 Interest on Loans......................................................................................... 31
Section 2.07 Default Interest.......................................................................................... 31
Section 2.08 Alternate Rate of Interest................................................................................ 32
Section 2.09 Termination and Reduction of Commitments.................................................................. 32
Section 2.10 Conversion and Continuation of Borrowings................................................................. 33
Section 2.11 Increase in Commitments................................................................................... 34
Section 2.12 Prepayment................................................................................................ 34
Section 2.13 Mandatory Prepayments..................................................................................... 35
Section 2.14 Requirements of Law....................................................................................... 37
Section 2.15 Change in Legality........................................................................................ 39
Section 2.16 Indemnity................................................................................................. 40
Section 2.17 Pro Rata Treatment........................................................................................ 40
Section 2.18 Sharing of Setoffs........................................................................................ 41
Section 2.19 Payments.................................................................................................. 41
Section 2.20 Taxes..................................................................................................... 42
Section 2.21 Certain Rules Relating to the Payment of Additional Amounts............................................... 44
Section 2.22 Letters of Credit......................................................................................... 46
Section 2.23 Swingline Loans........................................................................................... 50
Section 2.24 Consistent Tax Treatment.................................................................................. 52
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Article III Representations and Warranties.................................................................................. 52
Section 3.01 Financial Condition....................................................................................... 53
Section 3.02 Change.................................................................................................... 53
Section 3.03 Corporate Existence; Compliance with Law.................................................................. 53
Section 3.04 Corporate Power; Authorization; Enforceable Obligations................................................... 53
Section 3.05 No Legal Bar.............................................................................................. 54
Section 3.06 No Material Litigation.................................................................................... 54
Section 3.07 No Default................................................................................................ 55
Section 3.08 Intellectual Property..................................................................................... 55
Section 3.09 No Burdensome Restrictions; Compliance with Laws.......................................................... 55
Section 3.10 Taxes..................................................................................................... 55
Section 3.11 Federal Regulations....................................................................................... 56
Section 3.12 Employee Benefit Plans.................................................................................... 56
Section 3.13 Investment Company Act; Other Regulations................................................................. 56
Section 3.14 Subsidiaries.............................................................................................. 56
Section 3.15 Environmental Matters..................................................................................... 56
Section 3.16 Accuracy and Completeness of Information.................................................................. 57
Section 3.17 Solvency.................................................................................................. 58
Section 3.18 Senior Indebtedness....................................................................................... 58
Section 3.19 Title to Properties; Possession Under Leases.............................................................. 58
Section 3.20 U.S. Security Documents................................................................................... 58
Section 3.21 Mexican Security Documents................................................................................ 59
Section 3.22 Location of Real Property and Leased Premises............................................................. 60
Section 3.23 Labor Matters............................................................................................. 60
Article IV Conditions of Lending............................................................................................ 60
Section 4.01 All Credit Events......................................................................................... 60
Section 4.02 First Credit Event........................................................................................ 61
Article V Affirmative Covenants............................................................................................. 65
Section 5.01 Financial Statements...................................................................................... 65
Section 5.02 Certificates; Other Information........................................................................... 65
Section 5.03 Payment of Obligations.................................................................................... 66
Section 5.04 Conduct of Business and Maintenance of Existence.......................................................... 66
Section 5.05 Maintenance of Property................................................................................... 67
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Section 5.06 Insurance................................................................................................. 67
Section 5.07 Inspection of Property; Books and Records; Discussions.................................................... 67
Section 5.08 Notices................................................................................................... 67
Section 5.09 Environmental Laws........................................................................................ 69
Section 5.10 Use of Proceeds........................................................................................... 69
Section 5.11 Additional Collateral; Further Assurances................................................................. 69
Article VI Negative Covenants............................................................................................... 71
Section 6.01 Indebtedness.............................................................................................. 71
Section 6.02 Liens..................................................................................................... 74
Section 6.03 Investments, Loans and Advances........................................................................... 76
Section 6.04 Fundamental Changes....................................................................................... 78
Section 6.05 Sale of Assets............................................................................................ 79
Section 6.06 Restricted Payments....................................................................................... 80
Section 6.07 Transactions with Affiliates.............................................................................. 81
Section 6.08 Business of Parent, Borrowers and Subsidiaries............................................................ 82
Section 6.09 Negative Pledge Clauses................................................................................... 83
Section 6.10 Optional Payments and Modifications of Debt Instruments and other Material Agreements..................... 83
Section 6.11 Capital Expenditures...................................................................................... 84
Section 6.12 Consolidated Leverage Ratio............................................................................... 84
Section 6.13 Consolidated Interest Coverage Ratio...................................................................... 85
Section 6.14 Fiscal Year............................................................................................... 85
Article VII Events of Default............................................................................................... 85
Section 7.01 Certain Bankruptcy Events................................................................................. 85
Section 7.02 Other Events of Default................................................................................... 86
Article VIII The Administrative Agent and the Collateral Agent.............................................................. 89
Section 8.01 Appointment............................................................................................... 89
Section 8.02 Delegation of Duties...................................................................................... 89
Section 8.03 Exculpatory Provisions.................................................................................... 89
Section 8.04 Reliance by Agents........................................................................................ 90
Section 8.05 Notice of Default......................................................................................... 90
Section 8.06 Acknowledgments and Representations by Lenders............................................................ 90
Section 8.07 Expense Reimbursement; Indemnification.................................................................... 91
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Section 8.08 Agents in their Individual Capacities..................................................................... 91
Section 8.09 Successor Agents.......................................................................................... 92
Article IX Miscellaneous.................................................................................................... 92
Section 9.01 Amendments and Waivers.................................................................................... 92
Section 9.02 Notices................................................................................................... 94
Section 9.03 No Waiver; Cumulative Remedies............................................................................ 95
Section 9.04 Survival of Representations and Warranties................................................................ 95
Section 9.05 Successors and Assigns.................................................................................... 95
Section 9.06 Payment of Expenses and Taxes............................................................................. 99
Section 9.07 Set-off................................................................................................... 100
Section 9.08 Interest Rate Limitation.................................................................................. 100
Section 9.09 Counterparts.............................................................................................. 101
Section 9.10 Severability.............................................................................................. 101
Section 9.11 Integration............................................................................................... 101
Section 9.12 Headings.................................................................................................. 101
Section 9.13 Applicable Law............................................................................................ 101
Section 9.14 Submission to Jurisdiction; Waivers....................................................................... 101
Section 9.15 Acknowledgments........................................................................................... 103
Section 9.16 Waivers of Jury Trial..................................................................................... 103
Section 9.17 Confidentiality........................................................................................... 103
Section 9.18 Judgment Currency......................................................................................... 104
Section 9.19 Calculations; Computations................................................................................ 105
Section 9.20 Security Rights Granted in the Dutch Deeds of Pledge and Covenant to Pay.................................. 105
Section 9.21 Effectiveness; Restatement................................................................................ 107
SCHEDULES
Schedule 1.01(a) Inactive Subsidiaries
Schedule 1.01(b) Subsidiary Guarantors
Schedule 1.01(c) Mortgaged Properties
Schedule 2.01 Lenders; Commitments
Schedule 3.04(a) Consents, Authorizations, Notices and Filings
Schedule 3.06 Litigation
Schedule 3.08 Intellectual Property
Schedule 3.10 Tax Liens
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Schedule 3.14 Subsidiaries
Schedule 3.20 UCC Filings
Schedule 3.22(a) Owned Real Property
Schedule 3.22(b) Leased Real Property
Schedule 4.02(a) Local Counsel
Schedule 4.02(l) Mortgage Filing Offices
Schedule 6.01(a) Indebtedness
Schedule 6.02(a) Liens
Schedule 6.03(a) Investments
Schedule 6.05(f) Specified Subsidiaries
Schedule 6.07(iii) Permitted Indemnification and Contribution
Schedule 6.07(iv) Affiliate Transactions
EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Mortgage
Exhibit E Form of Revolving Note
Exhibit F-1 Form of Opinion of Xxxx Xxxxxxx, LLP
Exhibit F-2 Form of Opinion of Xxxxx, Xxxxxxx x Xxxxxxx, S.C.
Exhibit F-3 Form of Opinion of Bonn, Schmitt, Xxxxxxxx
Exhibit F-4 Form of Opinion of Loyens & Loeff
Exhibit F-5 Form of Local Counsel Opinion
Exhibit G Form of Acknowledgment
Exhibit H Notice of Commitment Increase Election
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RESTATED CREDIT AGREEMENT dated as of August
16, 2004, among JAFRA COSMETICS INTERNATIONAL, INC.,
a Delaware corporation ("JCI"), DISTRIBUIDORA
COMERCIAL JAFRA, S.A. DE C.V., a sociedad anonima de
capital variable organized under the laws of Mexico
("DCJ" and, with JCI, the "Borrowers"), JAFRA
WORLDWIDE HOLDINGS (LUX) S.AR.L., a societe a
responsabilite limitee organized under the laws of
Luxembourg ("Parent"), the Lenders (as defined in
Article I), the Issuing Bank (as defined in Article
I), THE BANK OF NEW YORK, a New York State banking
corporation, as administrative agent (in such
capacity, the "Administrative Agent") and collateral
agent (in such capacity, the "Collateral Agent") for
the Lenders.
Definitions of terms that are used but not defined herein are set forth
in Article I to this Agreement.
The Borrowers and Parent are parties to the Existing Credit Agreement.
On May 27, 2004, a Change in Control, as defined in the Existing Credit
Agreement, occurred by virtue of the Acquisition and Amendment No. 2 to the
Existing Credit Agreement was entered into amending the Existing Credit
Agreement so that the Acquisition would not result in the occurrence of an Event
of Default after the Effective Date (as defined in Amendment No. 2 to the
Existing Credit Agreement). The Borrowers and Parent have requested (a) the
Administrative Agent and the Lenders to restate the Existing Credit Agreement so
that such Change in Control will not result in an Event of Default at any time
and so that only those Lenders under the Existing Credit Agreement who wish to
continue as Lenders under this Agreement will remain parties hereto, (b) the
Lenders to extend credit in the form of Revolving Loans at any time and from
time to time prior to the Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $60,000,000 (or the Dollar Equivalent thereof
in Alternative Currencies), (c) the Swingline Lender to extend credit, at any
time and from time to time prior to the Maturity Date, in the form of Swingline
Loans in Dollars, in an aggregate principal amount at any time outstanding not
in excess of $7,500,000, and (d) the Issuing Banks to issue letters of credit,
in an aggregate face amount at any time outstanding not in excess of
$10,000,000, to support payment obligations incurred in the ordinary course of
business by the Borrowers and their respective Subsidiaries. The proceeds of the
Revolving Loans and Swingline Loans are to be used for general corporate
purposes and, together with the proceeds of a Vorwerk Loan in the Required
Vorwerk Amount, simultaneously with the effectiveness of this Agreement to
prepay in full Existing Loans.
The Lenders are willing to extend such credit to the Borrowers and the
Issuing Banks are willing to issue letters of credit for the account of the
Borrowers on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall 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, bears or bear
interest at a rate determined by reference to the Alternate Base Rate.
"Acknowledgment" shall mean the Loan Party Acknowledgment and Agreement
substantially in the form of Exhibit G, to be executed and delivered by each of
the Loan Parties, the Administrative Agent and the Collateral Agent.
"Acquisition" shall mean the acquisition of all of the outstanding
Capital Stock of Jafra S.A. by Vorwerk.
"Active Subsidiaries" shall mean all Subsidiaries other than those
listed on Schedule 1.01(a).
"Adjusted LIBOR" shall mean, with respect to any Eurocurrency Borrowing
for any Interest Period, an interest rate per annum equal to the product of (a)
the LIBOR in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, is in Control of, is Controlled by or is under common
Control with, such Person.
"Agents" shall have the meaning assigned to such term in Section 8.01.
"Aggregate Alternative Currency Revolving Credit Exposure" shall mean
the aggregate of the Lenders' Alternative Currency Revolving Credit Exposures.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greater of
(a) the Prime Rate in effect on such
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day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of
1%. If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms of the definition thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the preceding sentence,
until the circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. The term "Prime Rate" shall mean the rate of
interest per annum determined from time to time by the Administrative Agent as
its prime rate in effect at its principal office in New York City. The term
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"Alternative Currency" shall mean (a) Sterling and Euro and (b) any
other freely available currency which is freely transferable and freely
convertible into Dollars and in which dealings in deposits are carried on in the
London interbank market, which shall be requested by either Borrower in respect
of an Alternative Currency Borrowing and approved by the Administrative Agent
and each Lender making an Alternative Currency Loan comprising a part of such
Borrowing.
"Alternative Currency Borrowing" shall mean a Borrowing comprised of
Alternative Currency Loans.
"Alternative Currency Equivalent" shall mean on any date of
determination, with respect to any amount denominated in Dollars in relation to
any specified Alternative Currency, the equivalent in such specified Alternative
Currency of such amount in Dollars, determined by the Administrative Agent
pursuant to Section 1.03 using the applicable Exchange Rate then in effect.
"Alternative Currency Loan" shall mean any Loan denominated in an
Alternative Currency.
"Alternative Currency Revolving Credit Exposure" shall mean, at any
time, the sum of (a) the Dollar Equivalent of the aggregate principal amount of
all outstanding Alternative Currency Loans at such time, (b) the Dollar
Equivalent of the aggregate undrawn amount of all outstanding Letters of Credit
that are denominated in an Alternative Currency at such time and (c) the Dollar
Equivalent of the aggregate principal amount of all L/C Disbursements in respect
of Letters of Credit that are denominated in an Alternative Currency that have
not yet been reimbursed at such time.
"Amendment No. 2 to the Existing Credit Agreement" shall mean Amendment
No. 2, dated as of May 27, 2004, to the Credit Agreement, dated as of May 20,
2003, as amended,
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among JCI, DCJ, Parent, the lenders from time to time parties thereto and Credit
Suisse First Boston, as administrative agent.
"Applicable Commitment Fee Percentage" shall mean, for any period
during which the Consolidated Leverage Ratio is greater than 2.00:1.00, 0.50%,
and, in all other cases, 0.375%.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurocurrency Loan or ABR Loan, as the case may be, the applicable percentage set
forth below under the caption "Eurocurrency Spread" or "ABR Spread", as the case
may be, based upon the Consolidated Leverage Ratio as of the relevant date of
determination:
Eurocurrency ABR
Consolidated Leverage Ratio Spread Spread
---------------------------------- ------------ ------
Category 1 2.875% 1.875%
Greater than 3.50 to 1.00
------------------------------------------------------------
Category 2 2.625% 1.625%
Greater than 3.25 to 1.00 and less
than or equal to 3.50 to 1.00
------------------------------------------------------------
Category 3 2.50% 1.50%
Greater than 2.75 to 1.00 and less
than or equal to 3.25 to 1.00
------------------------------------------------------------
Category 4 2.375% 1.375%
Greater than 2.25 to 1.00 and less
than or equal to 2.75 to 1.00
------------------------------------------------------------
Category 5 2.25% 1.25%
Greater than 1.75 to 1.00 and less
than or equal to 2.25 to 1.00
------------------------------------------------------------
Category 6 2.00% 1.00%
Less than or equal to 1.75 to 1.00
------------------------------------------------------------
Each change in the Applicable Percentage resulting from a change in the
Consolidated Leverage Ratio shall be effective with respect to all Loans and
Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.01(a) or (b) indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change.
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Notwithstanding the foregoing, at any time during which Parent has
failed to deliver the financial statements and certificates on or prior to the
date required by Section 5.01(a) or (b), the Consolidated Leverage Ratio shall
be deemed to be in Category 1 for purposes of determining the Applicable
Percentage until the date such financial statements are delivered by Parent.
"Assignee" shall have the meaning assigned to such term in Section
9.05(c).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Borrowers and the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date to the same Borrower and, in the case of Eurocurrency
Loans, as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by either Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C, or such other form as shall be approved by the Borrowers and the
Administrative Agent.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close; provided, however, that with respect to matters relating to
Eurocurrency Loans, the term "Business Day" shall also exclude any day on which
commercial banks are not open for dealings in Dollar deposits in the London
interbank market, and, when used in connection with determining any date on
which any amount is to be paid or made available in an Alternative Currency, the
term "Business Day" shall also exclude any day on which commercial banks and
foreign exchange markets are not open for business in the principal financial
center in the country of such Alternative Currency.
"Calculation Date" shall mean (a) the last Business Day of each
calendar month and (b) at any time when the sum of the Aggregate Revolving
Credit Exposure exceeds 75% of the Total Revolving Credit Commitment, the last
Business Day of each calendar week.
"Capital Expenditure" shall have the meaning assigned to such term in
Section 6.11.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and time deposits, bankers acceptances and overnight bank deposits of
any Lender or of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial bank
satisfying the
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requirements of clause (b) of this definition, having a term of not more than 30
days with respect to securities issued or fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof, (d)
commercial paper of a domestic issuer rated at least A-1 or the equivalent
thereof by Standard and Poor's Ratings Service or any successor rating agency
("S&P") or P-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc. or
any successor rating agency ("Moody's") (or if at such time neither is issuing
ratings, then a comparable rating of such other nationally recognized rating
agency as shall be approved by the Administrative Agent in its reasonable
judgment), (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition, (g) shares of money market mutual or similar funds complying with
the risk limiting conditions of Rule 2a-7 or any successor rule of the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, and (h) investments similar to any of the foregoing denominated in
foreign currencies approved by the board of directors or comparable body of
Parent or either Borrower, in each case provided in clauses (a), (b) and (d)
above, maturing within twelve months after the date of acquisition.
"Change in Control" shall be deemed to have occurred if, after the
Closing Date: (a) any Person or "group" (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934 as in effect on the date hereof),
other than any of the Permitted Investors, shall have acquired a percentage of
shares of Voting Stock of Parent that is (x) greater than the percentage that is
held, directly or indirectly, in the aggregate by the Permitted Investors and
(y) greater than 35% of the total voting power of the Voting Stock of Parent;
provided that so long as Parent is a Subsidiary of an Ultimate Parent, no Person
shall be deemed to be or become a "beneficial owner" of more than 35% of the
total voting power of the Voting Stock of Parent unless such Person (A) shall be
or become a "beneficial owner" of more than 35% of the total voting power of the
Voting Stock of such Ultimate Parent and (B) shall not be a Subsidiary of an
Ultimate Parent; (b) Parent shall cease to beneficially own, directly or
indirectly, 100% of the Voting Stock of either Borrower (other than directors'
qualifying shares); (c) a "Change of Control" (as defined in the Senior
Subordinated Note Documents) shall occur; or (d) one or more members of the
Vorwerk Group shall fail to own more than 50% of the Voting Stock of the
Ultimate Parent.
"Class", when used in respect of any Loan, shall refer to a Revolving
Loan or Swingline Loan, and when used in respect of any Borrowing, shall refer
to a Revolving Credit Borrowing.
"Closing Date" shall mean August 16, 2004.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
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"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment and Swingline Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with JCI within the meaning of
Section 4001 of ERISA or is part of a group which includes JCI and which is
treated as a single employer under Section 414(b) or 414(c) of the Code.
"Consolidated Current Assets" shall mean, at any date of determination,
all amounts (other than cash and Cash Equivalents) which would, in conformity
with GAAP, be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of Parent and the Subsidiaries at such
date.
"Consolidated Current Liabilities" shall mean, at any date of
determination, all amounts which would, in conformity with GAAP, be set forth
opposite the caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of Parent and the Subsidiaries at such date, but
excluding (a) the current portion of any Funded Debt of Parent and the
Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness
consisting of Revolving Loans or Swingline Loans to the extent otherwise
included therein.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income or Consolidated Net Loss, as the case may be, for such period, (i)
adjusted to exclude the following items (without duplication) to the extent that
such items were included in the calculation of such Consolidated Net Income or
Consolidated Net Loss: (a) depreciation and amortization (including write-offs
or write-downs of amortizable and depreciable items) for such period, (b) the
amount of interest expense (net of interest income) of Parent and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period on the aggregate principal amount of their consolidated
Indebtedness, (c) the amount of tax expense of Parent and the Subsidiaries,
determined on a consolidated basis in accordance with GAAP, for such period, (d)
any non-cash expenses and charges, in each case, which represents an accrual for
which no cash is expected to be paid in the short term, (e) any special bonus
payments made on or before June 30, 2004 in connection with the Acquisition, and
any gain or loss associated with the sale or write-down of assets not in the
ordinary course of business, (f) any non-cash provisions for reserves of
discontinued operations, (g) any extraordinary, unusual or non-recurring gains
or losses or charges or credits, (h) any gains or losses relating to the
repatriation of foreign currency denominated investments, (i) any compensation
expense incurred in connection with dividends, distributions or other payments
to holders of Capital Stock of Parent or an Ultimate Parent (or of warrants,
options or rights to acquire, or deferred shares or other equity-linked
interests, relating to any such Capital Stock), (j) any unrealized gains or
losses in respect of Hedging Agreements, (k) any unrealized foreign currency
transaction gains or losses in respect of Indebtedness of any Person denominated
in a currency other than the functional currency of such Person and (l) any
unrealized foreign currency translation or transaction gains or losses in
respect of Indebtedness of Parent or any Subsidiary owing to Parent or any
Subsidiary, and (ii) plus the losses or minus the gains, as the case may be,
through December 31, 2004, from business or operations conducted by Parent or
any of its Subsidiaries in South America or Thailand, provided, however,
7
that with respect to any such losses or gains during the period from July 1,
2004 through December 31, 2004, the amount to be added or subtracted pursuant to
this clause (ii) shall not exceed $3,000,000 in the aggregate (and, for the
avoidance of doubt, such limitation shall not apply to losses or gains during
any other period).
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the amount
equal to the interest expense (accrued and paid or payable in cash for such
period, and in any event excluding any amortization or write-off of financing
costs otherwise included therein), net of interest income, of Parent and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period on the aggregate principal amount of their consolidated
Indebtedness.
"Consolidated Leverage Ratio" shall mean, as of the last day of any
fiscal quarter, the ratio of (a) Total Debt on such date minus the aggregate
cash and Cash Equivalents of Parent and its Subsidiaries on such date to (b)
Consolidated EBITDA for the period of four consecutive fiscal quarters ended on
such date.
"Consolidated Net Income" or "Consolidated Net Loss" shall mean, for
any period, the amount which, in conformity with GAAP, would be set forth
opposite the caption "net income" (or any like caption) or "net loss" (or any
like caption), as the case may be, on a consolidated statement of earnings of
Parent and the Subsidiaries for such fiscal period.
"Consultants" shall mean shall mean (x) non-employee independent
contractors who sell, purchase or contract to sell or purchase products of any
of Parent and its Subsidiaries and (y) employees of any Mexican Subsidiary of
Parent.
"Contractual Obligation" shall mean, as to any Person, any provision of
any material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property (including any Mortgaged Property) is bound.
"Control" shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"DCJ Guarantee Agreement" shall mean the Guarantee Agreement, dated the
Initial Closing Date, made by DCJ in favor of the Collateral Agent for the
benefit of the Secured Parties.
"DCJ Maximum Percentage" shall mean 60%.
8
"DCJ Revolving Credit Exposure" shall mean, on any date, that portion
of the Aggregate Revolving Credit Exposure on such date attributable to Loans
made to, or Letters of Credit issued for the account of, DCJ.
"DCJ Subsidiary Guarantor" shall mean each Subsidiary of DCJ listed on
Schedule 1.01(b), if any, and each other Subsidiary of DCJ that is or becomes a
party to a Mexican Subsidiary Guarantee Agreement.
"Default" shall mean any of the events specified in Section 7.01 or
7.02, whether or not any requirement for the giving of notice (other than, in
the case of Section 7.02(e), any Default Notice), the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Dollar Equivalent" shall mean, on any date of determination, with
respect to any amount denominated in any currency other than Dollars, the
equivalent in Dollars of such amount, determined by the Administrative Agent
pursuant to Section 1.03 using the applicable Exchange Rate with respect to such
currency at the time in effect.
"Domestic Subsidiaries" shall mean, with respect to any Person, all
Subsidiaries of such Person that are incorporated or organized under the laws of
the United States of America, any state thereof or the District of Columbia.
"Distribution" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Dutch Deeds of Pledge" shall have the meaning assigned to such term in
Section 9.20.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata or as otherwise defined in any Environmental Law.
"Environmental Law" shall mean any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority properly promulgated
and having the force and effect of law, or other Requirements of Law (including
common law) regulating, relating to or imposing liability or standards of
conduct concerning protection of the environment or human health as related to
the environment, as now or may at any relevant time hereafter be in effect.
"Environmental Permits" shall have the meaning assigned to such term in
Section 5.09(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"Euro" and "(euro)" shall mean the lawful single currency of
participating member states of the European Union introduced at the start of the
Third Stage of European Economic and Monetary Union pursuant to the Treaty
establishing the European Community, as amended.
9
"Eurocurrency", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, bears or bear
interest at a rate determined by reference to the Adjusted LIBOR.
"Event of Default" shall mean any of the events specified in Section
7.01 or 7.02, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" shall mean, for any fiscal year of Parent, the
amount equal to the excess, if any, of (a) the sum of (i) Consolidated EBITDA
for such fiscal year and (ii) decreases in Working Capital for such fiscal year
minus (b) the sum, without duplication, of (i) the aggregate amount actually
paid by Parent and its Subsidiaries in cash during such fiscal year on account
of (w) Capital Expenditures, (x) interest expense (accrued and paid or payable
in cash) on the aggregate principal amount of their consolidated Indebtedness,
(y) tax expense and (z) any investments made pursuant to Section 6.03(e), (i),
(m) or (o), (ii) the aggregate amount of all principal payments of Indebtedness
(net of any refinancings of any such Indebtedness to the extent applied to fund
such payments) during such fiscal year resulting in permanent reductions of such
Indebtedness (excluding, in the case of the Loans, any principal payment
pursuant to Section 2.13(b), (c) or (d), except to the extent that the event
giving rise to such payment causes an increase in Consolidated EBITDA), (iii)
the Net Proceeds from any sale or other disposition of property or assets of
Parent or any of the Subsidiaries to the extent that such Net Proceeds (A)
consist of any Reinvested Amount or are otherwise applied in accordance with
Section 2.13(b) and (B) are included in the calculation of Consolidated EBITDA,
and (iv) increases in Working Capital for such fiscal year.
"Exchange Rate" shall mean, on any day, with respect to any currency
other than Dollars (for purposes of determining the Dollar Equivalent) or any
Alternative Currency (for purposes of determining the Alternative Currency
Equivalent with respect to such Alternative Currency), the rate at which such
currency may be exchanged into Dollars or the applicable Alternative Currency,
as the case may be, as set forth at approximately 11:00 a.m., New York City
time, on such date on the applicable Bloomberg Key Cross Currency Rates Page. In
the event that any such rate does not appear on any Bloomberg Key Cross Currency
Rates Page, the Exchange Rate shall be determined by reference to such other
publicly available service for displaying exchange rates reasonably selected by
the Administrative Agent for such purpose or, at the discretion of the
Administrative Agent, such Exchange Rate shall instead be the arithmetic average
of the spot rates of exchange of the Administrative Agent in the market where
its foreign currency exchange operations in respect of such currency are then
being conducted, at or about 10:00 a.m., local time, on such date for the
purchase of Dollars or the applicable Alternative Currency, as the case may be,
for delivery two Business Days later, provided that, if at the time of any such
determination, for any reason, no such spot rate is being quoted, the
Administrative Agent, with the consent of Parent (not to be unreasonably
withheld), may use any other reasonable method it deems appropriate to determine
such rate, and such determination shall be presumed correct absent manifest
error.
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of May 20, 2003, as amended, among JCI, DCJ, Parent, the lenders from time to
time parties thereto and
10
Credit Suisse First Boston, as administrative agent, as amended by Amendment No.
1, dated as of June 25, 2003, and as amended by Amendment No. 2 to the Existing
Credit Agreement.
"Existing Loans" shall mean all Loans (as defined in the Existing
Credit Agreement) outstanding under the Existing Credit Agreement at the time of
the initial Borrowing under this Agreement.
"Fee Letter" shall mean the Fee Letter dated July 21, 2004, among the
Borrowers, the Lead Arranger and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent's Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any Person shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such Person.
"Financing Lease" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Backstop Letter of Credit" shall mean any Letter of Credit
issued under this Agreement to any Person for the account of either Borrower to
provide credit support for Indebtedness of any Foreign Subsidiary to such Person
which is permitted under Section 6.01.
"Foreign Base Rate" shall mean, in respect of any Alternative Currency
Loan on any day, the rate of interest per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) determined to be the average rate charged to borrowers
of similar quality as the applicable Borrower of such Alternative Currency Loans
as reasonably determined by the Administrative Agent.
"Foreign Base Rate Loan" shall mean any Alternative Currency Loan
bearing interest at a rate determined by reference to a Foreign Base Rate in
accordance with the provisions of Article II. Notwithstanding anything to the
contrary contained herein, Loans may be made or maintained as Foreign Base Rate
Loans only to the extent specified in Section 2.02(f), 2.08 or 2.15.
"Foreign Benefit Plan" shall mean any benefit plan which under
applicable law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle maintained exclusively by a Governmental
Authority.
"Foreign Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person that is not a Domestic Subsidiary.
"Foreign Subsidiary Holdco" shall mean any Subsidiary of Parent that
owns Capital Stock of either Borrower.
"Former Plan" shall mean any employee benefit plan in respect of which
JCI or a Commonly Controlled Entity has engaged in a transaction described in
Section 4069 or Section 4212(c) of ERISA.
11
"Funded Debt" shall mean, as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrowers, Indebtedness in respect of the
Loans.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Governmental Authority" shall mean the government of the United States
of America, and, as applicable, Mexico, The Netherlands, Luxembourg, the United
Kingdom, 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 shall mean any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (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; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantee Agreements" shall mean the Parent Guarantee Agreement, the
JCI Guarantee Agreement, JCI Subsidiary Guarantee Agreement, the DCJ Guarantee
Agreement, the Mexican Subsidiary Guarantee Agreement and, with respect to any
other guarantee agreement to be entered into pursuant to Section 5.11(b), a
guarantee agreement in a form reasonably satisfactory to Parent, the Borrowers
and the Collateral Agent.
"Guarantors" shall mean Parent, JCI, DCJ, JCSA, the JCI Subsidiary
Guarantors, any DCJ Subsidiary Guarantors and the JCSA Subsidiary Guarantors.
"Hedging Agreement" shall mean any agreement or arrangement that
relates to any interest rate protection, future, option, swap, cap, collar or
hedge, or to any foreign exchange contract or currency swap or hedge, or any
other similar agreement or arrangement and is entered into, purchased or
otherwise acquired by Parent or any of its Subsidiaries in the ordinary course
of business and not for purposes of speculation.
12
"Holding Company Expenses" shall mean (a) costs (including all
professional fees and expenses) incurred by an Ultimate Parent to comply with
its reporting obligations under applicable laws or under the Senior Subordinated
Note Documents or in connection with this Agreement or any other agreement or
instrument relating to Indebtedness of Parent or any Subsidiary, or otherwise
incurred in connection with compliance with applicable laws or applicable rules
or regulations of any governmental, regulatory or self-regulatory body or stock
exchange, including any reports filed with respect to the Securities Act of
1933, as amended, the Exchange Act of 1934, as amended, or the respective rules
and regulations promulgated thereunder, (b) indemnification obligations of an
Ultimate Parent owing to directors, officers, employees or other Persons under
its charter or by-laws or pursuant to written agreements with any such Person,
(c) obligations of an Ultimate Parent in respect of director and officer
insurance (including premiums therefor), (d) other operational expenses of an
Ultimate Parent incurred in the ordinary course of business, and (e) expenses
incurred by an Ultimate Parent in connection with any public offering of Capital
Stock or Indebtedness (i) where the net proceeds of such offering are intended
to be received by or contributed or loaned to Parent or a Subsidiary, or (ii) in
a prorated amount of such expenses in proportion to the amount of such net
proceeds intended to be so received, contributed or loaned, or (iii) otherwise
on an interim basis prior to completion of such offering so long as an Ultimate
Parent shall cause the amount of such expenses to be repaid to Parent or the
relevant Subsidiary out of the proceeds of such offering promptly if completed.
"Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all reimbursement obligations (contingent or
otherwise) of such Person in respect of letters of credit issued for the account
of such Person, (e) all obligations of such Person in respect of acceptances
created for the account of such Person, (f) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire for
value any preferred stock (or equivalent equity interests) of such Person which
is mandatorily redeemable prior to the scheduled maturity of the Loans (other
than any such stock held by Management Investors), (g) all Guarantees by such
Person of Indebtedness of others and (h) all obligations of the types referred
to in clauses (a) through (g) above secured by any Liens on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, dated as of the Initial
Closing Date, among DCJ, JCSA, any DCJ Subsidiary Guarantors, the JCSA
Subsidiary Guarantors and the Collateral Agent.
"Initial Closing Date" shall mean May 20, 2003.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
13
"Intellectual Property" shall have the meaning assigned to such term in
Section 3.08.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan
(including any Swingline Loan), or any Foreign Base Rate Loan, the last Business
Day of each March, June, September and December and the Maturity Date, and (b)
with respect to any Eurocurrency 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
Eurocurrency Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of an Alternative Currency
Borrowing or a Eurocurrency Borrowing or conversion of a Eurocurrency Borrowing
to an ABR Borrowing.
"Interest Period" shall mean, as to any Eurocurrency Borrowing, the
period commencing on the date of such Borrowing (or, as applicable, the
conversion or continuation of such Borrowing) and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, or if agreed
to by all of the Lenders, 9 or 12 months thereafter, as the applicable Borrower
may elect; provided, however, that, 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 on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
"Investment" shall have the meaning assigned to such term in Section
6.03.
"Issuing Bank" shall mean, as the context may require, (a) The Bank of
New York, with respect to Letters of Credit issued by it, and (b) City National
Bank, with respect to Letters of Credit issued by it, and (c) any other Lender
that may become an Issuing Bank under Section 2.22(i) or (k), with respect to
Letters of Credit issued by it.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"Jafra S.A." shall mean Jafra S.A., a Luxembourg societe anonyme,
formerly known as CDRJ North Atlantic (Lux) Sarl, a Luxembourg societe a
responsabilite limitee.
"JCI Guarantee Agreement" shall mean the Guarantee Agreement, dated as
of the Initial Closing Date, made by JCI in favor of the Collateral Agent for
the benefit of the Secured Parties.
"JCI Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee Agreement, dated as of the Initial Closing Date, made by the JCI
Subsidiary Guarantors in favor of the Collateral Agent for the benefit of the
Secured Parties.
"JCI Subsidiary Guarantor" shall mean each Domestic Subsidiary of JCI
listed on Schedule 1.01(b), if any, and each other Domestic Subsidiary of JCI
that is or becomes a party to a JCI Subsidiary Guarantee Agreement.
"JCSA" shall mean Jafra Cosmetics International, S.A. de C.V., a
sociedad anonima de capital variable organized under the laws of Mexico.
14
"JCSA Subsidiary Guarantor" shall mean each Subsidiary of JCSA listed
on Schedule 1.01(b), and each other Subsidiary of JCSA that is or becomes a
party to a Mexican Subsidiary Guarantee Agreement.
"L/C Commitments" shall mean the commitments of the Issuing Banks to
issue Letters of Credit pursuant to Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate then
undrawn and unexpired amount of the then outstanding Letters of Credit
denominated in Dollars, (b) the Dollar Equivalent of the aggregate then undrawn
and unexpired amount of outstanding Letters of Credit denominated in Alternative
Currencies, (c) the aggregate principal amount of all L/C Disbursements in
respect of Letters of Credit denominated in Dollars that have not then been
reimbursed or converted to Loans and (d) the Dollar Equivalent of the aggregate
principal amount of all L/C Disbursements in respect of Letters of Credit
denominated in Alternative Currencies that have not then been reimbursed or
converted to Loans. The L/C Exposure of any Revolving Credit Lender at any time
shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lead Arranger" shall mean BNY Capital Markets, Inc. and its successors
and assigns.
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that is a party hereto pursuant to an Assignment and Acceptance and
in compliance with Section 9.05. Unless the context indicates otherwise, the
term "Lenders" shall include the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.22.
"LIBOR" shall mean, with respect to any Eurocurrency Borrowing, the
rate per annum determined by the Administrative Agent at approximately 11:00
a.m. (London time) on the date which is two Business Days prior to the beginning
of the relevant Interest Period (as specified in the applicable Borrowing
Request) by reference to the British Bankers' Association Interest Settlement
Rates for deposits in Dollars or the relevant Alternative Currency, as
applicable (as set forth by any service selected by the Administrative Agent
which has been nominated by the British Bankers' Association as an authorized
information vendor for the purpose of displaying such rates), for a period equal
to the Interest Period applicable to such Eurocurrency Borrowing, provided that,
to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "LIBOR" shall be the interest rate
per annum determined by the Administrative Agent to be the average of the rates
per annum at which deposits in Dollars or the relevant Alternative Currency, as
applicable, are offered for such relevant Interest Period to major banks in the
London interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date which is two Business Days
prior to the beginning of such Interest Period.
15
"Lien" shall mean any mortgage, pledge, hypothecation, encumbrance,
lien (statutory or other), charge or security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic effect
as any of the foregoing).
"Loan Documents" shall mean this Agreement, the Notes, the Guarantee
Agreements, the Security Documents, the Indemnity, Subrogation and Contribution
Agreements and the Acknowledgment.
"Loan Parties" shall mean the Borrowers, the Guarantors and the
Subsidiaries of Parent that are parties to the Pledge Agreement, the Mexican
Pledge Agreement, the U.S. Security Agreement and the Mexican Security
Agreement.
"Loans" shall mean the Revolving Loans and the Swingline Loans.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, results of operations, property or condition (financial or
otherwise) of Parent and the Subsidiaries, taken as a whole, or (b) the validity
or enforceability of the Loan Documents as to any Loan Parties party thereto or
the rights and remedies of the Administrative Agent, the Collateral Agent or the
Lenders hereunder and thereunder, taken as a whole; provided, however, that in
no event shall the Acquisition be deemed to have had or resulted in any such
material adverse effect.
"Material Environmental Amount" shall mean an amount payable by Parent,
either Borrower or any of the Subsidiaries in respect of or under any
Environmental Law for remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties or any combination thereof in an amount that
would reasonably be expected to have a Material Adverse Effect.
"Material of Environmental Concern" shall mean any hazardous or toxic
substances, materials, pollutants or wastes, defined or regulated as such in or
under any applicable Environmental Law, including gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Indebtedness" shall mean Indebtedness in an aggregate
outstanding principal amount of $5,000,000 (or the Dollar Equivalent thereof in
another currency) or more.
"Material Subsidiary" shall mean, at any date, (a) any Subsidiary of
Parent which at such date has a market value in excess of $2,500,000 or annual
revenues in excess of $2,500,000 or (b) any group of Subsidiaries of Parent,
taken as a whole, which at such date has an aggregate market value in excess of
$5,000,000 or annual revenues in excess of $5,000,000.
"Maturity Date" shall mean August 16, 2008.
"Maximum Revolving Credit Commitment" shall mean $90,000,000 as of the
Closing Date, as such amount may be reduced from time to time pursuant to the
terms hereof.
16
"Mexican Facility Sale" shall mean the sale or other disposition, in
one or more transactions, of all or any portion of the following real property
located in Mexico City, Mexico: Boulevard Xxxxxx Xxxxx Xxxxxx No. 515; Xxxxxx
X'Xxxxxx No. 570; Xxxxxx X'Xxxxxx Xx. 000; Xxxxxx X'Xxxxxx Xx. 000; and Las
Xxxxxx No. 390.
"Mexican Pledge Agreement" shall mean the Mexican Pledge Agreement,
dated as of the Initial Closing Date, among CDRJ Latin America Holding Company
B.V., Latin Cosmetics Holdings B.V., Regional Cosmetics Holding B.V., Southern
Cosmetics Holdings B.V. and CDRJ Mexico Holding Company B.V., as pledgors, and
the Collateral Agent, as pledgee and for the benefit of the Secured Parties.
"Mexican Financing Agreement" shall mean one or more financing
agreements or other arrangements whereby DCJ and/or its Subsidiaries may incur
Indebtedness of the type contemplated by Section 6.01(k).
"Mexican Security Agreement" shall mean the irrevocable transfer of
title and guaranty trust agreement (contrato de fideicomiso irrevocable
traslativo de dominio y de garantia), dated as of the Initial Closing Date,
among JCSA, DCJ and the Subsidiaries of JCSA and DCJ, if any, party thereto,
collectively as trustors, the Collateral Agent, as beneficiary in first place
(for the benefit of the Secured Parties) and the Trustee, acting in such
capacity.
"Mexican Security Documents" shall mean each Security Document governed
by the laws of Mexico, executed by DCJ, JCSA or any of their respective Mexican
Subsidiaries and CDRJ Latin America Holding Company B.V. and its four direct
Dutch Subsidiaries.
"Mexican Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person that is incorporated or organized under the laws of
Mexico or any political division thereof.
"Mexican Subsidiary Guarantee Agreement" shall mean the Guarantee
Agreement, dated as of the Initial Closing Date, made by JCSA, the JCSA
Subsidiary Guarantors and any DCJ Subsidiary Guarantors in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Mexico" shall mean the United Mexican States.
"Mortgaged Properties" shall mean the owned real properties and
leasehold and subleasehold interests of the Loan Parties specified on Schedule
1.01(c).
"Mortgages" shall mean the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other security
documents delivered pursuant to Section 4.02(l)(i) or pursuant to Section 5.11,
each substantially in the form of Exhibit D.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any of the events referred
to in Section 2.13(b) or (d) and the defined terms used therein, (a) the gross
cash consideration, and all cash proceeds (as and when received) of non-cash
consideration (including any such cash proceeds in
17
the nature of principal and interest payments on account of promissory notes or
similar obligations), received by Parent and the Subsidiaries in connection with
such event, minus (b) the sum, without duplication, of (i) any taxes reasonably
estimated to be payable to any Federal, state, local or foreign taxing authority
by Parent and the Subsidiaries as a result thereof or as a result of any
transfer of funds in connection with the application of such funds in accordance
with Section 2.13(b) or (d), (ii) the amount of fees and commissions (including
reasonable investment banking fees, legal, accounting, consulting, survey, title
and recording tax expenses and other costs and expenses actually incurred in
connection with such event which are paid or payable by Parent and the
Subsidiaries), (iii) the amount of such net cash proceeds which are attributable
to (and payable to) minority interests, (iv) the amount of any reserve
reasonably maintained by Parent and the Subsidiaries with respect to
indemnification obligations owing pursuant to the definitive documentation
pursuant to which such event is consummated (with any unused portion of such
reserve to constitute Net Proceeds on the date upon which the indemnification
obligations terminate), (v) the amount of Indebtedness (other than intercompany
Indebtedness), if any, which is required to be repaid at the time or as a result
of such event out of the proceeds thereof and (vi) with respect to the
determination of Net Proceeds from a sale or other disposition of property or
assets referred to in Section 2.13(b), appropriate amounts to be provided by
Parent and the Subsidiaries to be applied to satisfy any reasonable expenses and
liabilities associated with any such property or assets and retained by Parent
or any such Subsidiary after such sale or other disposition and other
appropriate amounts which shall be used by Parent or any of the Subsidiaries to
discharge or pay on a current basis any other liabilities associated with such
property or assets.
"Note" shall have the meaning assigned to such term in Section 2.04(e).
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreements and the Security Documents.
"Parent Guarantee Agreement" shall mean the Parent Guarantee Agreement,
dated as of the Initial Closing Date, made by Parent in favor of the Collateral
Agent for the benefit of the Secured Parties.
"Participants" shall have the meaning assigned to such term in Section
9.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the U.S. Security Agreement.
"Permitted Investors" shall mean (a) any member or members of the
Vorwerk Group, (b) any Person reasonably satisfactory to the Lead Arranger, and
(c) any Person acting in the capacity of an underwriter in connection with a
public or private offering of Capital Stock of Parent.
"Permitted Ultimate Parent Payments" shall mean loans, advances,
dividends or distributions to an Ultimate Parent or other payments by Parent or
any Subsidiary (including
18
through the purchase or other acquisition of Capital Stock of an Ultimate
Parent) to pay or permit such Ultimate Parent to pay any Holding Company
Expenses or any Related Taxes.
"Person" shall mean any individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan" shall mean any employee pension benefit plan which is covered by
ERISA and in respect of which JCI or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of the
Initial Closing Date, among Parent, JCI, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.
"Preferred Stock" as applied to the Capital Stock of any corporation,
shall mean Capital Stock of any class or classes (however designated) that by
its terms is preferred as to the payment of dividends, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Prepayment Account" shall have the meaning assigned to such term in
Section 2.13(g).
"Pro Rata Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
"Process Agent" shall have the meaning assigned to such term in Section
9.14(b).
"Register" shall have the meaning given such term in Section 9.05(e).
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reinvested Amount" shall mean, with respect to any sale, transfer or
other disposition of assets of Parent or any of its Subsidiaries permitted by
Section 6.05(i) or any recovery of amounts under any property insurance policies
of Parent or any of its Subsidiaries, that portion of the Net Proceeds thereof
as shall, according to a certificate of a Responsible Officer of Parent or the
applicable Borrower delivered to the Administrative Agent within 30 days of such
sale or other disposition, be reinvested in the business of Parent or such
Borrower and its Subsidiaries in a manner consistent with the requirements of
Section 6.08 and the other provisions hereof within 360 days of the receipt of
such Net Proceeds or, if such reinvestment is in a project authorized by the
board of directors or comparable body of Parent or the applicable Borrower that
will take longer than such 360 days to complete, the period of time necessary to
complete such project (so long as Parent or such Subsidiary has committed to
expend such portion of the Net Proceeds
19
within, and is diligently pursuing such project during, the period of 360 days
from the receipt of such Net Proceeds), provided that (i) if any such
certificate of a Responsible Officer is not delivered to the Administrative
Agent on the date of such sale, transfer or other disposition, any Net Proceeds
therefrom shall be promptly (x) deposited in a cash collateral account
established with the Collateral Agent to be held as collateral for the benefit
of the Secured Parties on terms reasonably satisfactory to the Administrative
Agent and shall remain on deposit in such cash collateral account until such
certificate of a Responsible Officer is (or is required to be) delivered to the
Administrative Agent or (y) to the extent that the applicable Borrower has
indicated that no such certificate will be delivered, used to make a prepayment
of the Revolving Loans in accordance with Section 2.12, provided that,
notwithstanding anything in this Agreement to the contrary, the Borrowers may
not request any Revolving Credit Borrowing that would reduce the aggregate
amount of the unused Revolving Credit Commitments to an amount that is less than
the amount of any such prepayment until such certificate of a Responsible
Officer is delivered to the Administrative Agent, and (ii) any Net Proceeds not
so reinvested by such 360th day or later, as applicable, shall be utilized on
such day to prepay Revolving Loans pursuant to Section 2.13(b).
"Related Taxes" shall mean (a) any taxes, charges or assessments,
including income, sales, use, transfer, rental, ad valorem, value-added, stamp,
property, consumption, franchise, license, capital, net worth, gross receipts,
excise, occupancy, intangibles or similar taxes, charges or assessments (other
than U.S. federal, state or local taxes measured by income and U.S. federal,
state or local withholding imposed on payments made by an Ultimate Parent),
required to be paid by such Ultimate Parent by virtue of its being incorporated
or having Capital Stock outstanding (but not by virtue of owning stock or other
equity interests of any corporation or other entity other than Parent or any of
its Subsidiaries), or being a holding company parent of Parent or having
received Capital Stock of Parent or other assets as a capital contribution, or
receiving dividends from or other distributions in respect of the Capital Stock
of Parent, or having guaranteed any obligations of Parent or any Subsidiary
thereof, or having made any payment in respect of any of the items for which
Parent is permitted to make payments to such Ultimate Parent pursuant to Section
6.06, or (b) any other U.S. taxes measured by income for which such Ultimate
Parent is liable up to an amount not to exceed with respect to U.S. federal
taxes the amount of any such taxes that Parent would have been required to pay
on a separate company basis or on a consolidated basis if Parent had filed a
consolidated return on behalf of an affiliated group (as defined in Section 1504
of the Code) of which it were the common parent, or with respect to U.S. state
and local taxes, the amount of such taxes that Parent would have been required
to pay on a separate company basis or on a combined basis if Parent had filed a
combined return on behalf of an affiliated group consisting only of Parent and
its Subsidiaries.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Material of Environmental
Concern in, into, onto or through the environment.
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Repayment Date" shall have the meaning given such term in Section
2.11(a).
20
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under subsections .22, .23, .25, .27, .28 or .29 of PBGC Reg
Section 4043.
"Required Lenders" shall mean, at any time, at least two Lenders having
Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments representing an aggregate of more than 50% of the
sum of all Loans (excluding Swingline Loans) outstanding, L/C Exposure,
Swingline Exposure and unused Revolving Credit Commitments at such time. For
purposes of determining the Required Lenders, any amounts denominated in an
Alternative Currency shall be translated into Dollars at the Exchange Rates in
effect on the most recent Calculation Date.
"Required Vorwerk Amount" shall mean that amount, not to exceed
$20,000,000, which, when added to the proceeds of the initial Borrowing, will
provide sufficient funds for the payment in full of all amounts described in
Section 4.02(t).
"Requirement of Law" shall mean, as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or any
restrictions of record affecting any Mortgaged Property or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, provided that the foregoing shall not apply to
any non-binding recommendation of any Governmental Authority.
"Reset Date" shall have the meaning assigned to such term in Section
1.03(a).
"Responsible Officer" of any Person shall mean the chief executive
officer, the president or vice president, or, with respect to financial matters,
the Financial Officer of such Person or, with respect to benefits matters, the
appropriate officer of such Person.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans and/or participate in
Swingline Loans hereunder as set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender assumed its Revolving Credit
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.05.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender denominated in Dollars, plus the Dollar
Equivalent of the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender that are Alternative Currency Loans, plus the
aggregate amount at such time of such Lender's L/C Exposure and Swingline
Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.
21
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrowers pursuant to Section 2.01.
"Secured Parties" shall, as applicable, (i) with respect to the U.S.
Security Documents, have the meaning assigned to such term in the U.S. Security
Agreement; (ii) with respect to the Mexican Pledge Agreement, have the meaning
assigned to the term "Lenders" in the Mexican Pledge Agreement, and (iii) with
respect to the Mexican Security Agreement, have the meaning assigned to the term
"acreditantes" in the Mexican Security Agreement.
"Security Documents" shall mean the Mortgages, the U.S. Security
Agreement, the Mexican Security Agreement, the Mexican Pledge Agreement, the
Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"Senior Subordinated Note Documents" shall mean the indenture and other
agreements governing the Senior Subordinated Notes or pursuant to which the
Senior Subordinated Notes are issued.
"Senior Subordinated Notes" shall mean the 10-3/4% Senior Subordinated
Notes Due 2011 of the Borrowers, in an original aggregate principal amount of
$200,000,000.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" shall mean, when used with respect to any Person, that, as of
any date of determination, (a) the amount of the assets of such Person, at a
fair valuation, will, as of such date, exceed the amount of all liabilities of
such Person, contingent or otherwise, as of such date, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the probable liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business and (d) such Person will be able to pay its debts
as they mature. For purposes of determining whether a Person is Solvent, the
amount of any contingent liability shall be computed as the amount that, in
light of all the facts and circumstances existing at such time, represents the
amount that may reasonably be expected to become an actual or matured liability.
"Solvency" shall mean the condition of being Solvent.
"CNB Standby Letters of Credit" shall mean (a) the Standby Letter of
Credit, dated as of March 10, 1999, as amended, issued by City National Bank in
favor of ARI Fleet Services, S.A. de C.V., totaling $2.0 million availability,
and (b) the Standby Letter of Credit dated as of March 26, 2003 issued by City
National Bank in favor of Deutsche Bank A.G., totaling 400,000 Euro
availability.
"Statutory Reserves" shall mean 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 or by any other Governmental
22
Authority to which Lenders are subject for any category of deposits or
liabilities customarily used to fund loans or by reference to which interest
rates applicable to Loans are determined. Such reserve, liquid asset or similar
percentages shall include those imposed pursuant to Regulation D of the Board
(and for purposes of Regulation D, Eurocurrency Loans denominated in Dollars
shall be deemed to constitute Eurocurrency Liabilities). Eurocurrency Loans
shall be deemed 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 Regulation D or any other applicable law, rule or
regulation. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Sterling" and "(pound)" shall mean the lawful currency for the time
being of the United Kingdom.
"Subsidiary" shall mean, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, controlled or held, or the management of
which is otherwise Controlled, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or "Subsidiaries" in this Agreement shall refer to
a Subsidiary or Subsidiaries of Parent.
"Subsidiary Guarantors" shall mean the JCI Subsidiary Guarantors, any
DCJ Subsidiary Guarantors and the JCSA Subsidiary Guarantors.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans pursuant to Section 2.23 in the amount referred
to therein.
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
"Swingline Lender" shall mean The Bank of New York.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to its Swingline Commitment.
"Total Debt" shall mean, as of any date of determination, without
duplication, the total Indebtedness of Parent and its Subsidiaries required to
be reflected on a consolidated balance sheet of Parent on such date in
accordance with GAAP (other than Indebtedness of the type referred to in clause
(d), (e) or (g) of the definition of the term "Indebtedness", except, in the
case of such clause (d) or (e), to the extent of any unreimbursed drawings
thereunder).
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
"Transferee" shall have the meaning assigned to such term in Section
9.05(g).
23
"Trustee" shall mean BankBoston, S.A., Institucion de Banca Multiple,
Division Fiduciaria, acting in its capacity as trustee under the Mexican
Security Agreement, and any successor in such capacity.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined and the currency in which such Loan or the Loans
comprising such Borrowing are denominated. For purposes hereof, the term "Rate"
shall include the Adjusted LIBOR and the Alternate Base Rate, and currency shall
include Dollars and any Alternative Currency permitted hereunder.
"Ultimate Parent" means, as of the Closing Date, Jafra S.A., and
thereafter, any Person of which the Parent at any time is or becomes a direct
wholly owned Subsidiary after the Closing Date.
"Underfunding" shall mean an excess of all accrued benefits under a
Plan (based on those assumptions used to fund such Plan), determined as of the
most recent annual valuation date, over the value of the assets of such Plan
allocable to such accrued benefits.
"U.S. Security Agreement" shall mean the Security Agreement, dated as
of the Initial Closing Date, among JCI, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.
"U.S. Security Documents" shall mean each Security Document executed by
Parent, JCI or a Domestic Subsidiary.
"Vorwerk" shall meanVorwerk & Co. eins GmbH, a company organized under
the laws of the Federal Republic of Germany.
"Vorwerk Group" shall mean Vorwerk and its Affiliates (including
Xxxxxxx & Co. KG).
"Vorwerk Loans" shall mean any and all loans, advances and other
financial accommodations made by Vorwerk or any other member of the Vorwerk
Group to JCI under the Vorwerk Loan Agreement.
"Vorwerk Loan Agreement" shall mean the Loan Contract, dated the
Closing Date, made between JCI and Vorwerk or another member of the Vorwerk
Group, as amended, modified, restated, or supplemented from time to time.
"Voting Stock" of any Person shall mean all Capital Stock entitled to
vote generally in the election of directors (or Persons performing similar
functions) of such Person.
"wholly owned", shall mean, when used to modify the term "Subsidiary",
a Subsidiary of a Person of which securities (except for directors' qualifying
shares or shares held by nominees) or other ownership interests representing
100% of the equity or 100% of the ordinary voting power or 100% of the general
partnership interests are, at the time any determination is being made, owned,
controlled or held by such Person or one or more wholly owned Subsidiaries of
such Person or by such Person and one or more wholly owned Subsidiaries of such
Person.
24
"Working Capital" shall mean, as of any date of determination,
Consolidated Current Assets on such date minus Consolidated Current Liabilities
on such date.
Section 1.02 Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined. The
words "include", "includes" and "including" shall be deemed to be followed by
the phrase "without limitation". All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement (or incorporated in any other Loan Document by reference to this
Agreement) to any Loan Document shall mean such Loan Document as amended,
restated, supplemented or otherwise modified from time to time and (b) all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided, however, that if Parent notifies the
Administrative Agent that Parent wishes to amend any covenant in Article VI or
any related definition to eliminate the effect of any change in GAAP occurring
after the date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies Parent that the Required Lenders wish to amend
Article VI or any related definition for such purpose), then Parent's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
Parent and the Required Lenders.
Section 1.03 Exchange Rates. (a) Not later than 1:00 p.m., New York
City time, on each Calculation Date, the Administrative Agent shall determine
the Exchange Rate as of such Calculation Date to be used for calculating
relevant Dollar Equivalent and Alternative Currency Equivalent amounts. The
Exchange Rates so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a "Reset Date"), shall
remain effective until the next succeeding Reset Date and shall for all purposes
of this Agreement (other than any provision expressly requiring the use of a
current Exchange Rate) be the Exchange Rates employed in converting any amounts
between the applicable currencies.
(b) Not later than 5:00 p.m., New York City time, on each
Reset Date and on the date of each Alternative Currency Borrowing, the
Administrative Agent shall (i) determine the Dollar Equivalent of the aggregate
principal amount of the Alternative Currency Loans then outstanding (after
giving effect to any Alternative Currency Loans made or repaid on such date) and
(ii) notify the Borrowers of the results of such determination.
Section 1.04 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 "Eurocurrency Loan") or by Class and Type
(e.g., a "Eurocurrency Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Credit Borrowing") or by Type (e.g., a
"Eurocurrency Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving
Credit Borrowing").
25
ARTICLE II
THE CREDITS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Revolving Loans to either Borrower,
at any time and from time to time on or after the Closing Date, and until the
earlier of the Maturity Date and the termination of the Revolving Credit
Commitment of such Lender in accordance with the terms hereof, in Dollars or one
or more Alternative Currencies (as specified in the Borrowing Requests with
respect thereto), in an aggregate principal amount (determined as of the date of
each Revolving Credit Borrowing) that will not result in (a) such Lender's
Revolving Credit Exposure exceeding such Lender's Revolving Credit Commitment,
(b) the DCJ Revolving Credit Exposure exceeding the DCJ Maximum Percentage of
the Total Revolving Credit Commitment, (c) the Aggregate Alternative Currency
Revolving Credit Exposure exceeding $40,000,000, or (d) solely with respect to
the initial Borrowing, there being unused Commitments of less than $5,000,000.
Within the limits set forth in this Section and subject to the terms, conditions
and limitations set forth herein, each Borrower may borrow, pay or prepay and
reborrow Revolving Loans.
Section 2.02 Loans. (a) Each Loan (other than a Swingline Loan) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.02(f), Loans made pursuant to Sections 2.22 (d) and
2.23(e) and Swingline Loans, the Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $250,000 (or the
Alternative Currency Equivalent thereof) or (ii) equal to the remaining
available balance of the applicable Commitments.
(b) Subject to Sections 2.02(f), 2.08, 2.10(iv) and 2.15,
(i) each Borrowing denominated in Dollars shall be comprised of ABR Loans or
Eurocurrency Loans as the applicable Borrower may request pursuant to Section
2.03 and (ii) each Alternative Currency Borrowing shall be comprised entirely of
Eurocurrency Loans. Each Lender may at its option make any Eurocurrency 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 applicable Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that no Borrower shall be entitled to request any
Borrowing that, if made, would result in more than twelve Eurocurrency
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods or denominated in different
currencies, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section
2.02(f), Section 2.22(d) and Section 2.23(e), each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to such account as the
26
Administrative Agent may designate not later than 10:00 a.m., New York City
time, in the case of fundings to an account in New York City, or 10:00 a.m.,
local time, in the case of fundings to an account in another jurisdiction, and
the Administrative Agent shall, promptly upon receipt thereof, credit the
amounts so received to an account designated by the applicable Borrower in the
applicable Borrowing Request or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount in the required currency. If the Administrative
Agent shall have so made funds available then, to the extent that such Lender
shall not have made such portion available to the Administrative Agent, such
Lender and (if such amount is not made available by the applicable Lender within
three Business Days of the date of the applicable Borrowing) the applicable
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon in such
currency, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to the Administrative Agent at (i)
in the case of such Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds in the relevant currency (which determination shall be
conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Eurocurrency
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
(f) If the Issuing Bank shall not have received from the
applicable Borrower the payment required to be made by Section 2.22(e) within
the time specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Revolving Credit Lender of such L/C Disbursement and its
Pro Rata Percentage thereof. In the case of Letters of Credit denominated in
Dollars, each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount in Dollars equal to such Lender's Pro Rata Percentage of such L/C
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Revolving Loan of such Lender and such payment shall be deemed to have
reduced the L/C Exposure), and the Administrative Agent will promptly pay to the
Issuing Bank amounts so received by it from the Revolving Credit Lenders. In the
case of Letters of Credit denominated in an Alternative Currency, each Revolving
Credit Lender shall pay by wire
27
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., London time, on such date (or if such Revolving Credit Lender
shall have received such notice later than 12:00 (noon), local time in the
country of the Alternative Currency, on the immediately following Business Day),
an amount in such Alternative Currency equal to such Lender's Pro Rata
Percentage of such L/C Disbursement (it being understood that such amount shall
be deemed to constitute an Alternative Currency Revolving Loan bearing interest
at the relevant Foreign Base Rate of such Lender and such payment shall be
deemed to have reduced the L/C Exposure), and the Administrative Agent will
promptly pay to the Issuing Bank amounts so received by it from the Revolving
Credit Lenders. The Administrative Agent will promptly pay to the Issuing Bank
any amounts received by it from the Borrowers with respect to the reimbursement
of any payment of a draft under a Letter of Credit prior to the time that any
Revolving Credit Lender makes any payment pursuant to this paragraph (f); any
such amounts received by the Administrative Agent thereafter from the applicable
Borrower will be promptly remitted by the Administrative Agent to the Revolving
Credit Lenders that shall have made such payments and to the Issuing Bank, as
their interests may appear. If any Revolving Credit Lender shall not have made
its Pro Rata Percentage of such L/C Disbursement available to the Administrative
Agent as provided above, such Lender and (if such amount is not made available
by the applicable Lender within three Business Days of the date of the
applicable Borrowing) the applicable Borrower agrees to pay interest on such
amount, for each day from and including the date such amount is required to be
paid in accordance with this paragraph to but excluding the date such amount is
paid, to the Administrative Agent for the account of the Issuing Bank at (i) in
the case of the Borrower, a rate per annum equal to the interest rate applicable
to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, a rate determined by the Administrative Agent to
represent its cost of overnight funds in the applicable currency, and for each
day thereafter, (x) if such L/C Disbursement is denominated in Dollars, the
Alternate Base Rate, and (y) if such L/C Disbursement is denominated in an
Alternative Currency, the applicable Foreign Base Rate.
Section 2.03 Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan, a deemed Borrowing pursuant to Section 2.02(f) or
a Loan made pursuant to Section 2.22(d) or Section 2.23(e), as to which this
Section 2.03 shall not apply), the applicable Borrower shall deliver to the
Administrative Agent a duly completed Borrowing Request (or telephone the
Administrative Agent, promptly confirmed with a written (including by telecopy)
and duly completed Borrowing Request) (a) in the case of a Eurocurrency
Borrowing, not later than 12:30 p.m., New York City time, three Business Days
(or, if such Borrowing is to be an Alternative Currency Borrowing, 12:30 p.m.,
New York time, four Business Days) before a proposed Borrowing, and (b) in the
case of an ABR Borrowing, not later than 12:30 p.m., New York City time, one
Business Day before a proposed Borrowing. Each Borrowing Request (including a
telephonic Borrowing Request) shall be irrevocable, shall be signed by or on
behalf of the applicable Borrower and shall specify the following information:
(i) the currency of such Borrowing (which shall be Dollars or an Alternative
Currency); (ii) if such Borrowing is to be denominated in Dollars, whether such
Borrowing is to be a Eurocurrency Borrowing or an ABR Borrowing; (iii) the date
of such Borrowing (which shall be a Business Day); (iv) the number and location
of the account to which funds are to be disbursed; (v) the amount of such
Borrowing (which shall be expressed in Dollars, regardless of whether such
Borrowing is an Alternative Currency Borrowing); and (vi) if such Borrowing is
to be a Eurocurrency Borrowing, the initial Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary
28
specification in any Borrowing Request, each requested Borrowing shall comply
with the requirements set forth in Section 2.02. If no election as to the
currency of Borrowing is specified in any such notice, then the requested
Borrowing shall be denominated in Dollars. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing if denominated in Dollars or a Eurocurrency Borrowing if
denominated in an Alternative Currency. If no Interest Period with respect to
any Eurocurrency Borrowing is specified in any such notice, then the applicable
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly advise the applicable Lenders
of any notice given pursuant to this Section 2.03 (and the contents thereof),
and of each Lender's portion of the requested Borrowing and the account to which
Loans comprising the requested Borrowing are to be wired.
Section 2.04 Evidence of Debt; Repayment of Loans. (a) Each Borrower
hereby unconditionally promises, severally and not jointly, to pay to the
Administrative Agent for the account of the Swingline Lender or each other
Lender entitled thereto the then unpaid principal amount of each Swingline Loan,
on the last day of the Interest Period applicable to such Loan or, if earlier,
on the Maturity Date. Each Borrower hereby unconditionally promises, severally
and not jointly, to pay to the Administrative Agent for the account of each
Lender, on the Maturity Date, the then unpaid principal amount of each Revolving
Loan of such Lender made to such Borrower.
(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 to such
Borrower from time to time, including the amounts of principal and interest
payable and paid to such Lender by each such Borrower from time to time under
this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made to each Borrower
hereunder, the 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 Administrative Agent hereunder from each Borrower or any
Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraphs (b) and (c) above shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations
therein recorded absent manifest error; provided, however, 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 obligations of the applicable
Borrower to repay the Loans to it in accordance with the terms hereof.
(e) Prior to the Closing Date (or if any Lender becomes a
Lender after the Closing Date, prior to the date such Lender becomes a Lender),
any Lender may through the Administrative Agent request that Loans made by it to
a Borrower be evidenced by a promissory note, substantially in the form of
Exhibit E (each, a "Note"). In such event, the applicable Borrower shall execute
and deliver to such Lender a Note payable to such Lender in a principal amount
equal to such Lender's Revolving Credit Commitment.
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Section 2.05 Fees. (a) The Borrowers agree, severally and not jointly
in the respective proportions set forth in the next succeeding sentence, to pay
to the Administrative Agent for the account of Revolving Credit Lenders, on the
last Business Day of March, June, September and December in each year and on
each date on which the Commitments of all Lenders shall expire or be terminated
as provided herein, a commitment fee (a "Commitment Fee") equal to the
Applicable Commitment Fee Percentage per annum in effect from time to time on
the average daily unused amount of the Commitments (excluding the Swingline
Commitment) of such Lender during the preceding quarter (or other period
commencing with the Closing Date (for purposes of this Section 2.05, the
aggregate amount of the L/C Exposure shall be deemed used Commitments) or ending
with the Maturity Date or the date on which the Commitments of all Lenders shall
expire or be terminated). JCI shall be responsible for 40% of such Commitment
Fees and DCJ shall be responsible for 60% of such Commitment Fees. All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be. The Commitment Fee due
to each Lender shall commence to accrue on the Closing Date and shall cease to
accrue on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein. For purposes of calculating the Commitment Fees
only, no portion of the Revolving Credit Commitments shall be deemed utilized
under Section 2.17 as a result of outstanding Swingline Loans.
(b) The Borrowers agree, severally and not jointly in the
respective proportions set forth in the next succeeding sentence, to pay to the
Administrative Agent, for its own account, the administrative fees set forth in
the Fee Letter at the times and in the amounts specified therein (the
"Administrative Agent Fees") and to otherwise comply with the Fee Letter. JCI
shall be responsible for 40% of the Administrative Agent Fees and DCJ shall be
responsible for 60% of such Administrative Agent Fees.
(c) Each Borrower agrees, severally and not jointly, (i)
to pay to the Administrative Agent for the account of each Revolving Credit
Lender, on the last Business Day of March, June, September and December of each
year and on the date on which the Revolving Credit Commitments of all Lenders
shall be terminated as provided herein (each such date, an "L/C Fee Payment
Date"), a fee (an "L/C Participation Fee") calculated on such Lender's Pro Rata
Percentage of the average daily aggregate L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the Closing Date or ending with the
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) in respect of Letters of Credit issued for the account of such
Borrower at a rate equal to the Applicable Percentage from time to time used to
determine the interest rate on Revolving Credit Borrowings comprised of
Eurocurrency Loans pursuant to Section 2.06, (ii) to pay to the Issuing Bank a
fronting fee (the "Issuing Bank Fees") with respect to each Letter of Credit
issued by such Issuing Bank (payable in arrears), computed for the period from
and including the date of issuance of such Letter of Credit to the expiration
date of such Letter of Credit on each L/C Fee Payment Date, equal to 0.25% per
annum of the aggregate undrawn face amount of Letters of Credit outstanding
which were issued by such Issuing Bank, and (iii) to pay or reimburse the
Issuing Bank for such normal and customary costs and expenses as are incurred or
charged by such Issuing Bank in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit issued by it. All L/C Participation
Fees and
30
Issuing Bank Fees shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be.
(d) All Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders, except that the Issuing Bank Fees and the
Issuing Bank's costs and expenses described in Section 2.05(c)(iii) shall be
paid directly to the Issuing Bank.
Section 2.06 Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when the Alternate
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times) at a rate per annum equal to the Alternate Base Rate
plus the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurocurrency Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBOR for the Interest Period in effect for such
Borrowing plus the Applicable Percentage in effect from time to time.
(c) Subject to the provisions of Section 2.07, each
Foreign Base Rate Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 days) at a rate per annum equal to the
Foreign Base Rate.
(d) Interest on each Loan shall be payable on the
Interest Payment Dates applicable to such Loan except as otherwise provided in
this Agreement. The applicable Alternate Base Rate, Adjusted LIBOR or Foreign
Base Rate for each Interest Period or day within an Interest Period, as the case
may be, shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
(e) Interest on each Alternative Currency Borrowing shall
be payable in the applicable Alternative Currency.
Section 2.07 Default Interest. If a Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, such Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount from the date of such defaulted payment to but excluding the date of
actual payment (to the extent lawful, after as well as before judgment) (a) in
the case of overdue principal, at the rate otherwise applicable to such Loan
pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when determined by reference to
the Prime Rate and over a year of 360 days at all other times) equal to (i) if
such amount is payable in Dollars, the sum of the rate that would be applicable
to an ABR Loan plus 2.00% and (ii) if such amount is payable in an Alternative
Currency, the sum of the applicable Foreign Base Rate plus 2.00%.
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Section 2.08 Alternate Rate of Interest. In the event, that on the day
two Business Days prior to the commencement of any Interest Period for a
Eurocurrency Borrowing the Administrative Agent shall have reasonably determined
that (a) deposits in the principal amounts of the Alternative Currency Loans
comprising such Borrowing are not generally available in the London or other
relevant interbank market, or (b) by reason of circumstances affecting the
relevant market, reasonable means do not exist for ascertaining Adjusted LIBOR,
the Administrative Agent shall, as soon as practicable thereafter, give written
(including telecopy) notice of such determination to the Borrowers and the
Lenders. In the event of any such determination, until the Administrative Agent
shall have advised the Borrowers and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) if the conditions specified in clause
(b) above exist, any request by a Borrower for a Eurocurrency Borrowing
denominated in Dollars pursuant to Section 2.03, or to continue any Eurocurrency
Borrowing denominated in Dollars for another Interest Period or to convert an
ABR Borrowing to a Eurocurrency Borrowing pursuant to Section 2.10, shall be
deemed to be a request for an ABR Borrowing and (ii) if the conditions specified
in clause (a) above exist, any request for an Alternative Currency Borrowing
shall be rejected. Each determination by the Administrative Agent hereunder
shall be conclusive absent manifest error.
Section 2.09 Termination and Reduction of Commitments. (a) The
Revolving Credit Commitments, the L/C Commitment and the Swingline Commitment
shall automatically terminate on the Maturity Date. Notwithstanding the
foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New
York City time, on August 26, 2004, if the first Credit Event as contemplated by
Section 4.02 below shall not have occurred by such time.
(b) The Total Revolving Credit Commitment shall be
reduced by the amount (or, in the case of amount denominated in any currency
other than Dollars, the Dollar Equivalent of such amount) of all prepayments
made pursuant to Section 2.13(b) other than prepayments made with Net Proceeds
of the Mexican Facility Sale, Section 2.13(c) and Section 2.13(d). Promptly
following any reduction to the Total Revolving Credit Commitment under this
Section 2.09(b), the Administrative Agent shall notify the Borrowers and the
Lenders of the amount of the Total Revolving Credit Commitment, such
determinations being conclusive absent manifest error.
(c) Upon at least three Business Days' prior irrevocable
written (including telecopy) or telephone notice (which notice shall be
confirmed promptly in writing) to the Administrative Agent, the Borrowers may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Revolving Credit Commitments; provided, however, that
(i) each partial reduction of the Revolving Credit Commitments shall be in an
integral multiple of $500,000 and in a minimum amount of $2,500,000, (ii) the
Total Revolving Credit Commitment shall not be reduced to the extent that, after
giving effect thereto, the DCJ Revolving Credit Exposure would exceed the DCJ
Maximum Percentage of the Total Revolving Credit Commitment, (iii) the Total
Revolving Credit Commitment shall not be reduced to an amount that is less than
the Aggregate Revolving Credit Exposure at the time and (iv) the Maximum
Revolving Credit Commitment shall be reduced by an amount equal to each such
reduction of the Revolving Credit Commitments.
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(d) Each reduction in the Revolving Credit Commitments
hereunder shall be made ratably among the Lenders in accordance with their
respective applicable Commitments.
Section 2.10 Conversion and Continuation of Borrowings. Each Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:30 p.m., New York City time, one
Business Day prior to conversion, to convert any Eurocurrency Borrowing
denominated in Dollars into an ABR Borrowing, (b) not later than 12:30 p.m., New
York City time, three Business Days (or in the case of an Alternative Currency
Borrowing, four Business Days) prior to conversion or continuation, to convert
any ABR Borrowing into a Eurocurrency Borrowing denominated in Dollars or to
continue any Eurocurrency Borrowing as a Eurocurrency Borrowing in the same
currency for an additional Interest Period, and (c) not later than 12:30 p.m.,
New York City time, three Business Days (or in the case of an Alternative
Currency Borrowing, four Business Days) prior to conversion, to convert the
Interest Period with respect to any Eurocurrency Borrowing to another
permissible Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be
made pro rata among the Lenders in accordance with the respective
principal amounts of the Loans comprising the converted or continued
Borrowing;
(ii) if less than all the outstanding principal
amount of any Borrowing shall be converted or continued, then each
resulting Borrowing shall satisfy the limitations specified in Sections
2.02(a) and 2.02(b) regarding the principal amount and maximum number
of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each
Lender and the Administrative Agent by recording for the account of
such Lender the new Loan of such Lender resulting from such conversion
and reducing the Loan (or portion thereof) of such Lender being
converted by an equivalent principal amount;
(iv) if any Eurocurrency Borrowing is converted
at a time other than the end of the Interest Period applicable thereto,
the applicable Borrower shall pay, upon demand, any amounts due to the
Lenders pursuant to Section 2.16; and (v) upon notice to the Borrower
from the Administrative Agent given at the request of the Required
Lenders, after the occurrence and during the continuance of an Event of
Default (such notice stating that the Required Lenders have determined
that a conversion to, or continuance of a Borrowing as, a Eurocurrency
Borrowing is not appropriate), (x) no outstanding Borrowing denominated
in Dollars may be converted into, or continued as, a Eurocurrency
Borrowing, (y) unless repaid, each Eurocurrency Borrowing denominated
in Dollars shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto and (z) no Interest Period in excess
of one month may be selected for any Alternative Currency Borrowing.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the applicable Borrower requests be converted or continued, (ii)
whether such Borrowing is to be converted to or continued as a Eurocurrency
Borrowing or an ABR Borrowing, (iii) if such notice requests a
33
conversion, the date of such conversion (which shall be a Business Day) and (iv)
if such Borrowing is to be converted to or continued as a Eurocurrency
Borrowing, the Interest Period with respect thereto. If no Interest Period is
specified in any such notice with respect to any conversion to or continuation
as a Eurocurrency Borrowing, the applicable Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative Agent
shall advise the Lenders of any notice given pursuant to this Section 2.10 and
of each Lender's portion of any converted or continued Borrowing. If the
applicable Borrower shall not have given notice in accordance with this Section
2.10 to continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert such
Borrowing), such Borrowing shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), (i) in the case of a
Borrowing denominated in Dollars, automatically be continued as an ABR Borrowing
and (ii) in the case of an Alternative Currency Borrowing, automatically be
continued into a new Interest Period of one month. Notwithstanding any contrary
provisions herein, the currency of an outstanding Borrowing may not be changed
in connection with any conversion or continuation of such Borrowing.
Section 2.11 Increase in Commitments. At any time and from time to time
while the Commitments shall remain in effect, the aggregate amount of the
Commitments may, at the option of the Borrowers, be increased in increments of
not less than $5,000,000 to an amount not exceeding the Maximum Revolving Credit
Commitment; provided that (a) no Default shall exist immediately prior to or
after the effective date of each such Commitment increase, (b) the Borrowers
shall have delivered to the Agent a duly executed Notice of Commitment Increase
Election in the form of Exhibit H with respect to each such Commitment increase,
and (c) either existing or new Lenders shall have agreed to participate in the
Commitments in the amount of such increase. The Agent shall promptly notify each
Lender of any proposed increase in the amount of the Commitments.
Section 2.12 Prepayment. (a) Each and either Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, without premium or penalty (except as provided in Section 2.16), upon
prior written or telecopy notice (or telephone notice promptly confirmed by
written (including telecopy) notice) to the Administrative Agent (i) in the case
of a prepayment of a Eurocurrency Borrowing, given before 12:30 p.m., New York
City time, three Business Days (or, in the case of prepayment of an Alternative
Currency Borrowing, four Business Days) before such prepayment and (ii) in the
case of a prepayment of ABR Loans or Foreign Base Rate Loans, given before 12:30
p.m., New York City time, one Business Day before such prepayment; provided,
however, that each partial prepayment shall be in an amount that is an integral
multiple of $250,000 (or the Alternative Currency Equivalent thereof).
(b) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the applicable Borrower to
prepay such Borrowing by the amount stated therein on the date stated therein.
All prepayments under this Section 2.12 shall be subject to Section 2.16 but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to but excluding the date of payment.
34
Section 2.13 Mandatory Prepayments. (a) In the event of any termination
of all the Revolving Credit Commitments pursuant to Section 2.09, each Borrower
shall repay or prepay all its outstanding Revolving Credit Borrowings and all
outstanding Swingline Loans on the date of such termination. In the event of any
partial reduction of the Revolving Credit Commitments pursuant to Section 2.09,
then at or prior to the effective date of such reduction, the Administrative
Agent shall notify the Borrowers and the Revolving Credit Lenders of the
Aggregate Revolving Credit Exposure and the Aggregate Alternative Currency
Revolving Credit Exposure after giving effect thereto and the portion of the
Aggregate Revolving Credit Exposure and the Aggregate Alternative Currency
Revolving Credit Exposure attributable to each Borrower. If at any time, as a
result of such a partial reduction or termination, as a result of fluctuations
in exchange rates or otherwise (i) the Aggregate Revolving Credit Exposure would
exceed the Total Revolving Credit Commitment, (ii) the Aggregate Alternative
Currency Revolving Credit Exposure would exceed $40,000,000 or (iii) the DCJ
Revolving Credit Exposure would exceed the DCJ Maximum Percentage of the Total
Revolving Credit Commitment, then the Borrowers shall (x) on the date of such
reduction or termination of Revolving Credit Commitments or (y) within four
Business Days following notice from the Administrative Agent of any such
fluctuation in exchange rate or otherwise (which notice may be given by the
Administrative Agent in its own discretion and shall be given by the
Administrative Agent at the request of any Lender), repay or prepay Revolving
Credit Borrowings or Swingline Loans in an amount sufficient to eliminate such
excess. For purposes of clauses (i) and (iii) in the immediately preceding
sentence, the Aggregate Alternative Revolving Credit Exposure shall be
calculated by reference to the Dollar Equivalent of each amount denominated in
an Alternative Currency, such Dollar Equivalent to be determined as of the date
such Alternative Currency liability was incurred.
(b) The Borrowers shall repay Revolving Loans by the
amount equal to the aggregate amount of Net Proceeds (minus any Reinvested
Amount relating thereto) received by Parent or any of its Subsidiaries from (i)
the sale, transfer or other disposition by Parent or any of its Subsidiaries of
any property or assets of Parent or any of its Subsidiaries to any Person (other
than to the Parent or any Subsidiary thereof) pursuant to Sections 6.05(i) or
6.05(m) outside of the ordinary course of business; (ii) the sale or other
disposition of any Capital Stock, property or assets of any Foreign Subsidiary
existing on the Closing Date (other than DCJ, any Mexican Subsidiary which is a
Subsidiary Guarantor, Jafra Cosmetics Dominicana S.A., CDRJ Europe Holding
Company B.V. or any Subsidiary of CDRJ Europe Holding Company B.V. existing on
the Closing Date), or of any property or assets of any other Subsidiary existing
on the Closing Date that are used in any business or operations conducted in any
jurisdiction other than the United States, Mexico, the Dominican Republic and
Europe pursuant to Section 6.05(l); or (iii) the recovery by Parent or any of
its Subsidiaries of amounts owing to it under property insurance policies if
Parent and its Subsidiaries have not commenced replacement of the property on
account of which such amounts were paid within one year of the later of the date
of the casualty to, or condemnation of, such property or the receipt of such Net
Proceeds, provided that, notwithstanding the foregoing, any such repayment of
the Revolving Loans pursuant to this Section 2.13(b) shall only be required upon
any such sale or transfer or recovery to the extent the Net Proceeds received
therefrom, when aggregated with the Net Proceeds received from all such sales or
transfers or recoveries in the immediately preceding twelve-month period and
minus all applicable Reinvested Amounts relating to all such Net Proceeds,
exceed $5,000,000. The applicable Borrower shall make any prepayment pursuant to
this Section 2.13(b) as promptly as
35
practicable (and in any event, within three Business Days) following the date of
receipt of any such Net Proceeds (except that if any such Net Proceeds are
eligible to be reinvested in accordance with the definition of the term
"Reinvested Amount" and neither Parent nor any such Borrower has elected to
reinvest such proceeds, such prepayment shall be made on the earlier of (x) the
date on which the certificate of a Responsible Officer of Parent or such
Borrower to such effect is delivered to the Administrative Agent in accordance
with such definition and (y) the last day of the period within which a
certificate setting forth such election is required to be delivered in
accordance with such definition).
(c) On the Business Day following the date on which the
financial statements with respect to a fiscal year ending on or after December
31, 2005 are delivered pursuant to Section 5.01(a), the Borrowers shall prepay
outstanding Revolving Loans in accordance with Section 2.13(e) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then
ended; provided, however, that no such prepayment shall be required if the
Consolidated Leverage Ratio as of the end of such fiscal year shall be less than
3.00 to 1.00.
(d) In the event that Parent or any Subsidiary shall
receive Net Proceeds from the issuance or other disposition of Indebtedness for
money borrowed (other than Indebtedness for money borrowed permitted pursuant to
Section 6.01), the Borrowers shall, as promptly as practicable upon (and in any
event not later than the third Business Day next following) the receipt of such
Net Proceeds, apply an amount equal to 100% of such Net Proceeds to prepay
outstanding Revolving Loans.
(e) To the extent that Excess Cash Flow for any fiscal
year required under Section 2.13(c) to be used to prepay the Revolving Loans is
attributable (as reasonably determined by Parent) to one Borrower and its
Subsidiaries (as opposed to the other Borrower and its Subsidiaries), then such
Excess Cash Flow shall be used to prepay the Revolving Loans of such Borrower in
accordance with this Section 2.13(e).
(f) Parent shall deliver to the Administrative Agent, at
the time of each prepayment required under this Section 2.13, (i) a certificate
signed by a Financial Officer of Parent setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent reasonably
practicable, at least three days prior written notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
(g) Unless the Borrowers otherwise elect, amounts to be
applied pursuant to this Section 2.13 to the prepayment of Revolving Loans shall
be applied, as applicable, first to reduce outstanding ABR Revolving Loans. Any
amounts remaining after each such application shall, at the option of the
applicable Borrower, be applied to prepay Eurocurrency Revolving Loans
immediately and/or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account allocable to Revolving Loans to prepay Eurocurrency Revolving
Loans, in each case on the last day of their respective Interest Periods (or, at
the direction of Borrowers, on any earlier date) until all outstanding Revolving
Loans have been prepaid to the extent required by Section 2.13 or until all
36
the allocable cash on deposit with respect to such Loans has been exhausted and
thereupon any balance remaining in the Prepayment Account shall be disbursed to
the applicable Borrower. For purposes of this Agreement, the term "Prepayment
Account" shall mean an account established by the Borrowers with the
Administrative Agent and over which the Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal for
application in accordance with this paragraph (g). The Administrative Agent
will, at the request of Borrowers, invest amounts on deposit in the Prepayment
Account in Cash Equivalents that mature prior to the last day of the applicable
Interest Periods of the Eurocurrency Revolving Credit Borrowings to be prepaid,
as the case may be; provided, however, that (i) the Administrative Agent shall
not be required to make any investment that, in its sole judgment, would require
or cause the Administrative Agent to be in, or would result in any, violation of
any law, statute, rule or regulation and (ii) the Administrative Agent shall
have no obligation to invest amounts on deposit in the Prepayment Account if a
Event of Default pursuant to Section 7.01 or Section 7.02(a) shall have occurred
and be continuing. Any losses that may result from such investments shall not
relieve the applicable Borrower from its obligation to prepay Eurocurrency
Borrowings on the last day of the applicable Interest Period. Other than any
interest earned on such investments, the Prepayment Account shall not bear
interest. Interest or profits, if any, on such investments shall be deposited in
the Prepayment Account and reinvested and disbursed as specified above, except
to the extent necessary to make the applicable prepayment required by Section
2.13. If the maturity of the Loans has been accelerated pursuant to Article VII,
the Administrative Agent may, in its sole discretion, apply all amounts on
deposit in the Prepayment Account to satisfy any of the Obligations. Each
Borrower hereby grants to the Administrative Agent, for its benefit and the
benefit of the Secured Parties, a security interest in the Prepayment Account to
secure the Obligations.
Section 2.14 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
applicable to any Lender (which term shall include the Issuing Bank in this
Section 2.14) or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof (or, if later, the date on which
such Lender becomes a Lender):
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to any Letter of Credit or any
Eurocurrency Loan made by it or its obligation to make Eurocurrency
Loans or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes (including Non-Excluded
Taxes described in Section 2.20(b) and changes in taxes measured by or
imposed upon the overall net income, or franchise taxes, or taxes
measured by or imposed upon overall capital or net worth, or branch
taxes (in the case of such capital, net worth or branch taxes, imposed
in lieu of such net income tax), of such Lender or its applicable
lending office, branch, or any affiliate thereof);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the
37
determination of Adjusted LIBOR hereunder; or (iii) shall impose on
such Lender any other condition excluding any tax of any kind
whatsoever;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurocurrency Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrowers from such Lender,
through the Administrative Agent, in accordance herewith, the applicable
Borrower shall promptly pay such Lender, upon its demand, any additional amount
or amounts necessary to compensate such Lender for such increased cost or
reduced amount receivable with respect to such Eurocurrency Loans or Letters of
Credit, provided that, in any such case, such Borrower may elect to convert
Eurocurrency Loans made by such Lender hereunder to ABR Loans by giving the
Administrative Agent at least one Business Day's notice of such election, in
which case such Borrower shall promptly pay to such Lender, upon demand, without
duplication, amounts theretofore required to be paid to such Lender pursuant to
this Section 2.14(a) and such amounts, if any, as may be required pursuant to
Section 2.16. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.14(a), it shall provide prompt notice thereof to the
applicable Borrower, through the Administrative Agent, certifying (i) that one
of the events described in this Section 2.14(a) has occurred and describing in
reasonable detail the nature of such event, (ii) as to the increased cost or
reduced amount resulting from such event and (iii) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the calculation
thereof.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case, made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender) shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of such Lender's obligations hereunder or under any Letter of Credit
to a level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, within ten
Business Days after submission by such Lender to the Borrowers (with a copy to
the Administrative Agent) of a written request therefor certifying (i) that one
of the events described in this Section 2.14(b) has occurred and describing in
reasonable detail the nature of such event, (ii) as to the reduction of the rate
of return on capital resulting from such event and (iii) as to the additional
amount or amounts demanded by such Lender or corporation and a reasonably
detailed explanation of the calculation thereof, the applicable Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or corporation for such reduction.
(c) Any certificate provided pursuant to paragraph (a) or
(b) above as to any additional amounts payable pursuant to this Section 2.14
submitted by such Lender, through the Administrative Agent, to the Borrowers
shall be conclusive in the absence of manifest error. The agreements in this
Section 2.14 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
38
Section 2.15 Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, (i) any change in any
Requirement of Law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain any Eurocurrency Loan or to give
effect to its obligations as contemplated hereby with respect to any
Eurocurrency Loan or participations in Letters of Credit denominated in an
Alternative Currency, or shall make it unlawful for the Issuing Bank to issue
Letters of Credit denominated in an Alternative Currency, or (ii) there shall
have occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls) or currency exchange rates which would make it impracticable for any
Lender to make Loans denominated in such Alternative Currency to, or to issue
Letters of Credit denominated in such Alternative Currency for the account of, a
Borrower, then by prompt written notice thereof to the Borrowers and to the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist):
(i) such Lender may declare that Eurocurrency
Loans or Alternative Currency Loans (in the affected currency or
currencies), as the case may be, will not thereafter (for the duration
of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods and ABR Loans and Foreign Base Rate
Loans will not thereafter (for such duration) be converted into
Eurocurrency Loans), whereupon any request for a Eurocurrency Borrowing
or Alternative Currency Borrowing (in the affected currency or
currencies), as the case may be (or to convert an ABR Borrowing or a
Borrowing comprised of Foreign Base Rate Loans to a Eurocurrency
Borrowing or to continue a Eurocurrency Borrowing or an Alternative
Currency Borrowing (in the affected currency or currencies), as the
case may be, for an additional Interest Period) shall, as to such
Lender only, be deemed a request for an ABR Loan (in the case of Loans
denominated in Dollars) or a Foreign Base Rate Loan (in the case of
Loans denominated in an Alternative Currency) (or a request to continue
an ABR Loan as such or to convert a Eurocurrency Loan into an ABR Loan
or a Foreign Base Rate Loan, as the case may be), unless such
declaration shall be subsequently withdrawn;
(ii) such Lender may require that all outstanding
Eurocurrency Loans or Alternative Currency Loans (in the affected
currency or currencies), as the case may be, made by it be converted to
ABR Loans (in the case of Eurocurrency Loans denominated in Dollars) or
Foreign Base Rate Loans (in the case of Loans denominated in an
Alternative Currency), as the case may be, in which event all such
Eurocurrency Loans or Alternative Currency Loans (in the affected
currency or currencies), as the case may be, shall be automatically
converted to ABR Loans or Foreign Base Rate Loans, as the case may be,
as of the effective date of such notice as provided in paragraph (b)
below; and (iii) in the case of any such change affecting the Issuing
Bank's ability to issue, or any Revolving Credit Lender's ability to
acquire participations in, Letters of Credit denominated in an
Alternative Currency, the Issuing Bank or such Lender may declare that
Letters of Credit will not thereafter be issued in the affected
Alternative Currency or Currencies, whereupon the affected Alternative
Currency or Currencies shall be deemed (for the duration of such
declaration) not to constitute an Alternative Currency for purposes of
the issuance of Letters of Credit.
39
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurocurrency Loans or Alternative Currency Loans, as the case may be,
that would have been made by such Lender or the converted Eurocurrency Loans or
Alternative Currency Loans, as the case may be, of such Lender shall instead be
applied to repay the ABR Loans or Foreign Base Rate Loans, as the case may be,
made by such Lender in lieu of, or resulting from the conversion of, such
Eurocurrency Loans or Alternative Currency Loans, as the case may be.
(b) For purposes of this Section 2.15, a notice to the
Borrowers by any Lender shall be effective as to each Eurocurrency Loan made by
such Lender, on the last day of the Interest Period currently applicable to such
Eurocurrency Loan or within such earlier period required by law; in all other
cases such notice shall be effective on the date of receipt by the applicable
Borrower.
Section 2.16 Indemnity. Each Borrower agrees to indemnify, severally
and not jointly, each Lender against and to hold each Lender harmless from any
loss or expense (other than through such Lender's gross negligence or willful
misconduct) that such Lender may sustain or incur as a consequence of (a)
default by such Borrower in making a borrowing of, conversion into or
continuation of Eurocurrency Loans after such Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by such Borrower in making any prepayment after such Borrower has given
a notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurocurrency Loans on a day which is not the last day
of an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) that would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurocurrency market. If any Lender becomes
entitled to claim any amounts under the indemnity contained in this Section
2.16, it shall provide prompt notice thereof to the applicable Borrower, through
the Administrative Agent, certifying (i) that one of the events described in
clause (a), (b) or (c) has occurred and describing in reasonable detail the
nature of such event, (ii) as to the loss or expense sustained or incurred by
such Lender as a consequence thereof and (iii) as to the amount for which such
Lender seeks indemnification hereunder and a reasonably detailed explanation of
the calculation thereof. Such a certificate as to any indemnification pursuant
to this Section 2.16 submitted by such Lender, through the Administrative Agent,
to the applicable Borrower shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
Section 2.17 Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Revolving Credit Commitments and
40
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such Revolving Credit Commitments.
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole Dollar
(or comparable unit of any applicable Alternative Currency) amount.
Section 2.18 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
a Borrower or any other Loan Party, or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan or
Loans or L/C Disbursement as a result of which the unpaid principal portion of
its Revolving Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Revolving Loans
and participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Revolving Loans and L/C Exposure, as the case may be, of such other Lender, so
that the aggregate unpaid principal amount of the Revolving Loans and L/C
Exposure and participations Revolving Loans and L/C Exposure held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of all
Revolving Loans and L/C Exposure then outstanding as the principal amount of its
Revolving Loans and L/C Exposure prior to such exercise of banker's lien, setoff
or counterclaim or other event was to the principal amount of all Revolving
Loans and L/C Exposure outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrowers and Parent expressly consent to the foregoing arrangements and agree
that any Lender holding a participation in a Revolving Loan or L/C Disbursement
deemed to have been so purchased may, to the extent provided in Section 9.07,
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by Parent or such Borrower to such Lender by
reason thereof as fully as if such Lender had made a Loan directly to the
Borrowers in the amount of such participation.
Section 2.19 Payments. (a) Except as otherwise provided herein, the
applicable Borrower shall make each payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder and under any other
Loan Document not later than 1:00 p.m., New York City time or, in the case of
any payment in an Alternative Currency, 1:00 p.m., local time in the country of
the Alternative Currency), on the date when due in immediately available funds,
without setoff, defense or counterclaim. Each such payment (other than (i)
Issuing Bank
41
Fees and amounts pursuant to Section 2.05(c)(iii), which shall be paid directly
to the Issuing Bank, and (ii) reimbursements of drafts under Letters of Credit
which shall be paid to the respective Issuing Bank) shall be made to the
Administrative Agent at its offices designated by the Administrative Agent from
time to time. Each such payment (other than principal of and interest on
Alternative Currency Loans which shall be made in the applicable Alternative
Currency) shall be made in Dollars. The Administrative Agent shall distribute
such funds to the Lenders, as the case may be, holding obligations on account of
which such amounts were paid promptly upon receipt in like funds as received.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under any
other Loan Document shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
Section 2.20 Taxes. (a) Except to the extent required under applicable
law, all payments made by a Borrower or any Guarantor under this Agreement or
any Loan Document shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority excluding taxes measured by or imposed upon the overall
net income of the Administrative Agent or any Lender or its applicable lending
office, or any branch or affiliate of either, and all franchise taxes, branch
taxes, taxes on doing business or taxes measured by or imposed upon the overall
capital or net worth of the Administrative Agent or any Lender or its applicable
lending office, or any branch or affiliate of either, in each case imposed: (i)
by the jurisdiction under the laws of which the Administrative Agent or such
Lender, applicable lending office, branch or affiliate is organized or is
located, or in which the principal executive office of the Administrative Agent
or any Lender is located, or any nation within which such jurisdiction is
located or any political subdivision thereof; or (ii) by reason of any
connection between the jurisdiction imposing such tax and the Administrative
Agent or such Lender, applicable lending office, branch or affiliate other than
a connection arising from the Administrative Agent or such Lender having
executed, delivered or performed its obligations under, or received payment
under or enforced, this Agreement or any other Loan Document. If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any other
Loan Document, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the applicable Borrower or Guarantor shall be
entitled to deduct and withhold any Non-Excluded Taxes and shall not be required
to increase any such amounts payable to any Lender or the Administrative Agent
under the circumstances and to the extent set forth in Section 2.20(b). Whenever
any Non-Excluded Taxes are payable by a Borrower, as promptly as possible
thereafter such Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower showing payment
thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the
42
Administrative Agent the required receipts or other required documentary
evidence, such Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.20(a) shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Notwithstanding the provisions of Section 2.20(a),
the applicable Borrower or Guarantor shall be entitled to deduct and withhold
Non-Excluded Taxes and shall not be required to increase any amounts payable to
a Lender or the Administrative Agent in respect of:
(i) Non-Excluded Taxes imposed by any
Governmental Authority of, or located in, Mexico, to the extent such
Non-Excluded Taxes are imposed on payments at a rate in excess of 4.9%
(such Non-Excluded Taxes in excess of 4.9%, "Excess Mexican Taxes";
provided, however, that if after the date hereof any tax treaty to
which Mexico is a party is amended, this clause 2.20(b)(i) shall not
apply to any Lender or the Administrative Agent to the extent such
Lender or the Administrative Agent, as the case may be, would not have
been subject to such Excess Mexican Taxes but for such amendment;
(ii) Non-Excluded Taxes that would not have been
incurred but for the failure of such Lender or the Administrative
Agent, as the case may be, or in the case of a participation pursuant
to Section 9.05, the failure of the relevant participant, to comply
with any certification, identification, information, documentation or
other reporting requirement, if compliance is required by law,
regulation, administrative practice or an applicable treaty as a
precondition to exemption from, or reduction in the rate of, Non-
Excluded Taxes;
(iii) Non-Excluded Taxes imposed by the United
States of America, if such Lender or the Administrative Agent is not
organized under the laws of the United States of America or a state
thereof and fails to comply with requirements of Section 2.20(c); and
(iv) Non-Excluded Taxes imposed by any
Governmental Authority of, or located in, Mexico as a result of the
failure by any Lender (x) to provide to the Borrowers or any Guarantor,
as the case may be, upon request of the Borrowers or any Guarantor, as
the case may be, and if and when required under applicable law, a
letter specifying that the Lender is the effective beneficiary of the
interest payments under this Agreement or any other Loan Document, as
set forth in the Mexican Income Tax Law (Ley del Impuesto Sobre la
Renta) and the "Miscellaneous Tax Resolution for 2003" (Resolucion
Miscelanea Fiscal para 2003, as amended, or any equivalent general
rules in effect thereafter while this Agreement shall remain in full
force and effect, or (y) to maintain registration with the Ministry of
Finance and Public Credit as a foreign financial institution for
purposes of Section I of Article 195 of the Mexican Income Tax Law, as
long as such requirement is applicable to such Lender, and to comply
with the requirements set forth therein.
43
(c) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) on or before the date of any payment by a
Borrower under this Agreement or any other Loan Document to such
Lender, deliver to the Borrowers and the Administrative Agent two duly
completed copies of United States Internal Revenue Service Form W-8BEN
or W-8ECI, or successor applicable form, as the case may be;
(ii) deliver to the Borrowers and the
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it
to the Borrowers; and
(iii) obtain such extensions of time for filing
and complete such forms or certifications as may reasonably be
requested by the Borrowers or the Administrative Agent;
unless in any such case, any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrowers and the Administrative Agent. Such Lender shall certify that it is
entitled to receive payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal income taxes and
that it is entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Lender or a participant pursuant to Section 9.05
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this Section 2.20, provided
that in the case of a participant such participant shall furnish all such
required forms and statements to the Lender from which the related participation
shall have been purchased.
Section 2.21 Certain Rules Relating to the Payment of Additional
Amounts. (a) Upon the request, and at the expense, of a Borrower or Guarantor,
each Lender or the Administrative Agent to which such Borrower or Guarantor is
required to pay any additional amount pursuant to Section 2.14 or 2.20, and any
participant of a Lender or the Administrative Agent in respect of whose
participation such payment is required, shall reasonably afford such Borrower or
Guarantor the opportunity to contest, and reasonably cooperate with such
Borrower or Guarantor in contesting, the imposition of any Non-Excluded Tax
giving rise to such payment, provided that (i) such Lender or the Administrative
Agent shall not be required to afford such Borrower or Guarantor the opportunity
to so contest unless the Borrower or Guarantor shall have confirmed in writing
to such Lender or the Administrative Agent its obligation to pay such amounts
pursuant to this Agreement and (ii) such Borrower or Guarantor shall reimburse
such Lender or the Administrative Agent for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with such
Borrower or Guarantor in contesting the imposition of such Non-Excluded Tax.
(b) If a Lender or the Administrative Agent changes its
applicable lending office (other than pursuant to paragraph (c) below) and the
effect of the change, as of the date of the
44
change, would be to cause a Borrower or Guarantor to become obligated to pay any
additional amount under Section 2.14 or 2.20, such Borrower or Guarantor shall
not be obligated to pay such additional amount.
(c) If a condition or an event occurs which would, or
would upon the passage of time or giving of notice, result in the payment of any
additional amount to any Lender or the Administrative Agent by a Borrower or
Guarantor pursuant to Section 2.14 or 2.20 such Lender or the Administrative
Agent shall take such steps as may reasonably be available to it and acceptable
to such Borrower or Guarantor to mitigate the effects of such condition or event
(which shall include efforts to rebook the Loans or reissue Letters of Credit
held by such Lender at another lending office, or through another branch or an
affiliate, of such Lender), provided that such Lender or the Administrative
Agent shall not be required to take any step that, in its reasonable judgment,
would be materially disadvantageous to its business or operations or would
require it to incur additional costs (unless such Borrower or Guarantor agrees
to reimburse such Lender or the Administrative Agent for the reasonable
incremental out-of-pocket costs thereof). If a condition or event occurs which
would, or would upon the passage of time or giving of notice, result in the
payment of any additional amount to any Lender or the Administrative Agent by a
Borrower or Guarantor pursuant to Section 2.14(a)(i) (i.e. increased costs for
taxes) such Lender or the Administrative Agent shall promptly notify such
Borrower or Guarantor and the Administrative Agent, provided that a failure on
the part of a Lender or the Administrative Agent to notify such Borrower or
Guarantor shall not result in any liability to such Lender or the Administrative
Agent and shall not reduce the amount of any additional amounts payable
hereunder to such Lender or the Administrative Agent to the extent that such
failure to notify such Borrower or Guarantor does not result in the payment of
any additional amount by such Borrower or Guarantor pursuant to Section
2.14(a)(i) which payment could have been avoided or reduced had the Lender or
the Administrative Agent notified the Borrower or Guarantor in accordance with
this Section 2.21(c).
(d) Except as provided in the next sentence, if a
Borrower or Guarantor shall become obligated to pay additional amounts pursuant
to Section 2.14 or 2.20 and any affected Lender shall not have promptly taken
steps necessary to avoid the need for payments under Section 2.14 or 2.20, such
Borrower or Guarantor shall have the right, for so long as such obligation
remains, (i) with the assistance of the Administrative Agent, to seek one or
more substitute Lenders reasonably satisfactory to the Administrative Agent and
such Borrower to purchase the affected Loan, in whole or in part, at an
aggregate price no less than such Loan's principal amount plus accrued interest,
and assume the affected obligations under this Agreement, or (ii) to the extent
that no Default or Event of Default under Section 6.12, 6.13 or 7.02(a) shall
have occurred of which either Borrower has actual knowledge and is then
continuing, upon at least four Business Days irrevocable notice to the
Administrative Agent, to prepay the affected Loan, in whole or in part, subject
to Section 2.16 but otherwise without premium or penalty. If a Borrower or
Guarantor shall become obligated to pay additional amounts pursuant to Section
2.20 in respect of Non-Excluded Taxes imposed by Mexico, the rights of such
Borrower or Guarantor pursuant to the preceding sentence shall apply only in the
event such Non-Excluded Taxes are imposed at a rate in excess of 4.9%. In the
case of the substitution of a Lender, the Borrowers, the Administrative Agent,
the affected Lender, and any substitute Lender shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.05 to
effect the assignment of rights to, and the assumption of
45
obligations by, the substitute Lender. In the case of a prepayment of an
affected Loan, the amount specified in the notice shall be due and payable on
the date specified therein, together with any accrued interest to such date on
the amount prepaid. In the case of each of the substitution of a Lender and of
the prepayment of an affected Loan, the applicable Borrower shall first pay the
affected Lender any additional amounts owing under Sections 2.14, 2.16 and 2.20
(as well as any commitment fees and other amounts then due and owing to such
Lender) prior to such substitution or prepayment.
(e) If the Administrative Agent or any Lender receives a
refund in respect of taxes for which a Borrower or Guarantor has made additional
payments pursuant to Section 2.14(a) or 2.20(a), the Administrative Agent or
such Lender, as the case may be, shall promptly pay such refund (together with
any interest with respect thereto received from the relevant taxing authority)
to such Borrower or Guarantor; provided, however, that such Borrower and
Guarantor agrees promptly to return such refund (together with any interest with
respect thereto due to the relevant taxing authority) (free of all Non-Excluded
Taxes) to the Administrative Agent or the applicable Lender, as the case may be,
upon receipt of a notice that such refund is required to be repaid to the
relevant taxing authority. Notwithstanding anything to the contrary contained in
this Section 2.21(e), no Lender shall have any obligation to disclose to a
Borrower any of such Lender's books, records or tax filings.
(f) The obligations of the Administrative Agent and of
each Lender or participant of a Lender under this Section 2.21 shall survive the
termination of this Agreement and the payment of the Loans and all amounts
payable hereunder.
Section 2.22 Letters of Credit. (a) General. Either Borrower may
request the issuance of a Letter of Credit for its own or any of its
Subsidiaries' account, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section 2.22 shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement. The
CNB Standby Letters of Credit shall be deemed to be issued pursuant to this
Section 2.22.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. In order to request the issuance of a Letter of Credit (or
to amend, renew or extend an existing Letter of Credit), the applicable Borrower
shall deliver (including by telecopy) to the Issuing Bank and the Administrative
Agent (at least five Business Days prior to 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) below), the
amount of such Letter of Credit, the currency in which such Letter of Credit is
to be denominated (which shall be Dollars or, subject to Section 2.15, an
Alternative Currency), the name and address of the beneficiary thereof and such
other information as shall be reasonably necessary to prepare such 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 applicable Borrower shall be deemed to represent and warrant that, after
giving effect to such issuance, amendment, renewal or extension (A) the L/C
Exposure shall not exceed $10,000,000, (B) the Aggregate Alternative Currency
Revolving
46
Credit Exposure shall not exceed $40,000,000, (C) the Aggregate Revolving Credit
Exposure shall not exceed the Total Revolving Credit Commitment and (D) the DCJ
Revolving Credit Exposure shall not exceed the DCJ Maximum Percentage of the
Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire
at the close of business on the earlier of the date one year after the date of
the issuance of such Letter of Credit and the date that is three Business Days
prior to the Maturity Date, unless such Letter of Credit expires by its terms on
an earlier date; provided that any Letter of Credit may, upon the request of the
applicable Borrower, include a provision whereby such Letter of Credit shall be
renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is three Business Days prior to the Maturity Date)
unless the Issuing Bank notifies the beneficiary thereof at least 30 days prior
to the then-applicable expiration date that such Letter of Credit will not be
renewed.
(d) Participations. (i) The Issuing Bank irrevocably
agrees to grant and hereby grants to each Revolving Credit Lender, and,
to induce the Issuing Bank to issue Letters of Credit hereunder, each
Revolving Credit Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Bank, on the terms and
conditions hereinafter stated, for such Revolving Credit Lender's own
account and risk an undivided interest equal to such Revolving Credit
Lender's Pro Rata Percentage from time to time in effect in the Issuing
Bank's obligations and rights (other than with respect to the Issuing
Bank Fees and amounts pursuant to Section 2.05(c)(iii)) under each
Letter of Credit issued hereunder and the amount of each draft paid by
the Issuing Bank thereunder. Each Revolving Credit Lender agrees with
the Issuing Bank to make the payments specified in clause (f) of
Section 2.02 hereof.
(ii) Whenever, at any time after the Issuing Bank
has made payment under any Letter of Credit issued by it and has
received from any Revolving Credit Lender its pro rata share of such
payment in accordance with Section 2.02(f), the Issuing Bank receives
any payment related to such Letter of Credit (whether directly from a
Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Bank), or any payment of interest on account thereof,
the Issuing Bank will, (x) if with respect to payments in Dollars, if
such payment is received prior to 12:00 noon, New York City time, on a
Business Day, distribute to such Revolving Credit Lender its pro rata
share thereof prior to the end of such Business Day and otherwise the
Issuing Bank will distribute such payment on the next succeeding
Business Day and (y) if with respect to an Alternative Currency, if
such payment is received prior to 10:00 a.m., local time, on a Business
Day, distribute to such Revolving Credit Lender its pro rata share
thereof prior to the end of such Business Day and otherwise the Issuing
Bank will distribute such payment on the next succeeding Business Day;
provided, however, that in the event that any such payment received by
the Issuing Bank and distributed to the Revolving Credit Lenders shall
be required to be returned by the Issuing Bank, each such Revolving
Credit Lender shall return to the Issuing Bank the portion thereof
previously distributed by the Issuing Bank to it.
47
(e) Reimbursement. (i) Upon payment of a draft under a
Letter of Credit, the applicable Borrower agrees to reimburse the
Issuing Bank on the same Business Day on which it receives notice that
a draft presented under any Letter of Credit issued by such Issuing
Bank has been paid by such Issuing Bank, provided such Issuing Bank
provides such notice to the Borrower prior to 11:00 a.m., New York City
time, on such Business Day and otherwise the Borrower will reimburse
the Issuing Bank on the next succeeding Business Day by 11:00 a.m., New
York City time (or, in the case of any payment in an Alternative
Currency, 11:00 a.m., local time in the country of the Alternative
Currency); provided further that the failure to provide such notice
shall not affect the applicable Borrower's absolute and unconditional
obligation to reimburse the Issuing Bank for any draft paid under any
Letter of Credit issued by it. Any such notice shall indicate the
amount of (x) such draft so paid and (y) any taxes, fees, charges or
other costs or expenses reasonably incurred by the Issuing Bank in
connection with such payment. Each such payment shall be made to the
Issuing Bank at its address for notices specified herein in Dollars or
in the applicable Alternative Currency and in immediately available
funds.
(ii) Each drawing under any Letter of Credit
shall constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.02 of ABR Loans in the amount of
such drawing (or the Dollar Equivalent thereof) but without any
requirement for compliance with the prior notice or minimum borrowing
amount provisions of Section 2.02 or the conditions set forth in
Section 4.01. The date of Borrowing with respect to such borrowing
shall be the date of such drawing. Any such request or borrowing shall
not relieve the Issuing Bank or Revolving Credit Lender of any
liability resulting from the gross negligence or willful misconduct of
the Issuing Bank or any Revolving Credit Lender, or otherwise affect
any defenses or other right that either Borrower may have as a result
of any such gross negligence or willful misconduct.
(f) Obligations Absolute. (i) Each Borrower's obligation
to reimburse L/C Disbursements as provided in paragraph (e) above shall
be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under any and
all circumstances and irrespective of any set-off, counterclaim or
defense to payment which a Borrower may have or have had against the
Issuing Bank, any Lender or any beneficiary of a Letter of Credit,
provided that this paragraph shall not relieve the Issuing Bank or any
Lender of any liability resulting from the gross negligence or willful
misconduct of the Issuing Bank or any Lender, or otherwise affect any
defense or other right that a Borrower may have as a result of any such
gross negligence or willful misconduct.
(ii) Each Borrower also agrees with the Issuing
Bank that the Issuing Bank shall not be responsible for, and such
Borrower's reimbursement obligations under Section 2.22(e) shall not be
affected by, among other things, (x) the validity or genuineness of
documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged, or (y) any
dispute between or among such Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may
be transferred or (z) any claims whatsoever of such Borrower against
any beneficiary of such Letter of Credit or any such transferee,
48
provided that this paragraph shall not relieve the Issuing Bank of any
liability resulting from the gross negligence or willful misconduct of
the Issuing Bank, or otherwise affect any defense or other right that
such Borrower may have as a result of any such gross negligence or
willful misconduct.
(iii) Neither the Issuing Bank with respect to any
Letter of Credit nor any Lender with respect thereto shall be liable
for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with such Letter of Credit, except for errors or omissions
caused by such Person's gross negligence or willful misconduct.
(iv) Each Borrower agrees that any action taken
or omitted by the Issuing Bank under or in connection with any Letter
of Credit issued by it or the related drafts or documents, if done in
the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the Uniform Commercial Code of
the State of New York, shall be binding on such Borrower and shall not
result in any liability of such Issuing Bank or any Lender to such
Borrower.
(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
as promptly as possible give telephonic notification, confirmed by telecopy, to
the Administrative Agent and the applicable Borrower of such demand for payment
and whether the Issuing Bank has made or will make an L/C Disbursement
thereunder, provided that any failure to give or delay in giving such notice
shall not relieve the applicable Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Credit Lenders with respect to any such L/C
Disbursement; provided further that this paragraph shall not relieve the Issuing
Bank of any liability resulting from the gross negligence or willful misconduct
of the Issuing Bank, or otherwise affect any defense or other right that the
applicable Borrower may have as a result of any such gross negligence or willful
misconduct. The Administrative Agent shall promptly give each Revolving Credit
Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any
L/C Disbursement in respect of a Letter of Credit, then, unless the applicable
Borrower shall reimburse such L/C Disbursement in full as specified in clause
(e) above the unpaid amount thereof shall bear interest for the account of the
Issuing Bank, for each day from and including the date of such L/C Disbursement,
to but excluding the earlier of the date of payment by the Borrower or the date
on which interest shall commence to accrue thereon as provided in Section
2.02(f), at the rate per annum that would apply to such amount if such amount
were (i) in the case of an L/C Disbursement denominated in Dollars, an ABR Loan,
and (ii) in the case of an L/C Disbursement denominated in an Alternative
Currency, a Foreign Base Rate Loan.
(i) Resignation or Removal of the Issuing Bank. The
Issuing Bank may resign at any time by giving 180 days' prior written notice to
the Administrative Agent, the Lenders and the Borrowers, and may be removed at
any time by the Borrowers by notice to the Issuing Bank and the Administrative
Agent. Subject to the next succeeding paragraph, upon the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and
49
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit hereunder.
At the time such removal or resignation shall become effective, the Borrowers
shall pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The
acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a
form satisfactory to the Borrowers and the Administrative Agent, and, from and
after the effective date of such agreement, (i) such successor Lender shall have
all the rights and obligations of the previous Issuing Bank under this Agreement
and the other Loan Documents and (ii) references herein and in the other Loan
Documents 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 resignation or removal of the
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Reporting Requirements of Issuing Banks. (a) Within
two Business Days following the last day of each calendar month, each Issuing
Bank shall deliver to the Administrative Agent a report detailing all activity
during the preceding month with respect to any Letters of Credit issued by such
Issuing Bank, including the face amount, the account party, the beneficiary and
the expiration date of such Letters of Credit and any other information with
respect thereto as may be requested by the Administrative Agent.
(k) Additional Issuing Banks. The Borrowers may, at any
time and from time to time with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld) and such Lender, designate one or
more additional Lenders to act as an issuing bank under the terms of this
Agreement. Any Lender designated as an issuing bank pursuant to this paragraph
(k) shall be deemed to be an "Issuing Bank" (in addition to being a Lender) in
respect of Letters of Credit issued or to be issued by such Lender, and, with
respect to such Letters of Credit, such term shall thereafter apply to the other
Issuing Bank or Issuing Banks and such Lender.
Section 2.23 Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans, in Dollars, to either
Borrower at any time and from time to time on and after the Closing Date and
until the earlier of the Maturity Date and the termination of the Revolving
Credit Commitments in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of all Swingline Loans exceeding $7,500,000 in the
aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving effect
to any Swingline Loan, exceeding the Total Revolving Credit Commitment. Each
Swingline Loan shall be in a minimum amount of $250,000 or a multiple of
$100,000 in excess thereof. The Swingline Commitments may be terminated or
reduced from time to time as provided herein. Within the foregoing limits, each
Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder,
subject to the terms, conditions and limitations set forth herein.
50
(b) Swingline Loans. The applicable Borrower shall notify
the Administrative Agent and the Swingline Lender, by telecopy, or by telephone
(confirmed by telecopy), not later than 2:00 p.m., New York City time, on the
day of a proposed Swingline Loan. Such notice shall be delivered on a Business
Day, shall be irrevocable and shall refer to this Agreement and shall specify
the requested date (which shall be a Business Day), the account of the
applicable Borrower into which the Swingline Loan is to be deposited and the
amount of such Swingline Loan. The Swingline Lender will make the proceeds of
the Swingline Loan available to the Administrative Agent for further credit on
the date of such notice to the account so designated by the applicable Borrower.
(c) Prepayment. Each Borrower shall have the right at any
time and from time to time to prepay any Swingline Loan, in whole or in part,
upon giving written or telecopy notice (or telephone notice promptly confirmed
by written, or telecopy notice) to the Swingline Lender and the Administrative
Agent before 1:00 p.m., New York City time, on the date of prepayment at the
Swingline Lender's address for notices specified on Schedule 2.01 or as
otherwise specified in writing to the applicable Borrower. All principal
payments of Swingline Loans shall be accompanied by accrued interest on the
principal amount being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan
and, subject to the provisions of Section 2.07, shall bear interest as provided
in Section 2.06(a).
(e) Participations. (i) The Administrative Agent, at any
time in its sole and absolute discretion, may (or, upon the request of
the Swingline Lender, shall), on behalf of the applicable Borrower
(which hereby irrevocably directs the Administrative Agent to act on
its behalf) request that each Revolving Credit Lender make a Revolving
Credit Loan in an amount equal to such Revolving Credit Lender's Pro
Rata Percentage of the then outstanding principal amount of Swing Line
Loans (the "Refunded Swing Line Loans") on the date such notice is
given (regardless of whether the Refunded Swing Line Loans comply with
the minimum borrowing provisions of Section 2.02). In the event that
the Swingline Lender makes its request for refunding of the Swingline
Loans, each Revolving Credit Lender shall make the proceeds of its
Revolving Loan available in immediately available funds to the
Administrative Agent, for the benefit of the Swingline Lender, at the
office of the Administrative Agent prior to 11:00 a.m., New York City
time, on the first Business Day following such request (or, if such
request is made prior to 10:00 a.m., New York City time, on any date,
then the proceeds of such Revolving Loans shall instead be so made
available to the Administrative Agent prior to 2:00 p.m., New York City
time, on the date of such request), provided that in the event that any
of the events described in Section 7.01(a) or (b) shall have occurred
and be continuing, the Revolving Credit Lenders shall not make such
Revolving Loans and the provisions of clause (ii) below shall apply.
(ii) If, prior to the making of a Revolving Loan
pursuant to clause (i) above, one of the events described in Section
7.01(a) or (b) shall have occurred and be continuing, each Revolving
Credit Lender will, on the date such Revolving Loan was to have been
made, purchase from the Swingline Lender an undivided participating
interest in the Swingline Loan to be refunded in an amount equal to its
Pro Rata Percentage of such Swingline Loan to be refunded. Each
Revolving Credit Lender will immediately
51
transfer to the Administrative Agent, in immediately available funds,
the amount of its participation.
(iii) Whenever, at any time after the Swingline
Lender has received from any Revolving Credit Lender such Lender's
participating interest in a Swingline Loan to be refunded pursuant to
clause (ii), the Swingline Lender receives any payment on account
thereof, the Swingline Lender will pay to the Administrative Agent for
distribution to such Revolving Credit Lender its participating interest
in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving
Credit Lender's participating interest was outstanding and funded) in
like funds as received, provided that in the event that such payment
received by the Swingline Lender is required to be returned, such
Revolving Credit Lender will return to the Swingline Lender any portion
thereof previously distributed by the Swingline Lender through the
Administrative Agent to it in like funds as such payment is required to
be returned by the Swingline Lender.
(f) Unconditional Obligation to Refund Swingline Loans.
Each Revolving Credit Lender's obligation to make Revolving Loans and to
purchase participating interests in accordance with Sections 2.23(e)(i) and (ii)
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender may have
against the Swingline Lender, either Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of any Default or Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the applicable Borrower or any other Person; (iv) any breach of this Agreement
by the Borrower or any other Person; (v) any inability of the applicable
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such Revolving Loan is to be made or
participating interest is to be purchased; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Revolving Credit Lender does not make available to the Administrative
Agent the amount required pursuant to Sections 2.23(e)(i) and (ii), as the case
may be, the Administrative Agent shall be entitled to recover such amount on
demand from such Revolving Credit Lender, together with interest thereon for
each day from the date of non-payment until such amount is paid in full at the
rate applicable to ABR Loans.
Section 2.24 Consistent Tax Treatment. Each Borrower and each Lender
hereby agrees to treat the Loans to JCI as Indebtedness of JCI and the Loans of
DCJ as Indebtedness of DCJ for all U.S. federal, state and local tax purposes
and for all non-U.S. tax purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Parent and each Borrower hereby represents and warrants as to
itself and its Subsidiaries to the Administrative Agent, the Collateral Agent,
the Issuing Bank and each Lender that:
52
Section 3.01 Financial Condition. The audited consolidated balance
sheet of Jafra S.A. as at December 31, 2003, and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by and accompanied by an unqualified report from Ernst & Young LLP,
present fairly, in all material respects, the consolidated financial condition
of Jafra S.A. as at such date, and the consolidated results of its operations
and its consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of Jafra S.A. as at June 30, 2004, and the related
unaudited consolidated statements of income and cash flows for the three-month
period ended on such date, on the basis disclosed in the footnotes to such
financial statements, present fairly, in all material respects, the consolidated
financial condition of Jafra S.A. as at such date, and the consolidated results
of its operations and its consolidated cash flows for the three-month period
then ended (subject to the omission of certain footnotes and normal year-end
audit and other adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by a
Responsible Officer, and disclosed in any such schedules and notes, and except
that such unaudited financial statements do not contain certain footnotes). All
material Guarantees, material contingent liabilities and liabilities for taxes,
or all material long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, which according to GAAP must be
reflected in such financial statements or the notes thereto are so reflected.
During the period from June 30, 2004, to and including the date hereof, there
has been no disposition by Jafra S.A. of any business or property that would be
material to Jafra S.A., taken as a whole, other than any such disposition which
is reflected in the foregoing financial statements or in the notes thereto, or
which has otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
Section 3.02 Change. Since December 31, 2003, there has been no
development or event relating to or affecting any Loan Party which has had or
would reasonably be expected to have a Material Adverse Effect.
Section 3.03 Corporate Existence; Compliance with Law. Parent, each
Borrower and each of the Active Subsidiaries (a) is duly organized, validly
existing and, with respect to any such entity organized under the laws of a
jurisdiction of the United States of America, in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate or other
organizational power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except to the extent that the failure
to have such legal right would not be reasonably expected to have a Material
Adverse Effect, (c) is duly qualified as a foreign entity and, if applicable, in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and, if applicable, in good standing would not be reasonably expected
to have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.04 Corporate Power; Authorization; Enforceable Obligations.
(a) Each of Parent, each Borrower and each other Loan Party has the corporate or
other organizational power
53
and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of each Borrower, to borrow
hereunder, and has taken all necessary corporate or other organizational action
to authorize, in the case of each Borrower, the Borrowings on the terms and
conditions of this Agreement and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Loan Party or any other Subsidiary of Parent in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which Parent,
the Borrowers and each other Loan Party is a party, except for (i) consents,
authorizations, notices and filings described in Schedule 3.04(a), all of which
have been obtained or made or have the status described therein, (ii) filings to
perfect the Liens created by the Security Documents, (iii) filings pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3737, et
seq.), in respect of Accounts of the Borrowers and their Subsidiaries the
obligor in respect of which is the United States of America or any department,
agency or instrumentality thereof, (iv) recordation of the Mortgages and (v)
consents, authorizations, notices and filings which the failure to obtain or
make would not reasonably be expected to have a Material Adverse Effect.
(b) This Agreement has been, and each of the other Loan
Documents and any other agreement to be entered into by any Loan Party pursuant
hereto will be, duly executed and delivered on behalf of such Loan Party that is
party thereto. This Agreement constitutes, and each of the other Loan Documents
and any other agreement to be entered into by any Loan Party pursuant hereto
will constitute upon execution and delivery, the legal, valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
concurso mercantil, fraudulent conveyance, reorganization, moratorium, or
similar laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
Section 3.05 No Legal Bar. The execution, delivery and performance of
each Loan Document by each Loan Party party thereto, the incurrence or issuance
of and use of the proceeds of the Loans and of drawings under the Letters of
Credit by the Borrowers and the consummation on the Closing Date of the
transactions contemplated hereby (a) will not violate any Requirement of Law or
result in a breach of any Contractual Obligation applicable to or binding upon
either Borrower, any Subsidiary or any of their respective properties or assets
in any respect that would reasonably be expected to have a Material Adverse
Effect and (b) will not result in the creation or imposition of any Lien on any
of their properties or assets pursuant to any Requirement of Law applicable to
it, as the case may be, or any of its Contractual Obligations, except for the
Liens arising under the Security Documents or permitted under Section 6.02.
Section 3.06 No Material Litigation. Except as disclosed on Schedule
3.06, no litigation by, investigation by, or proceeding of or before any
arbitrator or any Governmental Authority is pending or, to the knowledge of
Parent or either Borrower, threatened by or against Parent or either Borrower or
any Subsidiary, or against any of its or their respective properties or
revenues, which (a) is so pending or threatened at any time on or prior to the
Closing Date and
54
relates to any Loan Document or the other transactions contemplated hereby or
(b) would reasonably be expected to have a Material Adverse Effect.
Section 3.07 No Default. None of Parent, either Borrower or any of the
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
Section 3.08 Intellectual Property. Parent and each of the Subsidiaries
owns, or has the legal right to use, all United States patents, trademarks,
trade names, copyrights, technology, know-how and processes necessary for the
conduct of its business substantially as currently conducted (the "Intellectual
Property"), except for those the failure to own or have such legal right to use
which would not reasonably be expected to have a Material Adverse Effect. Except
as set forth on Schedule 3.08, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does Parent
or any Subsidiary know of any such claim and, to the knowledge of Parent and the
Subsidiaries, the use of such Intellectual Property by Parent and the
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
Section 3.09 No Burdensome Restrictions; Compliance with Laws. (a)
Except as previously disclosed to the Lenders in writing prior to the Closing
Date, no Requirement of Law applicable to or Contractual Obligation of Parent,
either Borrower or any Subsidiary would reasonably be expected to have a
Material Adverse Effect.
(b) Certificates of occupancy and permits are in effect
for each Mortgaged Property as currently constructed, except to the extent that
any such failure to be in effect would reasonably be expected to have a Material
Adverse Effect.
(c) No exchange control law or regulation materially
restricts any Loan Party from complying with its obligations in respect of any
Alternative Currency Loan or Letter of Credit denominated in an Alternative
Currency.
Section 3.10 Taxes. Each of Parent and each of its Subsidiaries has
filed or caused to be filed all United States Federal income tax returns and all
other material tax returns which, to the knowledge of Parent and each Borrower,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or (ii) taxes, fees or other charges the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of Parent, such Borrower or such Subsidiary, as the case may be); other
than as disclosed on Schedule 3.10, no tax Lien has been filed, and, to the
knowledge of Parent or either Borrower, no claim is being asserted, with respect
to any such tax, fee or other charge.
55
Section 3.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U. If requested
by any Lender or the Administrative Agent, each Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation U.
Section 3.12 Employee Benefit Plans. During the five-year period prior
to each date as of which this representation is made, or deemed made, with
respect to any Plan (or, with respect to (vi), (viii) or (xi) below, as of the
date such representation is made or deemed made), none of the following events
or conditions, either individually or in the aggregate, has resulted or is
reasonably likely to result in a liability to JCI or any of its Subsidiaries
which would be reasonably expected to have a Material Adverse Effect; (i) a
Reportable Event; (ii) an "accumulated funding deficiency" (within the meaning
of Section 412 of the Code or Section 302 of ERISA); (iii) any material
noncompliance with the applicable provisions of ERISA or the Code; (iv) a
termination of a Single Employer Plan (other than a standard termination
pursuant to Section 4041(b) of ERISA); (v) a Lien in favor of the PBGC or a
Plan; (vi) Underfunding with respect to any Single Employer Plan; (vii) a
complete or partial withdrawal from any Multiemployer Plan by JCI or any
Commonly Controlled Entity; (viii) any liability of JCI or any Commonly
Controlled Entity under ERISA if JCI or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the annual valuation
date most closely preceding the date on which this representation is made or
deemed made; (ix) the Reorganization or Insolvency of any Multiemployer Plan;
(x) an event or condition with respect to which JCI or any Commonly Controlled
Entity has incurred or could incur any liability in respect of a Former Plan;
and (xi) with respect to any Foreign Benefit Plan, any material noncompliance
with applicable foreign law or the incurrence of any material liability.
Section 3.13 Investment Company Act; Other Regulations. None of Parent,
either Borrower or any Subsidiary is an "investment company" required to
register as such under the Investment Company Act of 1940, as amended, within
the meaning of such Act. None of Parent, either Borrower or any Subsidiary is
subject to regulation under any federal or state statute or regulation (other
than Regulation X) which limits its ability to incur Indebtedness.
Section 3.14 Subsidiaries. On the Closing Date, the Subsidiaries and
their jurisdiction of incorporation shall be as set forth on Schedule 3.14.
Section 3.15 Environmental Matters. Other than exceptions to any of the
following that would not, individually or in the aggregate, reasonably be
expected to result in the payment of a Material Environmental Amount:
(a) the facilities and properties owned, leased or
operated by Parent, either Borrower or any Subsidiary (the "Properties") do not
contain any Materials of Environmental Concern in amounts or concentrations
which (i) constitute a violation of, or (ii) would reasonably be expected to
give rise to liability on the part of Parent, either Borrower or any Subsidiary
under, any applicable Environmental Law;
(b) the Properties and all operations at the Properties
are in compliance, and have in the last five years been in compliance, in all
material respects with all applicable
56
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any applicable Environmental Law with respect to the
Properties or the business operated by Parent, either Borrower or any Subsidiary
(the "Business") which would materially interfere with the continued operation
of the Properties;
(c) none of Parent, either Borrower or any Subsidiary has
received any written notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with applicable Environmental Laws with regard to any of the Properties or the
Business, and none of Parent or either Borrower has knowledge or reason to
believe that any such notice will be received or is being threatened;
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, in violation of, or in a manner
or to a location which would reasonably be expected to give rise to liability on
the part of Parent, either Borrower or any Subsidiary under, any applicable
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties,
in violation of, or in a manner that would reasonably be expected to give rise
to liability on the part of Parent, either Borrower or any Subsidiary under, any
applicable Environmental Law;
(e) no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Parent or either
Borrower, threatened, under any applicable Environmental Law to which Parent,
either Borrower or any Subsidiary is or will be named as a party with respect to
the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any applicable
Environmental Law with respect to the Properties or the Business;
(f) there has been no Release or threatened Release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of Parent, either Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that would reasonably be expected to
give rise to liability on the part of Parent, either Borrower or any Subsidiary
under applicable Environmental Laws; and
(g) none of Parent, either Borrower or any Subsidiary has
assumed or retained, by contract or operation of law, any known or suspected
liabilities of any kind, fixed or contingent, as a result of any violation or
breach of applicable Environmental Law or with respect to any contamination by
any Materials of Environmental Concern.
Section 3.16 Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in Section 3.01,
the Loan Documents (including the schedules thereto, but excluding any
statements by the Administrative Agent or any Lender) and any other certificate
or document furnished by or on behalf of Parent, either Borrower or any
Subsidiary to the Administrative Agent or the Lenders from time to time in
connection with this Agreement, taken as a whole, did not, as of the Closing
Date, to the best knowledge of the Parent and the Borrowers, contain any
material misstatement of fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under
57
which the same were made, not materially misleading in their presentation of the
transactions contemplated hereby or of Parent and the Subsidiaries taken as a
whole; all except as otherwise qualified herein or therein. It is understood
that no representation or warranty is made concerning any forecasts, estimates,
pro forma information, projections and statements as to anticipated future
performance or conditions, and the assumptions on which they were based,
contained in any such financial statements, certificates or documents except
that, as of the date such forecasts, estimates, pro forma information,
projections and statements were generated, (i) such forecasts, estimates, pro
forma information, projections and statements were based on the good faith
assumptions of the management of Parent or either Borrower and (ii) such
assumptions were believed by such management to be reasonable. Such forecasts,
estimates, pro forma information, projections and statements, and the
assumptions on which they were based, may or may not prove to be correct.
Section 3.17 Solvency. As of the Closing Date, immediately prior to and
after giving effect to the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith, each Loan Party will be Solvent.
Section 3.18 Senior Indebtedness. The monetary obligations of the Loan
Parties under this Agreement and the other Loan Documents constitute "Senior
Indebtedness" of such Person under and as defined in the Senior Subordinated
Note Documents.
Section 3.19 Title to Properties; Possession Under Leases. (a) Each
Borrower and each of the Subsidiaries of either Borrower, as the case may be,
has good and marketable title to, or valid leasehold interests in, all its
material real properties (including all Mortgaged Property), except for 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
and those properties which are subject to the Mexican Security Agreement. All
such properties are free and clear of Liens, other than Liens expressly
permitted by Section 6.02.
(b) None of Parent nor any Borrower has received any
written notice of any pending condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation.
(c) None of Parent, either Borrower or any of the
Subsidiaries is obligated under any right of first refusal, option or other
contractual right to sell, assign or otherwise dispose of any Mortgaged Property
or any interest therein.
Section 3.20 U.S. Security Documents. Except with respect to (a) Liens
on equipment constituting fixtures, (b) any reserved rights of the United States
government as required under law, (c) Liens upon Patents, Patent Licenses,
Trademarks and Trademark Licenses (as such terms are defined in the U.S.
Security Agreement) to the extent that (i) such Liens cannot be perfected by the
filing of financing statements under the Uniform Commercial Code or by the
filing and acceptance thereof in the United States Patent and Trademark Office
or (ii) such Patents, Patent Licenses, Trademarks and Trademark Licenses are
not, individually or in the aggregate, material to the business of Parent, the
Borrowers and the Subsidiaries taken as a whole, (d) Liens on deposit accounts,
electronic chattel paper and letter-of-credit rights, (e) Collateral the
perfection of which requires filings in or other actions under the laws of
jurisdictions outside of the United
58
States of America, any state, territory or dependency thereof, Puerto Rico or
the District of Columbia (except to the extent that such filings or other
actions have been made or taken), (f) Liens on contracts or Accounts (as such
term is defined in the U.S. Security Agreement) on which the United States of
America or any department, agency, or instrumentality thereof is the obligor,
(g) Liens on proceeds of Accounts and Inventory which proceeds do not themselves
constitute Collateral (as such terms are defined in the U.S. Security
Agreement), until transferred to or deposited in the Collateral Proceeds Account
(as such term is defined in the U.S. Security Agreement) (if any), and (h)
claims of creditors of Persons receiving goods included as Collateral for "sale
or return" within the meaning of Section 2-326 of the Uniform Commercial Code of
the applicable jurisdiction, upon filing of the financing statements delivered
to the Administrative Agent by Parent, the Borrowers and the Subsidiaries in the
jurisdictions listed on Schedule 3.20 (which financing statements are in proper
form for filing in such jurisdictions) and the recording of the Mortgages (and
the recording of the U.S. Security Agreement, and the making of filings after
the Closing Date in any other jurisdiction as may be necessary under any
Requirement of Law) and the delivery to, and continuing possession by, the
Administrative Agent of all Instruments, Chattel Paper and Documents (as such
terms are defined in the U.S. Security Agreement) a security interest in which
is perfected by possession, the Liens created pursuant to each U.S. Security
Document, when executed and delivered, will constitute valid Liens on and, to
the extent provided therein, perfected security interests in the collateral
referred to in such U.S. Security Document (but as to the Copyrights and the
Copyright Licenses (as defined in the U.S. Security Agreement) and accounts
arising therefrom, only to the extent the Uniform Commercial Code of the
relevant jurisdiction, from time to time in effect, is applicable) in favor of
the Collateral Agent for the benefit of the Lenders, which Liens will be prior
to all other Liens of all other Persons, except for Liens permitted pursuant to
the Loan Documents (including those permitted to exist pursuant to Section
6.02), enforceable as such as against all other Persons (except, with respect to
goods only, buyers in the ordinary course of business and licensees in the
ordinary course of business to the extent provided in Section 9-320 or Section
9-321, as applicable, of the Uniform Commercial Code as from time to time in
effect in the applicable jurisdiction and except to the extent that recording of
an assignment or other transfer of title to the Administrative Agent in the
United States Patent and Trademark Office or the United States Copyright Office
may be necessary for such enforceability), except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law). Notwithstanding any other provision of this Agreement,
capitalized terms which are used in this Section 3.20 and not defined in this
Agreement are so used as defined in the applicable U.S. Security Document.
Section 3.21 Mexican Security Documents. The Liens created pursuant to
the Mexican Pledge Agreement constitute valid Liens on and, to the extent
provided therein, perfected security interests in the Pledged Shares referred to
in the Mexican Pledge Agreement in favor of the Collateral Agent for the benefit
of the Secured Parties, which Liens will be prior to all other Liens of all
other Persons, except for Liens permitted pursuant to the Loan Documents
(including those permitted to exist pursuant to Section 6.02), enforceable as
such as against all other Persons, except as enforceability may be limited by
applicable bankruptcy, insolvency, concurso mercantil, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law). The Trustee holds, free and clear of any Liens
(except for Liens
59
permitted pursuant to the Loan Documents (including those permitted to exist
pursuant to Section 6.02)) such title to the Trust Estate (as defined in the
Mexican Security Agreement) as has been conveyed to it by the trustors under the
Mexican Security Agreement, for the benefit of the Secured Parties, and the
Mexican Security Agreement, and such transfer of title to the Trustee is
enforceable as such as against all other Persons, except as enforceability may
be limited by applicable bankruptcy, insolvency, concurso mercantil,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). Notwithstanding any
other provision of this Agreement, capitalized terms which are used in this
Section 3.21 and not defined in this Agreement are so used as defined in the
applicable Mexican Security Document.
Section 3.22 Location of Real Property and Leased Premises. (a) To the
knowledge of the Parent and the Borrowers, Schedule 3.22(a) lists completely and
correctly as of the Closing Date all real property owned by the Borrowers and
the Subsidiaries and the addresses thereof.
(b) To the knowledge of the Parent and the Borrowers,
Schedule 3.22(b) lists completely and correctly as of the Closing Date all real
property leased by the Borrowers and the Subsidiaries and the addresses thereof.
Section 3.23 Labor Matters. As of the Closing Date, there are no
strikes, lockouts or slowdowns against Parent, either Borrower or any Subsidiary
pending or, to the knowledge of Parent or the Borrowers, reasonably expected to
be commenced against Parent, either Borrower or any Subsidiary which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect. The hours worked by and payments made to employees of
Parent, the Borrowers and the Subsidiaries have not been in violation of any
applicable federal, state, local or foreign law dealing with such matters,
except where such violations would not reasonably be expected to have a Material
Adverse Effect.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue, amend, renew or extend Letters of Credit hereunder are subject to the
satisfaction of the following conditions:
Section 4.01 All Credit Events. On the date of each Borrowing or the
making of a Swingline Loan, and on the date of each issuance, amendment, renewal
or extension of a Letter of Credit (each such event being called a "Credit
Event"):
(a) The Administrative Agent shall have received a notice
of such Borrowing as required by Section 2.03 (or such notice shall have been
deemed given in accordance with Section 2.02(f), 2.03 and 2.23) or, in the case
of the issuance, amendment, renewal or extension of a Letter of Credit, the
Issuing Bank and the Administrative Agent shall have received a notice
requesting the issuance, amendment, renewal or extension of such Letter of
Credit as required by Section 2.22(b) or, in the case of the Borrowing of a
Swingline Loan, the Swingline Lender and
60
the Administrative Agent shall have received a notice requesting such Swingline
Loan as required by Section 2.23(b).
(b) The representations and warranties set forth in
Article III hereof shall be true and correct in all material respects on and as
of the date of such Credit Event with the same effect as though made on and as
of such date, except to the extent such representations and warranties relate to
an earlier date.
(c) No Event of Default or Default shall have occurred
and be continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the applicable Borrower and Parent on the date of such Credit Event
as to the matters specified in paragraphs (b) and (c) of this Section 4.01.
Section 4.02 First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on
behalf of itself and the Lenders, a favorable written opinion of each of (i)
Xxxx Xxxxxxx, LLP, New York counsel for Parent and its Subsidiaries,
substantially to the effect set forth in Exhibit F-1, (ii) Xxxxx, Xxxxxxx x
Xxxxxxx, S.C., Mexican counsel for DCJ, JCSA and their respective subsidiaries,
substantially to the effect set forth in Exhibit F-2, (iii) Bonn, Schmitt,
Steichen, Luxembourg counsel for Parent, substantially to the effect set forth
in Exhibit F-3, (iv) Loyens & Loeff, Dutch counsel for Parent and its
Subsidiaries, substantially to the effect set forth in Exhibit F-4 and (v) each
local counsel listed on Schedule 4.02(a), substantially to the effect set forth
in Exhibit F-5, in each case (A) dated the Closing Date, (B) addressed to the
Administrative Agent, the Collateral Agent, the Lead Arranger and the Lenders,
and (C) covering such other matters relating to the Loan Documents and the other
transactions contemplated hereby as the Administrative Agent shall reasonably
request, and Parent and the Borrowers hereby request such counsel to deliver
such opinions.
(b) The Administrative Agent shall have received (i) a
copy of the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified, if available, as of a recent date by the
Secretary of State or other Governmental Authority of the state or other
jurisdiction of its organization, and, if applicable, a certificate as to the
good standing of each Loan Party as of a recent date, from such Secretary of
State or other Governmental Authority; (ii) a certificate of the Secretary,
Assistant Secretary or officer or director, as the case may be, of each Loan
Party dated the Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws, if any, of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors (or other corporate
or comparable body, as appropriate) of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and, in the case of the Borrowers, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate or articles of incorporation of such
Loan Party delivered have not been amended and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith
61
on behalf of such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; and (iv) any documents of
notarial instruments evidencing the powers of attorney of each officer to the
extent not included in the resolutions referred to in item (ii)(B) above.
(c) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Responsible Officer of
Parent and each Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01 (including reasonably
detailed calculations showing compliance with Sections 6.11, 6.12 and 6.13 as of
June 30, 2004).
(d) The Administrative Agent shall have received all
fees, costs and expenses due and payable on or prior to the Closing Date,
including the fees referred to in Sections 2.05(b).
(e) The Acknowledgment shall have been duly executed by
the parties thereto and delivered to the Collateral Agent and shall be in full
force and effect and the Administrative Agent, in the case of the Guarantee
Agreements and the Indemnity, Subrogation and Contribution Agreement, and the
Collateral Agent, in the case of the Security Documents, shall have received a
duly executed copy of each such agreement, each of which shall be in full force
and effect.
(f) All the outstanding Capital Stock of the Persons
pledged under the Pledge Agreement shall have been duly and validly pledged
thereunder (for purposes of U.S. law, insofar as such law may be applicable) to
the Collateral Agent for the ratable benefit of the Secured Parties and (to the
extent required to perfect the pledge of Capital Stock of any Foreign Subsidiary
thereunder) to the extent such Capital Stock is certificated, certificates
representing such shares, accompanied by instruments of transfer and stock
powers endorsed in blank, shall be in the actual possession of the Collateral
Agent, provided that (i) neither JCI nor any Domestic Subsidiary shall be
required to pledge more than 65% of the Voting Stock of any Foreign Subsidiary
of such Person and (ii) no Foreign Subsidiary of JCI shall be required to pledge
the Capital Stock of any of its Foreign Subsidiaries.
(g) All the outstanding Capital Stock pledged under the
Mexican Pledge Agreement shall have been duly and validly pledged in favor of
the Collateral Agent for the ratable benefit of the Secured Parties, and the
Collateral Agent shall have received (i) the original stock certificates
representing the Capital Stock pledged thereunder, duly endorsed "in pledge" (en
prenda) in favor of the Collateral Agent for the benefit of the Secured Parties,
and (ii) a copy of the entry made in the stock registry book (libro de registro
de acciones) of each issuer of Capital Stock pledged thereunder, evidencing that
the pledge and security interest created thereunder has been duly registered in
the stock registry book (libro de registro de acciones) of each such issuer.
(h) Each document (including each Uniform Commercial Code
financing statement, assignment or amendment) required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Collateral Agent for the benefit of the Secured
Parties a valid, legal and perfected first priority
62
security interest in and lien on the Collateral (subject to any Lien expressly
permitted by Section 6.02) described in the U.S. Security Agreement shall have
been delivered to the Collateral Agent.
(i) Each document required by law or reasonably requested
by the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Collateral Agent for the benefit of the Secured Parties a
valid, legal and perfected first priority security interest in and lien on the
Collateral (subject to any Lien expressly permitted by Section 6.02) described
in the Mexican Security Agreement shall have been delivered to the Collateral
Agent.
(j) The Collateral Agent shall have received the results
of a search of the Uniform Commercial Code (or equivalent) filings made with
respect to the JCI in the states (or other jurisdictions) within the United
States of America in which the chief executive office of each such Person is
located, any offices of such Persons in which records have been kept relating to
Accounts (as defined in the Security Documents) and the other jurisdictions in
which Uniform Commercial Code filings (or equivalent filings, if any,) are to be
made pursuant to such security document, together with copies of the financing
statements (or similar documents) disclosed by such search, and accompanied by
evidence reasonably satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been released.
(k) The Collateral Agent shall have received a Perfection
Certificate with respect to JCI dated the Closing Date and duly executed by a
Responsible Officer of JCI.
(l) (i) Each of the Mortgages, in form and substance
reasonably satisfactory to the Lenders, shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full force
and effect, (ii) each of such Mortgaged Properties shall not be subject to any
Lien other than those permitted under Section 6.02, (iii) each of such Mortgages
shall have been filed and recorded in the recording office as specified on
Schedule 4.02(l) (or a lender's title insurance policy, in form and substance
reasonably acceptable to the Collateral Agent, insuring such Mortgages, as a
first lien on such Mortgaged Property (subject to any Lien permitted by Section
6.02) shall have been received by the Collateral Agent) and, in connection
therewith, the Collateral Agent shall have received evidence satisfactory to it
of each such filing and recordation and (iv) the Collateral Agent shall have
received such other documents, including a policy or policies of title insurance
issued by a nationally recognized title insurance company, together with such
endorsements, coinsurance and reinsurance as may be reasonably requested by the
Collateral Agent and the Lenders, insuring the Mortgages as valid first liens on
the Mortgaged Properties, free of Liens other than those permitted under Section
6.02, together with such surveys, abstracts and appraisals required to be
furnished pursuant to the terms of the Mortgages or this Agreement.
(m) The Administrative Agent shall have received a copy
of, or a certificate as to coverage under, the insurance policies required by
Section 5.06 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable endorsement and to name the Administrative Agent as
additional insured, in form and substance reasonably satisfactory to the
Administrative Agent.
63
(n) JCI shall have received gross cash proceeds of a
Vorwerk Loan of not less than the Required Vorwerk Amount and in an aggregate
principal amount not to exceed $20,000,000.
(o) Jafra S.A., Parent, each Borrower and their
respective Subsidiaries shall have obtained all consents and approvals of
Governmental Authorities and third parties necessary in connection with the
continuing operations of Parent and its Subsidiaries, except to the extent that
the failure to obtain such consents and approvals would not reasonably be
expected to have a Material Adverse Effect; all such consents and approvals
shall be in full force and effect and all applicable waiting periods under
applicable law shall have expired without any governmental or judicial action
being taken that has had or would reasonably likely to have the effect of
restraining, preventing or imposing materially burdensome conditions on the
transactions contemplated hereby.
(p) The Lenders shall have received a certificate from a
financial officer of the Parent, reasonably satisfactory in form and substance
to the Administrative Agent, confirming the Solvency of the Parent and its
Subsidiaries on a consolidated basis after giving effect to the transactions
contemplated hereby.
(q) The Administrative Agent shall have received written
evidence of acceptance by the Process Agent of each appointment in form
reasonably satisfactory to the Administrative Agent.
(r) The Administrative Agent shall have received
certified copies of the updated shareholders' registers of CDRJ Europe Holding
Company B.V. and CDRJ Latin America Holding Company B.V., reflecting the release
of the existing Dutch share pledges and the creation of the Dutch share pledges
under the Dutch Deeds of Pledge.
(s) The Administrative Agent shall have received from the
Administrative Agent under the Existing Credit Agreement, (i) a payoff letter
showing all amounts due to the Administrative Agent and the Lenders under the
Existing Credit Agreement on the Closing Date, and (ii) evidence of the
resignation of the Administrative Agent under the Existing Credit Agreement
effective upon the payment in full of such amount to the Administrative Agent
under the Existing Credit Agreement for its account and the account of such
Lenders, in each case in form and substance satisfactory to the Administrative
Agent (under this Agreement).
(t) Subject to prior satisfaction or waiver by the
Administrative Agent of each of the conditions set forth in paragraphs (a)
through (s) of this Section, simultaneously with the initial extension of credit
under this Agreement, the Loans (as defined in the Existing Credit Agreement)
and all other amounts owing under the Existing Credit Agreement to any Lender
(as defined in the Existing Credit Agreement) which is not a Lender hereunder
shall have been repaid in full (it being understood and agreed that the
outstanding Loans hereunder at such time shall be made by the Lenders under this
Agreement pro rata in accordance with their respective Commitments).
64
ARTICLE V
AFFIRMATIVE COVENANTS
Each of Parent and each Borrower hereby agrees that, from and after the
Closing Date, so long as any Commitments shall remain in effect, and thereafter
until all outstanding Letters of Credit have been canceled or expired, and
payment in full of the Loans, all reimbursement obligations under any L/C
Disbursement then due and owing, and any other amount then due and owing, to any
Lender or the Administrative Agent hereunder or under any Note, each of Parent
and each Borrower shall and (except in the case of delivery of financial
information) shall cause each of its Subsidiaries to:
Section 5.01 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Parent, a copy of the consolidated balance
sheet of Parent as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst &
Young LLP or other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of Parent, the unaudited consolidated balance sheet of Parent as at
the end of such fiscal quarter and the related unaudited consolidated statements
of income and retained earnings and of cash flows of Parent for such fiscal
quarter and the portion of the fiscal year through the end of such fiscal
quarter, setting forth in each case in comparative form the figures for the
previous fiscal year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit and other
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by a Responsible Officer and disclosed therein, and
except, in the case of any financial statements delivered pursuant to Section
5.01(b), for the absence of certain notes).
Section 5.02 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.01(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that, in making the audit necessary therefor, no knowledge was obtained of any
Default or Event of Default, insofar as the same relates to any financial
accounting matters covered by their audit, except as specified in such
certificate;
65
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.01(a) and (b), a certificate of Parent,
executed on behalf of Parent by a Responsible Officer of Parent, stating that,
to the best of such Responsible Officer's knowledge, during such period (i) no
Subsidiary has been formed or acquired (or, if any such Subsidiary has been
formed or acquired, either Borrower has complied with the requirements of
Section 5.11 with respect thereto), (ii) neither Borrower nor any other Loan
Party has changed its name, its jurisdiction of organization, its principal
place of business or its chief executive office without complying with the
requirements of this Agreement and the Security Documents with respect thereto
and (iii) to the best of such Responsible Officer's knowledge, each Borrower and
each of the other Loan Parties has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to be observed, performed or satisfied by it (and
including therein a reasonably detailed calculation of the covenants set forth
in Sections 6.11, 6.12 and 6.13 and, in the case of the annual financial
statements, of Excess Cash Flow as of the last day of such period), and that
such Responsible Officer has obtained no knowledge of any Default or Event of
Default except, in each case, as specified in such certificate;
(c) not later than 90 days after the beginning of each
fiscal year of Parent, a copy of the projections by Parent of the operating
budget and cash flow budget of Parent and the Subsidiaries for such fiscal year,
such projections to be accompanied by a certificate of a Responsible Officer to
the effect that such Responsible Officer believes such projections have been
prepared on the basis of reasonable assumptions;
(d) if applicable, within five Business Days after the
same are sent, copies of all financial statements and reports which Parent or
either Borrower sends to its public securityholders, if any, and within five
Business Days after the same are filed, copies of all financial statements and
reports which Parent, either Borrower or any Subsidiary of either Borrower may
make to, or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(e) promptly, such additional financial and other
information as the Administrative Agent or any Lender (acting through the
Administrative Agent) may from time to time reasonably request.
Section 5.03 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Parent or the applicable Subsidiary, as the case may
be.
Section 5.04 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by Parent, the
Borrowers and their respective Subsidiaries, taken as a whole, and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of the business of Parent, the Borrowers and the
Subsidiaries, taken as a whole, except as otherwise permitted pursuant to
Section 6.04, provided that none of Parent, either Borrower or any of their
Subsidiaries shall be required to
66
maintain any such rights, privileges and franchises, if the failure to do so
would not reasonably be expected to have a Material Adverse Effect; and comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith would not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
Section 5.05 Maintenance of Property. Keep all property useful and
necessary in the business of the Borrowers and the Subsidiaries of the
Borrowers, taken as a whole, in good working order and condition.
Section 5.06 Insurance. Maintain with financially sound and reputable
insurance companies insurance on all its property material to the business of
Parent, the Borrowers and their respective Subsidiaries, taken as a whole, in at
least such amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written request, full
information as to the insurance carried.
Section 5.07 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, complete and correct
entries in conformity with all material Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Administrative Agent or any Lender (acting through the
Administrative Agent), at any reasonable time, upon reasonable notice, and as
often as may reasonably be desired, to visit and inspect any of its properties
and examine and, to the extent reasonable, make abstracts from any of its books
and records and to discuss the business, operations, properties and financial
and other condition of Parent and its Subsidiaries with officers and employees
of Parent and its Subsidiaries and with their independent certified public
accountants, in each case, (a) at the expense of Parent and the Borrowers (i)
with respect to any such actions by a Lender during the continuance of a Default
or an Event of Default or as otherwise required by Section 9.06 or (ii) with
respect to any such actions by the Administrative Agent and (b) at the expense
of the relevant Lender in any other case.
Section 5.08 Notices. Promptly give notice to the Administrative Agent,
the Issuing Bank and each Lender of:
(a) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, the
occurrence of any Default or Event of Default;
(b) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any (i)
default or event of default under any Contractual Obligation of Parent, either
Borrower or any of their respective Subsidiaries other than as previously
disclosed to the Lenders, or (ii) litigation, investigation or proceeding which
may exist at any time between Parent, either Borrower or any of the Subsidiaries
of the Borrowers and any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect;
(c) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any
litigation or proceeding which has a reasonable
67
possibility of an adverse determination which would result in a judgment against
Parent, either Borrower or any of their respective Subsidiaries of $5,000,000 or
more and which is not covered by insurance, or in which injunctive or similar
relief is sought that would reasonably be expected to have a Material Adverse
Effect;
(d) the following events, as soon as possible and in any
event within 30 days after a Responsible Officer of Parent or either Borrower
knows or reasonably should know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Single Employer Plan
(other than a Reportable Event described in Section 4043(c)(9) of ERISA), a
failure to make any required contribution to a Single Employer Plan or
Multiemployer Plan, the creation of any Lien on the property of Parent, either
Borrower or any of the Subsidiaries in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, if, as a result thereof, Parent, either Borrower or any of
the Subsidiaries would reasonably be expected to incur any material liability;
(ii) the existence of an Underfunding under a Single Employer Plan that exceeds
10% of the value of the assets of such Single Employer Plan, determined as of
the most recent annual valuation date of such Single Employer Plan on the basis
of the actuarial assumptions used to determine the funding requirements of such
Single Employer Plan as of such date; (iii) the institution of proceedings or
the taking of any other formal action by the PBGC or Parent, either Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Single
Employer Plan or Multiemployer Plan if, as a result thereof, Parent, either
Borrower or any of the Subsidiaries would reasonably be expected to incur any
material liability; (iv) the occurrence or expected occurrence of any event or
condition under which Parent, either Borrower or any Commonly Controlled Entity
has incurred or would reasonably be expected to incur any liability in respect
of a Former Plan; or (v) with respect to any Foreign Benefit Plan, the
occurrence of any material noncompliance with applicable foreign law or the
incurrence by either Borrower or any other Loan Party of any material liability;
(e) as soon as possible after a Responsible Officer of
Parent or either Borrower knows, and except as would not, individually or in the
aggregate, reasonably be expected to result in the payment of a Material
Environmental Amount, that (i) any Governmental Authority has identified Parent,
either Borrower or any of the Subsidiaries as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or any similar Environmental Law for the cleanup of Materials of
Environmental Concern at any location, whether or not owned, leased or operated
by Parent, either Borrower or any of the Subsidiaries; (ii) any Governmental
Authority may revoke any permit pursuant to Environmental Law held by Parent,
either Borrower or any of the Subsidiaries of the Borrowers, or deny or refuse
to renew any such permit sought by Parent, either Borrower or any of the
Subsidiaries of the Borrowers; or (iii) any property owned, leased, or operated
by Parent, either Borrower or any of the Subsidiaries of the Borrowers is being
listed on, or proposed for listing on, the National Priorities List ("NPL") or
the Comprehensive Environmental Response, Compensation, and Liability
Information System ("CERCLIS") maintained by the U.S. Environmental Protection
Agency or any similar list maintained by any Governmental Authority; and
68
(f) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any
development or event which as had or would reasonably be expected to have a
material adverse change in the business, operations, property or condition
(financial or otherwise) of Parent, either Borrower and the Subsidiaries, taken
as a whole.
Each notice pursuant to this Section 5.08 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Parent or the applicable Borrower proposes to
take with respect thereto.
Section 5.09 Environmental Laws. (a) Comply substantially with all
Environmental Laws applicable to it, and obtain, comply substantially with and
maintain any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws (collectively, "Environmental
Permits"); and (b) take all reasonable efforts to ensure that all of its
tenants, subtenants, contractors, subcontractors and invitees comply
substantially with all Environmental Laws, and obtain, comply substantially with
and maintain any and all Environmental Permits applicable to any of them insofar
as any failure to so comply, obtain or maintain reasonably would be expected to
adversely affect Parent, either Borrower or any of the Subsidiaries of the
Borrowers. For purposes of this Section 5.09(a), noncompliance shall be deemed
not to constitute a breach of this covenant, provided that, upon learning of any
actual or suspected noncompliance, Parent or the applicable Borrower shall in a
timely manner undertake all reasonable efforts to achieve substantial
compliance, and provided further that, in any case, such noncompliance, and any
other such noncompliance with any Environmental Law or Environmental Permit,
individually or in the aggregate, would not reasonably be expected to give rise
to the payment of a Material Environmental Amount.
Section 5.10 Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
Section 5.11 Additional Collateral; Further Assurances. (a) With
respect to any owned real property or fixtures located on owned real property,
in each case with a purchase price or a fair market value of at least
$1,000,000, in which either Borrower, JCSA, a Domestic Subsidiary of JCI, any
Subsidiary of DCJ, or any Subsidiary of JCSA acquires ownership rights at any
time after the Closing Date, promptly grant to the Collateral Agent, for the
benefit of the Lenders, a Lien of record on all such owned real property and
fixtures, upon terms reasonably satisfactory in form and substance to the
Collateral Agent and in accordance with any applicable requirements of any
Governmental Authority (including any appraisals of such property under the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 which the
Collateral Agent reasonably deems to be required by law), provided that (i)
nothing in this Section 5.11(a) shall defer or impair the attachment or
perfection of any security interest in any Collateral covered by any of the
Security Documents which would attach or be perfected pursuant to the terms
thereof without action by either Borrower, any of its Subsidiaries, JCSA, any of
its Subsidiaries, or any other Person and (ii) no such Lien shall be required to
be granted as contemplated by this Section 5.11(a) on any owned real property or
fixtures the acquisition of which is financed, or is to be financed within any
time period permitted by Section 6.01, until such Indebtedness is repaid in full
(and not refinanced as permitted by Section 6.01) or, as the case may be, the
Borrowers or JCSA determine not to proceed with such financing or
69
refinancing. In connection with any such grant to the Collateral Agent, for the
benefit of the Lenders, of a Lien of record on any such real property in
accordance with this Section 5.11, the applicable Borrower, JCSA or such
Subsidiary shall deliver or cause to be delivered to the Collateral Agent any
surveys, title insurance policies, environmental reports and other documents in
connection with such grant of such Lien obtained by it in connection with the
acquisition of such ownership rights in such real property or as the Collateral
Agent shall reasonably request (in light of the value of such real property and
the cost and availability of such surveys, title insurance policies,
environmental reports and other documents and whether the delivery of such
surveys, title insurance policies, environmental reports and other documents
would be customary in connection with such grant of such Lien in similar
circumstances).
(b) With respect to any Person that, subsequent to the
Closing Date, becomes (i) a Domestic Subsidiary of Parent, (ii) a Foreign
Subsidiary Holdco or (iii) a Subsidiary of DCJ or JCSA, promptly upon the
request of the Administrative Agent: (x) execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, a new pledge
agreement or a supplement to the Pledge Agreement, the Mexican Pledge Agreement
and/or the Mexican Security Agreement, as the case may be, as the Administrative
Agent shall reasonably deem necessary or reasonably advisable to grant to the
Collateral Agent, for the benefit of the Secured Parties, a Lien on the Capital
Stock of such Subsidiary which, with respect to any Domestic Subsidiary, is
owned by Parent or any of its Subsidiaries or, with respect to any Subsidiary of
DCJ or JCSA, owned by DCJ, JCSA or any of their respective Subsidiaries, (y)
deliver to the Collateral Agent the certificates (if any) representing such
Capital Stock, together with undated stock powers executed and delivered in
blank or, with respect to certificates representing Capital Stock of a Mexican
Subsidiary of DCJ or JCSA, duly endorsed "property" (en propiedad) in favor of
the Trustee, in either case, by a duly authorized officer of the applicable
Borrower or such Subsidiary, as the case may be, and (z) cause such new
Subsidiary (if it is a Subsidiary of either Borrower) (A) to become a party to
the applicable Security Documents, Guarantee Agreements and other Loan Documents
(including any Indemnity, Subrogation and Contribution Agreement), in each case
pursuant to documentation which is in form and substance reasonably satisfactory
to the Administrative Agent, and (B) to take all actions reasonably deemed by
the Administrative Agent to be necessary or reasonably advisable to cause the
Lien created by the applicable Security Documents to be duly perfected in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
reasonably requested by the Administrative Agent.
(c) With respect to any Person that, subsequent to the
Closing Date, becomes a Foreign Subsidiary of, and which has Voting Stock which
is owned directly by, (i) JCI or (ii) a Domestic Subsidiary of Parent, promptly
upon the request of the Administrative Agent: (A) JCI or such Domestic
Subsidiary shall execute and deliver to the Administrative Agent a new Pledge
Agreement and/or a new Mexican Pledge Agreement or a supplement to the Pledge
Agreement, the Mexican Pledge Agreement and/or the Mexican Security Agreement,
as the case may be, as the Administrative Agent shall reasonably deem necessary
or reasonably advisable to grant to the Collateral Agent, for the benefit of the
Secured Parties, a Lien on the Capital Stock of such Foreign Subsidiary which is
owned directly by JCI or any such Domestic Subsidiary of Parent (provided that
in no event shall more than 65% of the Voting Stock of any such Foreign
Subsidiary be required to be so pledged) and (ii) to the extent reasonably
deemed advisable by the Administrative Agent to perfect such security interest,
deliver to the Administrative Agent
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certificates (if any) representing such Voting Stock, together with undated
stock powers executed and delivered in blank or, with respect to certificates
representing Capital Stock of a Foreign Subsidiary that is a Mexican Subsidiary,
duly endorsed "in property" (en propiedad) in favor of the Trustee, or duly
endorsed "in pledge" (en prenda) in favor of the Collateral Agent, as
applicable, in any case, by a duly authorized officer of JCI or such Domestic
Subsidiary of Parent, as the case may be.
(d) Notwithstanding anything to the contrary contained
herein, no Subsidiary shall be required to comply with the provisions of this
Section 5.11 until such date as either (i) the consolidated gross revenues of
such Subsidiary and its Subsidiaries for the most recently completed period of
four consecutive fiscal quarters or (ii) the consolidated assets of such
Subsidiary and its Subsidiaries, exceed $2,500,000 (it being understood that any
such Subsidiary which achieves such assets or revenues after the date hereof
shall be deemed, for purposes of this Section 5.11 only, to have been newly
acquired by Parent or the applicable Borrower on the date upon which such assets
or revenues, as the case may be, are achieved).
ARTICLE VI
NEGATIVE COVENANTS
Each of Parent and each Borrower hereby agrees that, so long as the
Revolving Credit Commitments remain in effect, and thereafter until all
outstanding Letters of Credit have been canceled or expired, and payment in full
of the Revolving Loans, all L/C Disbursements then due and owing, and any other
amount then due and owing hereunder or under any Note to any Lender, each of
Parent and each Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
Section 6.01 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date
hereof and set forth on Schedule 6.01(a);
(b) Indebtedness created hereunder and under the other
Loan Documents;
(c) Indebtedness of the Borrowers on account of the
Senior Subordinated Notes and any refinancings thereof, provided that any such
refinancing (i) contains subordination provisions that are substantially the
same as the subordination provisions contained in the Senior Subordinated Notes
and the Senior Subordinated Note Documents (with any departures as a whole being
not adverse to the Lenders); (ii) does not provide for payments of principal or
interest (whether at maturity, at a date fixed for prepayment or by
acceleration) that are greater in amount or earlier than the payments of
principal of, and interest payable on, the Senior Subordinated Notes, except
that such refinancing may mature at any time after the first anniversary of the
Maturity Date; and (iii) does not contain any material affirmative or negative
covenant or any event of default or remedy the effect of which is to (A) subject
Parent or any Subsidiary to any more onerous or more restrictive provisions than
those of the Senior Subordinated Notes and the Senior Subordinated Note
Documents, or (B) otherwise adversely
71
affect the interests of the Lenders as senior creditors or the interests of the
Lenders hereunder in any material respect;
(d) Guarantees:
(i) of the Senior Subordinated Notes and
refinancings thereof permitted pursuant to Section 6.01(c), provided
that (x) such Guarantees are subordinated to the Obligations to the
same extent as the Senior Subordinated Notes and (y) no Subsidiary
shall Guarantee all or any part of the Senior Subordinated Notes unless
such Subsidiary also Guarantees the Obligations;
(ii) in respect of third-party loans and advances
to officers or employees of Parent or any of its Subsidiaries (x) for
travel and entertainment expenses incurred in the ordinary course of
business, (y) for relocation expenses incurred in the ordinary course
of business or (z) for other purposes, and in the case of this clause
(z), in an aggregate amount (as to Parent and all its Subsidiaries) of
up to $1,500,000 outstanding at any time;
(iii) by any Subsidiary (other than a Foreign
Subsidiary Holdco) in respect of Indebtedness of a Person in connection
with joint ventures or similar arrangements in respect of which no
other co-investor or other Person has a greater legal or beneficial
ownership interest than Parent and its Affiliates, and as to all of
such Persons does not at any time exceed $8,500,000 in aggregate
principal amount, provided that (x) such amount shall be increased by
an amount equal to $1,000,000 on each anniversary of the Closing Date,
commencing on the second anniversary of the Closing Date, so long as no
Default or Event of Default shall have occurred and be continuing on
any date on which such amount is to be increased and (y) such amount
and any increase in such amount permitted by clause (x) shall be
reduced by the aggregate amount of Investments made pursuant to Section
6.03(i);
(iv) of Parent and its Subsidiaries under any
Hedging Agreements; and
(v) other than those described in clauses (i)
through (iv) of this paragraph (d), by any Subsidiary (other than a
Foreign Subsidiary Holdco) in an aggregate amount not to exceed
$2,500,000;
(e) to the extent that any Indebtedness may be incurred
or arise thereunder, Indebtedness of Parent and any of its Subsidiaries under
any Hedging Agreements;
(f) Indebtedness of Parent to any wholly owned Subsidiary
and Indebtedness of any Subsidiary to Parent or any other wholly owned
Subsidiary of Parent;
(g) additional Indebtedness of Parent or any of its
Subsidiaries which is subordinated to the obligations of the Loan Parties
hereunder not exceeding $20,000,000 in aggregate principal amount at any one
time outstanding, provided that any such Indebtedness shall have terms and
conditions which are not materially more burdensome to the Loan Parties than,
and subordination provisions substantially similar to, the Senior Subordinated
Notes;
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(h) Indebtedness of any Subsidiary (other than any
Foreign Subsidiary Holdco) incurred to finance or refinance the purchase price
of, or Indebtedness of any Subsidiary (other than any Foreign Subsidiary Holdco)
assumed in connection with, any Permitted Acquisition permitted by Section
6.03(m), provided that (i) such Indebtedness is incurred prior to, substantially
simultaneously with or within six months after such acquisition or in connection
with a refinancing thereof, (ii) if such Indebtedness is owed to a Person, other
than the Person from whom such acquisition is made or any Affiliate thereof,
such Indebtedness shall have terms and conditions reasonably satisfactory to the
Required Lenders and shall not exceed 60% of the purchase price of such
acquisition (including any Indebtedness (excluding subordinated Indebtedness)
assumed in connection with such acquisition but excluding any Indebtedness under
this Agreement incurred to finance such acquisition), (iii) immediately after
giving effect to such acquisition no Default or Event of Default shall have
occurred and be continuing and (iv) the aggregate principal amount of
Indebtedness which may be incurred pursuant to this paragraph (h) shall not
exceed $10,000,000 during the term of this Agreement; and any refinancing,
refunding, renewal or extension of any such Indebtedness; provided further that,
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to the
premium or other amounts paid, and fees and expenses incurred, in connection
with such refinancing, refunding, renewal or extension;
(i) Indebtedness of a Person that becomes a Subsidiary of
either Borrower after the date hereof, provided that (i) such Indebtedness
existed at the time such Person became a Subsidiary and was not created in
anticipation thereof, (ii) immediately after giving effect to the acquisition of
such Person by the applicable Borrower, no Default or Event of Default shall
have occurred and be continuing and (iii) the aggregate principal amount of
Indebtedness which may be incurred pursuant to this paragraph (i) shall not
exceed $15,000,000 during the term of this Agreement; and any refinancing,
refunding, renewal or extension of any such Indebtedness;
(j) Indebtedness of any Subsidiary (other than any
Foreign Subsidiary Holdco) incurred to finance or refinance the acquisition of
fixed or capital assets (whether pursuant to a loan, a Financing Lease or
otherwise) and any other Financing Leases in an aggregate principal amount not
exceeding as to the Borrowers and all Subsidiaries $10,000,000 at any time
outstanding;
(k) Indebtedness of any of DCJ, JCSA, and their
respective Mexican Subsidiaries incurred in the ordinary course of business to
finance the working capital needs of any of DCJ, JCSA and such Subsidiaries,
provided that the aggregate principal amount of any such Indebtedness at any
time outstanding pursuant to this paragraph (k) shall not exceed $5,000,000 (or
the equivalent thereof in Mexican Pesos);
(l) Indebtedness of Foreign Subsidiaries (other than
Mexican Subsidiaries and Foreign Subsidiary Holdcos) of Parent incurred in the
ordinary course of business to finance the working capital needs of such Foreign
Subsidiaries;
(m) Indebtedness of Parent or any of its Subsidiaries
incurred to finance insurance premiums in the ordinary course of business;
73
(n) Indebtedness arising from the honoring of a check,
draft or similar instrument against insufficient funds, provided that such
Indebtedness is extinguished within two Business Days of its incurrence;
(o) Indebtedness of any Foreign Subsidiary (other than
any Foreign Subsidiary Holdco) of Parent fully supported on the date of the
incurrence thereof by a Foreign Backstop Letter of Credit;
(p) Indebtedness arising from performance, appeal,
judgment, replevin and similar bonds and suretyship arrangements, all in the
ordinary course of business;
(q) Indebtedness to finance loans and advances to
Consultants in the ordinary course of business in an aggregate amount not to
exceed $5,000,000 outstanding at any time (or the equivalent thereof in Mexican
Pesos);
(r) additional Indebtedness of Subsidiaries (other than
Foreign Subsidiary Holdcos) of Parent, provided that the aggregate principal
amount of any such Indebtedness incurred pursuant to this paragraph (r) (i) by
all such Subsidiaries shall not exceed $10,000,000 (or the equivalent thereof in
the applicable foreign currencies) and (ii) by Domestic Subsidiaries and Mexican
Subsidiaries of Parent shall not exceed $2,000,000 (or the equivalent thereof in
applicable foreign currencies); and
(s) Indebtedness constituting Vorwerk Loans in an
aggregate outstanding principal amount not to exceed at any time $20,000,000.
Section 6.02 Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, now owned or hereafter acquired by
it, except:
(a) Liens existing on the date hereof and set forth on
Schedule 6.02(a);
(b) Liens created pursuant to the Loan Documents;
(c) Liens for taxes, assessments and similar charges not
yet delinquent or the nonpayment of which in the aggregate would not reasonably
by expected to have a Material Adverse Effect, or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Parent or the Subsidiaries, as
the case may be, in conformity with GAAP (or, in the case of relevant Foreign
Subsidiaries of Parent, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of organization);
(d) pledges, deposits or other Liens in connection with
workers' compensation, unemployment insurance and other social security benefits
or other insurance related obligations (including pledges or deposits or other
Liens securing liability to insurance carriers under insurance or self-insurance
arrangements);
(e) Liens to secure the performance of bids, trade
contracts (other than for borrowed money), obligations for utilities, leases,
statutory obligations, surety and appeal bonds,
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performance bonds, judgment and like bonds, replevin and similar bonds and other
obligations of a like nature incurred in the ordinary course of business;
(f) zoning restrictions, easements, rights-of-way,
restrictions, other similar encumbrances incurred in the ordinary course of
business and minor irregularities of title which do not materially interfere
with the ordinary conduct of the business of Parent and its Subsidiaries taken
as a whole;
(g) Liens securing Indebtedness of Parent and its
Subsidiaries permitted by Section 6.01(h) or Section 6.01(j), provided that (i)
such Liens shall be created prior to, substantially simultaneously with or
within six months of the acquisition thereby financed or the date of the
incurrence or assumption of such Indebtedness and (ii) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness;
(h) Liens on the property or assets of a Person which
becomes a Subsidiary after the date hereof securing Indebtedness permitted by
Section 6.01(i), provided that (i) such Liens existed at the time such Person
became a Subsidiary and were not created in anticipation thereof and (ii) any
such Lien is not spread to cover any property or assets of such Person after the
time such Person becomes a Subsidiary;
(i) Liens of landlords or of mortgagees of landlords
arising by operation of law or pursuant to the terms of real property leases,
provided that the rental payments secured thereby are not yet due and payable;
(j) Liens arising by reason of any judgment, decree or
order of any court or other Governmental Authority, if appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order, are being diligently prosecuted and shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired;
(k) Liens existing on assets or properties at the time of
the acquisition thereof by Parent or any of the Subsidiaries which do not
materially interfere with the use, occupancy, operation and maintenance of
structures existing on the property subject thereto or extend to or cover any
assets or properties of Parent or such Subsidiary other than the assets or
property being acquired;
(l) any encumbrance or restriction (including, without
limitation, put and call agreements) with respect to the Capital Stock of any
joint venture or similar arrangement pursuant to the joint venture or similar
agreement with respect to such joint venture or similar arrangement, provided
that no such encumbrance or restriction affects in any way the ability of Parent
or any of the Subsidiaries to comply with the provisions of Section 5.11;
(m) Liens on property of any Foreign Subsidiary of Parent
securing Indebtedness of such Foreign Subsidiary of Parent permitted by Sections
6.01(d)(iii), 6.01(l) and 6.01(r);
(n) Liens securing Guarantees permitted under Section
6.01(d)(ii);
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(o) Liens on the accounts receivable and inventory of the
Mexican Subsidiaries of Parent to secure Indebtedness permitted by Section
6.01(k), provided that such Liens secure only such Indebtedness and do not
extend to the assets of Parent or any other Subsidiary;
(p) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business that
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(q) Liens on the assets of Parent or its Subsidiaries
(not otherwise permitted hereunder) which secure obligations not exceeding (as
to the Borrowers and the Subsidiaries in the aggregate) $2,500,000 in aggregate
amount at any time outstanding;
(r) Liens on Intellectual Property and foreign patents,
trademarks, trade names, copyrights, technology, know-how and processes to the
extent such Liens arise from the granting of licenses to use such Intellectual
Property and foreign patents, trademarks, trade names, copyrights, technology,
know-how and processes to any Person in the ordinary course of business of
Parent and its Subsidiaries; and (s) Liens on deposit accounts arising by
operation of law in favor of the depository bank where such account is
maintained.
Section 6.03 Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment (each an "Investment") in, any Person,
except:
(a) Investments existing on the Closing Date and set
forth on Schedule 6.03(a);
(b) Investments in cash and Cash Equivalents;
(c) Investments constituting Capital Expenditures
permitted pursuant to Section 6.11;
(d) extensions of trade credit in the ordinary course of
business;
(e) loans and advances to officers, directors or
employees of Parent or its Subsidiaries (i) for travel, entertainment and
relocation expenses in the ordinary course of business, (ii) for other purposes
in an aggregate amount for Parent and its Subsidiaries not to exceed $1,500,000
at any one time outstanding and (iii) relating to indemnification or
reimbursement of any officers, directors or employees in respect of liabilities
relating to their serving in any such capacity or as otherwise specified in
Section 6.07;
(f) Investments in Parent, either Borrower or any wholly
owned Subsidiary;
(g) Investments in the nature of pledges or deposits with
respect to leases or utilities provided to third parties in the ordinary course
of business or otherwise described in Section 6.02(d), (e) or (i);
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(h) Investments representing non-cash consideration
received by Parent or any of its Subsidiaries in connection with any sale or
other disposition of the property of Parent or any of its Subsidiaries permitted
by Section 6.05;
(i) Investments by Parent or any of its Subsidiaries in
one or more Persons in connection with joint ventures or similar arrangements in
respect of which no other co-investor or other Person has a greater legal or
beneficial ownership interest than Parent or such Subsidiary, in an aggregate
amount, when added to the amount of Permitted Acquisitions made pursuant to
paragraph (n) below, not to exceed $25,000,000 at any one time outstanding;
(j) Investments representing evidences of Indebtedness,
securities or other property received from another Person in connection with any
bankruptcy proceeding or other reorganization of such other Person or as a
result of foreclosure, perfection or enforcement of any Lien or exchange for
evidences of Indebtedness, securities or other property of such other Person,
provided that any such securities or other property received by any Loan Party
party to any Security Document is pledged to the Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Documents;
(k) Investments in (i) the Capital Stock of Parent which
is held by Parent as treasury stock and is restored to unissued status or is
eliminated from authorized shares, or options in respect thereof or (ii) the
Capital Stock of Parent or an Ultimate Parent purchased by JCI in connection
with the exercise of management stock options issued by JCI to officers,
directors and employees of Parent and its Subsidiaries;
(l) Investments of Parent and its Subsidiaries under any
Hedging Agreements;
(m) the acquisition of all or substantially all of the
business or assets or the Capital Stock of any Person or any business unit
thereof (a "Permitted Acquisition"), provided that:
(i) such acquisition is expressly permitted by Section 6.04;
and
(ii) the aggregate consideration (including cash and any
Indebtedness assumed in connection with such acquisitions) for all such
acquisitions made pursuant to this paragraph (m), when added to the amount of
Investments permitted pursuant to paragraph (i) above, does not exceed
$25,000,000 at any time outstanding;
provided in each case that, (A) the target of such acquisition has positive
Consolidated EBITDA, calculated on a pro forma basis after giving effect to such
acquisition (such calculation to be made in a manner reasonably satisfactory to
the Administrative Agent and to be evidenced by a certificate in form and
substance reasonably satisfactory to the Administrative Agent signed by a
Responsible Officer of each Borrower and delivered to the Administrative Agent
(which shall promptly deliver copies to each Lender) at least three Business
Days prior to the consummation of such acquisition) and (B) before and after
giving effect thereto, no Default or Event of Default shall occur as a result of
such acquisition;
(n) Investments in notes receivable and other instruments
and securities obtained in connection with transactions permitted by Section
6.05(d);
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(o) loans and advances to Consultants in the ordinary
course of business in an aggregate amount not to exceed $5,000,000 outstanding
at any time;
(p) Investments in the Capital Stock of an Ultimate
Parent purchased or otherwise acquired in connection with a Permitted Ultimate
Parent Payment; and
(q) additional Investments in an aggregate amount not to
exceed $10,000,000 at any one time outstanding;
Section 6.04 Fundamental Changes. Enter into any merger consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets except:
(a) any Subsidiary of Parent or either Borrower may be
merged or consolidated with or into Parent or such Borrower (provided that
Parent or such Borrower shall be the continuing or surviving corporation) or
with or into any one or more wholly owned Subsidiaries of Parent (provided that
any such wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation) and DCJ may be merged with or consolidated into a Mexican
Subsidiary of Parent which is a Guarantor, with the surviving or continuing
Person, if not DCJ, assuming all the obligations of DCJ under this Agreement and
the other Loan Documents pursuant to a written agreement reasonably satisfactory
to the Administrative Agent.
(b) any Subsidiary of Parent or either Borrower may
liquidate or sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to such Parent or Borrower or
any other wholly owned Subsidiary of Parent or such Borrower (provided that no
Loan Party shall sell or otherwise dispose of any Collateral (other than
inventory in the ordinary course of business and, to the extent permitted by
Sections 6.03, 6.06 and 6.08, cash and Cash Equivalents) pursuant to this clause
(b) to any Subsidiary that is not a Loan Party);
(c) Parent may consolidate or merge with or into or
transfer all or substantially all its assets to an Affiliate incorporated or
organized for the purpose of reincorporating or reorganizing Parent in another
jurisdiction in the United States of America, the Cayman Islands, Luxembourg or
the Kingdom of the Netherlands (including the Netherlands Antilles) or any other
member of the European Union, or changing its legal structure to a corporation
or other entity, provided that (i) no such action shall be taken if to do so
would adversely affect the Secured Parties and (ii) any such successor entity to
Parent shall execute or otherwise agree in a writing reasonably satisfactory to
the Administrative Agent to be bound by all applicable Loan Documents to which
Parent is a party and take all actions reasonably requested by the
Administrative Agent to comply with Section 5.11, including the delivery of
legal opinions reasonably satisfactory to the Administrative Agent;
(d) any Subsidiary (other than any Loan Party) of either
Borrower or of the Parent that has no assets, no liabilities and no operations
may wind up and dissolve itself or suffer dissolution; and
(e) as permitted by Section 6.05.
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Section 6.05 Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person other than Parent or any wholly owned Subsidiary of Parent,
except:
(a) the sale or other disposition of inventory, or of
surplus, obsolete or worn out property or assets, whether now owned or hereafter
acquired, in the ordinary course of business;
(b) the sale or other disposition of any other property
or assets in the ordinary course of business (it being understood that this
shall not include the sale or other disposition of all or substantially all of
any business unit);
(c) the sale or other disposition of any property or
assets (other than assets described in clauses (a) and (b) above), provided that
the aggregate market value of all assets so sold or disposed of in any period of
twelve consecutive months shall not exceed $5,000,000;
(d) the sale or discount without recourse of accounts
receivable or notes receivable arising in the ordinary course of business, or
the conversion or exchange of accounts receivable into or for notes receivable
in connection with the compromise or collection thereof, provided that, in the
case of any Foreign Subsidiary, any such sale or discount may be with recourse
if such sale or discount is consistent with customary practice in such Foreign
Subsidiary's country of business;
(e) the sale or other disposition of any assets or
property by Parent or any of its Subsidiaries to Parent, either Borrower or any
wholly owned Subsidiary thereof (provided that no Loan Party shall sell or
otherwise dispose of any Collateral (other than inventory in the ordinary course
of business and, to the extent permitted by Sections 6.03, 6.06 and 6.08, cash
and Cash Equivalents) pursuant to this clause (e) to any Subsidiary that is not
a Loan Party);
(f) the sale of the Capital Stock or all or substantially
all of the assets of the Subsidiaries set forth on Schedule 6.05(f);
(g) as permitted by Section 6.04(b), (c) or (d);
(h) the abandonment, sale or other disposition of
patents, trademarks or other intellectual property that are, in the reasonable
judgment of Parent or either Borrower, no longer economically practicable to
maintain or useful in the conduct of the business of Parent, the Borrowers and
the Subsidiaries thereof taken as a whole;
(i) any sale or other disposition of the property of
Parent or any of its Subsidiaries, so long as the Net Proceeds of any such sale
or other disposition do not exceed $10,000,000 in the aggregate after the
Closing Date, provided that an amount equal to 100% of the Net Proceeds of such
sale or other disposition less the Reinvested Amount is applied in accordance
with Section 2.13(b);
(j) any issuance, sale or other disposition of preferred
stock (or equivalent equity interest) of any Subsidiary constituting
Indebtedness created, incurred, assumed or existing in compliance with Section
6.01;
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(k) the sale or other disposition of Capital Stock of an
Ultimate Parent purchased or otherwise acquired in connection with any Permitted
Ultimate Parent Payment;
(l) the sale or other disposition of any Capital Stock,
property or assets of any Foreign Subsidiary existing on the Closing Date (other
than DCJ, any Mexican Subsidiary which is a Subsidiary Guarantor, Jafra
Cosmetics Dominicana S.A., CDRJ Europe Holding Company B.V. or any Subsidiary of
CDRJ Europe Holding Company B.V. existing on the Closing Date), or of any
property or assets of any other Subsidiary existing on the Closing Date that are
used in any business or operations conducted in any jurisdiction other than the
United States, Mexico, the Dominican Republic and Europe; provided that any such
disposition shall not include property or assets owned by either Borrower or any
Subsidiary Guarantor and used in any business or operations conducted in the
United States, Mexico, the Dominican Republic or Europe; and
(m) the Mexican Facility Sale.
Section 6.06 Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of Parent or options, warrants or
other rights to purchase common stock of Parent) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of Parent that is not Indebtedness or any warrants
or options to purchase any such stock, whether now or hereafter outstanding, or
make any other distribution (other than dividends payable solely in the common
stock of Parent or options, warrants or other rights to purchase common stock of
Parent) in respect thereof, either directly or indirectly, whether in cash or
property or in obligations of Parent (such declarations, payments, setting
apart, purchases, redemptions, defeasance, retirements, acquisitions and
distributions being herein called "Restricted Payments"), except that:
(a) Parent and its Subsidiaries may pay cash dividends in
an amount sufficient to permit Parent to pay its Guarantee on account of
interest on the Senior Subordinated Notes and the Senior Subordinated Note
Documents, to the extent that the payment of such Guarantee does not violate the
subordination provisions contained in the Senior Subordinated Notes or the
Senior Subordinated Note Documents;
(b) Parent and any Subsidiary may make Permitted Ultimate
Parent Payments;
(c) either Borrower and any other Subsidiary may pay cash
dividends in amounts sufficient to allow Parent to pay, and Parent may pay, cash
dividends up to an amount equal to 50% of Consolidated Net Income (as defined in
the indenture governing the Senior Subordinated Notes as in effect on the
Closing Date) accrued during the period (treated as one accounting period) from
July 1, 2004 to the end of the most recent fiscal quarter ending prior to the
date of such dividend for which consolidated financial statements of the Parent
are available plus $5,000,000, so long as on the date of such dividend by
Parent, before and after giving effect to such dividend, (i) no Default or Event
of Default shall have occurred and be continuing or result therefrom, (ii) the
Consolidated Leverage Ratio shall be less than 3.0 to 1.0, and (iii) the sum of
the amount of the unused Commitments and the amount of cash and Cash Equivalents
of the Borrowers shall not be less than $5,000,000; and
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(d) either Borrower and any other Subsidiary may pay cash
dividends in an amount sufficient to allow Parent to pay, and Parent may pay,
its obligations to Vorwerk or other members of the Vorwerk Group under any
agreement with Vorwerk or other members of the Vorwerk Group for the rendering
of management consulting or financial advisory services, provided that such
amount shall not exceed in the aggregate $1,000,000 per annum plus reasonable
out-of-pocket expenses.
Section 6.07 Transactions with Affiliates. Enter into any transaction
during any fiscal year, including any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate of Parent, the
value of which when taken together with all other such transactions in such
fiscal year exceeds $1,000,000, unless such transaction (a) is otherwise
permitted under this Agreement and (b) either (i) is upon terms no less
favorable to Parent, the applicable Borrower or its Subsidiary, as the case may
be, than it would obtain in a comparable arm's length transaction with a Person
that is not such an Affiliate, or (ii) has been approved by a majority of the
Disinterested Directors of Parent, or in the event that at the time of any such
transaction, there are no Disinterested Directors serving on the board of
directors or comparable body of Parent, such transaction shall be approved by a
nationally recognized expert with expertise in appraising the terms and
conditions of the type of transaction for which approval is required, provided
that nothing contained in this Section 6.07 shall be deemed to prohibit:
(i) Parent or any of its Subsidiaries from
entering into or performing any consulting, management or employment
agreements or other compensation arrangements with a director, officer
or employee of an Ultimate Parent, Parent or any of its Subsidiaries,
provided that in the case of any such agreement or arrangement with any
director, such agreement or arrangement provides for annual aggregate
base compensation not in excess of $150,000 for such director, in his
capacity as such;
(ii) the payment of transaction expenses in
connection with this Agreement and the transactions contemplated
hereby;
(iii) Parent or any of its Subsidiaries from
entering into, making payments pursuant to and otherwise performing an
indemnification and contribution agreement in favor of any of the
Persons listed on Schedule 6.07(iii) and their Affiliates and each
Person who is or becomes a director, officer, agent or employee of
Parent or any of the Subsidiaries, in respect of liabilities (A)
arising under the Securities Act of 1933, the Securities Exchange Act
of 1934 and any other applicable securities laws or otherwise, in
connection with any offering of securities by Parent or any of the
Subsidiaries, (B) incurred to third parties for any action or failure
to act of Parent or any of the Subsidiaries, predecessors or
successors, (C) arising out of the fact that any indemnitee was or is a
director, officer, agent or employee of Parent or any of the
Subsidiaries, or is or was serving at the request of any such
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or enterprise or (D) to
the fullest extent permitted by Delaware or other applicable state law,
arising out of any breach or alleged breach by such indemnitee of his
or her fiduciary duty as a director or officer of Parent or any of the
Subsidiaries;
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(iv) Parent or any of the Subsidiaries from
performing any agreements or commitments with or to any Affiliate
existing on the Closing Date and described on Schedule 6.07(iv); or
(v) any transaction (including entering into and
performing any agreement with respect thereto) permitted under Section
6.01(d), 6.02(n), 6.03(e), 6.03(i), 6.03(k), 6.03(o), 6.03(p), 6.04,
6.05(k), 6.06 or 6.08, or any transaction with a wholly owned
Subsidiary of Parent.
For purposes of this Section 6.07, "Disinterested Director" shall mean, with
respect to any Person and transaction, a member of the board of directors or
comparable body of such Person who does not have any material direct or indirect
financial interest in or with respect to such transaction (other than by virtue
of such member's ownership of Capital Stock of an Ultimate Parent, Parent or any
Subsidiary of Parent).
Section 6.08 Business of Parent, Borrowers and Subsidiaries. (a) Enter
into any business, either directly or through any Subsidiary, except for those
businesses of the same general type as those in which Parent and the
Subsidiaries are engaged on the Closing Date or which are related thereto.
(b) In the case of Parent or any Foreign Subsidiary
Holdco, engage in any business or business activity other than (i) the
transactions contemplated by the Loan Documents and the provision of
administrative, legal, accounting and management services to or on behalf of
Parent or any of its Subsidiaries, (ii) holding the Capital Stock, directly or
indirectly, of the Borrowers or any Subsidiary (including any Subsidiary formed
or acquired after the Closing Date) and the issuance, sale or transfer of
Capital Stock of such Foreign Subsidiary Holdco or any Subsidiary to Parent or
any wholly owned Subsidiary thereof, and the exercise of rights and the
performance of obligations in connection therewith, (iii) the entry into, and
exercise of rights and performance of obligations in respect of, (A) the Loan
Documents and Senior Subordinated Note Documents to which Parent or such Foreign
Subsidiary Holdco, as the case may be, is a party, and any other agreement to
which Parent or such Foreign Subsidiary Holdco, as the case may be, is a party
on the date hereof, in each case, as amended, supplemented, waived or otherwise
modified from time to time, and any refinancings, refundings, renewals or
extensions thereof, (B) contracts and agreements with officers, directors and
employees of Parent or such Foreign Subsidiary Holdco, as the case may be, or a
Subsidiary thereof relating to their employment or directorships, (C) insurance
policies and related contracts and agreements and (D) equity subscription
agreements, registration rights agreements, voting and other stockholder
agreements, engagement letters, underwriting agreements and other agreements in
respect of its equity securities or any offering, issuance or sale thereof, (iv)
with respect to Parent only, the offering, issuance and sale of its equity
securities, (v) with respect to Parent only, the filing of registration
statements, and compliance with applicable reporting and other obligations,
under federal, state or other securities laws, (vi) with respect to Parent only,
the listing of its equity securities and compliance with applicable reporting
and other obligations in connection therewith, (vii) the retention of counsel,
accountants and other advisory and consultants, and, with respect to Parent
only, transfer agents, private placement agents and underwriters, (viii) the
performance of obligations under and compliance with its certificate of
incorporation and by-laws, or any applicable law, ordinance, regulation, rule,
order, judgment, decree or permit,
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(ix) the incurrence and payment of its operating and business expenses and any
taxes for which it may be liable, (x) making loans to or other Investments in,
or borrowing money from, other Subsidiaries or Parent, (xi) owning Intellectual
Property and foreign patents, trademarks, trade names, copyrights, technology,
know-how and processes and licensing such Intellectual Property and foreign
patents, trademarks, trade names, copyrights, technology, know-how and processes
to other subsidiaries of Parent, (xii) paying dividends and other distributions
on account of its Capital Stock (to the extent permitted by Section 6.06),
(xiii) transactions with an Ultimate Parent permitted under Section 6.07, and
(xiv) other activities incidental or related to any of the foregoing.
Section 6.09 Negative Pledge Clauses. Enter into any agreement which
prohibits or limits the ability of Parent or any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its property or revenues,
whether now owned or hereafter acquired, to secure the Obligations or, in the
case of any Guarantor, its Obligations under the applicable Guarantee Agreement,
other than (a) this Agreement and the other Loan Documents and any related
documents, (b) any industrial revenue or development bonds, agreements governing
any purchase money Liens, acquisition agreements or Financing Leases or
operating leases of real property entered into in the ordinary course of
business otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed, acquired or
leased thereby) or (c) as otherwise permitted by any Security Document.
Section 6.10 Optional Payments and Modifications of Debt Instruments
and other Material Agreements. Except as otherwise provided below:
(a) Make any optional payment, prepayment, repurchase or
redemption of the Senior Subordinated Notes or make any optional payments on
account of or for a sinking or other analogous fund for the repurchase,
redemption, defeasance or other acquisition thereof (other than mandatory
redemptions, payments of principal and interest and payments of, in each case,
fees and expenses required by the Senior Subordinated Notes or the Senior
Subordinated Note Documents, only to the extent permitted under the
subordination provisions, if any, applicable thereto);
(b) Make any amendment, supplement, modification or
waiver of any of the terms of the Senior Subordinated Notes or the Senior
Subordinated Note Documents (i) which amends or modifies the subordination
provisions contained in the Senior Subordinated Notes and the Senior
Subordinated Note Documents; (ii) which shortens the fixed maturity or increases
the principal amount of, or increases the rate or shortens the time of payment
of interest on, or increases the amount or shortens the time of payment of any
principal or premium payable whether at maturity, at a date fixed for prepayment
or by acceleration or otherwise of the Indebtedness evidenced by the Senior
Subordinated Notes or increases the amount of, or accelerates the time of
payment of, any fees or other amounts payable in connection therewith to any
holder of the Senior Subordinated Notes; (iii) which relates to any material
affirmative or negative covenants or any events of default or remedies
thereunder and the effect of which is to subject Parent or any Subsidiary to any
more onerous or more restrictive provisions; or (iv) which otherwise adversely
affects the interests of the Lenders as senior creditors with respect to the
Senior Subordinated Notes or the interests of the Lenders hereunder in any
material respect; or
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(c) In the event of the occurrence of a Change in
Control, repurchase the Senior Subordinated Notes, unless the Borrowers shall
have (i) made payment in full of the Loans, all L/C Disbursements and any other
amounts then due and owing to any Secured Party hereunder and cash
collateralized the obligations of the Borrowers in respect of Letters of Credit
on terms reasonably satisfactory to the Administrative Agent and Issuing Bank or
(ii) made an offer to pay the Loans, all L/C Disbursements and any amounts then
due and owing to each Secured Party hereunder and to cash collateralize the
obligations of the Borrowers in respect of Letters of Credit in respect of each
Lender and shall have made payment in full thereof to each such Lender or the
Administrative Agent which has accepted such offer and cash collateralized such
obligations in respect of Letters of Credit of each such Issuing Bank which has
accepted such offer.
Notwithstanding the foregoing, (i) Borrowers may prepay, redeem, repurchase,
defease, acquire or otherwise retire Senior Subordinated Notes, in whole or in
part, so long as on the date of such prepayment, redemption, repurchase,
defeasance, acquisition or other retirement, before and after giving effect
thereto, (A) no Default or Event of Default shall have occurred and be
continuing or result therefrom and (B) the Consolidated Leverage Ratio shall be
less than 3.0 to 1.0; (ii) Borrowers may prepay the Vorwerk Loans, in whole or
in part, if (A) after giving effect to such prepayment the aggregate amount of
the unused Commitments together with cash and Cash Equivalents of the Borrowers
shall be at least $5,000,000, and (B) no Default or Event of Default shall have
occurred and be continuing or result therefrom; and (iii) Parent and Borrowers
may refinance any Indebtedness to the extent permitted under Section 6.01. For
the avoidance of doubt, this Section 6.10 shall not be construed to prohibit or
restrict (y) the making or consummation of an exchange offer whereby Senior
Subordinated Notes registered with the U.S. Securities and Exchange Commission
are issued in exchange for Senior Subordinated Notes not so registered, or (z)
the provision of Guarantees of Senior Subordinated Notes as permitted by Section
6.01(d), including by way of amendment or supplement to any Senior Subordinated
Note Document.
Section 6.11 Capital Expenditures. Make any expenditure (a "Capital
Expenditure") in respect of the purchase or other acquisition of fixed or
capital assets (excluding (i) any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations and
(ii) any Permitted Acquisition permitted by Section 6.03(m)) except for (x)
Capital Expenditures described in the immediately preceding parenthetical and
(y) additional Capital Expenditures, in the case of this clause (y) not
exceeding, in the aggregate for Parent and its Subsidiaries, during any fiscal
year of Parent, $13,000,000; provided that any portion of such amount, not to
exceed $6,500,000 per year, which is not so expended in the fiscal year for
which it is permitted above may be carried over to increase the amount permitted
for the next fiscal year of Parent and shall be deemed to be the first amounts
expended in such next fiscal year.
Section 6.12 Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio on the last day of any fiscal quarter of Parent ending during any
period set forth below to be in excess of the ratio set forth below for such
period:
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Period Ratio
------ -----
Closing Date - March 31, 2005 4.00 to 1.00
April 1, 2005 - December 30, 2005 3.75 to 1.00
December 31, 2005 - December 30, 2006 3.50 to 1.00
December 31, 2006 - December 30, 2007 3.00 to 1.00
December 31, 2007 - Thereafter 2.50 to 1.00
Section 6.13 Consolidated Interest Coverage Ratio. Permit, for any
period of four consecutive fiscal quarters of Parent ending during any period
set forth below, the Consolidated Interest Coverage Ratio at the last day of
such four fiscal quarter period to be less than the ratio set forth below
opposite such period:
Period Ratio
------ -----
Closing Date - December 30, 2005 2.25 to 1.00
December 31, 2005 - December 30, 2006 2.50 to 1.00
December 31, 2006 - December 30, 2007 2.75 to 1.00
December 31, 2007 - Thereafter 3.00 to 1.00
Section 6.14 Fiscal Year. Permit the fiscal year of Parent to end on a
day other than December 31.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Certain Bankruptcy Events. If any of the following events
shall occur and be continuing:
(a) Parent, either Borrower or any Material Subsidiary
shall commence any case, proceeding or other action (i) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, concurso mercantil, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (ii) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Parent, either Borrower or any Material
Subsidiaries shall make a general assignment for the benefit of its creditors;
(b) there shall be commenced against Parent, either
Borrower or any Material Subsidiary any case, proceeding or other action of a
nature referred to in clause (a) above which
85
(i) results in the entry of an order for relief or any such adjudication or
appointment or (ii) remains undismissed, undischarged or unbonded for a period
of 60 days;
(c) there shall be commenced against Parent, either
Borrower or any Material Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
(d) Parent, either Borrower or any Material Subsidiary
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (a), (b) or (c)
above; or
(e) Parent, either Borrower or any Material Subsidiary
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event:
(A) if such event is an Event of Default specified in
clause (a) or (b) of this Section 7.01 with respect to Parent or either
Borrower, the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including all amounts of obligations under
Letters of Credit, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable; and
(B) if such event is any other Event of Default
specified in this Section 7.01, any or all of the following actions may
be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrowers, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the
Borrowers, declare the Loans hereunder (with accrued interest thereon)
and all other amounts owing on account thereof under this Agreement
(including all amounts due in respect of Letters of Credit, whether or
not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
Section 7.02 Other Events of Default. If any of the following events
shall occur and be continuing:
(a) either Borrower shall fail to pay in the applicable
currency any principal of any Loan or the reimbursement obligation with respect
to any L/C Disbursement when due in accordance with the terms thereof or hereof
(it being understood that any conversion of a reimbursement obligation under a
Letter of Credit into a borrowing pursuant to Section 2.22(e) shall not
constitute a failure to make a payment in satisfaction of such reimbursement
obligation)
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or either Borrower shall fail to pay in the applicable currency any interest on
any Loan, or any other amount payable, within five days after any such interest
or other amount becomes due in accordance with the terms thereof or hereof;
(b) any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan Document or
that is contained in any certificate furnished by it at any time under or
pursuant to this Agreement or any such other Loan Document shall prove to have
been incorrect in any material respect on or as of the date deemed made;
(c) Parent, either Borrower or any Subsidiary shall
default in the observance or performance of any agreement contained in Article
VI or Section 4.07, 4.08, 4.09 or 4.10 of the U.S. Security Agreement;
(d) either Borrower or any other Loan Party shall default
in the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs (a)
through (c) of this Section 7.02), and such default shall continue unremedied
for a period ending on the earlier of (i) the date 30 days after a Responsible
Officer of Parent or either Borrower shall have discovered or should have
discovered such default and (ii) the date 15 days after written notice has been
given to the Borrowers by the Administrative Agent;
(e) Parent, either Borrower or any of the Borrowers'
Subsidiaries shall (i) default in any payment in the applicable currency of
principal of or interest on any Material Indebtedness (other than the Loans and
the reimbursement obligations under the Letters of Credit), beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such Material Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Material Indebtedness (or a trustee or Administrative Agent on
behalf of such holder or holders) to cause, with the giving of notice or lapse
of time if required, such Material Indebtedness to become due prior to its
stated maturity (an "Acceleration"), and such time shall have lapsed and, if any
notice (a "Default Notice") shall be required to commence a grace period or
declare the occurrence of an Event of Default before notice of Acceleration may
be delivered, such Default Notice shall have been given;
(f) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of
Parent, either Borrower or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is reasonably likely to result in the
termination of such Plan for purposes of Title IV of ERISA (other than a
standard termination pursuant to Section 4041(b) of ERISA), (iv) any Single
Employer Plan shall terminate for
87
purposes of Title IV of ERISA, (v) Parent, either Borrower or any Commonly
Controlled Entity shall, or is reasonably likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, (vi) the occurrence or expected occurrence of any event or
condition which results or is reasonably likely to result in Parent, either
Borrower or any Commonly Controlled Entity becoming responsible for any
liability in respect of a Former Plan, (vii) with respect to any Foreign Benefit
Plans, any material noncompliance with applicable foreign law or the incurrence
of any material liability, or (viii) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (viii)
above, such event or condition, together with all other such events or
conditions, if any, would be reasonably expected to result in liability which
would have a Material Adverse Effect;
(g) one or more judgments or decrees shall be entered
against Parent, either Borrower or any of its Active Subsidiaries involving in
the aggregate a liability (net of any insurance or indemnity payments actually
received in respect thereof prior to or within 60 days from the entry thereof,
or to be received in respect thereof, in the event any appeal thereof shall be
unsuccessful) of $5,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof;
(h) (i) any of the Security Documents or Guarantee
Agreements shall cease, for any reason, to be in full force and effect other
than pursuant to the terms hereof or thereof, or Parent, either Borrower or any
other Loan Party which is a party to any of the Security Documents or Guarantee
Agreements shall so assert in writing or (ii) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect as to
perfection and priority purported to be created thereby with respect to any
significant portion of the Collateral (other than in connection with any
termination of such Lien in respect of any Collateral as permitted hereby or by
any Security Document), and such failure of such Lien to be perfected and
enforceable with such priority shall have continued unremedied for a period of
20 days;
(i) the Senior Subordinated Notes, for any reason, shall
not be or shall cease to be validly subordinated as provided therein and in the
Senior Subordinated Note Documents to the obligations of any Loan Party under
this Agreement and the other Loan Documents; or
(j) a Change in Control shall have occurred;
then, and in any such event, either or both of the following actions may be
taken:
(i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrowers,
declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing on account thereof under this Agreement (including
all amounts due in respect of Letters of Credit, whether or not the
beneficiaries of the then
88
outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
Section 8.01 Appointment. Each of the Lenders and the Issuing Bank
hereby irrevocably designates and appoints each of the Administrative Agent and
the Collateral Agent (for purposes of this Article VIII, the Administrative
Agent and the Collateral Agent are referred to collectively as the "Agents") as
the agents of such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes the Agents to take such action on behalf
of such Lender or the Issuing Bank under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to the Agents by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agents shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agents. The Administrative Agent is hereby expressly
authorized by the Lenders and the Issuing Bank, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders and the Issuing Bank
all payments of principal of and interest on the Loans, all payments in respect
of L/C Disbursements and all other amounts due to the Lenders and the Issuing
Bank hereunder, and promptly to distribute to each Lender or the Issuing Bank
its proper share of each payment so received, (b) to give notice on behalf of
each of the Lenders to the Borrowers of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder, and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrowers or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute (i) the Acknowledgment and (ii) any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents.
Section 8.02 Delegation of Duties. Each of the Agents may execute any
and all of their respective duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to the
advice of counsel concerning all matters pertaining to such duties. Neither
Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact selected by it with reasonable care.
Section 8.03 Exculpatory Provisions. Neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful
89
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by Parent, either
Borrower or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by, either Agent under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of Parent or either Borrower to
perform its obligations hereunder or thereunder.
Neither Agent shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of Parent, either Borrower or any other
Loan Party.
Section 8.04 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
Parent or either Borrower), independent accountants and other experts selected
by the Administrative Agent. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Each Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or such larger number of Lenders as may be explicitly required
hereunder), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
Section 8.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, Parent or either Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders,
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
Section 8.06 Acknowledgments and Representations by Lenders. Each
Lender expressly acknowledges that neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by either Agent hereinafter
taken, including any review of the affairs of Parent or either Borrower, shall
be deemed to constitute any representation or warranty by such Agent to any
Lender. Each Lender represents to each other party hereto that it has,
independently and without reliance upon
90
the Agents or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Parent and the Borrowers and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
to each other party hereto that it will, independently and without reliance upon
either Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of Parent and the Borrowers. Each Lender
represents to each other party hereto that it is a bank, savings and loan
association or other similar savings institution, insurance company, investment
fund or company or other financial institution that makes or acquires commercial
loans in the ordinary course of its business, that it is participating hereunder
as a Lender for such commercial purposes, and that it has the knowledge and
experience to be and is capable of evaluating the merits and risks of being a
Lender hereunder. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Parent or either Borrower which may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
Section 8.07 Expense Reimbursement; Indemnification. Each Lender agrees
(a) to reimburse the Agents, on demand, in the amount of its pro rata share
(based on its Commitments hereunder) of any expenses incurred for the benefit of
the Lenders by the Agents, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrowers and (b) to indemnify and hold harmless
each Agent and any of its directors, officers, employees or agents, on demand,
in the amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity as Agent or any
of them in any way relating to or arising out of this Agreement or any other
Loan Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrowers or any other Loan Party, provided that no Lender
shall be liable to an Agent or any such other indemnified Person for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements as are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Agent or any of its
directors, officers, employees or agents. Each Revolving Credit Lender agrees to
reimburse each of the Issuing Bank and its directors, employees and agents, in
each case, to the same extent and subject to the same limitations as provided
above for the Agents.
Section 8.08 Agents in their Individual Capacities. Each of the Agents
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business
91
with Parent, either Borrower or any Subsidiary or Affiliate thereof as though
such Agent were not an Agent hereunder and under the other Loan Documents.
With respect to the Loans made by it, each of the Agents shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not such Agent and the terms
"Lender" and "Lenders" shall include each of the Agents in its respective
individual capacity.
Section 8.09 Successor Agents. (a) Subject to the appointment and
acceptance of a successor Agent as provided below, the Administrative Agent may
resign upon ten days' notice to the Lenders by notifying the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent (provided that, to the extent that no Default or
Event of Default is continuing at the time of such appointment, such Agent shall
have been approved by the Borrowers). If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a Lender and be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as the Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After an Agent's
resignation hereunder, the provisions of this Article and Section 9.06 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent. Without the consent of the
Borrowers, the Administrative Agent and the Collateral Agent may not be
different Persons.
(b) Upon appointment of the successor Agent, the retiring
Collateral Agent (the "Retiring Collateral Agent") shall promptly (i) deliver to
the new Collateral Agent all Collateral held by such Retiring Collateral Agent,
(ii) execute and file uniform commercial code financing statements, naming the
new Collateral Agent as assignee, in each jurisdiction financing statements have
been filed in connection with any Loan Document, (iii) take all such actions
required or requested by either Borrower to name the new Collateral Agent as
mortgagee under the Mortgages and (iv) take all such other actions required or
requested by either Borrower to perfect the pledge or lien pursuant to the
Security Documents in the name of the new Collateral Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments and Waivers. (a) Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be waived, amended,
supplemented or modified except in accordance with the provisions of this
Section 9.01.
(b) Except as set forth in the succeeding paragraphs of
this Section 9.01, the Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (i) enter
into with the Loan Parties written amendments,
92
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (ii) waive at any Loan Party's request on such terms
and conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences (any such amendment, supplement, modification or waiver, a
"Specified Change"); provided, however, that (x) without the written consent of
the Issuing Bank, no Specified Change shall amend, supplement or otherwise
modify any provisions of or directly applicable to any Letter of Credit, (y)
without the written consent of the Swingline Lender, no Specified Change shall
amend, modify or waive any provision of Section 2.23 or any other provision of
this Agreement governing the rights or obligations of the Swingline Lender, and
(z) without the written consent of the then Administrative Agent and Collateral
Agent, no Specified Change shall amend, modify or waive any provision of Article
VIII, or, without the prior written consent of the then Administrative or the
then Collateral Agent, as applicable, no Specified Change shall amend, modify or
waive any other provision of this Agreement governing the rights or obligations
of the Administrative Agent or the Collateral Agent.
(c) Without the written consent of the Required Lenders,
no Specified Change shall (i) waive any of the conditions precedent to the
funding of the initial Loans and extensions of credit set forth in Section 4.02
(except that the making of the initial extensions of credit by any Lender on the
Closing Date shall be deemed to constitute a waiver of such conditions precedent
by such Lender), (ii) waive any Default or Event of Default under Section 7.01
and its consequences or (iii) amend, supplement or otherwise modify any
provisions of Section 7.01.
(d) Without the written consent of the all of the
Lenders, no Specified Change shall take any action which has the effect of
releasing all or substantially all of the Collateral, Parent or either Borrower
from its Guarantee or all or substantially all of the Subsidiary Guarantors from
their Guarantees in respect hereof (except as permitted hereby or by any
Security Document).
(e) Without the written consent of each Lender directly
affected thereby, no Specified Change shall (i) reduce the amount or extend the
scheduled date of maturity of any Loan or of any installment thereof, (ii)
reduce the stated rate of any interest or fee payable or extend the scheduled
date of any payment thereof, (iii) increase the amount or extend the expiration
date of any Lender's Commitments or (iv) amend, modify or waive any provision of
this Section 9.01.
(f) Without the written consent of all the Lenders, no
Specified Change shall amend or modify the pro rata requirements of Section 2.17
or reduce the percentage specified in the definition of "Required Lenders".
(g) Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Lenders, the Administrative Agent, all future holders of the Loans and
the Loan Parties signatories thereto. In the case of any waiver, each of the
Loan Parties, the Lenders and the Administrative Agent shall be restored to
their former positions and rights hereunder and under the other Loan Documents,
and any
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Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
Section 9.02 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, first class postage prepaid, (c) in the case of delivery
by a nationally recognized overnight courier, when received, or (d) in the case
of delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of Parent, either Borrower, the Administrative
Agent, the Collateral Agent or the Issuing Bank, and in the case of a Lender, to
it at its address (or facsimile number) set forth on Schedule 2.01 or in the
Assignment and Acceptance pursuant to which such Lender shall have become a
party hereto, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Loans:
Parent, JCI and DCJ: c/o Jafra Cosmetics International, Inc
0000 Xxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000 0000
Telephone: (000) 000-0000
In the case of notices Xxxx Xxxxxxx, LLP
to Parent, JCI or DCJ, 1999 Avenue of the Stars
with a copy to: Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Administrative Agent, The Bank of New York
Collateral Agent and 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Issuing Bank: Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Agency Function Administration
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
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Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.03, 2.09(c), 2.10, 2.12(a), 2.17, 2.22(b)
or 2.23(b), shall not be effective until received.
Section 9.03 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent, the Issuing
Bank, any Lender or any Loan Party, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
Section 9.04 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any certificate delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.
Section 9.05 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of Parent, each Borrower, the Lenders, the
Issuing Bank, the Collateral Agent, the Administrative Agent, and their
respective successors and assigns, except that neither Parent nor either
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender except as expressly
provided in this Agreement and any attempted assignment without such consent
shall be null and void.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents,
provided that (unless the Borrowers, the Administrative Agent and, in the case
of any assignment of a Revolving Credit Commitment, the Issuing Bank and the
Swingline Lender otherwise consent in writing) no such participating interests
shall be in an aggregate principal amount of less than $1,000,000 in the
aggregate (or, if less, the full amount of such selling Lender's Loans and
Commitments). In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Loan Parties, the Administrative Agent, the Issuing Bank and
the Collateral Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. Any agreement pursuant to which any Lender shall sell
any such participating interest shall provide that such Lender shall retain the
sole right and responsibility to exercise such Lender's rights and enforce
Parent's and each Borrower's respective obligations hereunder, including the
right to consent to any amendment, supplement, modification or waiver of any
provision of this Agreement or any of the other Loan Documents, and no Lender
shall be entitled to create in favor of any Participant, in the participation
agreement pursuant to which
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such Participant's participating interest shall be created or otherwise, any
right to vote on, consent to or approve any matter relating to this Agreement or
any other Loan Document, provided that such participation agreement may provide
that, without the consent of the Participant, such Lender will not agree to any
amendment, supplement, modification or waiver, specified in Section 9.01(e) or
(f). The Borrowers also agree that each Lender shall be entitled to the benefits
of Sections 2.14, 2.16 and 2.20 without regard to whether it has granted any
participating interests, and that all amounts payable to a Lender under Sections
2.14, 2.16 and 2.20 shall be determined as if such Lender had not granted any
such participating interests.
(c) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to (i) any Lender or any Affiliate thereof (except in the case of an
assignment of a Revolving Credit Commitment, which assignment shall require the
prior written consent of the Issuing Bank and the Swingline Lender, which
consent, in each case, shall not be unreasonably withheld) or (ii) with the
prior written consent of the Administrative Agent and the Borrowers (and, in the
case of any assignment of a Revolving Credit Commitment, the Issuing Bank and
the Swingline Lender) (which, in each case, shall not be unreasonably withheld),
to any additional bank, financial institution or institutional entity (any such
assignee described in clause (i) or (ii), an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance executed by such Assignee, such
assigning Lender and the Administrative Agent (and, to the extent required
pursuant to clauses (i) and (ii) above, by the Borrowers, the Swingline Lender
and the Issuing Bank) and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined below), provided that (x)
unless the Borrowers, the Administrative Agent and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swingline
Lender otherwise consent in writing, no such assignment shall be in an aggregate
principal amount of less than $1,000,000 in the aggregate (or, if less, the full
amount of such selling Lender's Loans and Commitments) and (y) if any Lender
assigns all or any part of its rights and obligations under this Agreement to
one of its Affiliates in connection with or in contemplation of the sale or
other disposition of its interest in such Affiliate, the Borrowers' prior
written consent shall be required for such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment as set
forth therein and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding the foregoing, no Assignee, which as of the date of any
assignment to it pursuant to this Section 9.05(c) would be entitled to receive
any greater payment under Section 2.14 or 2.20 than the assigning Lender would
have been entitled to receive as of such date under such Sections with respect
to the rights assigned, shall be entitled to receive such payments unless the
Borrowers have consented in writing to the assignment and agreed in writing to
waive the benefit of this sentence.
(d) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder shall be
deemed to confirm to and agree with
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each other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Revolving
Credit Commitment, and the outstanding balances of its Revolving Loans, in each
case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, (ii) except as
set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of either
Borrower or any Subsidiary or the performance or observance by either Borrower
or any Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such Assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such Assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.01 or delivered pursuant to
Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such Assignee confirms the Lender acknowledgments
and representations set forth in Section 8.06; (vi) such Assignee appoints and
authorizes the Administrative Agent and the Collateral Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent and the Collateral Agent, respectively, by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such Assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender. The Assigning Lender and Assignee
that are parties to each such assignment shall (A) electronically execute and
deliver to the Administrative Agent an Assignment and Acceptance via an
electronic settlement system acceptable to the Administrative Agent (which
initially shall be ClearPar, LLC) or (B) manually execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500.
(e) The Administrative Agent, on behalf of the Borrowers,
shall maintain at the address of the Administrative Agent referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive and the
Borrowers, the Administrative Agent, the Issuing Bank, the Collateral Agent and
the Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrowers, the Collateral
Agent or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(f) Upon its receipt of (i) an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an
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Affiliate thereof, by the Borrowers, the Administrative Agent, the Issuing Bank
or the Swingline Lender, as applicable), (ii) a duly completed Administrative
Questionnaire, (iii) payment to the Administrative Agent of a registration and
processing fee of $3,500 (if required by the last sentence of Section 9.05(d))
and (iv) all necessary written consents to such assignment, the Administrative
Agent shall (x) promptly accept such Assignment and Acceptance, (y) on the
effective date determined pursuant thereto record the information contained
therein in the Register and (z) give notice of such acceptance and recordation
to the Borrowers. On or prior to such effective date, the assigning Lender shall
surrender any outstanding Notes held by it all or a portion of which are being
assigned, and the Borrowers, at their own expense, shall, upon the request to
the Administrative Agent made at the time of such assignment by the assigning
Lender or the Assignee, as applicable, execute and deliver to the Administrative
Agent (in exchange for the outstanding Notes of the assigning Lender) a new Note
to the order of such Assignee in an amount equal to the lesser of (i) the amount
of such Assignee's Revolving Credit Commitment and (ii) the aggregate principal
amount of all Revolving Loans made by such Assignee, in each case with respect
to the relevant Loan after giving effect to such Assignment and Acceptance and,
if the assigning Lender has retained a Loan hereunder, a new Note, as the case
may be, to the order of the assigning Lender in an amount equal to the lesser of
(y) the amount of such Lender's Revolving Credit Commitment and (z) the
aggregate principal amount of all Revolving Loans made by such Lender in each
case with respect to the relevant Loan after giving effect to such Assignment
and Acceptance. Any such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note replaced thereby. Any Notes surrendered by
the assigning Lender shall be returned by the Administrative Agent to the
applicable Borrower marked "canceled".
(g) Each Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of Section 9.17, any and all financial
information in such Lender's possession concerning the Borrowers and their
Affiliates which has been delivered to such Lender by or on behalf of the
Borrowers pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrowers in connection with such Lender's credit
evaluation of the Borrowers and their Affiliates prior to becoming a party to
this Agreement. No assignment or participation made or purported to be made to
any Transferee shall be effective without the prior written consent of the
Borrowers if it would require the Borrowers to make any filing with any
Governmental Authority or qualify any Loan or Note under the laws of any
jurisdiction, and the Borrowers shall be entitled to request and receive such
information and assurances as it may reasonably request from any Lender or any
Transferee to determine whether any such filing or qualification is required or
whether any assignment or participation is otherwise in accordance with
applicable law.
(h) Any Lender may (without the consent of the Borrower
or the Administrative Agent) at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in support
of obligations owed by such Lender (including, if such Lender is a fund that
invests in bank loans, to a trustee for holders of obligations owed, or
securities issued, by such fund); provided that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto and any foreclosure or exercise of remedies by
such assignee or trustee shall be subject to the provisions of this Section 9.05
regarding assignments in all respects.
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(i) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle administered by such Granting Lender or an Affiliate thereof (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrowers, the option to provide to the Borrowers
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrowers pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof, (iii) the Granting Lender (and not the SPC)
shall have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its SPC, and (iv) no
SPC shall (A) be entitled to receive any greater amount pursuant to any
provision of this Agreement, including without limitation subsection 2.14, 2.16,
2.20 or 9.06, than the Granting Lender would have been entitled to receive in
respect of the extensions of credit made by such SPC if such Granting Lender had
not designated such SPC hereunder, (B) be deemed to have any Revolving Credit
Commitment or (C) be designated if such designation would otherwise increase the
costs of the Commitments or the Loans to either Borrower. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof; provided,
however, that each Granting Lender designating any SPC hereby agrees to
indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such SPC during such period of forbearance. The indemnification
obligations of each Granting Lender under this Section 9.05(i) shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable under this Agreement. In addition, notwithstanding anything to the
contrary contained in this Section 9.05, any SPC may with notice to, but without
the prior written consent of, the Borrowers and the Administrative Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender.
Section 9.06 Payment of Expenses and Taxes. Each Borrower agrees (a) to
pay or reimburse each of the Administrative Agent, the Collateral Agent, the
Lead Arranger and the Issuing Bank for all reasonable out-of-pocket costs and
expenses incurred in connection with the preparation and execution of, and any
amendment, supplement, modification to, or waiver of the provisions of, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of one firm of counsel in each relevant jurisdiction to the
Administrative Agent, the Collateral Agent and the Lead Arranger, (b) to pay or
reimburse each Lender, the Administrative Agent, the Collateral Agent and each
Lead Arranger for all its reasonable costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other
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Loan Documents and any such other documents, including the reasonable fees and
disbursements of any local counsel to the Administrative Agent, the Collateral
Agent, the Lead Arranger and the several Lenders, (c) to pay, indemnify and hold
each Lender, the Collateral Agent, the Issuing Bank, the Lead Arranger and the
Administrative Agent (each such Person being called an "Indemnitee") harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of or any waiver or consent under or in respect of, this Agreement,
the other Loan Documents and any such other documents and (d) except as provided
in Section 8.09(b), to pay, indemnify and hold each Indemnitee harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents or the use of the proceeds of the Loans and other
extensions of credit hereunder, including any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of either Borrower, any of the Subsidiaries or any
of the Properties (all the foregoing in this clause (d) collectively the
"Indemnified Liabilities"), provided that Borrowers shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities arising from
(i) the gross negligence or willful misconduct of any Indemnitee (or any of
their respective directors, trustees, officers, employees, agents, successors
and assigns) or (ii) claims made or legal proceedings commenced against any
Indemnitee by any securityholder or creditor thereof arising out of and based
upon rights afforded any such securityholder or creditor solely in its capacity
as such. Notwithstanding the foregoing, except as provided in clauses (b) and
(c) above, the Borrowers shall have no obligation under this Section 9.06 to any
Indemnitee with respect to any tax, levy, impost, duty, charge, fee, deduction
or withholding imposed, levied, collected, withheld or assessed by any
Governmental Authority.
The agreements in this Section 9.06 shall survive repayment of the
Loans and all other amounts payable hereunder.
Section 9.07 Set-off. In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to Parent and the Borrowers (any such notice being expressly waived by the
Borrowers to the extent permitted by applicable law), upon the occurrence of an
Event of Default under Section 7.02(a) to set off and appropriate and apply
against any amount then due and payable any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of either Borrower. Each Lender agrees promptly to notify Parent, the
Borrowers and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
Section 9.08 Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement,
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together with all fees, charges and other amounts which are treated as interest
on such Loan or participation in such L/C Disbursement 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 or participation in accordance with applicable law, the
rate of interest payable in respect of such Loan or participation 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 or participation but were not payable as a
result of the operation of this Section 9.08 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
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.
Section 9.09 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be delivered to Parent,
the Borrowers and the Administrative Agent.
Section 9.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 9.11 Integration. This Agreement, the other Loan Documents and
the Fee Letter represent the agreement among the parties with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by any of the parties hereto relative to the subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents or
in the Fee Letter.
Section 9.12 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 are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Section 9.13 Applicable Law. THIS AGREEMENT AND ANY NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICTS
OF LAWS TO THE EXTENT THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE
AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 9.14 Submission to Jurisdiction; Waivers. (a) Each party hereto
hereby irrevocably and unconditionally:
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(i) submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other
Loan Documents (other than the Mexican Security Documents) to which it
is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts of
any thereof;
(ii) consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient forum and agrees not to plead or claim the same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of
mail), postage prepaid, to (x) Parent, JCI or the applicable Lender at
its address set forth in Section 9.02 or at such other address of which
the Administrative Agent, any such Lender, Parent and the Borrowers
shall have been notified pursuant thereto; and (y) DCJ, (x) in the case
of any action or proceeding brought in the courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts of any thereof, in care of
the Process Agent at the Process Agent's address set forth in paragraph
(b) below, and (y) in the case of any action or proceeding brought in
the courts of Mexico, to Xxxxxxxxx X. Xxxxx Xxxxxxx Xx. 000, Xxxxxxx
Xxxxxxxx, Xxxxxx D.F. C.P. 010140, Attn: Director General;
(iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law
or shall limit the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this Section 9.14 any punitive damages.
(b) DCJ hereby irrevocably designates, appoints and
empowers CT Corporation System, presently located at 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Process Agent") as its authorized agent,
to accept on its behalf, service of any and all process which may be served in
any suit, action or proceeding of the nature referred to in paragraph (a) above
in any courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts of any
thereof. Such service may be made by mailing or delivering a copy of such
process to DCJ in care of the Process Agent at the Process Agent's above address
and DCJ hereby irrevocably authorizes and directs the Process Agent to accept
such service on its behalf. DCJ represents and warrants that it has granted to
the Process Agent a valid, binding and enforceable irrevocable power of attorney
in the presence of a Mexican notary public, that such Process Agent has agreed
in writing to accept such appointment and that a true copy of such designation
and acceptance has been delivered to the Administrative Agent and the Lenders.
Such designation and appointment shall be irrevocable until all principal and
interest and all other amounts payable under the Loan Documents shall have been
paid in full in accordance with the provisions hereof. If such Process Agent
shall cease so to act, DCJ
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covenants and agrees to designate irrevocably and appoint without delay another
such Process Agent in New York City reasonably satisfactory to the
Administrative Agent and to deliver promptly to the Administrative Agent
evidence in writing of such other Process Agent's acceptance of such
appointment. DCJ irrevocably waives, to the fullest extent permitted by law, all
claim of error by reason of any such service and agrees that such service shall
be deemed in every respect effective service of process upon DCJ in any such
suit, action or proceeding and shall, to the fullest extent permitted by law, be
taken and held to be valid and personal service upon DCJ.
Section 9.15 Acknowledgments. Each of Parent and each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) none of the Administrative Agent, the Collateral
Agent, the Lead Arranger, the Issuing Bank or any Lender has any fiduciary
relationship with or duty to Parent or either Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders, on the one hand, and Parent and the Borrowers, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and (c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among Parent, the Borrowers and the Lenders.
Section 9.16 Waivers of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Section 9.17 Confidentiality. Each Lender (including the Swingline
Lender), the Administrative Agent, the Collateral Agent and the Issuing Bank
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees, agents, advisors and representatives) to keep confidential any
Confidential Information (as defined below), and in connection therewith comply
with their customary procedures for handling confidential information of this
nature and with safe and sound banking practices, provided that nothing herein
shall limit its disclosure of any such information (a) to such of its respective
officers, directors or employees as need to know such Confidential Information,
(b) to the extent required by statute, rule, regulation or judicial process, (c)
to counsel for any of the Lenders or such Lender's auditors or accountants, (d)
to bank examiners or insurance commissioners having jurisdiction over the
disclosing Lender, (e) to the Administrative Agent, the Collateral Agent, the
Lead Arranger, the Issuing Bank or any other Lender, (f) by the Administrative
Agent, the Collateral Agent, the Lead Arranger, the Issuing Bank or any Lender
to an Affiliate thereof, (g) in connection with any enforcement of any of the
Loan Documents or (h) to any Transferee, or prospective Transferee that agrees
to comply with this Section 9.17 and (in the case of any such Person that at the
time of such disclosure has not yet become a Lender) executes and delivers to
Parent and the Borrowers a written instrument in favor of Parent and the
Borrowers confirming such agreement,
103
in form and substance reasonably satisfactory to Parent and the Borrowers,
provided that (i) in the case of the preceding clauses (b) and (d), such Lender
shall, to the extent legally permissible, notify the Borrowers of the proposed
disclosure as far in advance as is reasonably practicable under the
circumstances, (ii) in the case of the preceding clause (c), such Lender shall
inform each such counsel, auditor or accountant of the agreement under this
Section 9.17 and take reasonable actions to cause compliance by any such Person
with this agreement (including, where appropriate, to cause any such Person to
acknowledge its agreement to be bound by the agreement under this Section 9.17)
and (iii) in the case of the preceding clause (f), such Lender, the Collateral
Agent, the Lead Arranger, the Issuing Bank or the Administrative Agent shall be
responsible for any failure by such Affiliate of the Lender, the Collateral
Agent, the Issuing Bank, the Lead Arranger, or the Administrative Agent to
comply with this Section 9.17. For purposes of this Section 9.17, "Confidential
Information" shall mean, with respect to the Administrative Agent, the
Collateral Agent, the Lead Arranger, the Issuing Bank or any Lender (each an
"Affected Party"), information delivered to such Affected Party by or on behalf
of Parent, either Borrower or any Subsidiary, the Administrative Agent or any
other Lender in connection with the transactions contemplated by or otherwise
pursuant to this Agreement or information obtained by the Affected Party in the
course of any review of the books or records of Parent, either Borrower or any
Subsidiary, provided that such term shall not include information (i) that was
publicly known or otherwise known to such Affected Party prior to the time of
such disclosure on a nonconfidential basis without a duty of confidentiality to
Parent, either Borrower or any Subsidiary being violated, (ii) that subsequently
becomes publicly known through no act or omission by any Affected Party or any
Person acting on the Affected Party's behalf, (iii) that becomes known to such
Affected Party on a nonconfidential basis without a duty of confidentiality to
Parent, either Borrower or any Subsidiary being violated and, other than through
disclosure by or on behalf of Parent or either Borrower or (iv) that constitutes
financial information delivered to any Affected Party that is otherwise publicly
available through no act or omission of any Affected Party or Person acting on
such Affected Party's behalf. Notwithstanding anything herein to the contrary,
any party to this Agreement (and any employee, representative or other agent of
such party) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure, except that tax treatment and tax structure shall not include the
identity of any existing or future party (or any affiliate of such party) to
this Agreement.
Section 9.18 Judgment Currency. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder in one
currency into another currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligations of Parent and the Borrowers in
respect of this Agreement, the other Loan Documents and any Note due to any
party hereto shall, notwithstanding any judgment in a currency (the "judgment
currency") other than the currency in which the sum originally due to such party
is denominated (the "original currency"), be discharged only to the extent that
on the Business Day following receipt by such party of any sum adjudged to be so
104
due in the judgment currency such party may in accordance with normal banking
procedures purchase the original currency with the judgment currency; if the
amount of the original currency so purchased is less than the sum originally due
to such party in the original currency, Parent or such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
party against such loss, and if the amount of the original currency so purchased
exceeds the sum originally due to any party to this Agreement, such party,
agrees to remit to Parent or such Borrower, as applicable, such excess. This
covenant shall survive the termination of this Agreement and payment of the
Loans and all other amounts payable hereunder.
Section 9.19 Calculations; Computations. Except as otherwise expressly
provided herein, to the extent that the determination of compliance with any
covenant contained herein or other provision hereof requires the conversion to
Dollars of foreign currency amounts, such Dollar amount shall be the Dollar
Equivalent of the amount of such foreign currency at the time such item is to be
calculated or is to be or was incurred, created or suffered or permitted to
exist or assumed or transferred or sold for purposes of this Agreement (except
if such item was incurred, created or assumed, or suffered or permitted to exist
or transferred prior to the date hereof, such conversion shall be made based on
the Dollar Equivalent of the amounts of such foreign currency at the date
hereof).
Section 9.20 Security Rights Granted in the Dutch Deeds of Pledge and
Covenant to Pay. Solely in connection with and for purposes of the perfection of
the security interests granted pursuant to the Dutch Deeds of Pledge, the
parties hereto agree as follows:
(i) JCI has agreed that, as security for its
obligations as Borrower under this Agreement (the "JCI Borrower
Obligations"), it shall cause a right of pledge to be vested on the
shares of CDRJ Europe Holding Company B.V. in the form of a notarial
deed of pledge on twenty-four of the forty issued and outstanding
shares in the capital of CDRJ Europe Holding Company B.V. (the "Europe
Deed of Pledge"). Without prejudice to the provisions of this
Agreement, and solely for the purpose of ensuring and preserving the
validity and continuity of the security rights to be granted by JCI
under or pursuant to the Europe Deed of Pledge, JCI hereby irrevocably
and unconditionally undertakes to pay to the Collateral Agent without
duplication amounts equal to and in the currency of the JCI Borrower
Obligations from time to time due in accordance with and under the same
terms and conditions as each of the JCI Borrower Obligations (such
payment undertakings and the obligations and liabilities which are the
result thereof hereinafter referred to as the "JCI Parallel Debt"). For
the avoidance of doubt, in no event shall the amount of the JCI
Parallel Debt exceed the JCI Borrower Obligations.
(ii) JCI and the Collateral Agent acknowledge
that (i) for this purpose, the JCI Parallel Debt constitutes
undertakings, obligations and liabilities of JCI to the Collateral
Agent which are separate and independent from, and without prejudice
to, the JCI Borrower Obligations which JCI has to any Secured Party and
(ii) that the JCI Parallel Debt represents the Collateral Agent's own
claims (vorderingen op naam) to receive payment of the JCI Parallel
Debt, provided that the total amount of the JCI Parallel Debt shall
never exceed the total amount of the JCI Borrower Obligations.
105
(iii) Every payment of monies made by JCI to the
Collateral Agent shall (conditionally upon such payment not
subsequently being avoided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar
laws of general application) be in satisfaction pro tanto of the
covenant by JCI contained in Section 9.20(i), provided that, if any
such payment as is mentioned above is subsequently avoided or reduced
by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application, the
Collateral Agent shall be entitled to receive a corresponding amount as
JCI Parallel Debt under Section 9.20(i) above from JCI and JCI shall
remain liable to satisfy such JCI Parallel Debt and such JCI Parallel
Debt shall be deemed not to have been discharged.
(iv) Subject to the provisions of Section
9.20(i), but notwithstanding any of the other provisions of this
Section 9.20:
(a) the total amount due and payable as
JCI Parallel Debt under this Section 9.20 shall be decreased
to the extent JCI shall have paid any amounts to the Secured
Parties or any of them to reduce the outstanding JCI Borrower
Obligations or any of the Secured Parties otherwise receives
any amount in payment of the JCI Borrower Obligations; and
(b) to the extent that JCI shall have
paid any amounts to the Collateral Agent under the JCI
Parallel Debt or the Collateral Agent otherwise shall have
received monies in payment of the JCI Parallel Debt, the total
amount due and payable under the JCI Borrower Obligations
shall be decreased as if said amounts were received directly
in payment of the JCI Borrower Obligations.
(v) For the avoidance of doubt, in the event
that JCI is in default in respect of the JCI Borrower Obligations, as
set forth in this Agreement, JCI shall, at the same time, be deemed in
default in respect of its obligations under the JCI Parallel Debt.
(vi) Parent has agreed that, as security for its
obligations as Guarantor under the Parent Guarantee Agreement (the
"Parent Obligations"), it shall cause a right of pledge to be vested on
the shares of CDRJ Latin America Holding Company B.V. in the form of a
notarial deed of pledge on all forty issued and outstanding shares in
the capital of CDRJ Latin America Holding Company B.V. (the "Latin
America Deed of Pledge" and, together with the Europe Deed of Pledge,
the "Dutch Deeds of Pledge"). Without prejudice to the provisions of
this Agreement and/or the Parent Guarantee Agreement, and for the
purpose of ensuring and preserving the validity and continuity of the
security rights to be granted by Parent under or pursuant to the Latin
America Deed of Pledge, Parent hereby irrevocably and unconditionally
undertakes to pay to the Collateral Agent without duplication amounts
equal to and in the currency of the Parent Obligations from time to
time due in accordance with and under the same terms and conditions as
each of the Parent Obligations (such payment undertakings and the
obligations and liabilities which are the result thereof hereinafter
referred to as the "Parent Parallel Debt"). For the avoidance of doubt,
in no event shall the amount of the Parent Parallel Debt exceed the
Parent Obligations.
106
(vii) Parent and the Collateral Agent acknowledge
that (i) for this purpose, the Parent Parallel Debt constitutes
undertakings, obligations and liabilities of Parent to the Collateral
Agent which are separate and independent from, and without prejudice
to, the Parent Obligations which Parent has to any Secured Party and
(ii) that the Parent Parallel Debt represents the Collateral Agent's
own claims (vorderingen op naam) to receive payment of the Parent
Parallel Debt, provided that the total amount of the Parent Parallel
Debt shall never exceed the total amount of the Parent Obligations.
(viii) Every payment of monies made by Parent to
the Collateral Agent shall (conditionally upon such payment not
subsequently being avoided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar
laws of general application) be in satisfaction pro tanto of the
covenant by Parent contained in Section 9.20(vi), provided that, if any
such payment as is mentioned above is subsequently avoided or reduced
by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application, the
Collateral Agent shall be entitled to receive a corresponding amount as
Parent Parallel Debt under Section 9.20(vi) above from Parent and
Parent shall remain liable to satisfy such Parent Parallel Debt and
such Parent Parallel Debt shall be deemed not to have been discharged.
(ix) Subject to the provisions of Section
9.20(vi), but notwithstanding any of the other provisions of this
Section 9.20:
(a) the total amount due and payable as
Parent Parallel Debt under this Section 9.20 shall be
decreased to the extent Parent shall have paid any amounts to
the Secured Parties or any of them to reduce the outstanding
Parent Obligations or any of the Secured Parties otherwise
receives any amount in payment of the Parent Obligations; and
(b) to the extent that Parent shall
have paid any amounts to the Collateral Agent under the Parent
Parallel Debt or the Collateral Agent otherwise shall have
received monies in payment of the Parent Parallel Debt, the
total amount due and payable under the Parent Obligations
shall be decreased as if said amounts were received directly
in payment of the Parent Obligations.
(x) For the avoidance of doubt, in the event
that Parent is in default in respect of the Parent Obligations, as set
forth in the Credit Agreement, Parent shall, at the same time, be
deemed in default in respect of its obligations under the Parent
Parallel Debt.
Section 9.21 Effectiveness; Restatement. This Agreement restates the
Existing Credit Agreement. This Agreement shall not be deemed to be a novation
or to extinguish the rights and obligations of the parties to this Agreement
under the Existing Credit Agreement and such rights and obligations, but solely
as restated hereby, shall continue as provided herein. This Agreement shall
become effective upon satisfaction (or waiver by the Administrative Agent) of
all of the conditions set forth in Section 4.01 and Section 4.02, whereupon (a)
the Existing Agreement shall be restated as set forth in this Agreement, (b)
each Lender under the Existing Credit Agreement shall be released from all
duties and obligations under the Existing Credit
107
Agreement, but only to the extent such duties and obligations do not expressly
continue under this Agreement, and, except in the case of any Lender hereunder,
shall have no further rights, duties or obligations under this Agreement, and
(c) the Administrative Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the administrative agent under the
Existing Credit Agreement, it being expressly understood and agreed that the
Administrative Agent hereunder shall have no liability for any act of, or
omission to act by, the administrative agent under the Existing Credit Agreement
or for any event or condition occurring or failing to occur prior to the
effectiveness of this Agreement. If any such condition set forth in Section 4.01
and Section 4.02 shall not have been satisfied (or waived by the Administrative
Agent), then the Existing Credit Agreement shall remain in full force and
effect.
108
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
JAFRA COSMETICS INTERNATIONAL, INC.,
By /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
DISTRIBUIDORA COMERCIAL JAFRA,
S.A. DE C.V.,
By /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
JAFRA WORLDWIDE HOLDINGS (LUX)
S.AR.L.
By /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
By /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Fonde de pouvoir
THE BANK OF NEW YORK,
individually and as Administrative Agent,
Collateral Agent, Issuing Bank and
Swingline Lender
By /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CITY NATIONAL BANK,
individually and as Issuing Bank
By /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
JAFRA RESTATED CREDIT AGREEMENT
BANK OF AMERICA, N.A.
By /s/ [ILLEGIBLE]
----------------------------------------
Name: [ILLEGIBLE]
Title: SVP
HSBC BANK USA, NATIONAL ASSOCIATION
By /s/ Xxxxxxx Xxxxxx, AVP
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
WESTLB AG, NEW YORK BRANCH
By /s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Name: XXXXXX XXXXXXXXX
Title: EXECUTIVE DIRECTOR
By /s/ [ILLEGIBLE]
----------------------------------------
Name: [ILLEGIBLE]
Title: Director
Global Specialized Finance
JAFRA RESTATED CREDIT AGREEMENT
LOAN PARTY ACKNOWLEDGMENT AND AGREEMENT
Dated as of August 16, 2004
This Loan Party Acknowledgment and Agreement is being executed and
delivered by the "Loan Parties" signatory hereto and The Bank of New York, as
administrative agent and collateral agent for the Lenders as hereinafter defined
(in such capacities, "Administrative Agent" and "Collateral Agent"
respectively), as a condition precedent to the effectiveness of the Restated
Credit Agreement, dated as of August 16, 2004, among Jafra Cosmetics
International, Inc. ("JCI"), Distribuidora Comercial Jafra, S.A. de C.V.
(together with JCI, the "Borrowers"), Jafra Worldwide Holdings (Lux) S.AR.L.
("Parent"), the "Lenders" named therein, the Issuing Bank (as defined therein),
Administrative Agent and Collateral Agent (said agreement, the "Restated Credit
Agreement"). The Restated Credit Agreement, restates the Credit Agreement, dated
as of May 20, 2003 (as amended by Amendment No. 1, dated as of June 25, 2003,
and as further amended by Amendment No. 2, dated as of May 27, 2004, the
"Existing Credit Agreement") among the Borrowers, the Parent, the Lenders named
therein (the "Existing Lenders"), the Issuing Bank named therein (the "Existing
Issuing Bank") and Credit Suisse First Boston, as administrative agent and
collateral agent for such Lenders (in such capacities, "Existing Administrative
Agent" and "Existing Collateral Agent" respectively). The definitions of terms
in the Restated Credit Agreement apply to terms that are used but not defined
herein.
Each of the undersigned Loan Parties hereby confirms, acknowledges and
agrees with the Administrative Agent, the Collateral Agent, the Lenders and the
other Loan Parties, that (a) it has read and understands the terms of the
Restated Credit Agreement and the other Loan Documents, (b) immediately upon the
effectiveness of the Restated Credit Agreement, each reference in the Loan
Documents to the "Credit Agreement" (including references such as "thereunder,"
"thereof and words of like import) shall mean and refer to the Restated Credit
Agreement, (c) each of the Guarantee Agreements to which such Loan Party is a
party is hereby affirmed as of the date hereof, and is, and shall after the
effectiveness of the Restated Credit Agreement continue to be, in full force and
effect in favor of the Collateral Agent for the benefit of the Secured Parties,
(d) each of obligations of such Loan Party under the Security Documents (other
than the Guarantee Agreements) to which it is a party is, and shall after the
effectiveness of the Restated Credit Agreement continue to be, in full force and
effect, in favor of the Collateral Agent for the benefit of the Secured Parties,
(e) each of the other Loan Documents to which such Loan Party is a party is
hereby affirmed as of the date hereof, and is, and shall after the effectiveness
of the Restated Credit Agreement continue to be, in full force and effect in
favor of the Administrative Agent, Collateral Agent for the benefit of the
Secured Parties, Issuing Bank the Lenders, and the other Loan Parties, as
applicable, (f) all of the Collateral described in the Security Documents does
secure, and shall after the effectiveness of the Restated Credit Agreement
continue to be security for, the payment of all of the Obligations (as defined
in each respective Security Document), notwithstanding any alteration of, or
increase in the amount of, the Obligations pursuant to the Restated Credit
Agreement, (g) the Obligations guaranteed under the Guarantees shall include all
obligations, covenants, duties, terms and conditions to be observed by the
Borrowers under the Restated Credit Agreement, notwithstanding any alteration
of, or increase in the amount of, the Obligations pursuant to the Restated
Credit Agreement and (h) immediately upon the effectiveness of the Restated
Credit Agreement, the Existing Administrative Agent and the Existing Collateral
Agent shall be replaced by the Administrative
Agent and the Collateral Agent, respectively, under each of the Loan Documents,
and the Administrative Agent and Collateral Agent shall succeed to and become
vested with all rights, powers, privileges and duties of the Existing
Administrative Agent and Existing Collateral Agent under the Loan Documents, it
being expressly understood and agreed that the Administrative Agent and
Collateral Agent shall have no liability for any act of, or omission to act by,
the Existing Administrative Agent or the Existing Collateral Agent or for any
event or condition occurring or failing to occur prior to the effectiveness of
the Restated Credit Agreement.
Each of the Administrative Agent, on its behalf and on behalf of the
Issuing Bank and the Lenders, and the Collateral Agent hereby confirms,
acknowledges and agrees with the Loan Parties that (a) immediately upon the
effectiveness of the Restated Credit Agreement, each reference in the Loan
Documents to the "Credit Agreement" (including references such as "thereunder,"
"thereof" and words of like import) shall mean and refer to the Restated Credit
Agreement, (b) immediately upon the effectiveness of the Restated Credit
Agreement, the Existing Administrative Agent and the Existing Collateral Agent
shall be replaced by the Administrative Agent and the Collateral Agent,
respectively, under each of the Loan Documents, and the Administrative Agent and
Collateral Agent shall succeed to and become vested with all rights, powers,
privileges and duties of the Existing Administrative Agent and Existing
Collateral Agent under the Loan Documents, it being expressly understood and
agreed that the Administrative Agent and Collateral Agent shall have no
liability for any act of, or omission to act by, the Existing Administrative
Agent or the Existing Collateral Agent or for any event or condition occurring
or failing to occur prior to the effectiveness of the Restated Credit Agreement
and (c) subject to the immediately preceding clause (b), each of the Loan
Documents to which any of Existing Administrative Agent, Existing Collateral
Agent, Existing Issuing Bank and Existing Lenders is a party is hereby affirmed
as of the date hereof by Administrative Agent, Collateral Agent, Issuing Bank
and the Lenders, respectively, and is, and shall after the effectiveness of the
Restated Credit Agreement continue to be, in full force and effect in favor of
the Loan Parties.
This Acknowledgment and Agreement shall not be construed to rescind,
modify, qualify or limit any obligation of any Loan Party, Administrative Agent,
Collateral Agent, Issuing Bank or any Lender under any Loan Document.
THIS ACKNOWLEDGMENT AND AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICTS OF LAWS TO THE EXTENT THAT THE
SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
This Acknowledgment and Agreement may be executed by one or more of the
parties hereto on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts, taken together, shall be deemed to
constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank.]
2
IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment and
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
"ADMINISTRATIVE AGENT" AND THE BANK OF NEW YORK
"COLLATERAL AGENT"
By: /s/ Xxxxxxx Xxxxxxx
-----------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
LOAN DOCUMENT ACKNOWLEDGMENT
"LOAN PARTIES" JAFRA COSMETICS INTERNATIONAL,
INC.
By: /s/ Xxxx Xxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
DISTRIBUIDORA COMERCIAL JAFRA,
S.A. DE C.V.
By: /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
JAFRA WORLDWIDE HOLDINGS (LUX)
S.AR.L
By: /s/ Xxxx Xxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
[Additional Signature Pages Follow]
LOAN DOCUMENT ACKNOWLEDGMENT
JAFRA COSMETICS INTERNATIONAL,
S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
SERVIDAY, S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
DISTRIBUIDORA VENUS, S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
DIRSAMEX, S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
JAFRA COSMETICS, S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
[Additional Signature Pages Follow]
LOAN DOCUMENT ACKNOWLEDGMENT
COSMETICOS Y FRAGRANCIAS, X.X.xx
C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
JAFRAFIN, S.A. de C.V.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
CDRJ EUROPE HOLDING COMPANY B.V.
By: Jafra Worldwide Holdings (Lux) S.ar.l,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
------------------------------
Narme: Xxxx Xxxxxxxx
Title: Chief Financial Officer
CDRJ LATIN AMERICA COMPANY B.V.
By: Jafra Worldwide Holdings (Lux) S.ar.l,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
[Additional Signature Pages Follow]
LOAN DOCUMENT ACKNOWLEDGMENT
LATIN COSMETICS HOLDINGS B.V.
By: Jafra Worldwide Holdings (Lux) S.ar.l.,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
REGIONAL COSMETICS HOLDING B.V.
By: Jafra Worldwide Holdings (Lux) S.ar.l.,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
SOUTHERN COSMETICS HOLDINGS B.V
By: Jafra Worldwide Holdings (Lux) S.ar.l.,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
CDRJ MEXICO HOLDING COMPANY B.V.
By: Jafra Worldwide Holdings (Lux) S.ar.l.,
its Managing Director
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
LOAN DOCUMENT ACKNOWLEDGMENT
