Exhibit 10.1
1
SIXTH AMENDMENT
SIXTH AMENDMENT, dated as of June 9, 1999 (this "Amendment"),
to the Credit and Guarantee Agreement, dated as of May 23, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among:
(a) REMINGTON PRODUCTS COMPANY, L.L.C., a Delaware limited liability
company (the "Company");
(b) REMINGTON CONSUMER PRODUCTS LIMITED, a corporation organized and
existing under the laws of the United Kingdom (the "UK Borrower");
(c) each Acquisition Subsidiary from time to time party thereto (together
with the Company and the UK Borrower, the "Borrowers");
(d) the Lenders from time to time parties to the Agreement including the
Issuing Bank;
(e) FLEET NATIONAL BANK and BANQUE NATIONALE DE PARIS, as Co- Documentation
Agents (in such capacity, the "Co-Documentation Agents"); and
(f) THE CHASE MANHATTAN BANK (formerly known as CHEMICAL BANK), a New York
banking corporation, as administrative agent (in such capacity, the
"Agent") for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrowers, the Lenders and the Agent are parties to the
Credit Agreement;
WHEREAS, the Borrowers have requested that the Agent and the Lenders
agree to amend certain provisions of the Credit Agreement in accordance with the
terms hereof;
WHEREAS, the Agent and the Lenders are willing to amend such provisions
of the Credit Agreement, but only upon the terms and subject to the conditions
set forth herein;
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
which are used herein shall have the meanings assigned thereto in the Credit
Agreement.
2. Amendment of Credit Agreement. (a) The Credit Agreement hereby is
amended to effect the changes contained in Annex I hereto, such that (after
giving effect to this Amendment) the Credit Agreement will have the terms and
conditions reflected in Annex I hereto.
(b) The Credit Agreement hereby is further amended by inserting therein
as new Exhibits A-5A and A-5B each of Annex II and Annex III, respectively,
hereto.
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3. Amendment of Guarantees and Security Documents. Each Lender hereby
authorizes and instructs the Agent to execute and deliver an amendment (the
"Security Amendment") to each Guarantee and Security Document substantially in
the form of Annex IV hereto.
4. Certain Matters Regarding Supplemental Loans. Each party hereto
hereby acknowledges and consents to the provisions of subsection 9.6 of the
Credit Agreement.
5. Representation and Warranty. Each of the Company, each of its
Affiliates who is a party hereto and each of its Subsidiaries who is a party
hereto (each, a "Credit Party") hereby represents and warrants to the Agent and
the Lenders that (a) the Security Documents and Guarantees to which such Credit
Party is a party are in full force and effect immediately prior to the
effectiveness of this Amendment and the Security Amendment and shall remain in
full force and effect after giving effect hereto and thereto and (b) each of the
representations and warranties contained in each Security Document and Guarantee
to which such Credit Party is a party is true and correct in all material
respects on the date hereof.
6. Certain Voting Matters. (a) Each Unsecured Supplemental Lender
hereby grants to the Agent such Unsecured Supplemental Lender's irrevocable and
unconditional proxy to exercise any and all voting rights attributable to the
Unsecured Supplemental Loans of such Unsecured Supplemental Lender (including,
without limitation, any voting rights attributable to claims existing on account
of such Unsecured Supplemental Loans in a bankruptcy or similar proceeding).
Each Lender hereby authorizes and instructs the Agent to (i) accept such proxy
and (ii) exercise such voting rights with respect to the Unsecured Supplemental
Loans by voting with respect to such Unsecured Supplemental Loans in the same
manner as the Majority Lenders (assuming for purposes of calculating the
"Majority Lenders" that the Unsecured Supplemental Loans did not exist). The
Agent hereby accepts such proxy and agrees to exercise the voting rights
attributable to the Unsecured Supplemental Loans in the manner contemplated by
clause (ii) above.
(b) Notwithstanding the provisions of Section 6(a) above, each
Unsecured Supplemental Lender may request in writing that the Agent vote the
Unsecured Supplemental Loans held by such Unsecured Supplemental Lender in a
particular manner with respect to any matter which is of the type described in
clause (i), (ii)(a), (ii)(b) or (iii) of the proviso to subsection 18.1 of the
Credit Agreement and, if such request is actually received by the Agent prior to
12:00 Noon (New York City time) at least one Business Day prior to the deadline
established for collecting votes on the relevant issue, the Agent shall vote the
Unsecured Supplemental Loans of such record holder in such manner; provided
that, in the event that any Unsecured Supplemental Lender shall have demanded
payment under (and in accordance with the terms of) the Guarantee, dated as of
June 7, 1999 (as amended, supplemented or otherwise modified from time to time,
the "Vestar Guarantee"), made by Vestar Equity Partners, L.P. ("Vestar") in
favor of such Unsecured Supplemental Lender and has not been paid within 15 days
following such demand, the provisions of this Section 6 shall be suspended as to
such Unsecured Supplemental Lender (and such Unsecured Lender shall have the
right to exercise all voting power attributable to its Unsecured Supplemental
Loans) until such time as such Unsecured Supplemental Lender has received
payment in accordance with the terms of the Vestar Guarantee.
(c) Each party hereto hereby acknowledges and agrees that the Agent
shall have no liability for exercising (or failing to exercise such voting
rights) in the manner contemplated by this Section 6.
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7. Conditions to Effectiveness. This Amendment shall become effective
on the date (such date, the "Amendment Closing Date") upon which the Agent
receives:
(a) counterparts hereof, executed and delivered by a duly authorized
officer of each Borrower, each Supplemental Lender and the Required
Lenders;
(b) counterparts of the Security Amendment, executed and delivered by a
duly authorized officer of each party thereto;
(c) an amendment fee, for the ratable account of the Lenders which execute
and deliver this Amendment on or prior to 12:00 Noon (New York City
time) on Wednesday, June 9, 1999 (or such later date as the Agent and
the Borrower shall agree), in the amount equal to 0.125% of the amount
of the Domestic Revolving Credit Commitments then in effect, the UK
Revolving Credit Commitments then in effect and the aggregate then
outstanding principal amount of the Domestic Term Loans and the UK Term
Loans;
(d) a Secretary's Certificate, executed and delivered by a duly authorized
Secretary or Assistant Secretary of the Company, certifying as to (i)
the names and true signatures of the officers of the Company authorized
to sign this Amendment and each other document, instrument and
agreement contemplated hereby, (ii) the authenticity and completeness
of an attached copy of the Certificate of Formation (and each amendment
thereto) of the Company, as certified (as of a recent date which is
satisfactory to the Administrative Agent) by the Secretary of State of
Delaware as being a true and complete copy thereof, (iii) the
authenticity and completeness of an attached copy of the Limited
Liability Company Agreement (and each amendment thereto) of the Company
and (iv) the authenticity, completeness and continuing effect of the
resolutions of the Members of the Company approving this Amendment,
each other documents, instrument and agreement contemplated hereby to
which the Company is a party and the borrowing and repayment by the
Borrower of the Supplemental Loans in accordance with the terms of the
Credit Agreement. Such Secretary's Certificate shall be in form and
substance reasonably satisfactory to the Agent and shall be dated as of
a date which is not earlier than the date hereof;
(e) a Secretary's Certificate, executed and delivered by a duly authorized
Secretary or Assistant Secretary of each Affiliate or Subsidiary of the
Company which is a party to a Guarantee or Security Document,
certifying as to (i) the names and true signatures of the officers of
such Affiliate or Subsidiary authorized to sign the Security Amendment
and each other document, instrument and agreement contemplated hereby
to which such Subsidiary or Affiliate (as the case may be) is a party,
(ii) the authenticity and completeness of an attached copy of the
Certificate of Incorporation (or analogous document) and each amendment
thereto of such Subsidiary or Affiliate, as certified (as of a recent
date which is satisfactory to the Administrative Agent) by the
Secretary of State of jurisdiction of organization thereof as being a
true and complete copy thereof, (iii) the authenticity and completeness
of an attached copy of By-Laws (or analogous document) and each
amendment thereto of such Subsidiary or Affiliate and (iv) the
authenticity, completeness and continuing effect of the resolutions of
the Board of Directors of such Subsidiary or Affiliate, approving the
Security Amendment, each other documents, instrument and agreement
contemplated hereby to which such Subsidiary or Affiliate (as the case
may be) is a party and the other matters contemplated by this
Amendment. Such Secretary's Certificate shall be in form and substance
reasonably
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satisfactory to the Agent and shall be dated as of a date which is not
earlier than the date hereof;
(e) the Vestar Guarantee made in favor of each Unsecured Supplemental
Lender, executed and delivered by a duly authorized officer of Vestar;
and
(f) a favorable written opinion, in form and substance reasonably
satisfactory to the Agent, of (i) counsel to the Company and each of
its Domestic Subsidiaries, in form and substance reasonably
satisfactory to the Agent, (ii) counsel to Vestar, in form and
substance reasonably satisfactory to the Unsecured Supplemental Lenders
and (iii) such local counsel as the Agent reasonably shall require.
Each such legal opinion shall be (x) dated the Amendment Closing Date,
(y) addressed to the Agent and the Lenders, and (z) covering such
matters relating to this Amendment and the Security Amendment as the
Agent reasonably shall require.
8. Representations and Warranties. The Borrowers hereby confirm,
reaffirm and restate the representations and warranties set forth in Section 6
of the Credit Agreement; provided that each reference to the Credit Agreement
therein shall be deemed to be a reference to the Credit Agreement after giving
effect to this Amendment. The Borrowers represent and warrant that no Default or
Event of Default has occurred and is continuing.
9. Continuing Effect of Credit Agreement. This Amendment shall not
constitute a waiver or amendment of any other provision of the Credit Agreement
not expressly referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of a Borrower that would
require a waiver or consent of the Agent or the Lenders. Except as expressly
amended hereby, the provisions of the Credit Agreement are and shall remain in
full force and effect.
10. Counterparts. This Amendment may be executed by the parties hereto
in any number of counterparts, and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
REMINGTON PRODUCTS COMPANY, L.L.C.
By:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:
Title:
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BANQUE NATIONALE DE PARIS, as a Co-
Documentation Agent and as a Lender
By:
Title:
FLEET NATIONAL BANK, as a Co-Documentation
Agent and as a Lender
By:
Title:
FIRST UNION NATIONAL BANK (as successor by merger to CORESTATES BANK, N.A.)
By:
Title:
BANKBOSTON, N.A. (formerly known as THE
FIRST NATIONAL BANK OF BOSTON)
By:
Title:
FIRST UNION NATIONAL BANK (formerly
known as FIRST UNION BANK OF CONNECTICUT)
By:
Title:
XXXXXX FINANCIAL, INC.
By:
Title:
PEOPLE'S BANK
By:
Title:
6
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
THE PROVIDENT BANK
By:
Title:
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby acknowledges and consents to the execution and
delivery by the Company of this Amendment and the other documents, instruments
and agreements contemplated hereby. Each of the undersigned hereby further (a)
acknowledges and agrees that all guarantees and collateral security provided by
the undersigned shall remain in full force and effect after giving effect to the
terms of this Amendment and such other documents, instruments and agreements and
(b) confirms that the Secured Supplemental Loans shall constitute "Obligations"
for purposes of each Guarantee and Security Document.
VESTAR XXXXXX CORP.
By:
--------------------------
Title:
VESTAR RAZOR CORP.
By:
Title:
RPI CORP.
By:
Title:
REMINGTON RAND CORPORATION
By:
Title:
7
REMINGTON CORPORATION, L.L.C.
By:
Title:
REMINGTON CAPITAL CORP.
By:
Title:
1
ANNEX II
to
Sixth Amendment
EXHIBIT A-5A to
Credit Agreement
Form of
SECURED SUPPLEMENTAL NOTE
$ New York, New York
June ___, 1999
FOR VALUE RECEIVED, the undersigned, REMINGTON PRODUCTS COMPANY, L.L.C., a
Delaware limited liability company (the "Borrower"), hereby unconditionally
promises to pay to the order of (the "Lender") at the office of The Chase
Manhattan Bank (the "Agent"), located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, in lawful money of the United States of America and in immediately
available funds, the principal amount of DOLLARS ($ ), or, if less, the unpaid
principal amount of the Secured ---------------------- ---------- Supplemental
Loans made by the Lender pursuant to subsection 9.1(a) of the Credit and
Guarantee Agreement, dated as of May 23, 1996 (as amended, supplemented or
otherwise modified, the "Credit Agreement"), among the Borrower, Remington
Consumer Products Limited, the Lender, the several banks and other financial
institutions from time to time parties thereto, Fleet National Bank and Banque
Nationale de Paris, as co-documentation agents, and the Agent. The principal
amount shall be due and paid in the amounts and on the dates specified in
subsection 9.3 of the Credit Agreement. The Borrower further agrees to pay
interest in like money on the unpaid principal amount of the Secured
Supplemental Loan from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsections 10.3 and 10.5 of the Credit Agreement.
The holder of this Note is authorized to record on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Secured Supplemental Loan made by the Lender pursuant to such Credit Agreement
and the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
and the applicable Eurodollar Rate with respect thereto. Each such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, provided that the failure to make any such recordation or any error in
any such recordation shall not affect the obligations of the Borrower under such
Credit Agreement or this Note.
This Note is (a) one of the Secured Supplemental Notes referred to in the
Credit Agreement, (b) subject to the provisions of the Credit Agreement and (c)
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents (subject to, among other things, the intercreditor agreements
contained in subsection 9.6 of the Credit Agreement). Reference is hereby made
to the Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in respect
thereof.
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Upon the occurrence of any one or more Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided in the
Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
REMINGTON PRODUCTS COMPANY, L.L.C.
By:
Name:
Title:
1
ANNEX III
to
Sixth Amendment
EXHIBIT A-5B to
Credit Agreement
Form of
UNSECURED SUPPLEMENTAL NOTE
$ New York, New York
June ___, 1999
FOR VALUE RECEIVED, the undersigned, REMINGTON PRODUCTS COMPANY, L.L.C., a
Delaware limited liability company (the "Borrower"), hereby unconditionally
promises to pay to the order of (the "Lender") at the office of The Chase
Manhattan Bank (the "Agent"), located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, in lawful money of the United States of America and in immediately
available funds, the principal amount of DOLLARS ($ ), or, if less, the unpaid
principal amount of the Secured Supplemental Loans made by the Lender pursuant
to subsection 9.1(b) of the Credit and Guarantee Agreement, dated as of May 23,
1996 (as amended, supplemented or otherwise modified, the "Credit Agreement"),
among the Borrower, Remington Consumer Products Limited, the Lender, the several
banks and other financial institutions from time to time parties thereto, Fleet
National Bank and Banque Nationale de Paris, as co-documentation agents, and the
Agent. The principal amount shall be due and paid in the amounts and on the
dates specified in subsection 9.3 of the Credit Agreement. The Borrower further
agrees to pay interest in like money on the unpaid principal amount of the
Unsecured Supplemental Loan from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsections 10.3 and 10.5 of the Credit Agreement.
The holder of this Note is authorized to record on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the
Unsecured Supplemental Loan made by the Lender pursuant to such Credit Agreement
and the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
and the applicable Eurodollar Rate with respect thereto. Each such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, provided that the failure to make any such recordation or any error in
any such recordation shall not affect the obligations of the Borrower under such
Credit Agreement or this Note.
This Note is (a) one of the Unsecured Supplemental Notes referred to in the
Credit Agreement, (b) subject to the provisions of the Credit Agreement and (c)
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is not secured by the Loan Documents.
Upon the occurrence of any one or more Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided in the
Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
REMINGTON PRODUCTS COMPANY, L.L.C.
By:
Name:
Title:
Annex IV to
Sixth Amendment
FIRST AMENDMENT
to
Guarantees and Security Documents
FIRST AMENDMENT, dated as of June 9, 1999 (this "Amendment"),
to each of:
(a) the Company Pledge Agreement, dated as of May 23, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Company
Pledge Agreement"), made by Remington Products Company, L.L.C. (the
"Company") in favor of the The Chase Manhattan Bank (formerly known as
Chemical Bank), as administrative agent (in such capacity, the
"Agent");
(b) the Company Security Agreement, dated as of May 23, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Company
Security Agreement"), made by the Company in favor of the Agent; and
(c) the Subsidiaries Guarantee, dated as of May 23, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiaries
Guarantee"), made by each Subsidiary of the Company which is from time
to time party thereto in favor of the Agent;
(collectively, the "Support Documents"). Unless otherwise defined herein,
capitalized terms which are used herein shall have the meanings assigned thereto
in the Support Documents.
W I T N E S S E T H :
WHEREAS, the Company and Remington Consumer Products Limited
(collectively, the "Borrowers") are parties to the Credit Agreement, dated as of
May 23, 1996 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), with the banks and other financial institutions from
time to time parties thereto (the "Lenders"), the Co-Documentation Agents named
therein and the Agent;
WHEREAS, the Borrowers have requested that the Agent and the
Lenders agree to amend certain provisions of the Credit Agreement and it is a
condition to the agreement of the Lenders to amend such provisions of the Credit
Agreement that each party hereto shall have executed and delivered this
Amendment;
WHEREAS, each party hereto (other than the Agent) is a
Subsidiary or an Affiliate of the Borrowers and will obtain material benefits
from the contemplated amendments of the Credit Agreement;
NOW THEREFORE, in consideration of the premises contained
herein, the parties hereto agree as follows:
1. Amendment of Subsidiaries Guarantee. The Subsidiaries
Guarantee hereby is amended by deleting in its entirety the definition of the
term "Obligations" contained in Section 1 thereof and by substituting therefor
the following:
"Obligations": the collective reference to all obligations and
liabilities of the Borrowers in respect of the unpaid principal of and
interest on the Loans, the Letters of Credit (including,without
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limitation, any Reimbursement Obligations) and all other obligations
and liabilities of each of the Borrowers to the Agent or the Lenders
(including, without limitation, interest accruing after the maturity
of the Loans and L/C Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any of the
Borrowers, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Notes, the Letters of Credit, the
other Loan Documents or any other document made, delivered or given in
connection therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Agent or to the Lenders that are required to be paid
by the Borrowers or the Guarantors pursuant to the terms of the Credit
Agreement or this Agreement or any other Loan Document).
2. Amendment of Company Pledge Agreement and Company Security
Agreement. Each of the Company Pledge Agreement and the Company Security
Agreement hereby is amended by deleted in its entirety the definition of the
term "Obligations" contained in Section 1 thereof and by substituting therefor
the following:
"Obligations": the collective reference to all obligations and
liabilities of the Company (including, without limitation, those
arising pursuant to Section 15 of the Credit Agreement) in respect of
the unpaid principal of and interest on the Loans, the Letters of
Credit (including, without limitation, any Reimbursement Obligations)
and all other obligations and liabilities of each of the Borrowers to
the Agent or the Lenders or (in the case of any Lender Hedging
Agreement) any affiliate thereof (including, without limitation,
interest accruing after the maturity of the Loans and L/C Obligations
and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, relating to any of the Borrowers, whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, the Notes,
the Letters of Credit, the other Loan Documents, any Lender Hedging
Agreement or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Agent, to the Lenders or the relevant affiliate that are
required to be paid by the Borrowers or the Guarantors pursuant to the
terms of the Credit Agreement or this Agreement or any other Loan
Document or the relevant Lender Hedging Agreement).
3. Amendment of Support Documents. Each of the Support
Documents hereby is amended by inserting in Section 1 thereof, in its proper
alphabetical order, the following new defined term:
"Lender Hedging Agreements": all short-term currency futures,
options and similar hedging arrangements entered into by a Borrower
with any Lender (or any affiliate of any Lender) in the ordinary course
of business to provide for protection against fluctuations in currency
exchange rates (either generally or under specific contingencies).
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4. Conditions to Effectiveness. This Amendment shall become
effective on the date (such date, the "Amendment Closing Date") upon which:
(a) the Agent receives counterparts hereof, executed and delivered by a
duly authorized officer of each signatory hereto; and
(b) the "Amendment Effective Date" occurs under (and as such term is
defined in) the Sixth Amendment, dated as of the date hereof, to the
Credit Agreement.
5. Continuing Effect of Support Documents. This Amendment
shall not constitute a waiver or amendment of any other provision of any Support
Document (or of any other Guarantee or Security Document) not expressly referred
to herein and shall not be construed as a waiver or consent to any further or
future action on the part of a Borrower that would require a waiver or consent
of the Agent or the Lenders.
6. Counterparts. This Amendment may be executed by the parties
hereto in any number of counterparts, and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective duly authorized
officers as of the date first above written.
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
Title:
REMINGTON PRODUCTS COMPANY, L.L.C.
By:
Title:
VESTAR XXXXXX CORP.
By:
Name:
Title:
4
VESTAR RAZOR CORP.
By:
Name:
Title:
RPI CORP.
By:
Name:
Title:
REMINGTON RAND CORPORATION
By:
Name:
Title:
REMINGTON CORPORATION, L.L.C.
By:
Name:
Title:
REMINGTON CAPITAL CORP.
By:
Name:
Title:
CREDIT AND GUARANTEE AGREEMENT, dated as of May 23, 1996,
among:
(a) REMINGTON PRODUCTS COMPANY, L.L.C., a Delaware limited liability company
(the "Company");
(b) REMINGTON CONSUMER PRODUCTS LIMITED, a corporation organized and
existing under the laws of the United Kingdom (the "UK Borrower";
together with the Company, the "Borrowers");
(c) the Lenders (as hereinafter defined) from time to time parties to this
Agreement, including the Issuing Bank;
(d) FLEET NATIONAL BANK and BANQUE NATIONALE DE PARIS, as Co- Documentation
Agents (in such capacity, the "Co-Documentation Agents"); and
(e) CHEMICAL BANK, a New York banking corporation, as administrative agent
(in such capacity, the "Agent") for the Lenders hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%.
"ABR Loans": Loans denominated in Dollars the rate of interest
applicable to which is based upon the ABR.
"Account": as defined in "Eligible Domestic Accounts" or in
"Eligible UK Accounts," as the context shall require.
"Account Debtor": with respect to any Account, the obligor
with respect to such Account.
"Adjusted Domestic Sterling Rate": with respect to any
Domestic Sterling Loan for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the product of (a) the Domestic Sterling Rate in effect for such
Interest Period and (b) MLA Cost.
"Adjusted LIBO Rate": with respect to any Eurodollar Loan for
any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO
Rate in effect for such Interest Period and (b) Statutory Reserves.
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"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. Unless
otherwise qualified, all references to an "Affiliate" or to
"Affiliates" in this Agreement shall refer to an Affiliate or
Affiliates of the Company.
"Agent": has the meaning assigned to such term in the preamble
hereto.
"Agreement": this Credit and Guarantee Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Advance Rate": with respect to (a) Eligible
Domestic Accounts, 85% and (b) Eligible Domestic Inventory, 60%
(collectively, the "Basic Advance Rates"); provided that, during each
period set forth below, the Basic Advance Rates shall be increased to
the extent necessary to cause the Domestic Borrowing Base to be
increased by the amount equal to the "Increase Amount" set forth below
opposite such period:
Period Increase Amount
--------------------- ---------------
01/01/99 - 12/15/99 $10,000,000
12/16/99 - 03/15/00 $0
03/16/00 - 12/15/00 $10,000,000
12/16/00 - 03/15/01 $0
03/16/01 - 06/29/01 $10,000,000
Thereafter $0
"Applicable Margin": for each Type of Loan, or with respect to
commitment fees, as applicable, the rate per annum set forth under the
relevant column heading below, based upon the Leverage Ratio in effect
from time to time as described below:
Eurodollar, Domestic
Sterling and Sterling ABR Fee
Base Rate Loans Rate Loans Percentage
---------------- ------- --------
Leverage Ratio of greater than 2.75% 1.50% 0.50%
or equal to 5.00 to 1.00
Leverage Ratio of less than 2.50% 1.25% 0.50%
5.00 to 1.00 and greater than
or equal to 4.00 to 1.00
Leverage Ratio of less than 2.25% 1.00% 0.50%
4.00 to 1.00 and greater than
or equal to 3.50 to 1.00
Leverage Ratio of less than 2.00% 0.75% 0.375%
3.50 to 1.00
3
Notwithstanding the foregoing, (x) at all times prior to the date upon
which the Company delivers the financial statements required pursuant
to subsection 13.4(b) for its fiscal quarter ended June 30, 1996, the
Company shall be deemed (for purposes of this definition only) to have
a Leverage Ratio of greater than 5.00 to 1.00, (y) the "Applicable
Margin" with respect to Secured Supplemental Loans shall at all times
be (i) in the case of Eurodollar Loans, 6% per annum and (ii) in the
case of ABR Rate Loans, 4.75% per annum and (z) the "Applicable Margin"
with respect to the Unsecured Supplemental Loans shall at all times be
(i) in the case of Eurodollar Loans, 1% per annum and (ii) in the case
of ABR Rate Loans, 0% per annum. Any change in the Applicable Margin
shall become effective on the date which is three Business Days
following the date of delivery by the Company of its financial
statements for the relevant fiscal period in accordance with the
provisions of subsection 13.4(a) or (b), as the case may be.
"Application": with respect to any requested Letter of Credit,
an application, in such form as the relevant Issuing Bank may specify
from time to time, requesting the Issuing Bank to issue such Letter of
Credit.
"Assignee": as defined in subsection 18.6(c).
"Attributable Debt": in respect of a Sale and Leaseback
Transaction, at the time of determination, the present value
(discounted at the actual rate of interest implicit in such
transaction) of the obligation of the lessee for net rental payments
during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has
been extended or may, at the option of the lessor, be extended).
"Available Domestic Revolving Credit Commitment": as to any
Domestic Lender at any time, the amount equal to the excess (if any) of
(a) the amount of such Domestic Lender's Domestic Revolving Credit
Commitment then in effect over (b) the amount equal to the sum of (i)
the aggregate principal amount of Domestic Revolving Credit Loans of
such Domestic Lender which are then outstanding and (ii) such Domestic
Lender's Commitment Percentage of the L/C Obligations then outstanding.
"Available UK Revolving Credit Commitment": as to any UK
Lender at any time, the amount equal to the excess (if any) of (a) the
amount of such UK Lender's UK Revolving Credit Commitment then in
effect over (b) the amount equal to the aggregate principal amount of
UK Revolving Credit Loans of such UK Lender which are then outstanding.
"Board": the Board of Governors of the Federal Reserve System
of the United States.
"Borrowers": as defined in the recitals hereto.
"Business Day": a day other than (a) with respect to the
Domestic Loans, a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and
(b) with respect to any Eurodollar Loans and the UK Loans, a day on
which banks are not open in London, England or otherwise for dealings
in Dollar or Pounds Sterling (as applicable) deposits in the London
interbank market.
4
"Capital Expenditures": for any period, the sum of all amounts
that would, in accordance with GAAP, be included as additions to
property, plant and equipment and other capital expenditures on a
consolidated statement of cash flows for the Company and its
Subsidiaries for such period. Notwithstanding the foregoing, the term
"Capital Expenditures" shall not include (a) capital expenditures in
respect of the reinvestment of sales proceeds, insurance proceeds and
condemnation proceeds received by the Company and its Subsidiaries in
connection with the sale, transfer or other disposition of the
Company's business units, assets or properties, if such reinvestment
(including, in the case of insurance proceeds, reinvestment in the form
of restoration or replacement of damaged property) is not considered a
"Prepayment Event" as contemplated in the definition of such term and
(b) capital expenditures which, after giving effect to the making
thereof, would not cause the Permitted Excess Cash Flow Basket to be
less than zero.
"Capital Lease Obligations": of any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified
and accounted for as capital leases on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Interest Expense": for any period, the gross interest
expense of the Company and its Subsidiaries for such period excluding
any fees (other than the commitment fee and all fees, charges and
commissions relating to the Letters of Credit) and expenses payable or
amortized during such period by the Company and its Subsidiaries in
connection with the Recapitalization less gross cash interest income of
the Company and its Subsidiaries for such period and excluding the
effects of (i) amortization of debt discounts, (ii) deferred financing
fees payable in connection with the Recapitalization and (iii) imputed
interest expense on deferred compensation arrangements, in each case
determined on a consolidated basis in accordance with GAAP, excluding
any interest expense accruing during such period and not paid in cash
during such period. For all purposes hereunder, the Cash Interest
Expense of the Company and its Subsidiaries shall be deemed to be
$4,333,333 for each of the fiscal quarters ending on each of December
31, 1995, March 31, 1996 and June 30, 1996.
"Change in Control": the occurrence of any of the following:
5
(i) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or
substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act of 1934, as
amended), other than Vestar;
(ii) the adoption of a plan relating to the
liquidation or dissolution of the Company;
(iii) prior to the consummation of an initial public
offering of equity securities of the Company, the consummation
of any transaction (including, without limitation, any merger
or consolidation) the result of which is that (a) Vestar
ceases to have sufficient voting power (including, without
limitation, by contractual arrangement) to elect a majority of
the members of the Management Committee or (b) Vestar sells,
grants an option to sell, pledges or otherwise disposes of
more than 20% of the amount of its investment in the Company
as of the Closing Date (other than in connection with such an
initial public offering and sales or other dispositions of
Capital Stock that do not result in Vestar ceasing to
beneficially own such Capital Stock);
(iv) following the consummation of an initial public
offering of equity securities of the Company, the Company
becomes aware (by way of a report or other filing with the
Securities and Exchange Commission or otherwise) that any
"person" (as used in Section 13(d)(3) of the Exchange Act of
1934, as amended), other than Vestar, has become the
beneficial owner, directly or indirectly, of (a) more than 35%
of the voting power of the voting Capital Stock of the Company
or (b) more of the voting power of such voting Capital Stock
than is beneficially owned by Vestar;
(v) the first day on which the Company fails to own
100% of the issued and outstanding equity interests in
Remington Capital Corp., other than by reason of a merger of
Remington Capital Corp. with and into a corporate successor to
the Company, or in any such successor; and
(vi) the first day on which more than one-third of
the members of the Management Committee are not Continuing
Members;
provided, however, that Vestar shall be deemed to be the beneficial
owner of the voting power of voting common stock if (a) Vestar retains
the right (by contractual arrangement or otherwise) to vote such
Capital Stock and (b) Vestar beneficially owns at least 20% of the
common Equity Interests of the Company (excluding any equity interests
which Vestar may be deemed to beneficially own solely because it has
the contractual right to vote such Capital Stock). For purposes of this
definition only, the term "Capital Stock" shall mean (w) in the case of
a corporation, corporate stock, (x) in the case of an association or
business entity, any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, (y) in
the case of a partnership, partnership interests (whether general or
limited) and (z) any other interest or participation that confers on a
6
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person; and the term "Equity
Interests" shall mean Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Chemical": Chemical Bank.
"Closing Date": the date on which the conditions precedent set
forth in subsection 12.2 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Company and its Subsidiaries,
now owned or hereinafter acquired, upon which a Lien is purported to be
created by any Security Document.
"Commercial Letter of Credit": as defined in subsection
4.1(b)(i).
"Commitment": as to any Lender, its Domestic Revolving Credit
Commitment, its Domestic Term Loan Commitment, its UK Revolving Credit
Commitment, its UK Term Loan Commitment, its Secured Supplemental
Commitment or its Unsecured Supplemental Commitment, as the context
shall require; collectively, such Lender's "Commitments."
"Commitment Percentage": as to any Lender at any time, the
percentage which the Commitments of such Lender then constitutes of the
Commitments of all Lenders (or, at any time after the Commitments shall
have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Domestic Term Loans, Domestic
Revolving Credit Exposure, UK Term Loans, UK Revolving Credit Exposure,
Secured Supplemental Loans and Unsecured Supplemental Loans then
outstanding constitutes of the aggregate principal amount of the
Domestic Term Loans, Domestic Revolving Credit Exposure, UK Term Loans,
UK Revolving Credit Exposure, Secured Supplemental Loans and Unsecured
Supplemental Loans then outstanding); provided that, with respect to
the Commitment of such Lender to provide any particular Loans and/or
other extensions of credit, the term "Commitment Percentage" shall mean
the percentage which the Commitment of such Lender to provide such
Loans and/or other extensions of credit then constitutes of the
Commitments of all Lenders to provide such Loans and/or other
extensions of credit (or, at any time after such Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Domestic Term Loans, Domestic Revolving Credit
Exposure, UK Term Loans, UK Revolving Credit Exposure, Secured
Supplemental Loans or Unsecured Supplemental Loans, as the case may be,
then outstanding constitutes of the aggregate principal amount of the
Domestic Term Loans, Domestic Revolving Credit Exposure, UK Term Loans,
UK Revolving Credit Exposure, Secured Supplemental Loans or Unsecured
Supplemental Loans, respectively, then outstanding).
7
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"Company": as defined in the preamble.
"Company Mortgage": the Mortgage to be executed and delivered
by the Company, in form and substance reasonably satisfactory to the
Agent, as the same may be amended, supplemented or otherwise modified
from time to time.
"Company Pledge Agreement": the Company Pledge Agreement to be
executed and delivered by the Company, substantially in the form of
Exhibit C-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"Company Security Agreement": the Security Agreement to be
executed and delivered by the Company, substantially in the form of
Exhibit C-2, as the same may be amended, supplemented or otherwise
modified from time to time.
"Condemnation Proceeds" shall have the meaning assigned to
such term in subsection 18.8(b).
"Confidential Information Memorandum": the Confidential
Information Memorandum of the Company dated April 1996.
"Continuing Members": as of any date of determination, any
member of the Management Committee who (i) was a member of the
Management Committee on the date hereof or (ii) was nominated for
election to the Management Committee with the approval of at least a
majority of the Continuing Members who were members of the Management
Committee at the time of such nomination or election.
"control": the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled"
shall have meanings correlative thereto.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Current Assets": as of any date, the total assets (excluding
cash and cash equivalents) that would properly be classified as current
assets of the Company and its Subsidiaries as of such date determined
on a consolidated basis in accordance with GAAP.
8
"Current Liabilities": as of any date, the total liabilities
(excluding Indebtedness for borrowed money) that would properly be
classified as current liabilities of the Company and its Subsidiaries
as of such date determined on a consolidated basis in accordance with
GAAP.
"Default": any of the events specified in Section 16, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Borrowing Base": as of any date of determination, an
amount equal to the sum, without duplication of (a) the Applicable
Advance Rate of the total of Eligible Domestic Accounts of the Company
and its Domestic Subsidiaries as of such date less the Domestic
Dilution Reserve then in effect and (b) the Applicable Advance Rate of
the Eligible Domestic Inventory of the Company and its Domestic
Subsidiaries as of such date. For purposes of determining the Domestic
Borrowing Base from time to time, Eligible Domestic Accounts and
Eligible Domestic Inventory of the Company and its Domestic
Subsidiaries shall be determined from time to time by the Agent by
reference to the Domestic Borrowing Base Certificate then most recently
delivered to it; provided that the information contained in such
Domestic Borrowing Base Certificate shall not be conclusive in
calculating the amount of Eligible Domestic Accounts and Eligible
Domestic Inventory and, after consultation with the Company, the Agent
shall be entitled to adjust the amounts and other information contained
therein to the extent that it believes in its reasonable credit
judgment that such adjustment is appropriate to reflect (x) the then
current amounts of Eligible Domestic Inventory and Eligible Domestic
Accounts or (y) changes in the business practices of the Company and
its Domestic Subsidiaries (or newly disclosed matters with respect to
them).
"Domestic Borrowing Base Certificate": a certificate, in
substantially the form attached hereto as Exhibit I-1, with such
changes as the Agent may from time to time reasonably request for the
purpose of monitoring the Domestic Borrowing Base.
"Domestic Dilution Factors": with respect to the Company and
its Domestic Subsidiaries at any date, the aggregate Dollar amount
equal to the sum of (a) any credit memos, adjustments, returns, and
allowances (such as for co-op advertising), (b) cash discounts, (c) bad
debt write-offs, (d) other non-cash credits, in each case applied to an
Account Debtor's balance in respect of Accounts domiciled in the United
States.
"Domestic Dilution Ratio": at any date, the amount (expressed
as a percentage) equal to (a) the aggregate amount of the Domestic
Dilution Factors for the 12 most recently ended fiscal months divided
by (b) total gross credit sales of the Company and its Domestic
Subsidiaries for such 12 fiscal months.
9
"Domestic Dilution Reserve": with respect to the Company and
its Domestic Subsidiaries, at any date which occurs (a) during the
period from March 1st through November 30th of any year, the amount
equal to the Domestic Dilution Ratio times the amount of Eligible
Domestic Accounts at such date and (b) during any other period, the
amount equal to the sum of (a) $1,500,000 and (b) the amount equal to
the Domestic Dilution Ratio times the amount of Eligible Domestic
Accounts at such date.
"Domestic Lender": at any date, each bank or other financial
institution which holds any Domestic Term Loan Commitment (or, after
the Closing Date, Domestic Term Loans) or Domestic Revolving Credit
Loan Commitment (or, at any time after the Domestic Revolving Credit
Loan Commitment has terminated, Domestic Revolving Credit Exposure) on
such date; collectively, the "Domestic Lenders".
"Domestic Loan": a Domestic Revolving Credit Loan or Domestic
Term Loan, as the context shall require; collectively, the "Domestic
Loans."
"Domestic Revolving Credit Commitment": as to any Domestic
Lender, the obligation of such Domestic Lender to make Domestic
Revolving Credit Loans and to participate in Domestic Swing Line Loans
made to, and to participate in Letters of Credit issued for the account
of, the Company hereunder in an aggregate principal and/or face amount
at any one time outstanding not to exceed the amount set forth opposite
such Domestic Lender's name on Schedule I under the heading "Domestic
Revolving Credit Commitments", as such amount may be reduced from time
to time in accordance with the provisions of this Agreement.
"Domestic Revolving Credit Exposure": at any date, (a) as to
all Domestic Lenders, the amount equal to the aggregate outstanding
principal amount of all Domestic Revolving Credit Loans, all Domestic
Swing Line Loans and all L/C Obligations then outstanding and (b) as to
any Domestic Lender, the amount equal to (i) the aggregate outstanding
principal amount of all then-outstanding Domestic Revolving Credit
Loans made by such Domestic Lender and (ii) such Domestic Lender's
Commitment Percentage of the then-outstanding aggregate principal
amount of all L/C Obligations and Domestic Swing Line Loans.
"Domestic Revolving Credit Loans": as defined in subsection
3.1.
"Domestic Revolving Credit Note": as defined in subsection
3.4(d).
"Domestic Sterling Loan": any Loan bearing interest based upon
a Domestic Sterling Rate.
"Domestic Sterling Rate": with respect to any Domestic
Sterling Loan for any Interest Period, (a) if at least two offered
rates for Pounds Sterling deposits for a period comparable to such
Interest Period appear on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on the first day of such Interest Period, the
arithmetic mean of all such offered rates and (b) if fewer than two
such offered rates so appear on the Reuters Screen LIBO Page, the
arithmetic mean, determined by the Agent based on quotations provided
10
by each of the Reference Lenders, of the respective rates per annum at
which Pounds Sterling deposits approximately equal to each Reference
Lender's respective portion of the applicable Domestic Sterling Loan
and for a period comparable to the applicable Interest Period are
offered to the principal London office of such Reference Lender in
immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, on the first day of such
Interest Period. The term "Reuters Screen LIBO Page" shall mean the
display screen designated "LIBO Page" on the Reuters Monitor Money
Rates Service (or such other page as may replace such page on such
service for the purpose of displaying comparable rates).
"Domestic Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction within the United States.
"Domestic Swing Line Commitment" of the Domestic Swing Line
Lender at any date shall mean the obligation of the Domestic Swing Line
Lender to make Domestic Swing Line Loans pursuant to subsection 5.1 in
the amount referred to therein.
"Domestic Swing Line Lender" shall mean Chemical.
"Domestic Swing Line Loan Participation Certificate" shall
mean a certificate, substantially in the form of Exhibit J-1.
"Domestic Swing Line Loans" shall have the meaning assigned to
such term in subsection 5.1(a).
"Domestic Swing Line Note" shall have the meaning assigned to
such term in subsection 5.1(b).
"Domestic Term Loan": as defined in subsection 2.1.
"Domestic Term Loan Commitment": as to any Domestic Lender,
the obligation of such Domestic Lender to make Domestic Term Loans to
the Company hereunder on the Closing Date in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Domestic Lender's name on Schedule I under the heading
"Domestic Term Loan Commitments", as such amount may be reduced from
time to time in accordance with the provisions of this Agreement.
"Domestic Term Loan Notes": as defined in subsection 2.4(d).
"EBITDA": for any period, without duplication, the sum of (a)
Net Income for such period, (b) all Federal, state, local and foreign
income taxes (including, in any event, any dividends or distributions
paid in accordance with the provisions of subsection 14.7(d)) deducted
in determining such Net Income, (c) interest expense deducted in
determining such Net Income, (d) depreciation, amortization and other
non-cash expenses and charges (including any charges resulting from the
write-up of inventory and other assets and including any foreign
currency translation losses resulting from the repayment on the Closing
Date of loans owing from the UK Borrower to the Company) deducted in
11
determining such Net Income (and not already excluded from the
definition of the term "Net Income") and (e) fees and expenses in
connection with the Recapitalization which have been deducted in
determining Net Income for such period. For all purposes hereunder,
EBITDA of the Company and its Subsidiaries shall be deemed to be (x)
$17,500,000 for the fiscal quarter ended December 31, 1995, (y)
$600,000 for the fiscal quarter ended March 31, 1996 and (z) $7,400,000
for the fiscal quarter ended June 30, 1996.
"Eligible Domestic Accounts": with respect to the Company and
its Domestic Subsidiaries at any date, the amount equal to the
aggregate gross amount of accounts receivable ("Accounts") reflected on
the receivable aging detail or other analogous statement (without
reduction for reserves) of the Company or such Domestic Subsidiary, as
the case may be, on such date that have been invoiced and represent the
bona fide sale and delivery of merchandise, in each case in the
ordinary course of business of the Company or such Domestic Subsidiary
in connection with its trade operations. Unless otherwise approved from
time to time in writing by the Agent, no Account shall be an Eligible
Domestic Account if:
(a) (i) the Company and/or a Domestic Subsidiary
thereof shall not be sole payee with respect to, or otherwise
shall not have sole lawful and absolute title to, such Account
or (ii) the sale to the Account Debtor giving rise to such
Account is on a xxxx-and-hold, guaranteed sale,
sale-and-return, ship-and-return, sale on approval or
consignment or other similar basis or made pursuant to any
other written agreement providing for repurchase or return of
any merchandise which has been claimed to be defective or
otherwise unsatisfactory (other than for breaches of
warranties provided in favor of consumers) or (iii) the goods
giving rise to such Account have not been shipped and
delivered to and accepted by the Account Debtor, or the
transaction giving rise to such Account otherwise does not
represent a completed sale; or
(b) such Account arises out of a sale made by the
Company or any Domestic Subsidiary thereof to an Affiliate; or
(c) (i) such Account (without giving effect to any
netting for credits) is unpaid more than 60 days from the due
date thereof or is unpaid for more than 180 days from the
invoice date thereof or (ii) such Account has been written off
the books of such person or has been otherwise designated as
uncollectible or (iii) more than 50% in face amount of all
Accounts of the same Account Debtor and its known affiliates,
taken together, are ineligible pursuant to clauses (i) and
(ii) above or (iv) a check, promissory note, draft, trade
acceptance or other instrument for the payment of money with
respect to all or any part of such Account has been received,
presented for payment and returned uncollected for any reason
or (v) the Account Debtor with respect to such Account is in
the "legal" aging category, is insolvent or the subject of any
bankruptcy or insolvency proceeding of any kind; or
12
(d) the Account is not payable in Dollars or the
Account Debtor is not incorporated under the laws of the
United States of America or any State thereof or the Account
Debtor is located outside (or has its principal place of
business or substantially all of its assets outside) the
continental United States, except (in any such case) to the
extent the Account is supported by an irrevocable letter of
credit reasonably satisfactory to the Agent (as to form,
substance and issuer) and assigned to and directly drawable by
the Agent; provided that up to $300,000 at any one time
outstanding of Accounts which would not be Eligible Domestic
Accounts pursuant to this clause (d) may be included as
Eligible Domestic Accounts at the discretion of the Company;
or
(e) the Account Debtor with respect to such Account
(i) is a creditor of the Company or any of its Domestic
Subsidiaries, (ii) has or has asserted a right of setoff
against the Company or any of its Domestic Subsidiaries, (iii)
has disputed its liability (whether by chargeback or
otherwise) or made any claim with respect to the Account which
has not been resolved or (iv) the Account is subject to any
adverse security deposit, progress payment or other similar
advance made by or for the benefit of the Account Debtor or
(v) such Account relates to amounts that the Company or any of
its Domestic Subsidiaries must remit to a taxing authority
(such as VAT), in each case, without duplication, to the
extent of the amount owed by the Company and its Domestic
Subsidiaries to the Account Debtor, the amount of such actual
or asserted right of setoff, the amount of such dispute or
claim, the amount of such adverse security deposit, progress
payment or other similar advance or the amount owed to such
taxing authority, as the case may be; or
(f) the Account does not comply in all material
respects with all requirements of applicable law, including
without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board
of Governors of the Federal Reserve System; or
(g) the Account Debtor with respect to such Account
is an independent authorized service center; or
(h) (i) such Account (other than any Account which is
owing from a Governmental Authority which is subject to the
Assignment of Claims Act of 1940, as amended) is not subject
to a valid and perfected first priority Lien in favor of the
Agent (for the benefit of the Lenders), subject to no other
Liens (other than the Liens, if any, permitted by the Loan
Documents to encumber such Account) or (ii) such Account does
not otherwise conform in all material respects to the
representations and warranties contained in the Loan
Documents; or
(i) the Account Debtor with respect to such Account
is the United States of America or any department, agency or
instrumentality thereof, unless the Company or the relevant
Domestic Subsidiary, as the case may be, duly assigns its
rights to payment of such Account to the Agent pursuant to the
Assignment of Claims Act of 1940, as amended, which assignment
and related documents and filings shall be in form and
13
substance reasonably satisfactory to the Agent; provided that
up to $450,000 at any one time outstanding of Accounts which
would not be Eligible Domestic Accounts pursuant to this
clause (i) may be included as Eligible Domestic Accounts at
the discretion of the Company.
"Eligible Domestic Inventory": shall mean, with respect to the
Company and its Domestic Subsidiaries at any date, the amount equal to
the value (determined in accordance with the Inventory Valuation
Standard and expressed in Dollars) of all inventory located within the
United States of the Company or any of its Domestic Subsidiaries (the
"Inventory"), net of any Inventory Reserves. Unless otherwise approved
from time to time in writing by the Agent, no Inventory shall be
"Eligible Domestic Inventory" if:
(a) such item of Inventory is comprised of packing,
packaging and/or shipping supplies or materials; or
(b) such item of Inventory is held on consignment, is
owned by the Company or any of its Domestic Subsidiaries and
has been consigned to other Persons, or is located at, or in
the possession of, a vendor of the Company or such Domestic
Subsidiary, or is in transit to or from, or held or stored by,
third parties; or
(c) such item of Inventory (i) is damaged or not in
good condition (to the extent not provided for by Inventory
Reserves as described above), (ii) is a sample in the retail
stores or for marketing purposes, or (iii) does not meet all
material standards imposed by any Governmental Authority
having regulatory authority over such item of Inventory, its
use or its sale or (iv) shall be a discontinued item or
otherwise be believed by the Agent (using its commercially
reasonable judgment, after consultation with the Company) to
be not readily usable or salable under the customary terms
upon which it usually is sold or at prices approximating at
least the cost thereof (after giving effect to any write-downs
and any Inventory Reserves applicable thereto); or
(d) the Company or its relevant Domestic Subsidiary,
as the case may be, shall not have good and marketable title
as sole owner of such item of Inventory or any claim disputing
the title of the Company or the relevant Subsidiary, as the
case may be, to, or right to possession of or dominion over,
such item of Inventory shall have been asserted; or
(e) any representation or warranty contained in this
Agreement or in any other Loan Document applicable to either
Inventory in general or to any such specific item of Inventory
has been breached in any material respect with respect to such
item of Inventory; or
(f) such item of Inventory is evidenced by an
Account; or
14
(g) such item of Inventory is subject to any
licensing, patent, royalty, trademark, trade name or copyright
agreements with any third party from whom the Company or any
of its Subsidiaries has received notice of a dispute in
respect of any such agreement to the extent that such dispute
could reasonably be expected to prevent the sale of such item
of Inventory; or
(h) such item of Inventory is not assignable or a
first priority, perfected security interest in such item of
Inventory has not been obtained by the Agent pursuant to the
Security Agreements; or
(i) such item of Inventory is subject to any Lien
whatsoever, other than Liens which are permitted to encumber
Inventory pursuant to the Loan Documents; or
(j) in the case of any determination of the Domestic
Borrowing Base made after the date which is three months after
the Closing Date, such item of Inventory is located on a
leasehold (including, without limitation, a leased department
of a retail store) as to which the lessor has not entered into
a landlord's waiver and consent, reasonably satisfactory in
form and substance to the Agent, providing a waiver of any
applicable Lien and providing the Agent with the right to
receive notice of default, the right to repossess such item of
Inventory (without the making of any payment to such landlord)
at any time upon the occurrence or during the continuance of a
Default or Event of Default and such other rights as may be
reasonably acceptable to the Agent; provided that such items
of Inventory shall be deemed not to constitute Eligible
Domestic Inventory only to the extent that the aggregate
amount of such Inventory located as such location is in excess
of $100,000.
"Eligible UK Accounts": with respect to the UK Borrower at any
date, the amount equal to the aggregate gross amount of accounts
receivable ("Accounts") reflected on its receivable aging detail or
other analogous statement (without reduction for reserves) of the UK
Borrower on such date that have been invoiced and represent the bona
fide sale and delivery of merchandise, in each case in the ordinary
course of business of the UK Borrower in connection with its trade
operations. Unless otherwise approved from time to time in writing by
the Agent, no Account shall be an Eligible UK Account if:
(a) (i) the UK Borrower shall not be sole payee with
respect to, or otherwise shall not have sole lawful and
absolute title to, such Account or (ii) the sale to the
Account Debtor giving rise to such Account is on a
xxxx-and-hold,guaranteed sale, sale-and-return,
ship-and-return, sale on approval or consignment or other
similar basis or made pursuant to any other written agreement
providing for repurchase or return of any merchandise which
has been claimed to be defective or otherwise unsatisfactory
(other than for breaches of warranties provided in favor of
consumers) or (iii) the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account
Debtor, or the transaction giving rise to such Account
otherwise does not represent a completed sale; or
15
(b) such Account arises out of a sale made by the UK
Borrower to an Affiliate; or
(c) (i) such Account (without giving effect to any
netting for credits) is unpaid more than 60 days from the due
date thereof or is unpaid for more than 180 days from the
invoice date thereof or (ii) such Account has been written off
the books of such person or has been otherwise designated as
uncollectible or (iii) more than 50% in face amount of all
Accounts of the same Account Debtor and its known affiliates,
taken together, are ineligible pursuant to clauses (i) and
(ii) above or (iv) a check, promissory note, draft, trade
acceptance or other instrument for the payment of money with
respect to all or any part of such Account has been received,
presented for payment and returned uncollected for any reason
or (v) the Account Debtor with respect to such Account is in
the "legal" aging category, is insolvent or the subject of any
bankruptcy or insolvency proceeding of any kind; or
(d) the Account is not payable in Pounds Sterling or
the Account Debtor is not incorporated under the laws of the
United Kingdom or the Account Debtor is located outside (or
has its principal place of business or substantially all of
its assets outside) the United Kingdom, except (in any such
case) to the extent the Account is either (x) supported by an
irrevocable letter of credit reasonably satisfactory to the
Agent (as to form, substance and issuer) and assigned to and
directly drawable by the Agent or (y) insured by a policy
reasonably satisfactory (as to issuer and terms) to the Agent;
or
(e) the Account Debtor with respect to such Account
(i) is a creditor of the UK Borrower, (ii) has or has asserted
a right of setoff against the UK Borrower, (iii) has disputed
its liability (whether by chargeback or otherwise) or made any
claim with respect to the Account which has not been resolved
or (iv) the Account is subject to any adverse security
deposit, progress payment or other similar advance made by or
for the benefit of the Account Debtor or (v) such Account
relates to amounts that the UK Borrower must remit to a taxing
authority (such as VAT), in each case, without duplication, to
the extent of the amount owed by the UK Borrower to the
Account Debtor, the amount of such actual or asserted right of
setoff, the amount of such dispute or claim, the amount of
such adverse security deposit, progress payment or other
similar advance or the amount owed to such taxing authority,
as the case may be; or
(f) the Account does not comply in all material
respects with all requirements of applicable law; or
(g) the Account Debtor with respect to such Account
is an independent authorized service center; or
16
(h) (i) such Account is not subject to a valid and
perfected first priority Lien in favor of the Agent (for the
benefit of the Lenders), subject to no other Liens (other than
the Liens, if any, permitted by the Loan Documents to encumber
such Account) or (ii) such Account does not otherwise conform
in all material respects to the representations and warranties
contained in the Loan Documents.
"Eligible UK Inventory": shall mean, with respect to the UK
Borrower at any date, the amount equal to the value (determined in
accordance with the Inventory Valuation Standard and expressed in
Pounds Sterling) of all inventory located within the United Kingdom of
the UK Borrower (the "Inventory"), net of any Inventory Reserves.
Unless otherwise approved from time to time in writing by the Agent, no
Inventory shall be "Eligible UK Inventory" if:
(a) such item of Inventory is comprised of packing,
packaging and/or shipping supplies or materials; or
(b) such item of Inventory is held on consignment, is
owned by the UK Borrower and has been consigned to other
Persons, or is located at, or in the possession of, a vendor
of the UK Borrower, or is in transit to or from, or held or
stored by, third parties; or
(c) such item of Inventory (i) is damaged or not in
good condition (to the extent not provided for by Inventory
Reserves as described above), (ii) is a sample in the retail
stores or for marketing purposes, or (iii) does not meet all
material standards imposed by any Governmental Authority
having regulatory authority over such item of Inventory, its
use or its sale or (iv) shall be a discontinued item or
otherwise be believed by the Agent (using its commercially
reasonable judgment, after consultation with the Company) to
be not readily usable or salable under the customary terms
upon which it usually is sold or at prices approximating at
least the cost thereof (after giving effect to any write-downs
and any Inventory Reserves applicable thereto); or
(d) the UK Borrower shall not have good and
marketable title as sole owner of such item of Inventory or
any claim disputing the title of the UK Borrower to, or right
to possession of or dominion over, such item of Inventory
shall have been asserted; or
(e) any representation or warranty contained in this
Agreement or in any other Loan Document applicable to either
Inventory in general or to any such specific item of Inventory
has been breached in any material respect with respect to such
item of Inventory; or
(f) such item of Inventory is evidenced by an
Account; or
(g) such item of Inventory is subject to any
licensing, patent, royalty, trademark, trade name or copyright
agreements with any third party from whom the UK Borrower has
received notice of a dispute in respect of any such agreement
to the extent that such dispute could reasonably be expected
to prevent the sale of such item of Inventory; or
17
(h) such item of Inventory is not assignable or a
first priority, perfected security interest in such item of
Inventory has not been obtained by the Agent pursuant to the
Security Agreements; or
(i) such item of Inventory is subject to any Lien
whatsoever, other than Liens which are permitted to encumber
Inventory pursuant to the Loan Documents; or
(j) in the case of any determination of the UK
Borrowing Base made after the date which is three months after
the Closing Date, such item of Inventory is located on a
leasehold (including, without limitation, a leased department
of a retail store) as to which the lessor has not entered into
a landlord's waiver and consent, reasonably satisfactory in
form and substance to the Agent, providing a waiver of any
applicable Lien and providing the Agent with the right to
receive notice of default, the right to repossess such item of
Inventory (without the making of any payment to such landlord)
at any time upon the occurrence or during the continuance of a
Default or Event of Default and such other rights as may be
reasonably acceptable to the Agent; provided that such items
of Inventory shall be deemed not to constitute Eligible UK
Inventory only to the extent that the aggregate amount of such
Inventory located as such location is in excess of $100,000.
"environment": ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in
any Environmental Law.
"Environmental Claim": any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental
Authority or any Person for damages, injunctive or equitable relief,
personal injury (including sickness, disease or death), Remedial Action
costs, tangible or intangible property damage, natural resource
damages, nuisance relating to Hazardous Material, pollution, any
adverse effect on the environment caused by any Hazardous Material, or
fines, penalties or restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a Release
(including sudden or non-sudden, accidental or non-accidental
Releases); (b) exposure to any Hazardous Material; (c) the presence,
use, handling, transportation, storage, treatment or disposal of any
Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law": any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, enforceable notices or binding agreements
issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of
natural resources, the management, Release or threatened Release of any
Hazardous Material or health and safety matters, including the
18
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. xx.xx. 9601 et seq. (collectively "CERCLA"), the Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Amendments of 1984, 42
U.S.C. xx.xx. 6901 et seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. xx.xx. 1251 et seq.,
the Clean Air Act of 1970, as amended 42 U.S.C. xx.xx. 7401 et seq.,
the Toxic Substances Control Act of 1976, 15 U.S.C. xx.xx. 2601 et
seq., the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. xx.xx. 651 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. xx.xx. 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. xx.xx. 1801
et seq., and any similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.
"Environmental Permit": any applicable permit, approval,
authorization, certificate, license, variance, filing or permission
required by or from any Governmental Authority pursuant to any
Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate": any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"Eurodollar Loan": any Loan bearing interest based upon the
Adjusted LIBO Rate.
"Event of Default": any of the events specified in Section 16,
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": for any period, EBITDA for such period,
minus (without duplication) (a) the sum of (i) Capital Expenditures for
such period, (ii) increases in Net Working Capital during such period,
(iii) decreases in Long-term Reserves during such period, (iv) all
Federal, state, local and foreign taxes added back to Net Income in
determining EBITDA for such period (including, in any event, any
dividends or distributions paid in accordance with the provisions of
subsection 14.7(d)), (v) the aggregate amount of Cash Interest Expense
for such period, (vi) all scheduled debt amortization during such
period and all voluntary prepayments of the Domestic Term Loans, the UK
Term Loans and the Supplemental Loans during such period and (vii) all
repayments of the Domestic Revolving Credit Loans and the UK Revolving
Credit Loans during such period to the extent that such repayments were
required pursuant to subsection 10.2(d) or (e) hereof in order to cause
the aggregate outstanding principal amount thereof to be not greater
than the Domestic Revolving Credit Commitments or the UK Revolving
19
Credit Commitments, as the case may be, then in effect plus (b) the sum
of (i) decreases in Net Working Capital during such period and (ii)
increases in Long-term Reserves during such period.
"Excluded Equity Investment": any issuance and sale by the
Company of its equity securities to its existing equity holders prior
to the consummation of an initial public offering of its equity
securities; provided that the proceeds of such issuance and sale are
utilized within five Business Days thereafter to make a Permitted
Acquisition.
"Facility": with respect to any Loan, its nature as a Domestic
Term Loan, a Domestic Revolving Credit Loan, a Domestic Swing Line
Loan, a UK Term Loan, a UK Revolving Credit Loan, a UK Swing Line Loan,
a Secured Supplemental Loan or an Unsecured Supplemental Loan, as the
case may be.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three federal
funds brokers of recognized standing selected by it.
"Fixed Charge Coverage Ratio": for any period, the ratio of
(a) the difference between (i) EBITDA for such period and (ii) Fixed
Charges for such period to (b) the sum of (i) Cash Interest Expense for
such period and (ii) all scheduled amortization of Indebtedness of the
Company and its Subsidiaries (on a consolidated basis) for borrowed
money (excluding maturities of working capital lines of credit of the
Foreign Subsidiaries of the Company) during such period. For purposes
of this definition, the aggregate amount of such scheduled amortization
of such Indebtedness for borrowed money shall be deemed to be (x)
$200,000 for the quarter ended December 31, 1995, (y) $200,000 for the
quarter ended March 31, 1996 and (z) $200,000 for the quarter ending
June 30, 1996.
"Fixed Charges": for any period, the amount equal to the sum
of (a) consolidated Capital Expenditures of the Company and its
Subsidiaries for such period and (b) cash income taxes paid by the
Company and its Subsidiaries on a consolidated basis during such period
(including, in any event, any dividends or distributions paid in
accordance with the provisions of subsection 14.7(d)). For all purposes
hereunder, the Fixed Charges of the Company and its Subsidiaries shall
be deemed to be (x) $2,700,000 for the fiscal quarter ended December
31, 1995, (y) $900,000 for the fiscal quarter ended March 31, 1996 and
(z) $2,500,000 for the fiscal quarter ended June 30, 1996.
"Foreign Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction outside the United States of
America.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time; provided that, for
purposes of determining compliance with the covenants contained in
subsections 14.12 through 14.16, GAAP shall mean generally accepted
20
accounting principles as in effect on the date of this Agreement and
applied on a basis consistent with the application used in the
financial statements referred to in subsection 11.5(a) for the 1995
fiscal year of the Company.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith.
"Guarantees": the collective reference to the guarantee made
by the Company pursuant to Section 15 hereof and each Subsidiary
Guarantee.
"Guarantor": any Person delivering a Subsidiaries Guarantee
pursuant to this Agreement.
"Hazardous Materials": all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid,
liquid or gaseous wastes, including petroleum or petroleum distillates,
friable asbestos or asbestos-containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas,
infectious or medical wastes regulated pursuant to any Environmental
Law and all other substances or wastes of any nature regulated pursuant
to any Environmental Law.
21
"Included Indebtedness": at any date, the amount equal to the
sum of (a) the average daily amount of Domestic Revolving Credit
Exposure during the period of 12 consecutive fiscal months ended on
such date, (b) the average daily principal amount of UK Revolving
Credit Exposure outstanding during the period of 12 consecutive fiscal
months ended on such date, (c) the average daily principal amount of
working capital Indebtedness for borrowed money of the Foreign
Subsidiaries of the Company (other than the UK Borrower) outstanding
during the period of 12 consecutive fiscal months ended on such date,
(d) the average daily principal amount of the Supplemental Loans during
the period of 12 consecutive fiscal months ended on such date and (e)
without duplication, the aggregate principal amount of all other
Indebtedness for borrowed money (including without limitation, the
Senior Subordinated Indebtedness and Loans owing hereunder which are
not described in clause (a), (b), (c) or (d) of this definition) of the
Company and its Subsidiaries (on a consolidated basis) outstanding as
of such date. For all purposes hereof, the aggregate average daily
principal amount of Indebtedness described in clauses (a), (b) and (c)
of this definition shall be deemed to be $29,500,000 on each date
through June 30, 1996.
"Indebtedness": of any Person at any date, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges customarily are
paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to assets purchased by such
Person, (e) all obligations of such Person issued or assumed as the
deferred purchase price for property or services (excluding trade
accounts payable and accrued expenses arising in the ordinary course of
business in accordance with customary trade terms), (f) all
indebtedness of others secured by a Lien on property owned or acquired
by such Person, whether or not the obligations secured thereby have
been assumed by such Person, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of Rate
Protection Agreements (such obligations to be equal at any time to the
termination value of such Agreements that would be payable by such
Person at such time) and (j) all obligations of such Person as an
account party to reimburse any bank or any other Person in respect of
letters of credit and bankers' acceptances. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or member, other than
to the extent that the instrument or agreement evidencing such
Indebtedness expressly limits the liability of such Person in respect
thereof pursuant to provisions and terms reasonably satisfactory to the
Agent.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
22
"Insurance Proceeds" shall have the meaning assigned to such
term in subsection 18.8(a).
"Interest Expense Coverage Ratio": for any period, the ratio
of (a) EBITDA for
such period to (b) Cash Interest Expense for such period.
"Interest Payment Date": (a) as to any ABR Loan or Sterling
Base Rate Loan, the last day of each March, June, September and
December, (b) as to any Eurodollar Loan or Domestic Sterling Loan
having an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any Eurodollar Loan or Domestic Sterling
Loan having an Interest Period longer than three months, each day
during such Interest Period which is three months or a whole multiple
thereof after the first day of such Interest Period and the last day of
such Interest Period.
"Interest Period": with respect to any Eurodollar Loan or
Domestic Sterling Loan:
(i initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan or Domestic Sterling Loan, as the case
may be, and ending one, two, three, six or (if confirmed by
each relevant Lender to be available) nine or 12 months
thereafter, as selected by the relevant Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan or Domestic Sterling Loan, as the case
may be, and ending one, two, three, six or (if confirmed by
each relevant Lender to be available) nine or 12 months
thereafter, as selected by the relevant Borrower by a notice
of continuation with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date
(or, in the case of any Interest Period applicable to a
Supplemental Loan, the maturity date with respect to the
Supplemental Loans);
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
23
(4) the relevant Borrower shall select Interest
Periods so as not to require a payment or prepayment of any
Eurodollar Loan or Domestic Sterling Loan, as the case may be,
during an Interest Period applicable thereto.
"International Pledge Agreement": each Pledge Agreement (or
analogous agreement), in form and substance reasonably satisfactory to
the Agent, to be executed and delivered by the Company and each
Domestic Subsidiary pledging capital stock of any Foreign Subsidiary,
as the same may be amended, supplemented or otherwise modified from
time to time.
"Inventory": as defined in "Eligible Domestic Inventory" or in
"Eligible UK Inventory," as the context shall require.
"Inventory Reserves": with respect to Inventory of:
(a) the Company and its Domestic Subsidiaries at any
date, the amount equal to the sum of (i) the amount by which
the value of the perpetual Inventory on such date exceeds the
value of the Inventory on the general ledger on such date,
(ii) any profits or transfer price additions accrued in
connection with transfers of such Inventory between the
Company and its Subsidiaries or among Subsidiaries of the
Company, (iii) any favorable variances (production material,
production manufacturing, purchase price variance or other
variance categories) that result when standard costs are
greater than the actual costs and are remaining in the ending
inventory balance (with such favorable variance inventory
reserve to (x) be subject to review, testing and, if
appropriate, adjustment by the Agent, (y) be calculated on the
last day of the accounting period for each calendar quarter,
commencing on March 31, 1999, on an individual product basis
and (z) remain in effect until the next calculation), (iv) the
amount of any reserve maintained by the Company and its
Subsidiaries (consistent with their respective historical
practices) for inactive, excess and obsolete inventory,
shrinkage, and markdowns and (v) the amount of any accrued
costs and expenses (such as freight, duty and insurance)
required to be paid by the Company and its Domestic
Subsidiaries in order to take possession at a facility of the
Company or any of its Domestic Subsidiaries of any Inventory
which is then in transit and which is included in the Domestic
Borrowing Base; and
(b) the UK Borrower at any date, the amount equal to
(i) the amount by which the value of the perpetual Inventory
on such date exceeds the value of the Inventory on the general
ledger on such date, (ii) any net favorable variances of the
six previous months (production material, production
manufacturing, purchase price variance, or other variance
categories) that result when standard costs are greater than
actual costs, (iii) the amount of any reserve maintained by
the UK Borrower (consistent with its historical practices) for
inactive, excess and obsolete inventory, shrinkage, and
markdowns and (v) the amount of any accrued costs and expenses
(such as freight, duty and insurance) required to be paid by
the UK Borrower in order to take possession at a facility of
the UK Borrower of any Inventory which is then in transit and
which is included in the UK Borrowing Base.
24
"Inventory Valuation Standard": with respect to Inventory at
any date, the lower of (a) cost of such Inventory, determined in
accordance with GAAP (excluding any LIFO reserve) and stated on a basis
consistent with the historical practices of the Company and its
Subsidiaries as of the Closing date and (b) market value of such
Inventory on such date.
"Issuing Bank": with respect to each Letter of Credit, (a)
Chemical, (b) at the request of the Borrower (and with the consent of
the Agent, which consent will not be unreasonably withheld), any other
Lender who agrees to serve in such capacity or (c) any affiliate
thereof.
"L/C Commitment": $10,000,000, as such amount may be reduced
from time to time in accordance with the terms hereof.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired face amount of the then
outstanding Letters of Credit and (b) the aggregate principal amount of
drawings under Letters of Credit which have not then been reimbursed
pursuant to subsection 4.5(a).
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Domestic Lenders other than the Issuing
Bank with respect thereto, if it is then a Domestic Lender.
"Lender" shall mean a Domestic Lender, a UK Lender, a Secured
Supplemental Lender or an Unsecured Supplemental Lender, as the context
shall require, and shall include the Issuing Bank as appropriate;
collectively, the "Lenders."
"Letter of Credit": as defined in subsection 4.1(b)(i).
"Leverage Ratio": as of any date, the ratio of (a) the amount
of Included Indebtedness as of such date minus cash and cash
equivalents as of such date to (b) EBITDA for the period of twelve
consecutive fiscal months ended on such date.
"LIBO Rate": with respect to any Eurodollar Loan for any
Interest Period, (a) if at least two offered rates for Dollar deposits
for a period comparable to such Interest Period appear on the Reuters
Screen LIBO Page as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of such Interest Period, the
arithmetic mean of all such offered rates and (b) if fewer than two
such offered rates so appear on the Reuters Screen LIBO Page, the
arithmetic mean, determined by the Agent based on quotations provided
by each of the Reference Lenders, of the respective rates per annum at
which Dollar deposits approximately equal to each Reference Lender's
respective portion of the applicable Eurodollar Loan and for a period
comparable to the applicable Interest Period are offered to the
principal London office of such Reference Lender in immediately
available funds in the London intermarket market at approximately 11:00
a.m., London time, on the day that is two Business Days prior to
25
the first day of such Interest Period. The term "Reuters Screen LIBO
Page" shall mean the display screen designated "LIBO Page" on the
Reuters Monitor Money Rates Service (or such other page as may replace
such page on such service for the purpose of displaying comparable
rates).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"Loan": a Domestic Revolving Credit Loan, a Domestic Swing
Line Loan, a Domestic Term Loan, a UK Revolving Credit Loan, a UK Swing
Line Loan, a UK Term Loan, a Secured Supplemental Loan or an Unsecured
Supplemental Loan, as the context shall require; collectively, the
"Loans."
"Loan Documents": this Agreement, any Notes, any Joinder
Agreements, the Guarantees, the Security Documents and the Rate
Protection Agreements.
"Lock Box Agreement" shall mean a Lock Box Agreement among the
Company or a Subsidiary, the Agent and a Lock Box Bank (as defined
therein; provided that each Lock Box Bank shall be a Bank party to this
Agreement), substantially in the form of Exhibit G hereto (with such
changes therein as shall (x) in the case of any Lock Box Agreement with
the UK Borrower or any of its Subsidiaries, be appropriate in
accordance with customary practice in the United Kingdom and (y) in any
case, be negotiated by the Agent and the respective Lock Box Bank), as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof and of this Agreement.
"Long-term Reserves": as of any date, the non-current
liabilities of the Company and its Subsidiaries as of such date in
respect of (a) pension benefits, (b) post-retirement benefits other
than pensions, such as retirement health care and life insurance
benefits, and (c) post-employment benefits, in each case determined on
a consolidated basis in accordance with GAAP.
"Management Subscription Agreements": the Management
Subscription Agreements, dated on or about the date hereof, between the
Company and certain of its executive officers.
"Margin Stock": as defined in Regulation U.
"Material Adverse Effect": a (a) materially adverse effect on
the business, assets, operations, properties, financial condition or
contingent liabilities of the Company and the Subsidiaries taken as a
whole, (b) material impairment of the ability of the Company or any
Subsidiary to perform any of its material obligations under any Loan
Document to which it is or will be a party or (c) material impairment
of the rights of or benefits available to the Agent, the Domestic
Lenders, the UK Lenders, the Secured Supplemental Lenders or the
Unsecured Supplemental Lenders under any Loan Document.
26
"Members": the Persons listed on Schedule XIII hereto.
"Members Pledge Agreement": the Pledge Agreement to be
executed and delivered by each of the Members, substantially in the
form of Exhibit B, as the same may be amended, supplemented or
otherwise modified from time to time.
"MLA Cost": in relation to a Domestic Sterling Loan, the cost
imputed to the Lenders of compliance with the Mandatory Liquid Assets
requirements of the Bank of England during an Interest Period,
expressed as a rate per annum and determined in accordance with
Schedule XVI.
"Mortgaged Property": each parcel of real property which is
subject to the Company Mortgage.
"Multiemployer Plan": (a) a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any Subsidiary or
ERISA Affiliate is making or accruing an obligation to make
contributions and (b) any multiemployer plan (as so defined) to which
the Company or any Subsidiary or ERISA Affiliate has within any of the
preceding five plan years made or accrued an obligation to make
contributions, but in the case of this clause (b) only if the Company,
a Subsidiary or an ERISA Affiliate of either would be liable under
Title IV of ERISA in respect of such plan.
"Net Cash Proceeds": with respect to any Prepayment Event or
other event, (a) the gross proceeds in the form of cash or Permitted
Investments (including insurance proceeds, condemnation awards and
payments from time to time in respect of installment obligations, if
applicable) received by or on behalf of the Company or any Subsidiary
in respect of such Prepayment Event or other event minus (b) the sum of
(i) in the case of any Prepayment Event, the amount, if any, of all
taxes (other than income taxes) payable by the Company or any
Subsidiary in connection with such Prepayment Event and the Company's
good-faith best estimate of the amount of all income taxes payable in
connection with such Prepayment Event (including, without limitations,
distributions under subsection 14.7(d)), (ii) in the case of a
Prepayment Event that is an asset sale or disposition, the amount of
any reasonable reserve established in accordance with GAAP against any
liabilities (including, without limitation, Indebtedness which is
payable upon such Prepayment Event) associated with the assets sold or
disposed of and retained by the Company or any Subsidiary, provided
that the amount of any subsequent reduction of such reserve (other than
in connection with a payment in respect of any such liability) shall be
deemed to be Net Cash Proceeds of a Prepayment Event occurring on the
date of such reduction, and (iii) reasonable and customary fees,
commissions and expenses and other costs paid by the Company or any
Subsidiary in connection with such Prepayment Event or other event, in
each case only to the extent not already deducted in arriving at the
amount referred to in clause (a) above.
27
"Net Income": for any period, the aggregate net income (or net
deficit) of the Company and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP; provided, however,
that the term "Net Income" shall exclude extraordinary gains and losses
from the sale of assets other than in the ordinary course of business
(including, without limitation, dispositions of obsolete fixed assets).
"Net Working Capital": as of any date, Current Assets as of
such date less Current Liabilities as of such date.
"Non-Excluded Taxes": as defined in subsection 10.12(a).
"Notes": the collective reference to the Domestic Revolving
Credit Notes, the Domestic Swing Line Note, the Domestic Term Loan
Notes, the UK Revolving Credit Notes, the UK Swing Line Note, the UK
Term Loan Notes, the Secured Supplemental Notes and the Unsecured
Supplemental Notes.
"Participant": as defined in subsection 18.6(b).
"Payment Sharing Notice" shall mean a written notice from the
Company or any Lender informing the Agent that an Event of Default has
occurred and is continuing and directing the Agent to allocate payments
thereafter received from the Borrowers in accordance with the
provisions of subsection 10.9(b)(ii).
"PBGC": the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Permitted Acquisition": as defined in subsection 14.5(f).
"Permitted Excess Cash Flow Basket": at any date, the amount
equal to the aggregate amount of Excess Cash Flow of the Company during
the period from the Closing Date through the last day of the fiscal
quarter most recently ended minus the amount equal to the sum of (a)
the aggregate amount required to be repaid pursuant to subsection
10.2(c) hereof in respect of such period, (b) the aggregate amount of
any Capital Expenditures made during such period in reliance upon the
provisions of clause (b) of the definition of such term and (c) the
amount by which the sum of (i) the aggregate principal amount of
Indebtedness then outstanding under subsection 14.1(h), (ii) the
aggregate principal amount of Indebtedness and trade payables which is
then guaranteed pursuant to subsection 14.3(c) and (iii) the aggregate
amount of all investments in and capital contributions to all Foreign
Subsidiaries since the Closing Date pursuant to subsection 14.5(e)
(net, in the case of this clause (iii) only, of the aggregate amount of
any dividends and distributions paid by such Foreign Subsidiaries to
the Company and its Domestic Subsidiaries), exceeds $17,500,000.
28
"Permitted Investments":
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within 90 days from the date of acquisition
thereof;
(b) without limiting the provisions of clause (d) below,
investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Group
or from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, bankers'
acceptances and time deposits (including, without limitation,
eurodollar time deposits) maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, (i) any domestic office
of the Agent or (ii) any domestic office of any other commercial bank
organized under the laws of the United States of America or any State
thereof, or any Lender that is a commercial bank, that has a combined
capital and surplus and undivided profits of not less than $250,000,000
and that is rated (or the senior debt securities of the holding company
of such commercial bank are rated) A or better by Standard & Poor's
Ratings Group or A2 or better by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by another nationally recognized rating
agency if neither of the two named rating agencies shall rate such
commercial bank (or the holding company of such commercial bank);
(d) investments in commercial paper maturing within one year
from the date of acquisition thereof and issued by (i) the holding
company of the Agent or (ii) the holding company of any other
commercial bank of recognized standing organized under the laws of the
United States of America or any state thereof, or any Lender that is a
commercial bank, that has (A) a combined capital and surplus in excess
of $250,000,000 and (B) commercial paper rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Group or at least P-1
or the equivalent thereof by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by another nationally recognized rating
agency if neither of the two named rating agencies rate such holding
company;
(e) repurchase agreements having a term of seven days or fewer
with (i) any domestic office of the Agent or (ii) any domestic office
of any other commercial bank of recognized standing organized under the
laws of the United States of America or any state thereof, or any
Lender that is a commercial bank, that has a combined capital and
surplus and undivided profits of not less than $250,000,000 and that is
rated (or the senior debt securities of the holding company of such
commercial bank are rated) A or better by Standard & Poor's Ratings
Group or A2 or better by Xxxxx'x Investor Services, Inc. or carrying an
equivalent rating by another nationally recognized rating agency if
neither of the two named rating agencies shall rate such commercial
bank (or the holding company of such commercial bank), and relating to
marketable direct obligations issued or unconditionally guaranteed by
the United States but only if the securities collateralizing such
repurchase agreements are delivered to or to the order of the Agent;
29
(f) other investment instruments approved in writing by the
Required Lenders and offered by financial institutions that have a
combined capital and surplus and undivided profits of not less than
$250,000,000; and
(g) investments in money market funds substantially all of the
assets of which are comprised of securities of the types described in
clauses (a) through (f) of this definition;
provided that, in the case of any Foreign Subsidiary of the Company,
the term "Permitted Investments" shall mean any investments which are
comparable in credit quality and tenor to those referred to above and
are used in the ordinary course of business by similar companies for
cash management purposes in the relevant jurisdiction.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": an employee benefit plan (other than a Multiemployer
Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code and either (i)
is maintained by the Company, any of its Subsidiaries or any Affiliate
or (ii) with respect to which the Company, any of its Subsidiaries or
any ERISA Affiliate has retained any liability.
"Pledge Agreements: the collective reference to the Members
Pledge Agreement, the Company Pledge Agreement, each Subsidiaries
Pledge Agreement and each International Pledge Agreement.
"Pounds Sterling" and "(pound)": the lawful currency of the
United Kingdom.
"Prepayment Event": (a) the sale, transfer or other
disposition of any business unit, asset or other property of the
Company or any Subsidiary (including dispositions in the nature of
casualties (to the extent covered by insurance) or condemnations
(including any Casualty or Condemnation in respect of any Mortgaged
Property, as contemplated by and defined in Section 18.8)), (b) the
issuance or incurrence by the Company or any Subsidiary of any
Indebtedness incurred pursuant to subsection 14.1(e), or the issuance
or sale by the Company or any Subsidiary of any debt securities or any
obligations convertible into or exchangeable for, or giving any Person
or entity any right, option or warrant to acquire from the Company or
any Subsidiary, any Indebtedness or any such debt securities or any
such convertible or exchangeable obligations or (c) the issuance or
sale by the Company or any Subsidiary of any equity securities (other
than the issuance of equity securities (x) to management of the Company
and its Subsidiaries pursuant to the Management Subscription
Agreements, (y) to the Company or any of its wholly-owned Subsidiaries
or (z) constituting an Excluded Equity Investment) or any obligations
convertible into or exchangeable for, or giving any Person any right,
option or warrant to acquire from the Company or any Subsidiary, any
equity securities or any such convertible or exchangeable obligations.
Notwithstanding the foregoing, the term "Prepayment Event" shall not
include:
30
(i) sales, transfers and other dispositions of used
or surplus equipment, vehicles and other assets in the
ordinary course of business permitted by subsection 14.6(b) to
the extent that the gross proceeds from all such sales does
not exceed $3,000,000 in the aggregate in any fiscal year;
provided, however, that to the extent that the Company shall
have reinvested on the date of such event (or certified to the
Agent that it intends to reinvest within 360 days of such
event) any of such excess proceeds in equipment, vehicles or
other assets used in the business of the Company, the
resultant Prepayment Event shall be reduced by the amount so
reinvested or to be reinvested (and provided, further, that
any amounts not so reinvested within 360 days after such
certification shall promptly be applied as Net Cash Proceeds
of a Prepayment Event and, during such time as any Default or
Event of Default has occurred and is continuing, shall be
deposited in a cash collateral account with the Agent until so
applied);
(ii) sales of inventory in the ordinary course of
business (including, without limitation, sales of damaged or
obsolete inventory) and sales of Permitted Investments;
(iii) the receipt of insurance or condemnation
proceeds (other than Condemnation Proceeds and Insurance
Proceeds in respect of Mortgaged Property), except to the
extent in excess of $3,000,000 in the aggregate in any fiscal
year; provided, however, that to the extent that the Company
shall have reinvested on the date of such event (or certified
to the Agent that it intends to reinvest within 360 days of
such event) any of such excess proceeds in equipment, vehicles
or other assets used in the Company's business, the resultant
Prepayment Event shall be reduced by the amount so reinvested
or to be reinvested (and provided, further, that any amounts
not so reinvested within 360 days after such certification
shall promptly be applied as Net Cash Proceeds of a Prepayment
Event and, during such time as any Default or Event of Default
has occurred and is continuing, shall be deposited in a cash
collateral account with the Agent until so applied); and
(iv) the receipt of Condemnation Proceeds and
Insurance Proceeds in respect of Mortgaged Property to the
extent that (A) such Condemnation Proceeds or Insurance
Proceeds are used to restore, repair or locate, acquire and
replace the related Mortgaged Property in accordance with
subsection 18.8, (B) such Condemnation Proceeds or Insurance
Proceeds, pursuant to subsection 18.8, are not otherwise
required to be applied as a mandatory prepayment pursuant to
subsection 10.2 or (C) to the extent permitted by subsection
18.8, such Condemnation Proceeds or Insurance Proceeds are (1)
reinvested in equipment, vehicles or other assets used in the
Company's principal lines of business within 180 days after
the receipt thereof and (2) the Company, pending such
reinvestment, has deposited such amounts in an escrow account
with (or otherwise reasonably satisfactory to) the Agent as
contemplated in subsection 18.8.
"Primary Obligations": all amounts owing hereunder and under
the other Loan Documents (other than the Unsecured Supplemental Loans
and the principal and interest owing on account of the Secured
Supplemental Loans) and all Lender Hedging Obligations (as defined in
the Security Documents).
31
"Prime Rate": the rate of interest per annum publicly
announced from time to time by Chemical Bank as its prime rate in
effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by Chemical
Bank in connection with extensions of credit to debtors).
"Properties": as defined in subsection 11.16(a).
"Qualifying Lender": at any time, a bank or other financial
institution which is at that time either:
(a) a bank for purposes of Section 349(3)(a) of the UK
Income and Corporation Taxes Act 1988 which takes into account
any interest payable or paid to it under this Agreement as a
trading receipt of its business in the United Kingdom; or
(b) resident (as such term is defined in the appropriate
double-taxation treaty) in a country with which the United
Kingdom has an appropriate double-taxation treaty giving
residents of that country complete exemptions from United
Kingdom taxation on interest including, for the avoidance of
doubt, complete exemption from the imposition of any
withholding or deduction for or on account of United Kingdom
taxation on interest (and which does not carry on business in
the United Kingdom through a permanent establishment with
which the indebtedness under this Agreement in respect of
which the interest is paid is effectively connected) and which
has secured relief from United Kingdom taxation in respect of
interest and/or commissions to be paid to it under this
Agreement pursuant to such treaty and for this purpose the
term "double-taxation treaty" means any convention or
agreement between the government of the United Kingdom and any
other government for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income
and capital gains.
"Rate Protection Agreements": mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or similar agreement entered into by the Company to provide protection
to the Company and the Subsidiaries against fluctuations in interest
rates. Each Rate Protection Agreement shall be on terms (including
terms relating to the calculation of payments for early termination)
reasonably satisfactory to the Agent with a counterparty that is either
a Lender or reasonably satisfactory to the Agent.
"Recapitalization": (a) the consummation of the transactions
described in the "Transaction Overview" contained in Section 3 of the
Confidential Information Memorandum and (b) the execution, delivery and
performance by the Company and its Subsidiaries of each of the Loan
Documents and the borrowings hereunder on the Closing Date.
"Recapitalization Documents": (a) the Loan Documents and (b)
each of the documents, instruments and agreements described in Schedule
XV hereto.
"Reference Lenders": Chemical, Banque Nationale de Paris and
Fleet National
Bank.
32
"Refunded Domestic Swing Line Loans" shall have the meaning
assigned to such term in subsection 5.1(c).
"Refunded UK Swing Line Loans" shall have the meaning assigned
to such term in subsection 8.1(c).
"Register": as defined in subsection 18.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": in respect of each Letter of
Credit, the obligation of the account party thereunder to reimburse the
Issuing Bank for all drawings made thereunder in accordance with
Section 4 and the Application related to such Letter of Credit.
"Release": any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping,
disposing or depositing, or threat thereof, of any Hazardous Material
in, into, onto or through the environment.
"Remedial Action": (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other
actions required by any Governmental Authority or voluntarily
undertaken to (i) clean up, remove, treat, xxxxx or in any other way
address any Hazardous Material in the environment, (ii) prevent the
Release or threat of Release, or minimize the further Release, of any
Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment, or (iii) perform
studies and investigations in connection with, or as a precondition to,
actions described in clauses (i) or (ii) above.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any reportable event as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event as to which the 30-day notice requirement has
been waived).
"Required Lenders": at any time, Lenders with aggregate
Commitment Percentages of at least 51% at such time.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": with respect to any Person, the chief
executive officer, the president or any vice president of such Person,
or, with respect to financial matters, the chief financial officer or
chief accounting officer of such Person.
33
"RPI": RPI Corp., a Delaware corporation.
"RPI Consulting Agreement": the Consulting and Transitional
Services Agreement, dated as of the date hereof, among RPI and the
Company, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the provisions of subsection
14.11(b).
"Secured Supplemental Commitment": as to any Secured
Supplemental Lender, the obligation of such Secured Supplemental Lender
to make Secured Supplemental Loans to the Company hereunder on the
Supplemental Closing Date in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such
Secured Supplemental Lender's name on Schedule I under the heading
"Secured Supplemental Commitments ", as such amount may be reduced from
time to time in accordance with the provisions of this Agreement.
"Secured Supplemental Lender ": at any date, each bank or
other financial institution which holds any Secured Supplemental
Commitment (or, after the Supplemental Closing Date, Secured
Supplemental Loans); collectively, the "Secured Supplemental Lenders ".
"Secured Supplemental Loans ": as defined in subsection 9.1.
"Secured Supplemental Note " as defined in subsection 9.4(d).
"Security Agreements": the collective reference to the Company
Security Agreement, each Subsidiaries Security Agreement, each
Subsidiaries Trademark Security Agreement, each Subsidiaries Patent
Security Agreement and the UK Debenture.
"Security Documents": the collective reference to the Company
Mortgage, the Security Agreements, the Lock Box Agreements, the Pledge
Agreements, and all other security documents hereafter delivered to the
Agent granting a Lien on any asset or assets of any Person to secure
the obligations and liabilities of the Company hereunder and under any
of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"Senior Leverage Ratio ": as of any date, shall mean the ratio
of (a) the amount of Included Indebtedness as of such date minus Senior
Subordinated Indebtedness to (b) EBITDA for the period of twelve
consecutive fiscal months ended on such date.
"Senior Subordinated Indebtedness": the $130,000,000 aggregate
principal amount of the Company's senior subordinated indebtedness, to
be issued on the Closing Date pursuant to the Indenture, dated as of
May 23, 1996, between the Company and Remington Capital Corp., as
co-issuers, and The Bank of New York, as trustee (as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with the provisions of subsection 14.11(b)).
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
34
"Specified Obligation Usage": at any date, the amount equal to
the sum of (a) the aggregate principal amount of any purchase money
Indebtedness then outstanding under subsection 14.1(d), (b) the
aggregate principal amount of Attributable Debt then outstanding in
respect of Sale and Leaseback Transactions permitted pursuant to
subsection 14.4 and (c) the aggregate amount then outstanding of
Capital Lease Obligations permitted pursuant to subsection 14.12.
"Standby Letter of Credit": as defined in subsection
4.1(b)(i).
"Statutory Reserves": 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 any other banking
authority, domestic or foreign, to which the Agent or any Lender
(including any branch, Affiliate, or other funding office making or
holding a Loan) is subject for, with respect to the determination of
the Adjusted LIBO Rate, Eurocurrency Liabilities (as defined in
Regulation D of the Board). Such reserve percentages shall include
(with respect to Eurodollar Loans) those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that
may be available from time to time to any Lender under such Regulation
D. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Sterling Base Rate": the rate of interest per annum publicly
announced from time to time by Chemical Bank as its base lending rate
(or analogous rate) in effect at its principal office in London,
England (such base lending rate not being intended to be the lowest
rate of interest charged by Chemical Bank in connection with extensions
of credit to debtors) plus 1/4 of 1%.
"Sterling Base Rate Loans": any Loan bearing interest at a
rate based upon the Sterling Base Rate.
"Subsidiaries Guarantees": the Guarantees to be executed and
delivered by each Domestic Subsidiary, substantially in the form of
Exhibit D-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"Subsidiaries Pledge Agreements": the Pledge Agreements to be
executed and delivered from time to time by each Domestic Subsidiary
owning capital stock of any other Domestic Subsidiary, substantially in
the form of Exhibit D-2, as the same may be amended, supplemented or
otherwise modified from time to time.
"Subsidiaries Patent Security Agreements": the Patent Security
Agreements to be executed and delivered by each Domestic Subsidiary in
favor of the Agent, substantially in the form of Exhibit D-5, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Subsidiaries Security Agreements": the Security Agreements to
be executed and delivered by each Domestic Subsidiary in favor of the
Agent, substantially in the form of Exhibit D-3, as the same may be
amended, supplemented or otherwise modified from time to time.
35
"Subsidiaries Trademark Security Agreements": the Trademark
Security Agreements to be executed and delivered by each Domestic
Subsidiary in favor of the Agent, substantially in the form of Exhibit
D-4, as the same may be amended, supplemented or otherwise modified
from time to time.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person (it being understood that, based upon present ownership and
management control, Remington Licensing Corporation is not a
"Subsidiary" of the Company). Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Company.
"Subsidiary Debt Basket Amount": the amount equal to
$17,500,000 plus any additional amounts which, after giving effect
thereto, would not cause the Permitted Excess Cash Flow Basket to be
less than zero.
"Subsidiary Obligations": the unpaid principal of, and
interest (including post-petition interest) on, the UK Term Loans, the
UK Revolving Credit Loans and the UK Swing Line Loans and all other
obligations and liabilities of the UK Borrower to the Agent and the
Lenders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with this Agreement (including, without
limitation, any amendment and restatement or refinancing hereof), the
Notes or any other Loan Document, or any other document executed and
delivered in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Agent or any Lender) or otherwise.
"Supplemental Closing Date ": the date on which the conditions
precedent set forth in the Sixth Amendment, dated as of June 9, 1999,
to this Agreement shall be satisfied.
"Supplemental Loans ": a Secured Supplemental Loan or an
Unsecured Supplemental Loan, as the context shall require;
collectively, the "Supplemental Loans".
"Termination Date": June 30, 2002.
"Tranche": the collective reference to Eurodollar Loans or
Domestic Sterling Loans under a single Facility the then current
Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
36
"Transferee": as defined in subsection 18.6(f).
"Type": as to any Loan, its nature as an ABR Loan, a
Eurodollar Loan, a Sterling Base Rate Loan or a Domestic Sterling Loan.
"UK Borrower": as defined in the preamble.
"UK Borrowing Base": as of any date of determination, an
amount equal to the sum, without duplication of (a) 85% of the total of
Eligible UK Accounts of the UK Borrower as of such date less the UK
Dilution Reserve then in effect and (b) 60% of the Eligible UK
Inventory of the UK Borrower. For purposes of determining the UK
Borrowing Base from time to time, Eligible UK Accounts and Eligible UK
Inventory of the UK Borrower shall be determined from time to time by
the Agent by reference to the UK Borrowing Base Certificate then most
recently delivered to it; provided that the information contained in
such UK Borrowing Base Certificate shall not be conclusive in
calculating the amount of Eligible UK Accounts and Eligible UK
Inventory and, after consultation with the Company, the Agent shall be
entitled to adjust the amounts and other information contained therein
and/or the advance rates set forth above to the extent that it believes
in its reasonable credit judgment that such adjustment is appropriate
to reflect (x) the then current amounts of Eligible UK Inventory and
Eligible UK Accounts or (y) changes in the business practices of the UK
Borrower (or newly disclosed matters with respect to it).
"UK Borrowing Base Certificate": a certificate, in
substantially the form attached hereto as Exhibit I-2, with such
changes as the Agent may from time to time reasonably request for the
purpose of monitoring the UK Borrowing Base.
"UK Debenture": the Debenture, dated as of the date hereof,
given by the UK Borrower in favor of the Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"UK Dilution Factors": with respect to the UK Borrower at any
date, the aggregate Pounds Sterling amount equal to the sum of (a) any
credit memos, adjustments, returns, and allowances (such as for co-op
advertising), (b) cash discounts, (c) bad debt write-offs, (d) other
non-cash credits, in each case applied to an Account Debtor's balance
in respect of Accounts.
"UK Dilution Ratio": at any date, the amount (expressed as a
percentage) equal to (a) the aggregate amount of the UK Dilution
Factors for the 12 most recently ended fiscal months divided by (b)
total gross credit sales of the UK Borrower for such 12 fiscal months.
"UK Dilution Reserve": with respect to the UK Borrower at any
date, the amount equal to the UK Dilution Ratio times the amount of
Eligible UK Accounts at such date.
"UK Lender": at any date, each bank or other financial
institution which holds any UK Term Loan Commitment (or, after the
Closing Date, UK Term Loans) or UK Revolving Credit Loan Commitment
(or, at any time after the UK Revolving Credit Loan Commitment has
terminated, UK Revolving Credit Exposure) on such date; collectively,
the "UK Lenders".
37
"UK Loan": a UK Revolving Credit Loan or UK Term Loan, as the
context shall require; collectively, the "UK Loans."
"UK Revolving Credit Commitment": as to any UK Lender, the
obligation of such UK Lender to make UK Revolving Credit Loans to, and
to participate in UK Swing Line Loans to, the UK Borrower hereunder in
an aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such UK Lender's name on Schedule I under
the heading "UK Revolving Credit Commitments", as such amount may be
reduced from time to time in accordance with the provisions of this
Agreement.
"UK Revolving Credit Exposure": at any date, (a) as to all UK
Lenders, the amount equal to the aggregate outstanding principal amount
of all UK Revolving Credit Loans and all UK Swing Line Loans then
outstanding and (b) as to any UK Lender, the amount equal to (i) the
aggregate outstanding principal amount of all then-outstanding UK
Revolving Credit Loans made by such UK Lender and (ii) such UK Lender's
Commitment Percentage of the then-outstanding principal amount of all
UK Swing Line Loans.
"UK Revolving Credit Loans": as defined in subsection 7.1.
"UK Revolving Credit Note": as defined in subsection 7.4(d).
"UK Swing Line Commitment" of the UK Swing Line Lender at any
date shall mean the obligation of the UK Swing Line Lender to make UK
Swing Line Loans pursuant to subsection 8.1 in the amount referred to
therein.
"UK Swing Line Lender" shall mean Chemical.
"UK Swing Line Loan Participation Certificate" shall mean a
certificate, substantially in the form of Exhibit J-2.
"UK Swing Line Loans" shall have the meaning assigned to such
term in subsection 8.1(a).
"UK Swing Line Note" shall have the meaning assigned to such
term in subsection 8.1(b).
"UK Term Loan Commitment": as to any UK Lender, the obligation
of such UK Lender to make UK Term Loans to the UK Borrower hereunder in
an aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such UK Lender's name on Schedule I under
the heading "UK Term Loan Commitments", as such amount may be reduced
from time to time in accordance with the provisions of this Agreement.
"UK Term Loans": as defined in subsection 6.1.
38
"UK Term Loan Note": as defined in subsection 6.4(d).
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Unsecured Supplemental Commitment ": as to any Unsecured
Supplemental Lender, the obligation of such Unsecured Supplemental
Lender to make Unsecured Supplemental Loans to the Company hereunder on
the Supplemental Closing Date in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such
Unsecured Supplemental Lender's name on Schedule I under the heading
"Unsecured Supplemental Commitments", as such amount may be reduced
from time to time in accordance with the provisions of this Agreement.
"Unsecured Supplemental Lender ": at any date, each bank or
other financial institution which holds any Unsecured Supplemental
Commitment (or, after the Supplemental Closing Date, Unsecured
Supplemental Loans); collectively, the "Unsecured Supplemental Lenders
."
"Unsecured Supplemental Loans ": as defined in subsection 9.2.
"Unsecured Supplemental Note ": as defined in subsection
9.4(e).
"Vestar": Vestar Equity Partners, L.P.
"Vestar Guarantee": each Guarantee, dated as of June 9, 1999,
made by Vestar Equity Partners, L.P. in favor of an Unsecured
Supplemental Lender, as the same may be amended, supplemented or
otherwise modified from time to time.
"Vestar Management Agreement": the Management Agreement, dated
as of the date hereof, among Vestar Capital Partners, the Company and
certain of its Subsidiaries, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the
provisions of subsection 14.11(b).
"Withdrawal Liability": the liability to a Multiemployer Plan,
as defined in Section 4201 of ERISA.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any other Loan Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any other Loan Document, and any
certificate or other document made or delivered pursuant hereto, unless
otherwise specified herein or therein, accounting terms relating to the Company
and its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
39
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) For purposes of calculating amounts hereunder, any amount
which is owing or denominated in a currency other than Dollars or Pounds
Sterling and required to be paid or expressed in Dollars or Pounds Sterling, as
the case may be, shall be converted into Dollars or Pounds Sterling,
respectively, at the exchange rate set forth on the date as of which such
calculation is made in The Wall Street Journal as the spot rate at which such
currency can be converted into Dollars or Pounds Sterling, respectively (or, if
no such rate is published, at any rate determined by the Agent in its reasonable
discretion).
(f) As used herein, the terms "corporation" and "limited
liability company" shall mean any business entity, regardless of structure
(including, without limitation, partnerships, limited liability companies and
business trusts); the terms "stockholders" and "members" with respect to any
particular business entity shall mean any Persons with ownership interests in
such business entity, regardless of structure; and references to particular
types of organizational documents of a particular business entity, such as a
certificate of incorporation and by-laws or a limited liability company
agreements, shall mean all organizational documents of such business entity,
regardless of structure.
SECTION 2. THE DOMESTIC TERM LOANS
2.1 Domestic Term Loans. Subject to the terms and conditions
hereof, each Domestic Lender severally agrees to make a term loan (a "Domestic
Term Loan") to the Company on the Closing Date in an amount not to exceed each
such Domestic Lender's Domestic Term Loan Commitment. The Domestic Term Loans
shall be made in Dollars and may from time to time be (a) Eurodollar Loans, (b)
ABR Loans or (c) a combination thereof, as determined by the Company in the
initial notice of borrowing or in any notice of conversion with respect thereto.
2.2 Procedure for Domestic Term Loan Borrowing. The Company
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 11:00 A.M., New York City time, on the Closing Date) requesting
that the Domestic Lenders make the Domestic Term Loans on the Closing Date. Upon
receipt of any such notice of borrowing from the Company, the Agent shall
promptly notify each Domestic Lender of receipt of such notice of borrowing and
of such Domestic Lender's Commitment Percentage of the Domestic Term Loans to be
made pursuant thereto. Each Domestic Lender will make the amount of its pro rata
share of the borrowing of Domestic Term Loans available to the Agent for the
account of the Company at the office of the Agent specified in subsection 18.2
prior to 12:00 Noon, New York City time, on the Closing Date in funds
immediately available to the Agent. Such borrowing will then be made available
to the Company by the Agent crediting the account of the Company on the books of
such office with the aggregate of the amounts made available to the Agent by the
Domestic Lenders and in like funds as received by the Agent. Notwithstanding
anything to the contrary contained herein, the Domestic Term Loans initially
shall be made as ABR Loans hereunder.
40
2.3 Amortization of Domestic Term Loans. (a) The Company
hereby unconditionally promises to pay to the Agent, for the account of the
Domestic Lenders, on each date set forth below the principal amount of the
Domestic Term Loans set forth opposite such date:
Date Amount
------------------ ----------
September 30, 1996 $ 125,000
December 31, 1996 125,000
March 31, 1997 125,000
June 30, 1997 125,000
September 30, 1997 125,000
December 31, 1997 125,000
March 31, 1998 125,000
June 30, 1998 125,000
September 30, 1998 187,500
December 31, 1998 187,500
March 31, 1999 187,500
June 30, 1999 187,500
September 30, 1999 187,500
December 30, 1999 187,500
March 30, 2000 187,500
June 30, 2000 187,500
September 30, 2000 250,000
December 31, 2000 250,000
March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 500,000
December 31, 2001 500,000
March 31, 2002 500,000
(b) The Company hereby unconditionally agrees that any
then-outstanding Domestic Term Loans shall be due and payable on the Termination
Date.
(c) The Company hereby agrees to pay interest on the unpaid
principal amount of the Domestic Term Loans from time to time outstanding from
the date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 10.5.
2.4 Evidence of Debt. (a) Each Domestic Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to such Domestic Lender resulting from each Domestic
Term Loan of such Domestic Lender from time to time, including the amounts of
principal and interest payable and paid to such Domestic Lender from time to
time under this Agreement.
(b) The Agent shall maintain the Register pursuant to
subsection 18.6(d), and a subaccount therein for each Domestic Lender, in which
shall be recorded (i) the amount of each Domestic Term Loan made hereunder and
each Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Domestic Lender under the Domestic Term Loans and (iii) the
amount of any sum received by the Agent from the Company in respect of principal
of or interest on the Domestic Term Loans, and the amount of each Domestic
Lender's share thereof.
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(c) The entries made in the Register and the accounts of each
Domestic Lender maintained pursuant to subsection 2.4(a) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Domestic Lender or the Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the Domestic Term
Loan made to the Company by such Domestic Lender in accordance with the terms of
this Agreement.
(d) The Company agrees that, upon the request to the Agent by
any Domestic Lender, the Company will execute and deliver to such Domestic
Lender a promissory note of the Company evidencing the Domestic Term Loan of
such Domestic Lender, substantially in the form of Exhibit A-1, with appropriate
insertions as to date and principal amount (a "Domestic Term Loan Note").
2.5 Use of Proceeds of Domestic Term Loans. The Domestic Term
Loans shall be used on the Closing Date to finance the Recapitalization,
including distributions to be made on the Closing Date as contemplated thereby,
and to pay fees and expenses incurred in connection therewith and with the
financings contemplated thereby.
SECTION 3. THE DOMESTIC REVOLVING CREDIT LOANS
3.1 Domestic Revolving Credit Loans. Subject to the terms and
conditions hereof, each Domestic Lender severally agrees to make loans on a
revolving credit basis ("Domestic Revolving Credit Loans") to the Company from
time to time during the Commitment Period; provided, that no Domestic Revolving
Credit Loan shall be made if, after giving effect to the making of such Loan and
the simultaneous application of the proceeds thereof, the aggregate amount of
the Domestic Revolving Credit Exposure of all the Domestic Lenders would exceed
the lesser of (i) the aggregate amount of the Domestic Revolving Credit
Commitments and (ii) the Domestic Borrowing Base then in effect. Amounts
borrowed by the Company under this subsection 3.1 may be repaid in whole or in
part and, up to but excluding the last day of the Commitment Period, reborrowed,
all in accordance with the terms and conditions hereof. The Domestic Revolving
Credit Loans shall be made in Dollars and may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Company and set forth in the notice of borrowing or notice of conversion
with respect thereto; provided, that (x) no Eurodollar Loan shall be made after
the day that is one month prior to the Termination Date and (y) any Domestic
Revolving Credit Loans to be made on the Closing Date shall be made entirely as
ABR Loans.
3.2 Procedure for Domestic Revolving Credit Loan Borrowing.
The Company shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 11:00 A.M., New York City time, three Business
Days prior to the requested borrowing date, with respect to the part of the
Domestic Revolving Credit Loans that are to be initially Eurodollar Loans or one
Business Day prior to the requested borrowing date, otherwise) requesting that
the Domestic Lenders make the Domestic Revolving Credit Loans specified in the
notice of borrowing in respect thereof on the requested borrowing date. Each
42
borrowing of Domestic Revolving Credit Loans shall be in an amount equal to (a)
in the case of ABR Loans, (x) $500,000 or a whole multiple of $100,000 in excess
thereof (or, if the then aggregate undrawn amount of the Domestic Revolving
Credit Commitments is less than $500,000, such lesser amount), (y) the principal
amount of Refunded Domestic Swing Line Loans, if made pursuant to subsection
5.1(c), or (z) the amount set forth in subsection 4.5(c), if made pursuant
thereto, and (b) in the case of Eurodollar Loans, $1,000,000 or a whole multiple
of $100,000 in excess thereof. Upon receipt of any such notice of borrowing from
the Company, the Agent shall promptly notify each Domestic Lender of receipt of
such notice of borrowing. Subject to the terms and conditions hereof, each
Domestic Lender will make the amount of its pro rata share of each borrowing of
Domestic Revolving Credit Loans available to the Agent for the account of the
Company at the office of the Agent specified in subsection 18.2 prior to 12:00
Noon, New York City time, on the borrowing date requested by the Company in
funds immediately available to the Agent. Such borrowing will then be made
available to the Company by the Agent crediting the account of the Company on
the books of such office with the aggregate of the amounts made available to the
Agent by the Domestic Lenders and in like funds as received by the Agent.
3.3 Repayment of Domestic Revolving Credit Loans. (a) The
Company hereby unconditionally promises to pay to the Agent, for the account of
the Domestic Lenders, on the Termination Date all amounts owing on account of
the Domestic Revolving Credit Loans.
(b) The Company hereby agrees to pay interest on the unpaid
principal amount of the Domestic Revolving Credit Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 10.5.
3.4 Evidence of Debt. (a) Each Domestic Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to such Domestic Lender resulting from each Domestic
Revolving Credit Loan of such Domestic Lender from time to time, including the
amounts of principal and interest payable and paid to such Domestic Lender from
time to time under this Agreement.
(b) The Agent shall maintain the Register pursuant to
subsection 18.6(d), and a subaccount therein for each Domestic Lender, in which
shall be recorded (i) the amount of each Domestic Revolving Credit Loan made
hereunder and each Interest Period (if any) applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Company to each Domestic Lender under Domestic Revolving Credit Loans and
(iii) the amount of any sum received by the Agent from the Company in respect of
principal of or interest on the Domestic Revolving Credit Loans, and the amount
of each Domestic Lender's share thereof.
(c) The entries made in the Register and the accounts of each
Domestic Lender maintained pursuant to subsection 3.4(a) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Domestic Lender or the Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the Domestic
Revolving Credit Loans made to the Company by such Domestic Lender in accordance
with the terms of this Agreement.
43
(d) The Company agrees that, upon the request to the Agent by
any Domestic Lender, the Company will execute and deliver to such Domestic
Lender a promissory note of the Company evidencing the Domestic Revolving Credit
Loans of such Domestic Lender, substantially in the form of Exhibit A-2, with
appropriate insertions as to date and principal amount (a "Domestic Revolving
Credit Note").
3.5 Use of Proceeds of Domestic Revolving Credit Loans. The
Domestic Revolving Credit Loans shall be used from time to time (a) to finance a
portion of the Recapitalization and to pay fees, to refinance certain existing
working capital Indebtedness and to pay expenses in connection therewith and
with the financing thereof (provided that not more than $40,000,000 in aggregate
principal amount of the Domestic Revolving Credit Loans shall be utilized for
the purposes described in this clause (a)), (b) to finance closing and
post-closing adjustments payable under the Recapitalization Documents related to
adjustments in working capital and (c) for working capital and general corporate
purposes of the Company and its Subsidiaries (except any purchase, lease or
other acquisition of all or substantially all of the Capital Stock or assets of
any entity (other than any Subsidiary) or any division thereof).
SECTION 4. LETTER OF CREDIT SUB-FACILITY
4.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Bank agrees to issue letters of credit for the account of
the Company on any Business Day during the Commitment Period in such form as
shall be reasonably acceptable to such Issuing Bank; provided that no Letter of
Credit shall be issued if, after giving effect thereto (i) the aggregate amount
of the Domestic Revolving Credit Exposure of all the Domestic Lenders would
exceed the lesser of (A) the aggregate amount of the Domestic Revolving Credit
Commitments or (B) the Domestic Borrowing Base then in effect or (ii) the
aggregate amount of the L/C Obligations would exceed the L/C Commitment then in
effect.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (A) a
standby letter of credit issued to support obligations of the Company
or any of its Subsidiaries, contingent or otherwise, to provide credit
support for workers' compensation, other insurance programs and other
lawful corporate purposes (a "Standby Letter of Credit") or (B) a
commercial letter of credit issued in respect of the purchase of goods
and services in the ordinary course of business of the Company and its
Subsidiaries (a "Commercial Letter of Credit"; together with the
Standby Letters of Credit, the "Letters of Credit"); and
(ii) expire no later than the earlier of 365 days after
its date of issuance and 5 Business Days prior to the Termination Date;
provided that unless the relevant Issuing Bank notifies the Company not
less than 30 days prior to the expiry of such Letter of Credit that
such Issuing Bank is not willing to extend it, any such Letter of
Credit may by its terms be automatically extended for periods of one
year from the current or any future expiration date thereof (but not to
any date which is later than 5 Business Days prior to the Termination
Date).
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
44
(d) No Issuing Bank shall at any time be obligated to issue a
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any Domestic Lender to exceed any limits imposed by, any
applicable Requirement of Law.
4.2 Procedure for Issuance of Letters of Credit under this
Agreement. The Company may from time to time request that an Issuing Bank issue
a Letter of Credit by delivering to such Issuing Bank at its office listed on
Schedule II or otherwise notified to the Company an Application therefor (with a
copy to the Agent), completed to the satisfaction of such Issuing Bank, and such
other certificates, documents and other papers and information as such Issuing
Bank may reasonably request. Upon receipt by such Issuing Bank of any
Application, and subject to the terms and conditions hereof, such Issuing Bank
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall such Issuing Bank be required to issue the
requested Letter of Credit earlier than five Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by such
Issuing Bank and the Company. Such Issuing Bank shall advise the Agent of the
terms of the Letter of Credit on the date of issuance thereof and shall promptly
thereafter furnish copies thereof and each amendment thereto to the Company and
the Agent. The Agent shall, with the cooperation of the Issuing Banks and the
Company, prepare and distribute to the Domestic Lenders a quarterly summary
setting forth issuances, cancellations, extensions and changes in face amounts
of Letters of Credit.
4.3 Fees, Commissions and Other Charges. (a) The Company shall
pay to the Agent, for the account of the Domestic Lenders (including the
relevant Issuing Bank) pro rata according to their respective Commitment
Percentages of the Domestic Revolving Credit Commitments, a letter of credit
commission with respect to each Letter of Credit, computed at a rate per annum
equal to the then Applicable Margin for Eurodollar Loans on the daily average
undrawn face amount of such Letter of Credit. Such commission shall be payable
in arrears on the last day of each March, June, September and December to occur
after the date of issuance of such Letter of Credit and on the expiration date
of such Letter of Credit and shall be nonrefundable. On each date upon which the
Company pays to the Agent letter of credit commissions pursuant to this
subsection 4.3(a), the Company shall also pay to the relevant Issuing Bank a
fronting fee with respect to each Letter of Credit, computed at a rate per annum
equal to 1/8 of 1% on the daily average undrawn face amount of such Letter of
Credit.
(b) In addition to the foregoing fees and commissions, the
Company shall (i) pay or reimburse the relevant 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 such
Letter of Credit and (ii) pay such Issuing Bank such other fees as shall be
agreed by such Issuing Bank and the Company.
(c) The Agent shall, promptly following its receipt thereof,
distribute to the relevant Issuing Bank and the Domestic Lenders all fees and
commissions received by the Agent for their respective accounts pursuant to this
subsection.
4.4 L/C Participations. (a) Each Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
45
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
such Issuing Bank, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk, an undivided interest equal to such L/C
Participant's Commitment Percentage of the Domestic Revolving Credit Commitments
in such Issuing Bank's obligations and rights under each Letter of Credit issued
by such Issuing Bank hereunder and the amount of each draft paid by such Issuing
Bank thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Bank that, if a draft is paid under any Letter of Credit
issued by such Issuing Bank for which the Company has not reimbursed such
Issuing Bank to the full extent required by the terms of this Agreement, such
L/C Participant shall pay to such Issuing Bank upon demand at such Issuing
Bank's office listed in Schedule II or otherwise notified to such L/C
Participant an amount equal to such L/C Participant's Commitment Percentage of
the Domestic Revolving Credit Commitments times the amount of such draft, or any
part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to an Issuing Bank pursuant to subsection 4.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit is
not paid to such Issuing Bank on the date such payment is due from such L/C
Participant, such L/C Participant shall pay to such Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal funds rate, as quoted by such Issuing Bank, during the period from and
including the date such payment is required to the date on which such payment is
immediately available to such Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of such Issuing Bank submitted to any
L/C Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Bank has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with subsection 4.4(a), such
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the account party or otherwise, including by way of set-off or
proceeds of collateral applied thereto by such Issuing Bank), or any payment of
interest on account thereof, such Issuing Bank will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the event
that any such payment received by such Issuing Bank shall be required to be
returned by such Issuing Bank, such L/C Participant shall return to such Issuing
Bank the portion thereof previously distributed by such Issuing Bank to it.
(d) Notwithstanding the foregoing, no Domestic Lender shall be
required to purchase a participating interest in an Issuing Bank's obligations
and rights under a Letter of Credit if, prior to the issuance by such Issuing
Bank of such Letter of Credit or increase by such Issuing Bank of the face
amount of, or extension by such Issuing Bank of the expiration date of, such
Letter of Credit, such Issuing Bank has received written notice from such
Domestic Lender specifying that such Domestic Lender believes in good faith that
an Event of Default has occurred and is continuing, describing the nature of
such Event of Default and stating that, as a result thereof, such Domestic
Lender shall cease to purchase such participating interests, except that (x) in
the case of an increase in face amount, such Domestic Lender shall be required
to purchase such participating interest to the extent of the face amount of such
Letter of Credit prior to such Domestic Lender's written notice and (y) in the
case of an extension of expiration date, such Domestic Lender shall be required
to purchase such participating interest to the extent that such Letter of Credit
is drawn prior to prior expiration date (without giving effect to such
46
extension); provided that the obligation of such Domestic Lender to purchase
such participating interests shall be reinstated upon the earlier to occur of
(i) the date upon which such Domestic Lender notifies such Issuing Bank that its
prior notice has been withdrawn and (ii) the date upon which the Event of
Default specified in such notice no longer is continuing (it being understood
that, in the event that such Event of Default was not continuing at the time
that such Issuing Bank received such notice, such Domestic Lender shall be
obligated to purchase such participating interest promptly upon discovery that
its good faith belief was erroneous).
4.5 Reimbursement Obligation. (a) The Company agrees to
reimburse the relevant Issuing Bank in respect of each Letter of Credit issued
by such Issuing Bank on each date on which such Issuing Bank notifies the
Company (with a copy to the Agent at its address listed in subsection 18.2) of
the date and amount of a draft presented under such Letter of Credit and paid by
such Issuing Bank for the amount of (i) such draft so paid and (ii) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Bank in
connection with such payment; provided that, if such Issuing Bank shall notify
the Company of a drawing after 2:00 p.m., New York City time, on the date of any
drawing under a Letter of Credit, the Company will not be required to reimburse
such Issuing Bank until the next succeeding Business Day and, until such
reimbursement is so required, the amount of such drawing shall be deemed to be a
Domestic Revolving Credit Loan which is an ABR Loan hereunder in accordance with
the provisions of paragraph (c) below. Each such payment shall be made to such
Issuing Bank at its address for notices specified herein in lawful money of the
United States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Company under this subsection from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which is 2% above the rate payable with respect to ABR Loans
from time to time.
(c) Each notice of a drawing under any Letter of Credit shall
constitute a request by the Company for a borrowing pursuant to subsection 3.2
of Domestic Revolving Credit Loans which are ABR Loans in the amount of such
drawing plus any amounts payable pursuant to subsection 4.5(a)(ii) in respect of
such drawing. The borrowing date with respect to such borrowing shall be the
date of such drawing.
4.6 Obligations Absolute. (a) The obligations of the Company
under this Section 4 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Company may have or have had against any Issuing Bank or any
beneficiary of a Letter of Credit.
(b) The Company hereby agrees with each Issuing Bank that such
Issuing Bank shall not be responsible for, and the Company's Reimbursement
Obligations under subsection 4.5(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged; provided, that reliance upon such documents by such
Issuing Bank shall not have constituted gross negligence or wilful misconduct of
such Issuing Bank or (ii) any dispute between or among the Company and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Company or any
Subsidiary against any beneficiary of such Letter of Credit or any such
transferee.
47
(c) No Issuing Bank 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 any Letter of Credit issued by
it, except for errors or omissions caused by such Issuing Bank's gross
negligence or willful misconduct.
(d) The Company agrees that any action taken or omitted by an
Issuing Bank under or in connection with any Letter of Credit issued by such
Issuing Bank 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 Customs, shall be binding on the Company and shall not
result in any liability of such Issuing Bank to the Company or any Subsidiary.
4.7 Letter of Credit Payments. If any draft shall be presented
for payment to an Issuing Bank under any Letter of Credit issued by it, such
Issuing Bank shall promptly notify the Company of the date and amount thereof.
The responsibility of such Issuing Bank to the Company in connection with any
draft presented for payment under any Letter of Credit issued by such Issuing
Bank shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in substantial conformity with such Letter of Credit.
4.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 4, the provisions of this Section 4 shall apply.
SECTION 5. AMOUNT AND TERMS OF
DOMESTIC SWING LINE SUB-FACILITY
5.1 Domestic Swing Line Commitments. (a) Subject to the terms
and conditions hereof, the Domestic Swing Line Lender agrees to make swing line
loans (individually, a "Domestic Swing Line Loan"; collectively, the "Domestic
Swing Line Loans") to the Company under the Domestic Revolving Credit
Commitments from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000, provided
that no Domestic Swing Line Loan shall be made if, after giving effect to the
making of such Domestic Swing Line Loan and the simultaneous application of the
proceeds thereof, the aggregate amount of the Domestic Revolving Credit Exposure
of all the Domestic Lenders would exceed the lesser of (i) the aggregate amount
of the Domestic Revolving Credit Commitments and (ii) the Domestic Borrowing
Base then in effect. Amounts borrowed by the Company under this subsection 5.1
may be repaid in whole or in part and, up to but excluding the last day of the
Commitment Period, reborrowed, all in accordance with the terms and conditions
hereof. All Domestic Swing Line Loans shall be made in Dollars as ABR Loans and
shall not be entitled to be converted into Eurodollar Loans. The Company shall
give the Domestic Swing Line Lender irrevocable notice (which notice must be
received by the Domestic Swing Line Lender prior to 11:00 A.M., New York City
time) on the requested borrowing date specifying the amount of each requested
Domestic Swing Line Loan, which shall be in a minimum amount of $100,000 or a
whole multiple thereof. The proceeds of each Domestic Swing Line Loan will be
made available by the Domestic Swing Line Lender to the Company by crediting the
account of the Company designated to the Domestic Swing Line Lender with such
proceeds.
48
(b) The Company hereby unconditionally promises to pay to the
Domestic Swing Line Lender on the Termination Date all amounts owing on account
of the Domestic Swing Line Loans. The Domestic Swing Line Loans shall be
evidenced by a promissory note of the Company substantially in the form of
Exhibit A-6, with appropriate insertions (the "Domestic Swing Line Note"),
payable to the order of the Domestic Swing Line Lender and representing the
obligation of the Company to pay the aggregate unpaid principal amount of the
Domestic Swing Line Loans, with interest thereon as prescribed in subsection
10.5. The Domestic Swing Line Lender is hereby authorized to record the
borrowing date, the amount of each Domestic Swing Line Loan and the date and
amount of each payment or prepayment of principal thereof on the schedule
annexed to and constituting a part of the Domestic Swing Line Note and, in the
absence of manifest error, any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded, provided that the
failure of the Domestic Swing Line Lender to make such recordation (or any error
in such recordation) shall not affect the obligations of the Company hereunder
or under such Note. The Domestic Swing Line Note shall (a) be dated the Closing
Date, (b) be stated to mature on the Termination Date and (c) bear interest for
the period from the Closing Date on the unpaid principal amount thereof from
time to time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, subsection 10.5.
(c) The Domestic Swing Line Lender, at any time in its sole
and absolute discretion, may, on behalf of the Company (which hereby irrevocably
directs the Domestic Swing Line Lender to act on its behalf), request each
Domestic Lender, including Chemical, to make a Domestic Revolving Credit Loan in
an amount equal to such Domestic Lender's Commitment Percentage of the Domestic
Revolving Credit Commitments times the amount of the Domestic Swing Line Loans
(the "Refunded Domestic Swing Line Loans") outstanding on the date such notice
is given. Unless any of the events described in paragraph (g) or (h) of Section
16 shall have occurred (in which event the procedures of paragraph (d) of this
subsection 5.1 shall apply), each Domestic Lender shall make the proceeds of its
Domestic Revolving Credit Loan available to the Domestic Swing Line Lender for
its own account at the office specified for Chemical in subsection 18.2 prior to
11:00 A.M. (New York City time) in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such Domestic
Revolving Credit Loans shall be immediately applied to repay the Refunded
Domestic Swing Line Loans. Notwithstanding anything to the contrary contained
herein, the Domestic Swing Line Lender shall (unless any of the events described
in paragraph (g) or (h) of Section 16 shall have occurred) request each Domestic
Lender to make such a Domestic Revolving Credit Loan for the purpose of
refunding outstanding Domestic Swing Line Loans not less frequently than every
15 days.
(d) If, prior to the making of a Domestic Revolving Credit
Loan pursuant to paragraph (c) of subsection 5.1, one of the events described in
paragraph (g) or (h) of Section 16 shall have occurred, each Domestic Lender
will, on the date such Domestic Revolving Credit Loan was to have been made,
purchase an undivided participating interest in the Refunded Domestic Swing Line
Loans in an amount equal to its Commitment Percentage of the Domestic Revolving
Credit Commitments times the aggregate amount of such Refunded Domestic Swing
Line Loans. Each Domestic Lender will immediately transfer to the Domestic Swing
Line Lender, in immediately available funds, the amount of its participation and
upon receipt thereof the Domestic Swing Line Lender will deliver to such
Domestic Lender a Domestic Swing Line Loan Participation Certificate dated the
date of receipt of such funds and in such amount.
49
(e) Whenever, at any time after the Domestic Swing Line Lender
has received from any Domestic Lender such Domestic Lender's participating
interest in a Refunded Domestic Swing Line Loan pursuant to paragraph (d) above,
the Domestic Swing Line Lender receives any payment on account thereof, the
Domestic Swing Line Lender will distribute to such Domestic Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Domestic
Lender's participating interest was outstanding and funded) in like funds as
received; provided, however, that in the event that such payment received by the
Domestic Swing Line Lender is required to be returned, such Domestic Lender will
return to the Domestic Swing Line Lender any portion thereof previously
distributed by the Domestic Swing Line Lender to it in like funds as such
payment is required to be returned by the Domestic Swing Line Lender.
(f) Notwithstanding the foregoing, no Domestic Lender shall be
required to make a Domestic Revolving Credit Loan to the Company for the purpose
of refunding a Domestic Swing Line Loan pursuant to paragraph (c) above or to
purchase a participating interest in a Domestic Swing Line Loan pursuant to
paragraph (d) above if, prior to the making by the Domestic Swing Line Lender of
such Domestic Swing Line Loan, the Domestic Swing Line Lender has received
written notice from such Domestic Lender specifying that such Domestic Lender
believes in good faith that an Event of Default has occurred and is continuing,
describing the nature of such Event of Default and stating that, as a result
thereof, such Domestic Lender shall cease to make such Domestic Revolving Credit
Loans or purchase such participating interests, as the case may be; provided
that the obligation of such Domestic Lender to make such Domestic Revolving
Credit Loans and to purchase such participating interests shall be reinstated
upon the earlier to occur of (i) the date upon which such Domestic Lender
notifies the Domestic Swing Line Lender that its prior notice has been withdrawn
and (ii) the date upon which the Event of Default specified in such notice no
longer is continuing (it being understood that, in the event that such Event of
Default was not continuing at the time that the Domestic Swing Line Lender
received such notice, such Domestic Lender shall be obligated to make its
Domestic Revolving Credit Loan or purchase its participating interest in such
Domestic Swing Line Loan promptly upon discovery that its good faith belief was
erroneous).
5.2 Participations. Each Domestic Lender's obligation to make
Domestic Revolving Credit Loans pursuant to paragraph (c) of subsection 5.1 or
to purchase participating interests pursuant to paragraph (d) of subsection 5.1
shall (except to the extent expressly set forth in subsection 5.1(c), (d) or
(f)) be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Domestic Lender may have against
the Domestic Swing Line Lender, the Company or any other Person for any reason
whatsoever; (b) the occurrence or continuance of an Event of Default or any
other failure to satisfy any condition precedent to borrowing under Section 12;
(c) any adverse change in the condition (financial or otherwise) of the Company
or any other Person; (d) any breach of this Agreement by the Company or any
other Domestic Lender; (e) the amount of the Domestic Borrowing Base in effect
on the date of such purchase; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
5.3 Use of Proceeds of Domestic Swing Line Loans. The proceeds
of the Domestic Swing Line Loans hereunder shall be used by the Company for any
purpose for which the proceeds of Domestic Revolving Credit Loans may be used.
50
SECTION 6. THE UK TERM LOANS
6.1 UK Term Loans. Subject to the terms and conditions hereof,
each UK Lender severally agrees to make a term loan (a "UK Term Loan") to the UK
Borrower on the Closing Date in an amount not to exceed each such UK Lender's UK
Term Loan Commitment. The UK Term Loans shall be made in Pounds Sterling and may
from time to time be (a) Domestic Sterling Loans, (b) Sterling Base Rate Loans
or (c) a combination thereof, as determined by the UK Borrower in the initial
notice of borrowing or in any notice of conversion with respect thereto.
6.2 Procedure for UK Term Loan Borrowing. The UK Borrower
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 11:00 A.M., London, England time, on the Closing Date) requesting
that the UK Lenders make the UK Term Loans on the Closing Date. Upon receipt of
any such notice of borrowing from the UK Borrower, the Agent shall promptly
notify each UK Lender of receipt of such notice of borrowing and of such UK
Lender's Commitment Percentage of the UK Term Loans to be made pursuant thereto.
Each UK Lender will make the amount of its pro rata share of the borrowing of UK
Term Loans available to the Agent for the account of the UK Borrower at the
office of the Agent specified in subsection 18.2 prior to 12:00 Noon, London,
England time, on the Closing Date in funds immediately available to the Agent.
Such borrowing will then be transferred by the Agent to its principal office
located in the City of New York and held by the Agent (on behalf of the UK
Lenders) until such time as the Domestic Term Loans are borrowed on the Closing
Date. At such time, the Agent shall transfer such amounts as actually have been
received by it (and in like funds as received by it) in the manner directed by
the UK Borrower. Notwithstanding anything to the contrary contained herein, the
UK Term Loans initially shall be made as Sterling Base Rate Loans hereunder.
6.3 Amortization of UK Term Loans. (a) The UK Borrower hereby
unconditionally promises to pay to the Agent, for the account of the UK Lenders,
on each date set forth below the principal amount of the UK Term Loans set forth
opposite such date:
Date Amount
----------------- -------------
September 30, 1996 (pound) 49,695.20
December 31, 1996 49,695.20
March 31, 1997 115,995.47
June 30, 1997 115,995.47
September 30, 1997 49,695.20
December 31, 1997 49,695.20
March 31, 1998 115,995.47
June 30, 1998 115,995.47
September 30, 1998 124,238.01
December 31, 1998 124,238.01
March 31, 1999 124,238.01
June 30, 1999 124,238.01
September 30, 1999 124,238.01
December 30, 1999 124,238.01
March 30, 2000 124,238.01
June 30, 2000 124,238.01
51
September 30, 2000 165,650.68
December 31, 2000 165,650.68
March 31, 2001 165,650.68
June 30, 2001 165,650.68
September 30, 2001 331,301.35
December 31, 2001 331,301.35
March 31, 2002 331,301.34
(b) The UK Borrower hereby unconditionally agrees that any
then-outstanding UK Term Loans shall be due and payable on the Termination Date.
(c) The UK Borrower hereby agrees to pay interest on the
unpaid principal amount of the UK Term Loans from time to time outstanding from
the date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 10.5.
6.4 Evidence of Debt. (a) Each UK Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the UK Borrower to such UK Lender resulting from each UK Term
Loan of such UK Lender from time to time, including the amounts of principal and
interest payable and paid to such UK Lender from time to time under this
Agreement.
(b) The Agent shall maintain the Register pursuant to
subsection 18.6(d), and a subaccount therein for each UK Lender, in which shall
be recorded (i) the amount of each UK Term Loan made hereunder and each Interest
Period (if any) applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each UK Lender
under the UK Term Loans and (iii) the amount of any sum received by the Agent
from the UK Borrower in respect of principal of or interest on the UK Term
Loans, and the amount of each UK Lender's share thereof.
(c) The entries made in the Register and the accounts of each
UK Lender maintained pursuant to subsection 6.4(a) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the UK Borrower therein recorded; provided,
however, that the failure of any UK Lender or the Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the UK Borrower to repay (with applicable interest) the UK Term
Loan made to the UK Borrower by such UK Lender in accordance with the terms of
this Agreement.
(d) The UK Borrower agrees that, upon the request to the Agent
by any UK Lender, the UK Borrower will execute and deliver to such UK Lender a
promissory note of the UK Borrower evidencing the UK Term Loan of such UK
Lender, substantially in the form of Exhibit A-3 with appropriate insertions as
to date and principal amount (a "UK Term Loan Note").
6.5 Use of Proceeds of UK Term Loans. The UK Term Loans shall
be used on the Closing Date to refinance outstanding Indebtedness of the UK
Borrower.
52
SECTION 7. THE UK REVOLVING CREDIT LOANS
7.1 UK Revolving Credit Loans. Subject to the terms and
conditions hereof, each UK Lender severally agrees to make loans on a revolving
credit basis ("UK Revolving Credit Loans") to the UK Borrower from time to time
during the Commitment Period; provided, that no UK Revolving Credit Loan shall
be made if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof, the aggregate outstanding principal amount
of the UK Revolving Credit Loans would exceed the lesser of (i) the aggregate
amount of UK Revolving Credit Commitments and (ii) the UK Borrowing Base then in
effect. Amounts borrowed by the UK Borrower under this subsection 7.1 may be
repaid in whole or in part and, up to but excluding the last day of the
Commitment Period, reborrowed, all in accordance with the terms and conditions
hereof. The UK Revolving Credit Loans shall be made in Pounds Sterling and may
from time to time be (i) Domestic Sterling Loans, (ii) Sterling Base Rate Loans
or (iii) a combination thereof, as determined by the UK Borrower and set forth
in the notice of borrowing or notice of conversion with respect thereto;
provided, that (x) no Domestic Sterling Loan shall be made after the day that is
one month prior to the Termination Date and (y) any UK Revolving Credit Loans to
be made on the Closing Date shall be made entirely as Sterling Base Rate Loans.
7.2 Procedure for UK Revolving Credit Loan Borrowing. (a) The
UK Borrower shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 11:00 A.M., London, England time, three Business
Days prior to the requested borrowing date, if all or any part of the UK
Revolving Credit Loans are to be initially Domestic Sterling Loans or one
Business Day prior to the requested borrowing date, otherwise) requesting that
the UK Lenders make the UK Revolving Credit Loans specified in the notice of
borrowing in respect thereof on the requested borrowing date. Each borrowing of
UK Revolving Credit Loans shall be in an amount equal to (i) in the case of
Sterling Base Rate Loans, (pound)350,000 or a whole multiple of (pound)100,000
in excess thereof (or, if the then aggregate undrawn amount of the UK Revolving
Credit Commitments is less than (pound)350,000, such lesser amount) or the
principal amount of Refunded UK Swing Line Loans, if made pursuant to subsection
8.1(a), and (ii) in the case of Domestic Sterling Loans, (pound)750,000 or a
whole multiple of (pound)100,000 in excess thereof. Upon receipt of any such
notice of borrowing from the UK Borrower, the Agent shall promptly notify each
UK Lender of receipt of such notice of borrowing. Subject to the terms and
conditions hereof, each UK Lender will make the amount of its pro rata share of
each borrowing of UK Revolving Credit Loans available to the Agent for the
account of the UK Borrower at the office of the Agent specified in subsection
18.2 prior to 12:00 Noon, London, England time, on the borrowing date requested
by the UK Borrower in funds immediately available to the Agent. Such borrowing
will then be made available to the UK Borrower by the Agent crediting the
account of the UK Borrower on the books of such office with the aggregate of the
amounts made available to the Agent by the UK Lenders and in like funds as
received by the Agent.
(b) Notwithstanding the provisions of clause (a) of this
subsection 7.2, the UK Revolving Credit Loans to be borrowed on the Closing Date
shall be made by the UK Lenders upon same-day notice (which must be received by
the Agent prior to 11:00 A.M., London, England time) on the Closing Date. Upon
receipt by the Agent of the proceeds of such UK Revolving Credit Loans, the
Agent shall transfer such proceeds to its principal office located in New York
City and shall hold such proceeds (on behalf of the UK Lenders) until such time
as the Domestic Term Loans are borrowed on the Closing Date. At such time, the
Agent shall transfer such amounts as actually have been received by it (and in
like funds as received by it) in the manner directed by the UK Borrower.
53
7.3 Repayment of UK Revolving Credit Loans. (a) The UK
Borrower hereby unconditionally promises to pay to the Agent, for the account of
the UK Lenders, on the Termination Date all amounts owing on account of the UK
Revolving Credit Loans.
(b) The UK Borrower hereby agrees to pay interest on the
unpaid principal amount of the UK Revolving Credit Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 10.5.
7.4 Evidence of Debt. (a) Each UK Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the UK Borrower to such UK Lender resulting from each UK
Revolving Credit Loan of such UK Lender from time to time, including the amounts
of principal and interest payable and paid to such UK Lender from time to time
under this Agreement.
(b) The Agent shall maintain the Register pursuant to
subsection 18.6(d), and a subaccount therein for each UK Lender, in which shall
be recorded (i) the amount of each UK Revolving Credit Loan made hereunder and
each Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the UK
Borrower to each UK Lender under the UK Revolving Credit Loans and (iii) the
amount of any sum received by the Agent from the UK Borrowing in respect of
principal of or interest on the UK Revolving Credit Loans, and the amount of
each UK Lender's share thereof.
(c) The entries made in the Register and the accounts of each
UK Lender maintained pursuant to subsection 7.4(a) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the UK Borrower therein recorded; provided,
however, that the failure of any UK Lender or the Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the UK Borrower to repay (with applicable interest) the UK
Revolving Credit Loans made to the UK Borrower by such UK Lender in accordance
with the terms of this Agreement.
(d) The UK Borrower agrees that, upon the request to the Agent
by any UK Lender, the UK Borrower will execute and deliver to such UK Lender a
promissory note of the UK Borrower evidencing the UK Revolving Credit Loans of
such UK Lender, substantially in the form of Exhibit A-4, with appropriate
insertions as to date and principal amount (a "UK Revolving Credit Note").
7.5 Use of Proceeds of UK Revolving Credit Loans. The UK
Revolving Credit Loans shall be used from time to time for working capital and
other general corporate purposes of the UK Borrower and its Subsidiaries (other
than to finance acquisitions).
SECTION 8. AMOUNT AND TERMS OF
UK SWING LINE SUB-FACILITY
8.1 UK Swing Line Commitments. (a) Subject to the terms and
conditions hereof, the UK Swing Line Lender agrees to make swing line loans
(individually, a "UK Swing Line Loan"; collectively, the "UK Swing Line Loans")
to the UK Borrower under the UK Revolving Credit Commitments from time to time
during the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed (pound)2,000,000, provided that no UK Swing Line Loan
54
shall be made if, after giving effect to the making of such UK Swing Line Loan
and the simultaneous application of the proceeds thereof, the aggregate amount
of the UK Revolving Credit Exposure of all the UK Lenders would exceed the
lesser of (i) the aggregate amount of the UK Revolving Credit Commitments and
(ii) the UK Borrowing Base then in effect. Amounts borrowed by the UK Borrower
under this subsection 8.1 may be repaid in whole or in part and, up to but
excluding the last day of the Commitment Period, reborrowed, all in accordance
with the terms and conditions hereof. All UK Swing Line Loans shall be made in
Pounds Sterling as Sterling Base Rate Loans and shall not be entitled to be
converted into Domestic Sterling Loans. The UK Borrower shall give the UK Swing
Line Lender irrevocable notice (which notice must be received by the UK Swing
Line Lender prior to 11:00 A.M., London time) on the requested borrowing date
specifying the amount of each requested UK Swing Line Loan, which shall be in a
minimum amount of (pound)50,000 or a whole multiple thereof. The proceeds of
each UK Swing Line Loan will be made available by the UK Swing Line Lender to
the UK Borrower by crediting the account of the UK Borrower designated to the UK
Swing Line Lender with such proceeds.
(b) The UK Borrower hereby unconditionally promises to pay to
the UK Swing Line Lender on the Termination Date all amounts owing on account of
the UK Swing Line Loans. The UK Swing Line Loans shall be evidenced by a
promissory note of the UK Borrower substantially in the form of Exhibit A-7,
with appropriate insertions (the "UK Swing Line Note"), payable to the order of
the UK Swing Line Lender and representing the obligation of the UK Borrower to
pay the aggregate unpaid principal amount of the UK Swing Line Loans, with
interest thereon as prescribed in subsection 10.5. The UK Swing Line Lender is
hereby authorized to record the borrowing date, the amount of each UK Swing Line
Loan and the date and amount of each payment or prepayment of principal thereof
on the schedule annexed to and constituting a part of the UK Swing Line Note
and, in the absence of manifest error, any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded, provided
that the failure of the UK Swing Line Lender to make such recordation (or any
error in such recordation) shall not affect the obligations of the UK Borrower
hereunder or under such Note. The UK Swing Line Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Termination Date and (c) bear
interest for the period from the Closing Date on the unpaid principal amount
thereof from time to time outstanding at the applicable interest rate per annum
determined as provided in, and payable as specified in, subsection 10.5.
(c) The UK Swing Line Lender, at any time in its sole and
absolute discretion, may, on behalf of the UK Borrower (which hereby irrevocably
directs the UK Swing Line Lender to act on its behalf), request each UK Lender,
including Chemical, to make a UK Revolving Credit Loan in an amount equal to
such UK Lender's Commitment Percentage of the UK Revolving Credit Commitments
times the amount of the UK Swing Line Loans (the "Refunded UK Swing Line Loans")
outstanding on the date such notice is given. Unless any of the events described
in paragraph (g) or (h) of Section 16 shall have occurred (in which event the
procedures of paragraph (d) of this subsection 8.1 shall apply), each UK Lender
shall make the proceeds of its UK Revolving Credit Loan available to the UK
Swing Line Lender for its own account at the office in London specified for
Chemical in subsection 18.2 prior to 11:00 A.M. (London time) in funds
immediately available on the Business Day next succeeding the date such notice
is given. The proceeds of such UK Revolving Credit Loans shall be immediately
applied to repay the Refunded UK Swing Line Loans.
55
(d) If, prior to the making of a UK Revolving Credit Loan
pursuant to paragraph (c) of subsection 8.1, one of the events described in
paragraph (g) or (h) of Section 16 shall have occurred, each UK Lender will, on
the date such UK Revolving Credit Loan was to have been made, purchase an
undivided participating interest in the Refunded UK Swing Line Loans in an
amount equal to its Commitment Percentage of the UK Revolving Credit Commitments
times the aggregate amount of such Refunded UK Swing Line Loans. Each UK Lender
will immediately transfer to the UK Swing Line Lender, in immediately available
funds, the amount of its participation and upon receipt thereof the UK Swing
Line Lender will deliver to such UK Lender a UK Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount.
(e) Whenever, at any time after the UK Swing Line Lender has
received from any UK Lender such UK Lender's participating interest in a
Refunded UK Swing Line Loan pursuant to paragraph (d) above, the UK Swing Line
Lender receives any payment on account thereof, the UK Swing Line Lender will
distribute to such UK Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such UK Lender's participating interest was outstanding and
funded) in like funds as received; provided, however, that in the event that
such payment received by the UK Swing Line Lender is required to be returned,
such UK Lender will return to the UK Swing Line Lender any portion thereof
previously distributed by the UK Swing Line Lender to it in like funds as such
payment is required to be returned by the UK Swing Line Lender.
(f) Notwithstanding the foregoing, no UK Lender shall be
required to make a UK Revolving Credit Loan to the UK Borrower for the purpose
of refunding a UK Swing Line Loan pursuant to paragraph (c) above or to purchase
a participating interest in a UK Swing Line Loan pursuant to paragraph (d) above
if, prior to the making by the UK Swing Line Lender of such UK Swing Line Loan,
the UK Swing Line Lender has received written notice from such UK Lender
specifying that such UK Lender believes in good faith that an Event of Default
has occurred and is continuing, describing the nature of such Event of Default
and stating that, as a result thereof, such UK Lender shall cease to make such
UK Revolving Credit Loans or purchase such participating interests, as the case
may be; provided that the obligation of such UK Lender to make such UK Revolving
Credit Loans and to purchase such participating interests shall be reinstated
upon the earlier to occur of (i) the date upon which such UK Lender notifies the
UK Swing Line Lender that its prior notice has been withdrawn and (ii) the date
upon which the Event of Default specified in such notice no longer is continuing
(it being understood that, in the event that such Event of Default was not
continuing at the time that the UK Swing Line Lender received such notice, such
UK Lender shall be obligated to make its UK Revolving Credit Loan or purchase
its participating interest in such UK Swing Line Loan promptly upon discovery
that its good faith belief was erroneous).
8.2 Participations. Each UK Lender's obligation to make UK
Revolving Credit Loans pursuant to paragraph (c) of subsection 8.1 or to
purchase participating interests pursuant to paragraph (d) of subsection 8.1
shall (except to the extent expressly set forth in subsection 8.1(c), (d) or
(f)) be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such UK Lender may have against the UK
Swing Line Lender, the UK Borrower or any other Person for any reason
whatsoever; (b) the occurrence or continuance of an Event of Default or any
other failure to satisfy any condition precedent to borrowing under Section 12;
(c) any adverse change in the condition (financial or otherwise) of the UK
Borrower
56
or any other Person; (d) any breach of this Agreement by the UK Borrower or any
other UK Lender; (e) the amount of the UK Borrowing Base in effect on the date
of such purchase; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
8.3 Use of Proceeds of UK Swing Line Loans. The proceeds of
the UK Swing Line Loans hereunder shall be used by the UK Borrower for any
purpose for which the proceeds of UK Revolving Credit Loans may be used.
SECTION 9. THE SUPPLEMENTAL LOANS
9.1 Supplemental Loans. (a) Subject to the terms and
conditions hereof, each Secured Supplemental Lender severally agrees to make
term loans ("Secured Supplemental Loans") to the Company on the Supplemental
Closing Date in an amount not to exceed the Secured Supplemental Commitment of
such Secured Supplemental Lender. The Secured Supplemental Loans shall be made
in Dollars and may from time to time be (i) Eurodollar Loans, (ii) ABR Loans or
(iii) a combination thereof, as determined by the Company and set forth in the
notice of borrowing or notice of conversion with respect thereto; provided that
the Secured Supplemental Loans to be made on the Supplemental Closing Date
initially shall be made as ABR Loans and shall be converted to Eurodollar Loans
as promptly as is practicable thereafter.
(b) Subject to the terms and conditions hereof, each Unsecured
Supplemental Lender severally agrees to make term loans ("Unsecured Supplemental
Loans") to the Company on the Supplemental Closing Date in an amount not to
exceed the Unsecured Supplemental Commitment of such Unsecured Supplemental
Lender. The Unsecured Supplemental Loans shall be made in Dollars and may from
time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
thereof, as determined by the Company and set forth in the notice of borrowing
or notice of conversion with respect thereto; provided that the Unsecured
Supplemental Loans to be made on the Supplemental Closing Date initially shall
be made as ABR Loans and shall be converted to Eurodollar Loans as promptly as
is practicable thereafter.
9.2 Procedure for Supplemental Loan Borrowing. The Company
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 11:00 A.M., New York City time, on the Supplemental Closing Date)
requesting that the Supplemental Lenders make the Supplemental Loans on the
Supplemental Closing Date. Upon receipt of any such notice of borrowing from the
Company, the Agent shall promptly notify each Supplemental Lender of receipt of
such notice of borrowing and of such Supplemental Lender's Facility Percentage
of the Secured Supplemental Loans and Unsecured Supplemental Loans to be made
pursuant thereto. Each Supplemental Lender will make the amount of its pro rata
share of the borrowing of the Secured Supplemental Loans and/or Unsecured
Supplemental Loans (as applicable) available to the Agent for the account of the
Company at the office of the Agent specified in subsection 18.2 prior to 12:00
Noon, New York City time, on the Supplemental Closing Date in funds immediately
available to the Agent. Such borrowing will then be made available to the
Company by the Agent crediting the account of the Company on the books of such
office with the aggregate of the amounts made available to the Agent by the
Supplemental Lenders and in like funds as received by the Agent.
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9.3 Repayment of Supplemental Loans. The Company hereby
unconditionally agrees that any then-outstanding Supplemental Loans shall be due
and payable on June 30, 2001.
(a) The Company hereby agrees to pay interest on the unpaid
principal amount of the Supplemental Loans from time to time outstanding from
the date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 10.5.
9.4 Evidence of Debt. (a) Each Supplemental Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to such Supplemental Lender resulting from each
Secured Supplemental Loan and each Unsecured Supplemental Loan of such
Supplemental Lender from time to time, including the amounts of principal and
interest payable and paid to such Supplemental Lender from time to time under
this Agreement.
(b) The Agent shall maintain the Register pursuant to
subsection 18.6(d), and a subaccount therein for each Supplemental Lender, in
which shall be recorded (i) the amount of each Secured Supplemental Loan made
hereunder and each Interest Period (if any) applicable thereto, (ii) the amount
of each Unsecured Supplemental Loan made hereunder and each Interest Period (if
any) applicable thereto, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Company to each Supplemental
Lender under the Supplemental Loans and (iii) the amount of any sum received by
the Agent from the Company in respect of principal of or interest on the
Supplemental Loans, and the amount of each Supplemental Lender's share thereof.
(c) The entries made in the Register and the accounts of each
Supplemental Lender maintained pursuant to subsection 9.4(a) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Supplemental Lender or the Agent to maintain the
Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Company to repay (with applicable interest) the
Supplemental Loans made to the Company by such Supplemental Lender in accordance
with the terms of this Agreement.
(d) The Company agrees that, upon the request to the Agent by
any Secured Supplemental Lender, the Company will execute and deliver to such
Secured Supplemental Lender a promissory note of the Company evidencing the
Secured Supplemental Loan of such Secured Supplemental Lender, substantially in
the form of Exhibit A-5A, with appropriate insertions as to date and principal
amount (a "Secured Supplemental Note").
(e) The Company agrees that, upon the request to the Agent by
any Unsecured Supplemental Lender, the Company will execute and deliver to such
Unsecured Supplemental Lender a promissory note of the Company evidencing the
Unsecured Supplemental Loan of such Unsecured Supplemental Lender, substantially
in the form of Exhibit A-5B, with appropriate insertions as to date and
principal amount (an "Unsecured Supplemental Note").
9.5 Use of Proceeds of Supplemental Loans. The Supplemental
Loans shall be used for general corporate purposes of the Company and its
Subsidiaries.
9.6 Collateral for Supplemental Loans. (a) The Unsecured
Supplemental Lenders hereby acknowledge and agree that, notwithstanding anything
to the contrary contained in Guarantees or the Security Documents , the
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Unsecured Supplemental Loans are intended to be unsecured and shall not benefit
from the guarantees and security interests provided pursuant thereto.
(b) The parties hereto (including, without limitation, the
Secured Supplemental Lenders) hereby acknowledge and agree that the Secured
Supplemental Loans shall benefit from a first priority, perfected security
interest in all Collateral, and shall benefit from all Guarantees, which secure
or support (as the case may be) the obligations owing by the Company on account
of the Domestic Loans. Notwithstanding the foregoing, the Lenders (including,
without limitation, the Secured Supplemental Lenders) hereby irrevocably
authorize and instruct the Agent to apply any proceeds derived from such
Collateral and Guarantees, as follows:
first, to the payment of the Primary Obligations; and
second, to the extent of any excess proceeds after application in
accordance with clause first above, to the payment of
principal and interest on account of the Secured
Supplemental Loans.
The provisions of this subsection 9.6(b) constitute solely an intercreditor
agreement among the Lenders and the Agent, and shall not affect the rights and
interests of the Secured Supplemental Lenders with respect to the Company, its
Subsidiaries and any other third parties.
(c) The Supplemental Lenders hereby agree that any payments
(other than payments on account of the Unsecured Supplemental Loans under the
Vestar Guarantee) received on account of the Supplemental Loans (whether from
the Company, with the proceeds of Collateral, under any Guarantee, pursuant to
any right of setoff or otherwise) prior to the indefeasible payment in full of
the Primary Obligations which are then due and payable shall be held by the
Supplemental Lenders in trust for the other Lenders and shall be promptly
delivered to the Agent for ratable distribution to such other Lenders on account
of the Primary Obligations (with any excess amounts being refunded to the
Secured Supplemental Lenders after the indefeasible payment in full of the
Primary Obligations).
SECTION 10. CERTAIN PROVISIONS APPLICABLE TO THE LOANS
AND LETTERS OF CREDIT
10.1 Termination or Reduction of Commitments. The Company
shall have the right, upon not less than five Business Days' notice to the
Agent, to terminate any Commitments or, from time to time, to reduce the
aggregate amount of any Commitment hereunder. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple thereof and shall reduce
permanently the Commitments then in effect.
10.2 Optional and Mandatory Prepayments. (a) Any Borrower may
at any time and from time to time prepay any Loans (other than, to the extent
that any other Loans are then outstanding, the Unsecured Supplemental Loans), in
whole or in part, without premium or penalty, upon at least three Business Days'
irrevocable notice to the Agent (in the case of Eurodollar Loans or Domestic
Sterling Loans) or one Business Day's irrevocable notice to the Agent (in the
case of ABR Loans or Sterling Base Rate Loans). Upon receipt of any such notice
the Agent shall promptly notify each affected Lender thereof. If any such notice
59
is given, the amount specified in such notice shall be due and payable on the
date specified therein, together with any amounts payable pursuant to subsection
10.13 and (except in the case of prepayments of the Domestic Revolving Credit
Loans or the UK Revolving Credit Loans which are not accompanied by a permanent
reduction of the Domestic Revolving Credit Commitments or the UK Revolving
Credit Commitments, as the case may be) accrued interest to such date on the
amount prepaid. Partial prepayments of the Domestic Term Loans and the UK Term
Loans shall be applied pro rata to the remaining installments of principal
thereof. Amounts prepaid on account of the Domestic Term Loans, the UK Term
Loans and the Supplemental Loans may not be reborrowed. Partial prepayments
under this subsection shall be in an aggregate principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof (in the case of Domestic Loans) or
(pound)350,000 or a whole multiple of (pound)100,000 in excess thereof (in the
case of UK Loans).
(b) As promptly as practicable following the occurrence of any
Prepayment Event (and, in any event, within one Business Day following the
receipt by the Company or any of its Subsidiaries of the Net Cash Proceeds
therefrom), the Borrowers shall prepay the Loans (in the manner, and to the
extent, specified by subsection 10.2(f)) by the amount equal to 100% of such Net
Cash Proceeds.
(c) Within 90 days following the last day of each fiscal year
of the Company and, in any event, not later than the date upon which the
financial statements with respect to such fiscal year are delivered to the Agent
pursuant to subsection 13.4(a) (commencing with the fiscal year ending December
31, 1997), the Borrowers shall prepay Loans (in the manner, and to the extent,
specified by subsection 10.2(f)) by the amount equal to 50% of Excess Cash Flow
for such fiscal year; provided, however, that no such prepayment shall be
required to be so made if the Leverage Ratio (calculated in accordance with the
provisions of subsection 14.16) on the last day of the fiscal year in respect of
which such prepayment would otherwise be required was less than or equal to 3.00
to 1.00.
(d) If on any date (including any date on which a Domestic
Borrowing Base Certificate is delivered pursuant to subsection 13.4(j)) the
aggregate principal amount of the Domestic Revolving Credit Exposure on such
date exceeds the lesser of the Domestic Revolving Credit Commitments then in
effect and the then applicable Domestic Borrowing Base, the Company shall
immediately (and without notice or demand) prepay the Domestic Swing Line Loans
(and, to the extent necessary, the Domestic Revolving Credit Loans) by the
amount equal to such excess.
(e) If on any date (including any date on which a UK Borrowing
Base Certificate is delivered pursuant to subsection 13.4(j)) the UK Revolving
Credit Exposure on such date exceeds the lesser of the UK Revolving Credit
Commitments then in effect and the then applicable UK Borrowing Base, the UK
Borrower shall immediately (and without notice or demand) prepay the UK Swing
Line Loans (and, to the extent necessary, the UK Revolving Credit Loans) by the
amount equal to such excess.
(f) All mandatory prepayments pursuant to subsections 10.2(b)
and (c) shall be applied to the prepayment of the Domestic Term Loans, the UK
Term Loans and the Secured Supplemental Loans (ratably between such Facilities
and ratably among the remaining installments of principal of each thereof). In
the event that any such amounts remain available for mandatory prepayments after
payment of the Loans as set forth above in this clause (f), then:
60
(i) the Applicable Advance Rates shall thereafter be reduced
(but not to less than the Basic Advance Rates) by the amount of such
excess and the Domestic Revolving Credit Loans and the UK Revolving
Credit Loans shall be repaid to the extent that they exceed the
Domestic Borrowing Base or the UK Borrowing Base (as the case may be)
then in effect; and
(ii) any such amounts remaining after application in
accordance with clause (i) above shall be applied to the prepayment of
the Unsecured Supplemental Loans (ratably among the remaining
installments of principal thereof).
All mandatory prepayments pursuant to this subsection 10.2 shall be accompanied
by payment of accrued interest through the date of such prepayment and any
amounts payable under subsection 10.13. Amounts prepaid on account of the
Domestic Term Loans, the UK Term Loans and the Supplemental Loans may not be
reborrowed.
10.3 Conversion and Continuation Options. (a) Any Borrower may
elect from time to time to convert its Eurodollar Loans to ABR Loans or Domestic
Sterling Loans to Sterling Base Rate Loans (as applicable) by giving the Agent
at least two Business Days' prior irrevocable notice of such election. Any
Borrower may elect from time to time to convert its ABR Loans to Eurodollar
Loans or Sterling Base Rate Loans to Domestic Sterling Loans (as applicable) by
giving the Agent at least three Business Days' prior irrevocable notice of such
election. Any such notice of conversion to Eurodollar Loans or Domestic Sterling
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the Agent shall promptly
notify each affected Lender thereof. ABR Loans and Sterling Base Rate Loans may
be converted as provided herein, provided that (i) no ABR Loan may be converted
into a Eurodollar Loan and no Sterling Base Rate Loan may be converted into a
Domestic Sterling Loan when any Event of Default has occurred and is continuing
and the Agent has or the Required Lenders have determined that such a conversion
is not appropriate, (ii) no ABR Loan may be converted into a Eurodollar Loan and
no Sterling Base Rate Loan may be converted into a Domestic Sterling Loan after
the date that is one month prior to the Termination Date (in the case of
conversions of Domestic Revolving Credit Loans or UK Revolving Credit Loans) or
to the date of the final installment of principal of the Domestic Term Loans,
the UK Term Loans or the Supplemental Loans (in the case of conversions of
Secured Supplemental Loans or Unsecured Supplemental Loans) and (iii) no
Supplemental Loan which is a Eurodollar Loan may be converted to an ABR Loan at
any time when (in accordance with the provisions of clause (4) of the proviso to
the definition of the term "Interest Period" contained in subsection 1.1) such
Supplemental Loan could be maintained as a Eurodollar Loan hereunder.
(b) Any Eurodollar Loans or Domestic Sterling Loans may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the relevant Borrower giving notice to the Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in subsection 1.1, of the length of the next Interest Period to be
applicable to such Eurodollar Loans or Domestic Sterling Loans, as the case may
be, provided that no Eurodollar Loan or Domestic Sterling Loan may be continued
as such (i) when any Event of Default has occurred and is continuing and the
Agent has or the Required Lenders have determined that such a continuation is
not appropriate or (ii) after the date that is one month prior to the
Termination Date (in the case of continuations of Domestic Revolving Credit
Loans or UK Revolving Credit Loans) or the date of the final installment of
principal of the Domestic Term Loans, the UK Term Loans or the Supplemental
Loans (in the case of continuations of Secured
61
Supplemental Loans and Unsecured Supplemental Loans) and provided, further, that
if such Borrower shall fail to give such notice or if such continuation is not
permitted such Loans shall be automatically converted to ABR Loans (in the case
of Eurodollar Loans) or Sterling Base Rate Loans (in the case of Domestic
Sterling Loans) on the last day of such then expiring Interest Period.
10.4 Minimum Amounts of Tranches. All borrowings, conversions
and continuations of Eurodollar Loans and Domestic Sterling Loans, and all
selections of Interest Periods, shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans or Domestic Sterling Loans, as the case may be,
comprising each Tranche shall be not less than $1,000,000 (in the case of
Eurodollar Loans) and (pound)750,000 (in the case of Domestic Sterling Loans)
and there shall not be more than 10 Tranches of Eurodollar Loans and 5 Tranches
of Domestic Sterling Loans at any one time outstanding.
10.5 Interest Rates and Payment Dates for Loans. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Adjusted LIBO Rate for
such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) Each Domestic Sterling Loan shall bear interest for each
day during each Interest Period with respect thereto at a rate per annum equal
to the Adjusted Domestic Sterling Rate for such Interest Period plus the
Applicable Margin.
(d) Each Sterling Base Rate Loan shall bear interest at a rate
per annum equal to the Sterling Base Rate plus the Applicable Margin.
(e) If any Borrower shall default in the payment of the
principal or interest on any Loan or any other amount becoming due hereunder or
under any Security Document, by acceleration or otherwise, the Borrower shall on
demand from time to time pay interest, to the extent permitted by law, on such
defaulted amount to but excluding the date of actual payment (after as well as
before judgment) at a rate per annum equal to (a) in the case of any Loan, the
rate applicable to such Loan under subsection 10.5(a), (b), (c) or (d), as the
case may be, plus 2% per annum and (b) in the case of any other amount owing (i)
with respect to Domestic Loans, the rate that would be applicable to an ABR Loan
under subsection 10.5(b) plus 2% per annum and (ii) with respect to UK Loans,
the rate that would be applicable to a Sterling Base Rate Loan under subsection
10.5(d) plus 2% per annum.
(f) Interest on Loans shall be payable in arrears on each
Interest Payment Date or as otherwise specified herein; provided, that interest
accruing pursuant to paragraph (e) of this subsection shall be payable from time
to time on demand.
10.6 Inability to Determine Interest Rate. If, prior to the
date which is two Business Days prior to the first day of any Interest Period:
(a) the Agent shall have determined (which determination shall
be conclusive absent manifest error) that, by reason of circumstances
affecting the relevant market
62
generally, adequate and reasonable means do not exist for ascertaining
the LIBO Rate or Domestic Sterling Rate, as applicable, for such
Interest Period, or
(b) the Agent shall have received notice from Lenders having
Commitments comprising at least 25% of the aggregate amount of the
affected Commitments that the LIBO Rate or the Domestic Sterling Rate,
as applicable, determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrowers and
the affected Lenders as soon as practicable thereafter. If such notice is given
(x) any Eurodollar Loans or Domestic Sterling Loans, as the case may be,
requested to be made on the first day of such Interest Period shall be made as
ABR Loans or Sterling Base Rate Loans, respectively, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
or Domestic Sterling Loans, as the case may be, shall be converted to or
continued as ABR Loans or Sterling Base Rate Loans, respectively, and (z) any
outstanding Eurodollar Loans or Domestic Sterling Loans, as the case may be,
shall be converted, on the first day of such Interest Period, to ABR Loans or
Sterling Base Rate Loans, respectively. Until such notice has been withdrawn by
the Agent, no further Eurodollar Loans or Domestic Sterling Loans, as the case
may be, shall be made or continued as such, nor shall the Borrowers have the
right to convert Loans to Eurodollar Loans or Domestic Sterling Loans, as the
case may be.
10.7 Commitment Fee; Other Fees. (a) The Company agrees to pay
to the Agent, for the account of each Domestic Lender, a commitment fee for the
period from and including the Closing Date to, but excluding, the Termination
Date, computed for each day during such period at the rate per annum equal to
the Applicable Margin for commitment fees then in effect on the amount equal to
the average daily amount of the Available Domestic Revolving Credit Commitment
of such Domestic Lender on such day. Such commitment fee shall be payable
quarterly, in arrears, on the last day of each March, June, September and
December and on the Termination Date or such earlier date on which the Domestic
Revolving Credit Commitments shall terminate as provided herein, commencing on
the first of such dates to occur after the date hereof.
(b) The UK Borrower agrees to pay to the Agent, for the
account of each UK Lender, a commitment fee for the period from and including
the Closing Date to, but excluding, the Termination Date, computed for each day
during such period at the rate per annum equal to the Applicable Margin for
commitment fees then in effect on the amount equal to the average daily amount
of the Available UK Revolving Credit Commitment of such Lender on such day. Such
commitment fee shall be payable quarterly, in arrears, on the last day of each
March, June, September and December and on the Termination Date or such earlier
date on which the UK Revolving Credit Commitments shall terminate as provided
herein, commencing on the first of such dates to occur after the date hereof.
(c) The Company agrees to pay to the Agent, for its own
account, the fees in the amounts and on the dates agreed to by such parties in
writing prior to the date of this Agreement.
(d) The Company agrees to pay to the Agent, for the account of
each Lender, a utilization fee for each day upon which the Domestic Revolving
63
Credit Exposure exceeds the amount which would be available under the Domestic
Borrowing Base if the Domestic Borrowing Base were determined using the Basic
Advance Rates (i.e., without giving effect to any Increase Amount then in
effect). Such utilization fee shall be in the amount equal to 1/4 of 1% per
annum on the then outstanding amount of such Lender's Domestic Revolving Credit
Exposure, UK Revolving Credit Exposure, Domestic Term Loans and UK Term Loans
and shall be payable quarterly, in arrears, on the last day of each March, June,
September and December. Nothing contained herein shall be deemed to permit the
Domestic Revolving Credit Exposure at any date to exceed the Domestic Borrowing
Base then in effect.
10.8 Computation of Interest and Fees. (a) Commitment fees,
interest and Letter of Credit commissions shall be calculated on the basis of a
360-day year for the actual days elapsed; provided that (i) interest on ABR
Loans which is determined by reference to the Prime Rate shall be calculated on
the basis of a 365/366-day year for the actual days elapsed and (ii) interest on
UK Loans shall be calculated on the basis of a 365-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Company and the
affected Lenders of each determination of an Adjusted LIBO Rate or a Domestic
Sterling Rate. Any change in the ABR 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 day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. Any change in the Sterling Base Rate shall be
effective as of the opening of business on the day in which such change is
announced by Chemical Bank in London. The Agent shall as soon as practicable
notify the Company and the affected Lenders of the effective date and the amount
of each such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the relevant Borrower and the affected Lenders in the absence of manifest error.
10.9 Pro Rata Treatment and Payments. (a) Each borrowing by a
Borrower of Loans shall be made ratably by the Lenders holding the Commitments
to provide such Facility of Loans in accordance with their respective Commitment
Percentages thereof.
(b) Whenever any payment received by the Agent under this
Agreement or any Note is insufficient to pay in full all amounts then due and
payable to the Agent and the Lenders under this Agreement and the Notes:
(i If the Agent has not received a Payment Sharing Notice (or
if the Agent has received a Payment Sharing Notice but the Event of
Default specified in such Payment Sharing Notice has been cured or
waived pursuant to subsection 18.1 and by the Lenders holding the
majority of the UK Revolving Credit Commitments), such payment shall be
distributed pro rata according to the respective Commitment Percentages
of the Lenders holding Commitments or Loans on account of which such
payment was made.
(ii If the Agent has received a Payment Sharing Notice which
remains in effect (or, if the Event of Default specified therein has
been waived pursuant to subsection 18.1, but not by the Lenders holding
the majority of the UK Revolving Credit Commitments), all payments
received by the Agent under this Agreement or any Note shall be
distributed by the Agent and applied by the Agent and the Lenders in
the following order: first, to the payment of fees and expenses due and
payable to the Agent under and in connection with this Agreement;
second, to the payment of all expenses due and payable hereunder,
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ratably among the Lenders in accordance with the aggregate amount of
such payments owed to each such Lender; third, to the payment of fees
due and payable under subsection 10.7, ratably among the Lenders in
accordance with the Commitment Percentage of each Lender of the
Commitments for which such payment is owed; fourth, to the payment of
the interest accrued on all Loans and Notes and all commissions and
fees set forth in subsection 4.3(a), regardless of whether any such
amount is then due and payable, ratably among the Lenders in accordance
with the aggregate accrued interest, commissions and fees owed to each
Lender on account thereof; fifth, to the payment of the principal
amount of all Loans and Notes, regardless of whether any such amount is
then due and payable, ratably among the Lenders in accordance with the
aggregate principal amount owed to each such Lender and sixth, to the
payment of any other obligations owing hereunder, ratably among the
Lenders in accordance with the aggregate amount owed to each Lender;
and any balance shall be returned to the relevant Borrower.
(c) All payments (including prepayments) to be made by a
Borrower on account of principal, Reimbursement Obligations, interest and fees
shall be made without set-off or counterclaim and shall be made to the Agent for
the account of the applicable Lenders at the office of the Agent specified in
subsection 18.2, or at such other location as the Agent may direct, on or prior
to 12:00 Noon, local time at the location of such office, in lawful money of the
currency in which the Commitments on account of which such amounts have been
paid are denominated and in immediately available funds. The Agent shall
distribute such payments in accordance with the provisions of subsection 10.9(a)
or (b), as the case may be, promptly upon receipt in like funds as received.
(d) If any payment hereunder (other than payments on
Eurodollar Loans or Domestic Sterling Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment hereunder on a Eurodollar Loan or a Domestic
Sterling Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the effect of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day. If any payment of principal shall be extended under this
paragraph (d), interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing date that such Lender will not make the amount
which would constitute its Commitment Percentage of the borrowing to be made on
such date available to the Agent, on such borrowing date the Agent may assume
that such Lender has made such amount available to the Agent and, in reliance
upon such assumption, make available to the relevant Borrower a corresponding
amount. If such amount is made available to the Agent on a date after such
borrowing date, such Lender shall pay to the Agent on demand an amount equal to
the product of (i) the daily average Federal Funds Effective Rate during such
period as determined by the Agent times (ii) such amount times (iii) a fraction
of which the numerator is the number of days from and including such borrowing
date to the date on which such amount becomes immediately available to the Agent
and of which the denominator is 360. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this paragraph (e) shall be
conclusive, in the absence of manifest error. If such amount is not in fact made
available to the Agent by such Lender within three Business Days after such
borrowing date, the Agent shall be entitled to recover such amount, with
interest thereon at the rate per annum then applicable to ABR Loans,
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in the case of Domestic Loans, or Sterling Base Rate Loans, in the case of UK
Loans, hereunder, within eight Business Days after demand, from the relevant
Borrower.
(f) All payments and prepayments on account of Loans and fees
hereunder on account of the Domestic Facilities shall be made in Dollars and all
payments and prepayments on account of Loans and fees hereunder on account of
the UK Facilities shall be made in Pounds Sterling.
10.10 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans or Domestic Sterling Loans, or to make or
maintain extensions of credit to one or more Borrowers contemplated by this
Agreement, the commitment of such Lender hereunder to make Eurodollar Loans or
Domestic Sterling Loans (as the case may be), continue Eurodollar Loans or
Domestic Sterling Loans (as the case may be) as such, convert Loans to
Eurodollar Loans or Domestic Sterling Loans (as the case may be) and maintain
extensions of credit to such Borrowers shall forthwith be canceled to the extent
necessary to remedy or prevent such illegality and such Lender's Loans then
outstanding as Eurodollar Loans or Domestic Sterling Loans (as the case may be),
if any, shall be converted automatically to ABR Loans or Sterling Base Rate
Loans, respectively, on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan or Domestic Sterling Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the relevant Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 10.13.
10.11 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender or any Issuing Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender or any Issuing Bank or any
corporation controlling such Lender or such Issuing Bank or from which
such Lender or such Issuing Bank obtains funding or credit to any tax
of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any Application or any Eurodollar Loan or Domestic Sterling
Loan made by it, or change the basis of taxation of payments to such
Lender or such Issuing Bank or such corporation in respect thereof
(except for Non-Excluded Taxes covered by subsection 10.12 and changes
in the rate of tax on the overall net income of such Lender or such
Issuing Bank or such corporation);
(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 or such Issuing Bank
or any corporation controlling such Lender or such Issuing Bank or from
which such Lender or such Issuing Bank obtains funding or credit which
in the case of Eurodollar Loans or Domestic Sterling Loans, as the case
may be, is not otherwise included in the
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determination of the Adjusted LIBO Rate or Domestic Sterling Rate, as
the case may be, hereunder or
(iii) shall impose on such Lender or such Issuing Bank or any
corporation controlling such Lender or such Issuing Bank or from which
such Lender or such Issuing Bank obtains funding or credit any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender or
such Issuing Bank or such corporation, by an amount which such Lender or such
Issuing Bank or such corporation deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or Domestic Sterling Loans or
issuing or participating in Letters of Credit or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Company shall pay such
Lender or such Issuing Bank any additional amounts necessary to compensate such
Lender or such Issuing Bank for such increased cost or reduced amount
receivable.
(b) If any Lender or any Issuing Bank 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 such Issuing Bank or any corporation controlling such Lender or such
Issuing Bank or from which such Lender or such Issuing Bank obtains funding or
credit with any request or directive regarding capital adequacy (whether or not
having the force of law) from any Governmental Authority made subsequent to the
date hereof does or shall have the effect of reducing the rate of return on such
Lender's or such Issuing Bank's or such corporation's capital as a consequence
of its obligations hereunder or under any Letter of Credit to a level below that
which such Lender or such Issuing Bank or such corporation could have achieved
but for such change or compliance (taking into consideration such Lender's or
such Issuing Bank's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender or such Issuing Bank to be
material, then, from time to time, the Company shall pay to such Lender or such
Issuing Bank such additional amount or amounts as will compensate such Lender or
such Issuing Bank for such reduction.
(c) In addition to, and without duplication of, amounts which
may become payable from time to time pursuant to paragraphs (a) and (b) of this
subsection 10.11, the Company agrees to pay to each Lender which requests
compensation under this paragraph (c) by notice to the Company, on the last day
of each Interest Period with respect to any Eurodollar Loan or Domestic Sterling
Loan made by such Lender to the Company, at any time when such Lender shall be
required to maintain reserves against "Eurocurrency Liabilities" under
Regulation D of the Board (or, at any time when such Lender may be required by
the Board or by any other Governmental Authority, whether within the United
States, the United Kingdom or in another relevant jurisdiction, to maintain
reserves against any other category of liabilities which includes deposits by
reference to which the Adjusted LIBO Rate or the Domestic Sterling Rate is
determined as provided in this Agreement or against any category of extensions
of credit or other assets of such Lender which includes any such Eurodollar
Loans or Domestic Sterling Loans), an additional amount (determined by such
Lender's calculation or, if an accurate calculation is impracticable, estimate
using such means of allocation as such Lender shall determine) equal to the
actual costs, if any, incurred by such Lender during such Interest Period as a
result of the applicability of the foregoing reserves to such Eurodollar Loans
or Domestic Sterling Loans, as the case may be.
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(d) A certificate of each Lender or any Issuing Bank setting
forth (x) such amount or amounts as shall be necessary to compensate such Lender
or such Issuing Bank for amounts claimed by it in good faith pursuant to
paragraph (a), (b) or (c) above, as the case may be, and (y) setting forth in
reasonable detail an explanation of the basis for requesting such compensation
and the calculation thereof, shall be delivered to the Company and shall be
conclusive absent manifest error. The Company shall pay each Lender or such
Issuing Bank the amount shown as due on any such certificate delivered to it
within 20 days after its receipt of the same.
(e) The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
10.12 Taxes. (a) All payments made by the Borrowers under this
Agreement 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, in the case of the Agent and each Lender, net income taxes
imposed on the Agent or such Lender (including, without limitation, each Lender
in its capacity as the Issuing Bank), as the case may be, as a result of a
present or former connection between the jurisdiction of the Governmental
Authority imposing such tax and the Agent or such Lender (excluding a connection
arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement) (all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Non-Excluded Taxes"). If
any Non-Excluded Taxes are required to be withheld from any amounts payable to
the Agent or any Lender hereunder, the amounts so payable to the Agent or such
Lender shall be increased to the extent necessary to yield to the 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. Whenever any Non-Excluded Taxes are payable by a Borrower, as
promptly as possible thereafter such Borrower shall send to the 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 such Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, such Borrower shall indemnify
the Agent and such Lender for any incremental taxes, interest or penalties that
may become payable by the Agent or such Lender as a result of any such failure.
The agreements in this subsection 10.12(a) shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) (i) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver to
the Company and the Agent on or before the date it becomes a Lender (x) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, and (y) an Internal Revenue
Service Form W-8 or W-9 or successor applicable form, as the case may be. Each
such Lender also agrees to deliver to the Company and the Agent (x) two further
copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event (including, without limitation, a change in such
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Lender's lending office) requiring a change in the most recent form previously
delivered by it to the Company and the Agent, and (y) obtain such extensions of
the time for filing and to renew such forms and certifications thereof as may
reasonably be requested by the Company or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Company and the Agent. Such Lender shall certify (x)
in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes and (y) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States backup withholding tax.
(ii) In the event that:
(a) at the date of this Agreement, a Lender is not a
Qualifying Lender; or
(b) a Lender ceases to be a Qualifying Lender, other than as a
result of (i) the introduction of, suspension, withdrawal or
cancellation of, or change in, or change in the official
interpretation, administration or application of, any law or regulation
having the force of law or any published practice or published
concession of any relevant taxing authority in any jurisdiction with
which that Lender has a connection, occurring after the date of this
Agreement or (ii) the amendment, withdrawal, suspension, cancellation
or termination of any applicable tax treaty with respect to that Lender
occurring after the date of this Agreement;
then no Borrower who is resident in the United Kingdom will be liable to pay to
such a Lender under subsection 10.12 any amount in respect of taxes levied or
imposed by the United Kingdom or any taxing authority of or in the United
Kingdom in excess of the amount it would have been obliged to pay if such Lender
had been a Qualifying Lender.
10.13 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense (but excluding any
lost profits) which such Lender may sustain or incur as a consequence of (a)
default by such Borrower in payment when due of the principal amount of or
interest on any Eurodollar Loan or Domestic Sterling Loan, (b) default by such
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans or Domestic Sterling Loans after such Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (c)
default by such Borrower in making any prepayment of Eurodollar Loans or
Domestic Sterling Loans after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement, or (d) the making of a
payment, prepayment or conversion of Eurodollar Loans or Domestic Sterling Loans
on a day which is not the last day of an Interest Period with respect thereto,
including, without limitation, in each case, any such loss or expense arising
from the reemployment or repayment of funds obtained by such Lender or from fees
payable to terminate the deposits from which such funds were obtained. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
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10.14 Determinations. In making the determinations
contemplated by subsections 10.11, 10.12 and 10.13, each Lender may make such
estimates, assumptions, allocations and the like that such Lender in good faith
determines to be appropriate. Upon request of the Company, each relevant Lender
shall furnish to the Company, at any time after demand for payment of an amount
under subsection 10.12(a) or 10.13, a certificate outlining in reasonable detail
the computation of any amounts owing. Any certificate furnished by a Lender
shall be binding and conclusive in the absence of manifest error.
10.15 Lock Box Accounts. Any amounts received from time to
time in the Lock Box Accounts (as defined in the Lock Box Agreements) or
otherwise paid in accordance with the requirements of subsection 14.21 shall be
applied:
(a) in the case of amounts owing to the Company and its
Domestic Subsidiaries, to repay, first, any then outstanding
Domestic Swing Line Loans, second, any then outstanding
Domestic Revolving Credit Loans, third, to cash collateralize
any then outstanding Domestic Letters of Credit, fourth, to
prepay any then outstanding Domestic Term Loans and, fifth, to
prepay and then outstanding Secured Supplemental Loans; and
(b) in the case of other amounts, to repay, first, any then
outstanding UK Swing Line Loans, second, any then outstanding
UK Revolving Credit Loans and, third, to cash collateralize
any then outstanding UK Letters of Credit.
The Company hereby acknowledges and agrees that all fees and expenses incurred
by the Agent, any Lender or the Company with regard to a Lock Box Agreement, the
lock boxes established pursuant thereto and any concentration accounts
established in connection therewith shall be the obligation of the Company.
SECTION 11. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders (including the Issuing
Bank) to enter into this Agreement and to make the extensions of credit
hereunder, each Borrower hereby represents and warrants to the Agent and each
Lender that:
11.1 Organization; Powers. Such Borrower and each of the
Subsidiaries (a) is a corporation or limited liability company which is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business and is in good
standing in every juris diction where such qualification is required, except
where the failure so to qualify or be in good standing would not result in a
Material Adverse Effect, and (d) has the corporate or limited liability company
(as the case may be) power and authority to execute, deliver and perform its
obligations under each of the Recapitalization Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and, in the case of such Borrower, to borrow hereunder.
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11.2 Authorization. The execution, delivery and performance by
each of such Borrower and the Subsidiaries of each of the Recapitalization
Documents to which it is a party and the borrowings hereunder, the creation of
the security interests contemplated thereby and the other transactions
contemplated hereby and thereby (a) have been duly authorized by all requisite
corporate or limited liability company (as the case may be) and, if required,
stockholder or member action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, other than any law, statute, rule or
regulation the violation of which will not result in a Material Adverse Effect,
or of the certificate or articles of incorporation or limited liability company
agreement or other constitutive documents or by-laws of such Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any material
provision of any material indenture, agreement or other instrument to which such
Borrower or any Subsidiary is a party or by which any of them or any of their
property (including the Mortgaged Property) or assets is or may be bound, (ii)
be in conflict with, result in a breach of, constitute (alone or with notice or
lapse of time or both) a default under or give rise to any right to accelerate
any material obligation on the part of such Borrower or any Subsidiary under any
such indenture, agreement or other instrument or (iii) result in the creation or
imposition of any Lien (other than any Lien created under the Security
Documents) upon or with respect to any property or assets now owned or hereafter
acquired by such Borrower or any Subsidiary.
11.3 Enforceability. This Agreement (or the Joinder Agreement
to which it is a party, as the case may be) has been duly executed and delivered
by such Borrower. This Agreement constitutes, and each other Recapitalization
Document when executed and delivered by such Borrower and/or each of the
Subsidiaries party thereto will constitute, a legal, valid and binding
obligation of such Borrower and/or such Subsidiary enforceable against such
Borrower and/or such Subsidiary in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).
11.4 Approvals. (a) No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Recapitalization, except for (i) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (ii) recordation of the Company Mortgage and (iii) such others as have
been made or obtained and are in full force and effect.
(b) No consent or authorization of any Person (other than any
Governmental Authority) is required in connection with the Recapitalization,
except such consents and authorizations (i) as have been obtained and are in
full force and effect or (ii) the failure of which to obtain could not
reasonably be expected to have a Material Adverse Effect.
11.5 Financial Statements. (a) The Company has heretofore
furnished to the Lenders its consolidated balance sheets and statements of
income and changes in financial condition (i) as of and for the fiscal years
ended December 31, 1994, and December 31, 1995, audited by and accompanied by
the opinion of Coopers & Xxxxxxx LLP, independent public accountants, and (ii)
as of and for the fiscal quarter ended March 30, 1996, certified by its chief
financial officer. Such financial statements present fairly the financial
71
condition and results of operations of the Company and its consolidated
Subsidiaries as of such dates and for such periods and were prepared in
accordance with GAAP applied on a consistent basis, except, in the case of
unaudited statements, for normal year-end audit adjustments and the absence of
notes. Such balance sheets and the notes thereto disclose all liabilities,
direct or contingent, of the Company and its consolidated Subsidiaries as of the
dates thereof which are required by GAAP to be so disclosed or which otherwise
could have a Material Adverse Effect.
(b) The UK Borrower has heretofore furnished to the Lenders
its consolidated balance sheets and statements of income and changes in
financial condition (i) as of and for the fiscal years ended December 31, 1994,
and December 31, 1995, audited by and accompanied by the opinion of Coopers &
Xxxxxxx LLP, independent public accountants. Such financial state ments present
fairly the financial condition and results of operations of the UK Borrower and
its consolidated Subsidiaries as of such dates and for such periods and were
prepared in accordance with generally accepted accounting principles as in
effect in the United Kingdom on the date hereof applied on a consistent basis.
Such balance sheets and the notes thereto disclose all material liabilities,
direct or contingent, of the UK Borrower and its consolidated Subsidiaries as of
the dates thereof which are required by GAAP to be so disclosed or which
otherwise could have a Material Adverse Effect.
(c) The Company has heretofore furnished to the Lenders
unaudited pro forma consolidated balance sheets as of March 30, 1996, which were
prepared giving effect to the Recapitalization as if it had occurred on such
date. Such pro forma balance sheets have been prepared based on the assumptions
used to prepare the pro forma financial information contained in the
Confidential Information Memorandum, are based on the most recent information
available to the Company as of the date of delivery thereof, reflect all
adjustments believed by management in good faith to be required to be made in
order to give effect to the Recapitalization and present fairly on a pro forma
basis the estimated consolidated financial position of the Company and its
Subsidiaries as of March 30, 1996, assuming that the Recapitalization had
actually occurred at March 30, 1996.
(d) The Company has heretofore furnished to the Lenders its
unaudited pro forma consolidated statement of income for the period of 12 fiscal
months ended on March 30, 1996, which was prepared giving effect to the
Recapitalization as if it had occurred on the first day of such fiscal year.
Such statement of income is based on the most reasonable information available
to the Company as of the date of delivery thereof, reflects all adjustments
believed by management in good faith to be required to be made in order to give
effect to the Recapitalization and presents fairly on a pro forma basis the
estimated results of operations of the Company and its consolidated Subsidiaries
for the period of 12 fiscal months ended on March 30, 1996, assuming that the
Recapitalization had actually occurred on the first day thereof.
11.6 No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, properties, financial
condition, contingent liabilities, or material agreements of the Company and the
Subsidiaries, taken as a whole, since December 31, 1995 (it being understood
that the Recapitalization, in itself, does not constitute such a material
adverse change).
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11.7 Title to Properties; Possession Under Leases. (a) Each of
such Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Property), other than leasehold interests in retail store properties
to the extent that the termination of such leasehold interests would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by subsection 14.2 (but with respect to any representation
made as of the Closing Date, not including clauses (c), (l) and (n) thereof). No
material portion of any Mortgaged Property shall be subject to any lease,
license, sublease or other agreement granting to any person any right to use,
occupy or enjoy the same.
(b) Except as set forth on Schedule V, such Borrower has not
received any notice of, nor has any knowledge of, any pending or contemplated
Condemnation proceeding (as defined in subsection 8.18(b)) affecting the
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
(c) Except as set forth on Schedule V, such Borrower is not
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.
11.8 Subsidiaries. Schedule XI sets forth as of the Closing
Date a list of all Subsidiaries of the Company and the percentage ownership
interest of the Company therein.
11.9 Litigation; Compliance with Laws. (a) Except as set forth
on Schedule VI, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of such Borrower, threatened against or affecting such Borrower or any
Subsidiary or any business, property, assets or rights of any such Person (i)
that involve any Recapitalization Document or the Recapitalization or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely deter mined, could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(b) None of such Borrower nor any of its Subsidiaries (i) nor
any of their respective material properties or assets is in violation of, nor
will the continued operation of their material properties and assets as
currently operated violate, any law, rule, regulation or statute (including any
zoning, building, Environmental Law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting the Mortgaged
Property, or (ii) is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where (in the case of clauses (i)
and (ii)) such violation or default could reasonably be expected to result in a
Material Adverse Effect.
(c) To the extent required by applicable law in the
jurisdiction in which the Mortgaged Property is located, certificates of
occupancy and permits are in effect for the Mortgaged Property as currently
constructed.
11.10 Agreements. (a) Neither such Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate or limited liability company restriction that has resulted or could
reasonably be expected to result in a Material Adverse Effect.
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(b) Neither such Borrower nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
11.11 Federal Reserve Regulations. (a) Neither such Borrower
nor any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit has been or will be used by such Borrower or any of its Subsidiaries,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation G, U and X.
11.12 Investment Company Act; Public Utility Holding Company
Act. Neither such Borrower nor any Subsidiary (a) is an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) is a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
11.13 Tax Returns. Such Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal tax returns and material state and
local tax returns required to have been filed by it or with respect to it and
has paid or accrued or caused to be paid or accrued all taxes shown to be due
and payable on such 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, except taxes that are being contested in
good faith by appropriate proceedings and for which it shall have set aside on
its books adequate reserves in accordance with GAAP. Such Borrower and each of
its Subsidiaries has filed or made adequate provision in accordance with GAAP on
its books for any material taxes payable by it in connection with the
Recapitalization (including any such taxes payable in respect of indemnities).
No tax Lien has been filed and, to the knowledge of such Borrower, no claim is
being asserted with respect to any such tax, fee or other charge.
11.14 No Material Misstatements. No written information,
report, financial statement, exhibit or schedule furnished by or on behalf of
such Borrower to the Agent or any Lender in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto when taken
as a whole, as of the date such information, report, financial statement,
exhibit or schedule was furnished, contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading;
provided, however, that, (a) to the extent any such information was based
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upon or constituted a forecast or projection, such Borrower represents only that
it acted in good faith and utilized assumptions believed by it to be reasonable
and (b) as to information that is specified as having been supplied by third
parties (other than Affiliates of the Company), such Borrower represents only
that it is not aware of any material misstatement therein or material omission
therefrom.
11.15 Employee Benefit Plans. The Company, each of its
Subsidiaries and each ERISA Affiliate is in compliance with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder, except where failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect. The present value of
all benefit liabilities under each Plan (based on those assumptions that would
be used in a termination of such Plan) did not, as of the last annual valuation
date applicable thereto, exceed by more than $5,000,000 the value of the assets
of such Plan, on a Form 5500 reporting basis. None of the Company, any of its
Subsidiaries or any ERISA Affiliate has incurred any Withdrawal Liability in an
amount that could reasonably be expected to result in a Material Adverse Effect.
None of the Company, any of its Subsidiaries or any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated where such
reorganization or termination has resulted or could reasonably be expected to
result, through increases in the contributions required to be made to such Plan
or otherwise, in a Material Adverse Effect.
11.16 Environmental Matters. (a) The properties now or
formerly owned or operated by such Borrower and its Subsidiaries (the
"Properties") do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute, or constituted a violation of, or (ii)
could give rise to liability under, Environmental Laws resulting from any
Release of Hazardous Materials during such Borrower's or its Subsidiaries'
ownership or operation of the Properties or, to the knowledge of such Borrower,
at any other time, which violations and liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(b) The Properties and all operations of such Borrower and its
Subsidiaries are in compliance, and, to the extent that such Borrower or any of
its Subsidiaries owned or operated such Properties in the past three years, in
the last three years have been in compliance, with all Environmental Laws and
all Environmental Permits and all necessary Environmental Permits have been
obtained and are in effect, except to the extent that such non-compliance or
failure to obtain any necessary permits, in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
(c) During the time of such Borrower's or its Subsidiaries'
ownership or operation of the Properties and, to the knowledge of such Borrower,
at any other time, there have been no Releases or threatened Releases at, from,
under or proximate to the Properties or otherwise in connection with the
operations of such Borrower or its Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, and none of the Properties currently owned or operated by such
Borrower and its Subsidiaries are listed on the Federal National Priorities List
(under CERCLA and as defined pursuant to Environmental Law).
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(d) Neither such Borrower nor any of its Subsidiaries has
received any Environmental Claim in connection with the Properties or the
operations of such Borrower or its Subsidiaries or with regard to any Person
whose liabilities for environmental matters such Borrower or its Subsidiaries
has retained or assumed, in whole or in part, contractually, by operation of law
or otherwise, which, in the aggregate, could reasonably be expected to result in
a Material Adverse Effect, nor do such Borrower or any of its Subsidiaries have
reason to believe that any such notice will be received or is being threatened.
(e) Hazardous Materials have not been transported from the
Properties by such
Borrower or any of its Subsidiaries or, to the knowledge of such Borrower, any
other party, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Properties in a manner that could
reasonably be expected to give rise to liability under any Environmental Law
that would constitute a Material Adverse Effect, nor have such Borrower or any
of its Subsidiaries retained or assumed any liability, contractually, by
operation of law or otherwise, with respect to the generation, treatment,
storage or disposal of Hazardous Materials, which transportation, generation,
treatment, storage or disposal, or retained or assumed liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
11.17 Insurance. Schedule X sets forth a true, complete and
correct description of all material insurance maintained by the Company for
itself and its Subsidiaries as of the Closing Date. As of each such date, such
insurance is in full force and effect and all premiums have been duly paid. The
Company and its Subsidiaries have insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
11.18 Solvency. Immediately after the consummation of the
Recapitalization and immediately following the making of each Loan made on the
Closing Date and after giving effect to the application of the proceeds of such
Loans (a) the fair salable value of the assets of the Company on a consolidated
basis will exceed the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent liabilities)
of the Company on a consolidated basis as they mature, (b) the assets of the
Company on a consolidated basis will not constitute unreasonably small capital
to carry out its businesses as conducted or as proposed to be conducted,
including the capital needs of the Company on a consolidated basis (taking into
account, in each case, the particular capital requirements of the businesses
conducted by the Company and the projected capital requirements and capital
availability of such businesses), and (c) the Company does not intend to, nor
does it believe that it or any Subsidiary will, incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of
cash to be received by it and the amounts to be payable on or in respect of its
obligations).
11.19 Labor Matters. Except as set forth on Schedule VII, as
of the Closing Date, there are no strikes pending or threatened against such
Borrower or any Subsidiary. Neither the hours worked and payments made to
employees nor the Company and the Subsidiaries have been in violation in any
material respect of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from such Borrower or any of its
Subsidiaries, or for which any claim may be made against such Borrower or any of
its Subsidiaries, on account of wages and employee health and welfare insurance
and other benefits, have been paid or, to the extent required under GAAP,
accrued as a liability on the books of such Borrower or any of its
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Subsidiaries, except to the extent that failure to make such payment or accrual
could not reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect.
11.20 Capitalization. As of the Closing Date and after giving
effect to the Recapitalization, the authorized capital stock of the Company
shall consist of approximately $7,700,000 of common membership interests and
approximately $62,000,000 of preferred membership interests. Set forth on
Schedule XIII is a list of every Person that, as of the Closing Date (and after
giving effect to the consummation of the Recapitalization), shall own of record
membership interests of the Company, together with the Dollar amount of
membership interests so owned.
11.21 Security Documents. (a) Each Pledge Agreement is
effective to create in favor of the Agent, for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral (as
defined in such Pledge Agreement) and proceeds thereof and, when such Collateral
is delivered to the Agent, and/or the appropriate filings have been made in each
case as set forth in such Pledge Agreement, such Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Collateral and
the proceeds thereof, in each case prior and superior in right to any other
Person.
(b) Each of the Security Agreements is effective to create in
favor of the Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral (as defined in each Security
Agreement) and proceeds thereof and, when financing statements in appropriate
form are filed in the offices specified on Schedule IX, the Subsidiaries
Trademark Security Agreement and the Subsidiaries Patent Security Agreement are
filed with and recorded by the United States Patent and Trademark Office, the
appropriate filings are made and recorded with the UK Register of Patents and
the UK Register of Trademarks and the UK Debenture is registered with the
English Companies Registry and (where applicable) the UK Land Registry, and/or,
if required under such Security Agreement, such Collateral is delivered to the
Agent. Each of the Security Agreements shall constitute a fully perfected (to
the extent governed by the laws of the United States or the United Kingdom) Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral and the proceeds thereof, in each case prior and
superior in right to any other Person (other than Persons who have delivered
releases to the Agent on or prior to the Closing Date of any prior security
interests held by such Persons), other than with respect to the rights of
Persons pursuant to Liens expressly permitted by subsection 14.2.
(c) The Company Mortgage is effective to create in favor of
the Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable Lien on all of the right, title and interest of the Company and its
Subsidiaries in and to the Mortgaged Property thereunder and the proceeds
thereof, and when the Company Mortgage is filed in the land records of City of
Bridgeport, Connecticut, the Company Mortgage shall constitute fully perfected
Liens on, and security interests in, all right, title and interest of the
Company and its Subsidiaries in such Mortgaged Property and the proceeds
thereof, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Liens expressly permitted
by subsection 14.2.
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(d) Each Lock-Box Agreement is effective to create in favor of
the Agent, for the ratable benefit of the Agent and the Lenders, a perfected
first Lien on, and security interest in, all right, title and interest of the
Company or its Subsidiary (as the case may be) party thereto in the proceeds of
accounts receivable and in all other monies received in any lock box established
pursuant to any Lock Box Agreement. The Company and each of its Subsidiaries has
notified the account debtors in respect of each Account to make all payments in
respect of such Accounts through the lock boxes established pursuant to the Lock
Box Agreement. Notwithstanding the foregoing, the representations and warranties
contained in this subsection 11.21(d) shall be made by the Company only from and
after March 31, 1998.
(e) For purposes of this subsection 11.21, the term "Lenders"
shall not include the Unsecured Supplemental Lenders.
11.22 Location of Real Property and Leased Premises. (a) Part
A of Schedule VIII lists completely and correctly as of the Closing Date all
real property owned by the Company and the Subsidiaries and the addresses
(including, without limitation, the counties in which such real property is
located) thereof. The Company and the Subsidiaries own in fee all the real
property set forth on Part A of Schedule VIII.
(b) Part B of Schedule VIII lists completely and correctly as
of the Closing Date all real property leased by the Company and the
Subsidiaries, and the addresses (including, without limitation, the counties in
which such real property is located) and names of the owners of such leasehold
interests. The Company and its Subsidiaries have valid leases in all the real
property set forth on Part B of Schedule VIII.
11.23 Recapitalization. As of the Closing Date, each
Recapitalization Document (other than any Loan Document) is in full force and
effect in accordance with its terms.
11.24 Regulation H. The Mortgaged Property is not located in
an area that has been identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968.
SECTION 12. CONDITIONS PRECEDENT
The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder are subject to the satisfaction of the following
conditions:
12.1 Each Extension of Credit. On the date of each extension
of credit hereunder:
(a) Notice of Borrowing. The Agent shall have received a
notice of such borrowing as required by subsection 2.2, 3.2, 5.1, 6.2,
7.2, 8.2 or 9.2 (as the case may be) or, in the case of the issuance of
a Letter of Credit, the Issuing Bank and the Agent shall have received
a notice requesting the issuance of such Letter of Credit as required
by subsection 4.2.
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(b) Representations and Warranties. Each representation and
warranty set forth in Section 11 shall be true and correct in all
material respects on and as of the date of such extension of credit
with the same effect as though made on and as of such date, except to
the extent such representation and warranty expressly relate to an
earlier date.
(c) No Default. At the time of and immediately after the
making of such extension of credit, no Event of Default or Default
shall have occurred and be continuing.
Each borrowing of Loans and issuance of a Letter of Credit hereunder (including,
without limitation, the extensions of credit to be made on the Closing Date)
shall be deemed to constitute a representation and warranty by the relevant
Borrower on the date of such borrowing or issuance as to the matters specified
in paragraphs (b) and (c) above. Continuations and conversions of outstanding
borrowings pursuant to subsection 10.3 shall not be deemed to be borrowings for
the purpose of this Section 12.1.
12.2 Initial Extensions of Credit. On the Closing Date:
(a) Loan Documents. The Agent shall have received:
(i) counterparts of this Agreement, duly executed and
delivered by the Company, the UK Borrower, the Issuing Bank,
the Agent and each Lender (with a counterpart for each
Lender);
(ii) each of the Pledge Agreements, each executed and
delivered by a duly authorized officer of the party thereto;
(iii) each of the Guarantees, each executed and delivered
by a duly authorized officer of the party thereto;
(iv) each of the Security Agreements, each executed and
delivered by a duly authorized officer of the party thereto;
(v) the Company Mortgage, executed and delivered by a duly
authorized officer of the Company; and
(vi) the Domestic Swing Line Note, the UK Swing Line Note
and for the account of each Lender that has so requested, such
Notes as shall have been requested by such Lender, each duly
executed and delivered by a duly authorized officer of the
Borrower which is the maker thereof.
(b) Legal Opinions. The Agent shall have received, on
behalf of itself, the Lenders and the Issuing Bank, a favorable written
opinion of (i) Xxxxxxxx & Xxxxx, counsel for the Company and each of
its Domestic Subsidiaries, in form and substance reasonably
satisfactory to the Agent, (ii) Xxxxx Xxxxxxxx, special counsel in the
United Kingdom to the UK Borrower, in form and substance reasonably
satisfactory to the Agent and (iii) local counsel to the Company and
its Subsidiaries described in Schedule XII hereto, in form and
substance reasonably satisfactory to the Agent. Each such legal opinion
shall
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be (x) dated the Closing Date, (y) addressed to the Issuing Bank, the
Agent and the Lenders, and (z) covering such matters relating to the
Recapitalization Documents and the Recapitalization as the Agent shall
reasonably request; the Company and the UK Borrower hereby instruct
such counsel to deliver such opinions.
(c) Legal Matters Generally. All legal matters incident to
this Agreement, the borrowings and extensions of credit hereunder and
the Recapitalization Documents shall be satisfactory to the Agent, to
the Lenders, to the Issuing Bank and to Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Agent.
(d) Corporate Documents. The Agent shall have received (i)
a copy of the certificate or articles of incorporation (or other
analogous organizational document), including all amendments thereto,
of the Company, each other Borrower and each Domestic Subsidiary of the
Company, certified as of a recent date by the Secretary of State of the
state of its organization (or, in the case of the UK Borrower, by a
Responsible Officer thereof), and a certificate as to the good standing
of the Company and each of its Domestic Subsidiaries as of a recent
date, from such Secretary of State; (ii) a certificate of the Secretary
or Assistant Secretary of each Borrower and each Domestic Subsidiary of
the Company dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws or limited liability
company agreement (or other analogous governing document) of such
Borrower or Domestic Subsidiary, as the case may be, 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 Management Committee (or, if applicable, other analogous
governing body) of such Borrower or Domestic Subsidiary, as the case
may be, authorizing the execution, delivery and performance of the
Recapitalization Documents to which such Person is a party and, in the
case of a Borrower, 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 (or other
analogous organizational document) of such Borrower or such Domestic
Subsidiary, as the case may be, have not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency
and signature of each officer of the Borrower or such Domestic
Subsidiary executing any material Recapitalization Document or any
other document delivered in connection herewith on behalf of such
Borrower or Domestic Subsidiary, as the case may be; (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) such other documents as
the Agent, the Lenders, the Issuing Bank or Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Agent, may reasonably request.
(e) Fees. The Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Company and its
Subsidiaries hereunder or under any other Loan Document.
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(f) Capital Stock. All the outstanding Capital Stock of the
Company and each Domestic Subsidiary and 65% of the outstanding Capital
Stock of each Foreign Subsidiary that is owned directly by the Company
or any Domestic Subsidiary shall have been duly and validly pledged
under a Pledge Agreement to the Agent for the ratable benefit of the
Lenders (other than the Unsecured Supplemental Lenders) and
certificates representing such Capital Stock, accompanied by
instruments of transfer and stock powers endorsed in blank, shall be in
the actual possession of the Agent (or, in the case of the Company or
any Subsidiary with respect to which ownership interests are evidenced
by book entry, other evidence of the perfection of and action to
perfect such security interests as required by such Pledge Agreement
shall have been delivered and taken).
(g) Financing Statements. Each document (including each
Uniform Commercial Code financing statement) required by law or the
relevant Security Document or reasonably requested by the Agent to be
filed, registered or recorded in order to create in favor of the Agent
for the benefit of the Lenders (other than the Unsecured Supplemental
Lenders) a valid, legal and perfected (to the extent such perfection is
governed by the laws of the United States or the United Kingdom),
first- priority security interest in and Lien on the collateral
(subject to any Lien expressly permitted by subsection 14.2 and the
relevant Security Document) described in each Security Document shall
have been delivered to the Agent for filing and such other actions as
are necessary to cause the Liens granted under each Security Document
in favor of the Agent to be perfected (to the extent such perfection is
governed by the laws of the United States or the United Kingdom),
first-priority security interests (subject to any Lien expressly
permitted by subsection 14.2 and the relevant Security Document) shall
have been taken.
(h) Termination of Existing Credit Facilities. The Agent
shall have received evidence reasonably satisfactory to it of (x) the
termination of the (i) the Loan and Security Agreement dated as of
August 12, 1992 by and between Remington Products Company, a Delaware
general partnership ("RPC"), and The Provident Bank, (ii) the Loan and
Security Agreement dated as of August 12, 1992 by and between RPC and
People's Bank, and (iii) the Accounts Financing Agreement [Security
Agreement] dated August 12, 1996 between RPC and Congress Financial
Corporation (New England) and Accounts Financing Agreement [Security
Agreement] dated December 24, 1993 between Remington Consumer Products
Limited and Congress Financial Corporation (New England), in all cases
as heretofore amended, supplemented or otherwise modified, (y) the
release of all Liens created or maintained thereby and (z) the
discharge of all the obligations of the Company and its Subsidiaries
thereunder.
(i) Lien Search. The Agent shall have received the results
of a search of the Uniform Commercial Code filings (or equivalent
filings) made with respect to the Company and its Domestic Subsidiaries
in the States (or other jurisdictions) in which are located the chief
executive offices of such Persons or any offices of such Persons in
which records have been kept relating to Accounts and the other
jurisdictions in which Uniform Commercial Code filings (or equivalent
filings) are to be made pursuant to clause (g) of this subsection 12.2,
together with copies of the financing statements (or similar documents)
disclosed by such search, and accompanied by evidence satisfactory
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to the Agent that the Liens indicated in any such financing statement
(or similar document) would be permitted under subsection 14.2 and the
relevant Security Documents or have been released.
(j) Mortgage. (i) The Company Mortgage shall have been
filed and recorded in the land records of City of Bridgeport,
Connecticut (or a lender's title insurance commitment, in form and
substance reasonably acceptable to the Agent, insuring the Lien of such
Security Document as a first Lien on such Mortgaged Property (subject
to any Lien listed on Schedule B of any related lender's title
insurance policy delivered to the Agent prior to the Closing Date)
shall have been received by the Agent) and, in connection therewith,
(ii) the 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 Agent and the
Lenders, insuring the Company Mortgage as a valid first lien on the
Mortgaged Property, free of Liens other than those listed on Schedule B
of any related lender's title insurance policy or commitment delivered
to the Agent prior to the Closing Date, together with such abstracts,
appraisals and legal opinions as may be reasonably requested by the
Agent or the Lenders.
(k) Insurance. The Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
subsection 13.2 and the applicable provisions of the Security
Documents, which certificate (and the information referenced therein)
shall be in form and substance reasonably satisfactory to the Agent.
(l) Recapitalization. The Recapitalization shall have been
consummated or shall be consummated simultaneously with the first
borrowing hereunder in accordance with applicable law and on terms
reasonably satisfactory to the Lenders. The Agent shall have received a
certificate of a Responsible Officer of the Company certifying that the
aggregate amount of fees and expenses (other than fees and expenses
which reduce amounts which are otherwise payable to the Members or
partners of the Company (or its predecessor) in connection with the
Recapitalization) paid and payable by the Company and its Subsidiaries
in connection with the Recapitalization and the financing thereof are
not expected to exceed $15,000,000.
(m) Other Indebtedness. After giving effect to the
Recapitalization, the Company and its Subsidiaries shall have no
outstanding Indebtedness other than (i) the Loans and (ii) other
Indebtedness permitted pursuant to subsection 14.1.
(n) Environmental Review. The Lenders shall have received
(and shall be entitled to rely upon) an environmental review in form
and substance reasonably satisfactory to the Agent performed by Strata
Environmental.
(o) Capitalization. The Company shall have (i) received,
concurrently with the making of the initial Loans on the Closing Date,
not less than $129,000,000 in gross cash proceeds from the issuance of
the Senior Subordinated Indebtedness and (ii) equity of not less than
$69,000,000 (including, without limitation, $35,000,000 in equity from
existing shareholders and $850,000 in equity from senior management of
the Company).
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(p) Consulting Report. The Lenders shall have received a
copy of a consulting report prepared for Vestar by Corporate Decisions,
Inc. and the contents of such report shall be in form and substance
satisfactory to the Lenders.
(q) Borrowing Base Audits. The Agent shall have received
the results of an audit of the inventory and accounts receivable of the
Company and its Subsidiaries and of the UK Borrower, and such report
shall be in form and substance satisfactory to the Agent.
(r) No Consents. All requisite Governmental Authorities and
third parties (other than any landlords with respect to retail store
properties) shall have approved or consented to the Recapitalization to
the extent required, all applicable appeal periods shall have expired
and there shall be no governmental or judicial action, actual or
threatened, that has or would have a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
transactions contemplated hereby, including the Recapitalization.
(s) Borrowing Base Certificates. The Agent shall have
received a Domestic Borrowing Base Certificate and a UK Borrowing Base
Certificate. Each such Borrowing Base Certificate shall (i) be dated
the Closing Date, (ii) reflect the relevant Borrowing Base as of April
30, 1996 and (iii) be signed by a Responsible Officer of the Company.
SECTION 13. AFFIRMATIVE COVENANTS
The Company covenants and agrees with each Lender (including
the Issuing Bank) that so long as this Agreement shall remain in effect and
until the Commitments have been terminated and the principal of and interest on
each Loan, all fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing:
13.1 Existence; Businesses and Properties. (a) The Company
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence, except as otherwise expressly permitted under subsection 14.6.
(b) The Company will, and will cause each of the Subsidiaries
to, do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is currently conducted and operated; comply
in all material respects with all material applicable laws, rules, regulations
and statutes (including any zoning, building, Environmental Law, ordinance, code
or approval or any building permits or any restrictions of record or agreements
affecting the Mortgaged Property) and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted; and at all times maintain
and preserve all property material to the conduct of such business and keep such
property in good
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repair, working order and condition and from time to time make, or cause to be
made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
13.2 Insurance. (a) The Company will, and will cause each of
the Subsidiaries to, keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies of
established repute in the same general area engaged in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it or the use of
any products sold by it; and maintain such other insurance as may be required by
law.
(b) The Company will, and will cause each of its Domestic
Subsidiaries to, cause all such policies to be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement, in form
and substance satisfactory to the Agent, which endorsement shall provide that,
from and after the Closing Date, (i) the insurance carrier shall give the Agent
at least 30 days' (or, in the case of non-payment of premiums, 10 days') prior
notice of termination of such policies and (ii) if the insurance carrier shall
have received written notice from the Agent of the occurrence of an Event of
Default, the insurance carrier shall pay all proceeds otherwise payable to the
Company or any of its Domestic Subsidiaries under such policies directly to the
Agent.
(c) If at any time the area in which the Premises (as defined
in the Company Mortgage) are located is designated a "flood hazard area" in any
Flood Insurance Rate Map published by the Federal Emergency Management Agency,
the Company will, and will cause each of the Subsidiaries to, obtain flood
insurance in such total amount as the Agent may from time to time reasonably
require, and otherwise comply with the National Flood Insurance Program as set
forth in said Flood Disaster Protection Act of 1973, as it may be amended from
time to time.
13.3 Obligations and Taxes. The Company will, and will cause
each of the Subsidiaries to, pay its Indebtedness and other material obligations
promptly and in accordance with their terms and pay and discharge promptly when
due all taxes, assessments and govern mental charges or levies imposed upon it
or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Company shall have
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of a Lien and, in the case
of a Mortgaged Property, there is no risk of forfeiture of such property.
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13.4 Financial Statements, Reports, etc.. The Company will
furnish to the Agent and each Lender:
(a) within 105 days after the end of each fiscal year, its
consolidated and consolidating balance sheets and related statements of
operations, stockholders' equity and cash flows for such fiscal year
and the results of its operations and the operations of its
Subsidiaries during such year, setting forth in each case in
comparative form the figures for the previous year, audited (in the
case of the consolidated financial statements) by Coopers & Xxxxxxx LLP
or other independent public accountants of recognized national standing
reasonably acceptable to the Required Lenders and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of the Company on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 45 days (or, in the case of the first fiscal
quarter to end following the Closing Date, 60 days) after the end of
each of the first three fiscal quarters of each fiscal year, its
unaudited consolidated and consolidating balance sheets and related
statements of operations, stockholders' equity and cash flows showing
the financial condition of the Company and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of
its operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding fiscal period of the previous year (or, in the case of
the consolidated balance sheet, the last day of the relevant fiscal
period during such prior year) and the figures for such periods in the
Company's budget previously furnished to the Lenders, all certified by
one of its Responsible Officers (in his or her capacity as such) as
fairly presenting the financial condition and results of operations of
the Company on a consolidated and consolidating basis in accordance
with GAAP, subject to normal year-end audit adjustments and the absence
of notes;
(c) within 105 days after the end of each fiscal year, the
consolidated and consolidating balance sheets and related statements of
operations, stockholders' equity and cash flows of the UK Borrower for
such fiscal year and the results of its operations and the operations
of its Subsidiaries during such year, setting forth in each case in
comparative form the figures for the previous year;
(d) within 45 days (or, in the case of the first fiscal
quarter to end following the Closing Date, 60 days) after the end of
each of the first three fiscal quarters of each fiscal year, the
unaudited consolidated and consolidating balance sheets and related
statements of operations, stockholders' equity and cash flows of the UK
Borrower showing the financial condition of the UK Borrower and its
consolidated Subsidiaries as of the close of such fiscal quarter and
the results of its operations and the operations of such Subsidiaries
during such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for
the corresponding fiscal period of the previous year (or, in the case
of the consolidated balance sheet, the last day of the relevant fiscal
period during such prior year), all certified by one of its Responsible
Officers (in his or her capacity as such) as fairly presenting the
financial condition and
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results of operations of the UK Borrower on a consolidated and
consolidating basis in accordance with generally accepted accounting
principles as in effect from time to time in the United Kingdom,
subject to normal year-end audit adjustments and the absence of notes;
(e) concurrently with any delivery of any such financial
statements contemplated by clause (a) through (d) hereof, a certificate
of a Responsible Officer of the Company or the UK Borrower, as
appropriate (in his or her capacity as such) (and, in the case of any
financial statements being delivered under paragraph (a) above, a
certificate of the opining accounting firm, which certificate may be
limited to accounting matters and disclaim responsibility for legal
interpretations), (i) certifying that it has no actual knowledge of the
occurrence of any Event of Default or Default or, if it has knowledge
of any Event of Default or Default, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Agent demonstrating (A) compliance with the
covenants contained in subsections 14.12 through 14.16 and 14.23 and
(B) the Leverage Ratio then in effect for purposes of determining the
Applicable Margin;
(f) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by the Company or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any of or all the functions of said Commission, or with any national
securities exchange, or distributed to its members or shareholders, as
the case may be;
(g) promptly following the preparation thereof, copies of
each management letter prepared by the Company's auditors for
distribution to the Management Committee of the Company (together with
any response thereto prepared by the Company);
(h) as soon as available, and in any event no later than 95
days after the end of each fiscal year, the budget of the Company for
the then-current fiscal year (together with the assumptions utilized in
establishing such budget), with such budget and assumptions to be in
form and substance reasonably satisfactory to the Agent and certified
by a Responsible Officer of the Company (in his or her capacity as
such) as representing the Company's most reasonable good faith estimate
of its budget for such fiscal year;
(i) upon the earlier of (i) 105 days after the end of each
fiscal year of the Company (commencing with the fiscal year ending
December 31, 1997) and (ii) the date on which the financial statements
with respect to such period are delivered pursuant to paragraph (a)
above, a certificate of a Responsible Officer of the Company setting
forth, in detail satisfactory to the Agent, the calculation and amount
of Excess Cash Flow, if any, for such period;
(j) on each "delivery date" for the relevant "reporting
date," deliver to the Administrative Agent each of (i) a Domestic
Borrowing Base Certificate, setting forth the Domestic Borrowing Base
as of the relevant reporting date, (ii) a UK Borrowing Base
Certificate, setting forth the UK Borrowing Base as of the relevant
reporting date, (iii)
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any applicable supporting documentation described in Schedule XIV with
respect to such Domestic and UK Borrowing Base Certificates and (iv) a
certificate listing each Lender Hedging Agreement (as defined in the
Company Pledge Agreement) then in effect and the notional amount,
currency and tenor with respect thereto, duly completed and signed by a
Responsible Officer of the Company (in his or her capacity as such);
for purposes of this clause (j), the term:
(x) "reporting date" shall mean each of (i) the last
day of each calendar month, (ii) the fifteenth day of each
of each calendar month during the period from September of
1998 through January 1999, (iii) the fifteenth day of each
calendar month during the period from September 1999
through January 2000 and (iv) any other time when the Agent
notifies the Company that it reasonably believes that the
then-existing Domestic Borrowing Base or UK Borrowing Base
(as the case may be) is materially inaccurate; and
(y) "delivery date" shall mean fifteen days after the
corresponding reporting date (or, to the extent that the
relevant Borrowing Base Certificate is being delivered
pursuant to clause (x)(iv) above, ten days after the date
upon which the notice described therein is delivered);
provided that, for purposes of completing any Borrowing Base
Certificate delivered pursuant to clause (x)(ii) or (x)(iii) above, the
relevant Borrowing Base shall be calculated based upon a reasonable,
good faith estimate by the Company of its Eligible Domestic Inventory
and Eligible Domestic Accounts or the UK Borrower of its Eligible UK
Inventory and Eligible UK Accounts (as the case may be) on the relevant
reporting date;
(k) promptly, such information with respect to accounts
payable, inventory purchases, accounts receivable and similar matters
with respect to the Company and its Subsidiaries as the Agent
reasonably may request at any time and from time to time; and
(l) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Company and its Subsidiaries, or compliance with the terms of any
Loan Document, as any Lender may reasonably request.
(m) as soon as available, and in any event not later than
30 days after the end of each month occurring during each fiscal year
(other than the third, sixth, ninth and twelfth such month), the
unaudited consolidated balance sheets of the Company and its
consolidated Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income and of cash flows for such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year, accompanied by a certificate of a Responsible Officer
certifying that (i) such financial statements are fairly stated in all
material respects (subject to normal year-end audit adjustments) and
(ii) such Responsible Officer has no actual knowledge of the occurrence
of any Event of Default or Default or, if s/he has
87
knowledge of any Event of Default or Default, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken
with respect thereto; and
(n) as soon as available, and in any event not later than
30 days after the end of each month occurring during each fiscal year
(other than the third, sixth, ninth and twelfth such month), the
unaudited consolidated balance sheets of the UK Borrower and its
consolidated Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income and of cash flows for such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year, accompanied by a certificate of a Responsible Officer
certifying that (i) such financial statements are fairly stated in all
material respects (subject to normal year-end audit adjustments) and
(ii) such Responsible Officer has no actual knowledge of the occurrence
of any Event of Default or Default or, if s/he has knowledge of any
Event of Default or Default, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect
thereto.
13.5 Litigation and Other Notices. The Company will, and will
cause each of the Subsidiaries to, furnish to the Agent and each Lender prompt
written notice of the occurrence of the following:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any written threat or
written notice of intention of any Person to file or commence, any
action, suit or proceeding, whether at law or in equity or by or before
any Governmental Authority, against the Company or any Subsidiary or
Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
13.6 ERISA. The Company will, and will cause each of the
Subsidiaries to, (a) comply with the applicable provisions of ERISA and the Code
and the regulations and published interpretations thereunder, except where the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect, and (b) furnish to the Agent (i) as soon as possible, and in any
event within 30 days after any Responsible Officer of the Company either knows
or has a reasonable basis to know that any Reportable Event has occurred, that
alone or together with any other Reportable Event could reasonably be expected
to result in liability, of the Company, any Subsidiary or any ERISA Affiliate to
the PBGC, a statement of a Responsible Officer of the Company (in his or her
capacity as such) setting forth details as to such Reportable Event and the
action proposed to be taken with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after
receipt thereof, a copy of any notice the Company, any Subsidiary or any ERISA
Affiliate receives from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans or to appoint a trustee to administer any Plan or
Plans, (iii) within 20 Business Days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code a notice of failure to make a required
88
installment or other payment with respect to a Plan, a statement of a
Responsible Officer of the Company setting forth details as to such failure and
the action proposed to be taken with respect thereto, together with a copy of
such notice given to the PBGC and (iv) promptly and in any event within 30 days
after receipt thereof by the Company, any Subsidiary or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by the
Company, any Subsidiary or any ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability or (B) a determination that a Multiemployer Plan is, or is
expected to be, terminated or in reorganization, in each case within the meaning
of Title IV of ERISA; provided, however, that no such notice will be required
under this subsection 13.6 unless the event, when aggregated with all other
events occurring at the same time, could be reasonably expected to result in
liability in an amount that would exceed $5,000,000.
13.7 Maintaining Records; Access to Properties and
Inspections. (a) The Company will, and will cause each of the Subsidiaries to,
maintain all financial records in accordance with GAAP and permit any
representatives designated by any Lender to visit and inspect the financial
records and the properties of the Company or any Subsidiary at reasonable times
and upon reasonable notice and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by any Lender to discuss the affairs, finances,
properties and condition of the Company or any Subsidiary with the officers
thereof and independent accountants therefor.
(b) The Company will, and will cause each of its Subsidiaries
to, permit the Agent or any third party designated by the Agent to conduct (upon
notice to a Responsible Officer of the Company and at the sole expense of the
Company) an audit and/or collateral examination of the accounts receivable and
inventories of the Company and its Subsidiaries, and of the Domestic Borrowing
Base and UK Borrowing Base, at such times as the Agent or the Required Lenders
reasonably shall require.
13.8 Use of Proceeds. The Company will, and will cause each of
the Subsidiaries to, use the proceeds of the Loans and request the issuance of
Letters of Credit only for the purposes set forth in subsections 2.5, 3.5, 4.1,
5.3, 6.5, 7.5, 8.3 or 9.5 (as appropriate).
13.9 Compliance with Environmental Laws. Except as could not
reasonably be expected to result in a Material Adverse Effect, the Company will,
and will cause each of the Subsidiaries to, comply, and use its reasonable best
efforts to cause all lessees and other Persons occupying its Properties to
comply, in all material respects with all Environmental Laws and Environmental
Permits applicable to its operations and Properties; obtain and renew all
material Environmental Permits necessary for its operations and Properties; and
conduct any Remedial Action required by any Governmental Authority in accordance
with Environmental Laws; provided, however, that neither the Company nor any of
the Subsidiaries shall be required to undertake any Remedial Action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
13.10 Preparation of Environmental Reports. If a Default
caused by reason of a breach of subsection 11.16 or 13.9 shall have occurred and
be continuing, the Company will, and will cause each of the Subsidiaries to, at
the request of the Required Lenders through the Agent,
89
provide to the Lenders within 45 days after such request, at the expense of the
Company, an environmental site assessment report for the Properties (which are
the subject of such default) prepared by an environmental consulting firm
reasonably acceptable to the Agent, indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance or Remedial Action
in connection with such Properties.
13.11 Further Assurances. The Company will, and will cause
each of the Subsidiaries to, execute any and all further documents, financing
statements, agreements and instruments, and take all further action (including
filing Uniform Commercial Code and other financing statements, mortgages and
deeds of trust) that may be required under applicable law, or which the Required
Lenders or the Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and first priority of the security interests
created or intended to be created by the Security Documents.
13.12 Additional Guarantees. The Company will, and will cause
each of the Domestic Subsidiaries to, execute and deliver to the Agent a
Subsidiaries Guarantee with respect to each Domestic Subsidiary of the Company
which is acquired, created or otherwise becomes such a Domestic Subsidiary after
the date hereof. Each such Subsidiaries Guarantee shall be accompanied by such
resolutions, incumbency certificates and legal opinions as are reasonably
requested by the Agent and are in form and substance reasonably satisfactory to
the Agent.
13.13 Additional Stock Pledges. (a) The Company will, and will
cause each of its Subsidiaries to, pledge to the Agent 100% of the issued and
outstanding Capital Stock or other equity interests (other than directors'
qualifying shares) of each Domestic Subsidiary of the Company which has not
previously been pledged hereunder. Such pledge shall be granted pursuant to a
Pledge Agreement substantially in the form of Exhibit C-1 or D-2, as the case
may be.
(b) The Company will, and will cause each of its Domestic
Subsidiaries to, pledge (or grant analogous security interests) to the Agent in
accordance with the laws of the jurisdiction of organization of the issuer
thereof 65% (rounded downward to eliminate any fraction of a share) of the
issued and outstanding shares of each class of capital stock or other ownership
interests entitled to vote (within the meaning of Treasury Regulations
ss.1.956-2(c)(2)) ("Voting Stock") and 100% of the issued and outstanding shares
of each class of capital stock or other ownership interests not entitled to vote
(within the meaning of such Regulation) ("NonVoting Stock") of each first-tier
Foreign Subsidiary from time to time of the Company which (in each case) is
owned of record by the Company or any Domestic Subsidiary of the Company and
which has not previously been pledged hereunder. Each such pledge shall be
granted pursuant to a Pledge Agreement in such form as (x) may be reasonably
required in order to perfect a security interest in the Pledged Stock delivered
thereto as defined therein under the laws of the jurisdiction in which the
issuer of such Pledged Stock is organized and (y) is in form and substance
reasonably satisfactory to the Agent.
(c) The Company will, and will cause each of the Domestic
Subsidiaries to, execute and deliver each Pledge Agreement required to be
executed and delivered pursuant to this subsection 13.13 promptly following the
organization, acquisition or identification of any
90
such Subsidiary or first-tier Foreign Subsidiary. Each such Pledge Agreement
shall be accompanied by (i) share certificates evidencing the Pledged Stock
thereunder (to the extent that such Pledged Stock is certificated) as defined
therein, together with an undated stock power for each such share certificate
(duly executed in blank and delivered by a duly authorized officer of the
Pledgor of the Pledged Stock represented by such certificate), (ii) in the case
of the pledge of capital stock or other ownership interests of any Foreign
Subsidiary, evidence of the taking of all such other actions as may be necessary
or appropriate for the perfection and first priority of such pledge and (iii) in
the case of any Subsidiary, such resolutions, incumbency certificates and legal
opinions as are reasonably requested by the Agent and shall otherwise be in form
and substance reasonably satisfactory to the Agent.
(d) [RESERVED].
(e) In the event that there shall be a change in law that
substantially eliminates the adverse tax consequences to the Company or any of
its Subsidiaries that would have resulted on the date hereof from the pledge of
more than 66-2/3% of the Voting Stock of any Foreign Subsidiary, the Company
will, and will cause each of its Subsidiaries to, (i) pledge such additional
amount of shares of such Voting Stock (with respect to each Foreign Subsidiary
the Voting Stock of which then is pledged hereunder) and (ii) notwithstanding
the provisions of subsection 13.13(b) and (c), pledge the maximum amount of
shares of such Voting Stock (with respect to each Foreign Subsidiary the Voting
Stock of which is pledged thereafter), in each case which can be so pledged
without the incurrence of adverse tax consequences and take or cause to be taken
such further action as the Agent may reasonably request (including, without
limitation, the delivery of legal opinions) in order to perfect its security
interest in such stock; provided that the foregoing requirement shall be limited
to the extent that such pledge (x) is not permitted under applicable law, (y)
would violate any agreements then in effect which relate to Indebtedness
permitted hereunder or (z) would reasonably be expected to have material adverse
consequences to the Company or its Subsidiaries.
13.14 Additional Security Agreements. (a) The Company will
cause each of its Domestic Subsidiaries which has not previously done so to
execute and deliver to the Agent a Subsidiary Security Agreement and to take
such other action as reasonably shall be necessary or as the Agent reasonably
shall request to grant to the Agent a first priority perfected (to the extent
required in such Security Agreement) security interest in all Collateral
described in such Security Agreement (subject to any Liens permitted to encumber
such Collateral pursuant to subsection 14.2). Each such Security Agreement shall
be accompanied by such evidence of the taking of all actions as may be necessary
or appropriate for the perfection (to the extent required in such Security
Agreement) and first priority of such security interest (including, without
limitation, the filing of any necessary Uniform Commercial Code financing
statements) and such resolutions, incumbency certificates and legal opinions as
are reasonably requested by the Agent, all of which shall be in form and
substance reasonably satisfactory to the Agent.
(b) [RESERVED].
13.15 Rate Protection Agreements. If, at any time and from
time to time, at least 50% of the aggregate principal amount of the Indebtedness
for borrowed money of the Company and its Subsidiaries does not bear interest at
a fixed rate and the Agent or the Required Lenders
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so request, the Company will (within 90 days thereafter) enter into (and
thereafter maintain in effect for a period of at least three years following
such date or, if shorter, through the Termination Date) Rate Protection
Agreements providing for interest rate protection on terms reasonably acceptable
to the Agent, to the extent necessary to cause at least 50% of such Indebtedness
to bear interest at a fixed rate.
13.16 Material Contracts. The Company will, and will cause
each of the Subsidiaries to, maintain in full force and effect (including
exercising any available renewal option), and without amendment or modification,
all its material contracts unless the failure so to maintain such contracts or
to exercise any renewal option (or the amendments or modifications thereto),
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
13.17 Surveys and Zoning. The Company will, and will cause
each of the Subsidiaries to, within 60 days after the Closing Date, furnish the
Agent with (a) an as-built survey of the Mortgaged Property, in form and
substance satisfactory to the Agent and (b) endorsements to the title policies
required by subsection 12.2(j) providing access, survey, comprehensive
(Restrictions, Encroachments and Minerals), tax lot and contiguity coverage.
13.18 Cash Management System. Within 30 days following the
Closing Date, the Company will, and will cause each of its Domestic Subsidiaries
to, cause substantially all of its accounts receivable to be paid by the
relevant account debtor directly into a lock-box which is subject to a Lock-Box
Agreement.
13.19 Patents, Trademarks and Copyrights. The Company will and
will cause each of its Domestic Subsidiaries to (a) use best efforts to register
with the United States Patent and Trademark Office or the United States
Copyright Office, as the case may be, all of its or their right, title and
interest in each material Patent, Trademark and Copyright (as each such term is
or may be defined in the Security Agreements) used in its or their business in
the United States which is so registerable under applicable law, (b) report each
such filing and registration to the Agent within fifteen Business Days after the
last day of the fiscal quarter in which such filing occurs and (c) promptly upon
request by the Agent, execute and deliver any and all agreements, instruments,
documents, and papers (each of which shall be in form and substance reasonably
satisfactory to the Agent) as may be necessary or as the Agent may reasonably
request to grant (to the extent possible) to the Agent, for the benefit of the
Lenders (other than the Unsecured Supplemental Lenders), a perfected, first
priority security interest therein and in any goodwill and general intangibles
relating thereto or represented thereby.
13.20 Covenants of Other Borrowers. Each Borrower other than
the Company covenants and agrees with each Lender (including the Issuing Bank)
that it shall abide by the covenants of the Company set forth in this Section 13
to the extent the Company has covenanted to cause it to take or to refrain from
taking any action.
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SECTION 14. NEGATIVE COVENANTS
The Company covenants and agrees with each Lender (including
the Issuing Bank) that, so long as this Agreement shall remain in effect and
until the Commitments have been terminated and the principal of and interest on
each Loan, all fees and all other expenses or amounts payable under any Loan
Document have been paid in full and all Letters of Credit have been canceled or
have expired and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, the Company will
not, and will not cause or permit any of the Subsidiaries to:
14.1 Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness existing on the Closing Date and set forth
on Schedule III (and any extensions, renewals or replacements of such
Indebtedness so long as the principal amount of such Indebtedness is
not increased);
(b) Indebtedness created under any Loan Document;
(c) Senior Subordinated Indebtedness issued on or prior to
the Closing Date not in excess of $130,000,000 in aggregate principal
amount;
(d) Indebtedness consisting of purchase money Indebtedness
incurred in the ordinary course of business after the Closing Date to
finance Capital Expenditures permitted under subsection 14.13;
provided, however, that (i) the aggregate amount of Specified
Obligation Usage (after giving effect to the incurrence of such
Indebtedness) does not exceed $10,000,000 at any one time outstanding
and (ii) such Indebtedness is incurred by no later than 90 days after
the making of the Capital Expenditures financed thereby;
(e) Indebtedness in respect of Sale and Leaseback
Transactions permitted under subsection 14.4;
(f) Indebtedness in respect of Capital Lease Obligations
permitted under subsection 14.12;
(g) in the case of the Company, Indebtedness in respect of
Rate Protection Agreements;
(h) Indebtedness (other than (i) inter-company payables in
the ordinary course of business and (ii) inter-company loans of the
proceeds of Excluded Equity Investments) of the Company to any
Subsidiary and of any Subsidiary to the Company or any other
Subsidiary; provided that, after giving effect to the incurrence of any
such Indebtedness, the amount equal to the sum of:
93
(x) the aggregate principal amount of all such Indebtedness
owing by Foreign Subsidiaries to the Company and its Domestic
Subsidiaries permitted pursuant to this clause (h); and
(y) the aggregate principal amount of Indebtedness of
Foreign Subsidiaries in respect of which the Company or any
Domestic Subsidiary has incurred Guarantee Obligations which
are permitted pursuant to subsection 14.3(c); and
(z) the aggregate amount of all investments in and capital
contributions to all Foreign Subsidiaries since the Closing
Date permitted pursuant to subsection 14.5(e) (net of the
aggregate amount of any dividends and distributions paid by
such Foreign Subsidiaries to the Company and its Domestic
Subsidiaries);
shall not, in the aggregate, exceed the amount equal to (i) with
respect to the UK Borrower, $7,500,000 at any one time outstanding and
(ii) with respect to all other Foreign Subsidiaries in the aggregate,
the amount at any one time outstanding equal to the Subsidiary Debt
Basket Amount then in effect;
(i) short-term Indebtedness of Foreign Subsidiaries of the
Company (other than the UK Borrower) for working capital purposes;
provided that, after giving effect to the incurrence of any such
Indebtedness, the aggregate principal amount of all such Indebtedness
of all Foreign Subsidiaries (other than the UK Borrower) shall not
exceed $22,500,000 at any one time outstanding;
(j) [omitted];
(k) Indebtedness of the Company to former employees on
account of the obligation of the Company to pay for Capital Stock which
was re-purchased by the Company upon termination of employment of such
employees; provided that the aggregate principal amount of Indebtedness
outstanding under this paragraph (k) shall not exceed $1,000,000 at any
one time outstanding; and
(l) in the case of the Company, other unsecured
Indebtedness in a principal amount at any time outstanding not in
excess of $5,000,000.
14.2 Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any Person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Company and its
Subsidiaries existing on the Closing Date and set forth on Schedule IV
or on Schedule B to any lender's title insurance policy delivered to
the Agent in accordance with subsection 12.2(j) prior to the Closing
Date (and any extension, renewal or replacement of such Liens);
provided, however, that such Liens shall secure only those obligations
that they secure on the Closing Date;
(b) any Lien created under the Loan Documents;
94
(c) any Lien existing on any property or asset prior to the
acquisition thereof (including, without limitation, by way of the
acquisition of the Capital Stock of the entity owning such property or
asset) by the Company or any Subsidiary; provided, however, that (i)
such Lien is not created in contemplation of or in connection with such
acquisi tion, and (ii) such Lien does not apply to any other property
or assets of the Company or any Subsidiary; provided, further, that no
such Lien shall encumber any Accounts or Inventory which are included
in the calculation of the Domestic Borrowing Base or the UK Borrowing
Base;
(d) Liens for taxes, assessments or governmental charges
not yet due and payable or that are being contested in compliance with
subsection 13.3;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary
course of business and securing obligations that are not due and
payable or, if a portion thereof is due and payable, that are being
contested in compliance with subsection 13.3; provided that no such
Liens on account of amounts which are due and payable shall encumber
any Accounts or Inventory which are included in the calculation of the
Domestic Borrowing Base or the UK Borrowing Base;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) pledges and deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases (other than
Capital Lease Obligations), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(h) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Company or any Subsidiary;
provided, however, that (i) such security interests secure Indebtedness
permitted by subsection 14.1, (ii) such security interests are
incurred, and the Indebtedness secured thereby is created, by no later
than 90 days after such acquisition (or construction), (iii) the
Indebtedness secured thereby does not exceed 85% of the lesser of the
cost or the fair market value of such real property, improvements or
equipment at the time of such acquisition (or construction) and (iv)
such security interests do not apply to any other property or assets of
the Company or any Subsidiary;
(i) Liens incurred in connection with Capital Lease
Obligations permitted under subsection 14.12;
(j) Liens incurred in connection with any Sale and
Leaseback Transaction permitted under subsection 14.4;
(k) Liens on properties and assets of Foreign Subsidiaries
(other than the UK Borrower) which secure Indebtedness permitted
pursuant to subsection 14.1(i);
95
(l) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
that do not materially impair the current use or (in the case of the
Mortgaged Property) the value of the property subject thereto;
(m) Liens arising from precautionary filing of Uniform
Commercial Code financing statements regarding leases; and
(n) judgement Liens relating to judgements not giving rise
to an Event of Default.
14.3 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $500,000 at any one time outstanding;
(b) guarantees made in the ordinary course of its business by
the Company of obligations of any of its Subsidiaries (other than
guarantees of trade payables and Indebtedness for borrowed money) which
obligations are otherwise permitted under this Agreement;
(c) guarantees made in the ordinary course of its business by
the Company of Indebtedness and trade payables of any of its Foreign
Subsidiaries; provided that, after giving effect to the incurrence of
such guarantee, the amount equal to the sum of:
(x) the aggregate principal amount of the Indebtedness
owing by Foreign Subsidiaries to the Company and its Domestic
Subsidiaries permitted pursuant to subsection 14.1(h); and
(y) the aggregate principal amount of Indebtedness and
trade payables guaranteed by the Company permitted pursuant to
this clause (c); and
(z) the aggregate amount of all investments in and capital
contributions to all Foreign Subsidiaries since the Closing
Date permitted pursuant to subsection 14.5(e) (net of the
aggregate amount of any dividends and distributions paid by
such Foreign Subsidiaries to the Company and its Domestic
Subsidiaries);
shall not, in the aggregate, exceed the amount equal to (i) with
respect to the UK Borrower, $7,500,000 at any one time outstanding and
(ii) with respect to all other Foreign Subsidiaries in the aggregate,
the amount at any one time outstanding equal to the Subsidiary Debt
Basket Amount then in effect; and
(d) the guarantee set forth in subsection 15 and the
Subsidiaries Guarantees.
14.4 Sale and Leaseback Transactions. Enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such
96
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred (a "Sale and
Leaseback Transaction"), except Sale and Leaseback Transactions entered into by
the Company to finance the acquisition of equipment and other property so long
as (a) the aggregate amount of Specified Obligation Usage (after giving effect
to the consummation of such Sale and Leaseback Transaction) does not exceed
$10,000,000 at any one time outstanding and (b) such Sale and Leaseback
Transaction occurs within 360 days after the acquisition of such equipment or
other property.
14.5 Investments, Loans and Advances. Purchase, hold or
acquire any Capital Stock, evidences of Indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, or incur any Guarantee Obligation in
respect of Indebtedness of, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any part of the assets of, any
other Person, except:
(a) investments by the Company and the Subsidiaries existing
on the Closing Date in the Capital Stock of the Subsidiaries;
(b) Permitted Investments;
(c) pledges and deposits permitted under subsection 14.2(g);
(d) loans and advances to employees of the Company or any
of its Subsidiaries for (i) travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate principal
amount outstanding at any one time not to exceed $2,000,000 or (ii) the
purpose of financing the purchase by such employees of equity interests
in the Company in an aggregate principal amount outstanding at any one
time not to exceed $1,000,000; provided that no loan or advance
contemplated by clause (ii) above shall be permitted to be made during
such time as any Default or Event of Default has occurred and is
continuing;
(e) loans and advances by the Company to any Subsidiary to
the extent permitted by subsection 14.1 and investments in and capital
contributions to any Subsidiary; provided that, after giving effect to
the incurrence of any such Indebtedness and the making of such
investments and capital contributions, the amount equal to the sum of
(x) the aggregate principal amount of all such Indebtedness of all
Foreign Subsidiaries incurred which is permitted pursuant to subsection
14.1(i), (y) the aggregate principal amount of such Indebtedness of
Foreign Subsidiaries in respect of which the Company or any Domestic
Subsidiary has incurred Guarantee Obligations which are permitted
pursuant to subsection 14.3(c) and (y) the aggregate amount of all
investments in and capital contributions to all Foreign Subsidiaries
since the Closing Date which are permitted pursuant to this clause (e)
(net of the aggregate amount of any dividends and distributions paid by
such Foreign Subsidiaries to the Company and its Domestic Subsidiaries)
shall not exceed the Subsidiary Debt Basket Amount then in effect;
(f) any purchase, lease or other acquisition (any such
acquisition and each other acquisition which is approved by the
Required Lenders, a "Permitted Acquisition")
97
for which the aggregate consideration (other than consideration in the
form of equity interests in the Company and cash consideration which
constitutes the proceeds of Excluded Equity Investments) payable (with
non-cash consideration being valued at its fair market value) by the
Company and the Subsidiaries, in the aggregate with all such
consideration paid or payable for all other Permitted Acquisitions
under this clause (f) since the Closing Date, does not exceed
$30,000,000; provided, however, that (i) at the time of and immediately
after giving effect to such Permitted Acquisition no Default or Event
of Default shall have occurred and be continuing and (ii) the Agent
shall have received the officer's certificate referenced in subsection
12.3(d) hereof; and
(g) investments, loans and advances made to Remington
Licensing Corporation to fund expenses incurred in intellectual
property litigation and the maintenance of intellectual property
rights.
14.6 Mergers, Consolidations and Sales of Assets. Merge into
or consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or sell, transfer, assign, lease, sublease or otherwise
dispose of (in one transaction or in a series of transactions) all or any part
of its assets (whether now owned or hereafter acquired) or any Capital Stock of
any Subsidiary; provided, however, that the foregoing shall not prohibit:
(a) sales of Permitted Investments for cash;
(b) sales, transfers and other dispositions of used or
surplus equipment, vehicles and other assets in the ordinary course of
business (to the extent that the Borrowers shall have complied with the
provisions of subsection 10.2);
(c) Sale and Leaseback Transactions permitted by subsection
14.4;
(d) sales of inventory in the ordinary course of business
(including, without limitation, sales of inventory on an arm's-length
basis to Foreign Subsidiaries of the Company in the ordinary course of
business);
(e) sales, transfers and other dispositions by a Subsidiary
to the Company or to any other Subsidiary that is a Guarantor and is a
party to all applicable Security Documents;
(f) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof in the ordinary course of
business; provided that, at the date of such sale or discount, such
accounts receivable are not included in the calculation of the Domestic
Borrowing Base or the UK Borrowing Base then in effect;
(g) the merger of any Subsidiary with the Company or any
other Subsidiary; provided, however, that (A) at the time of and
immediately after giving effect to any such merger no Default or Event
of Default shall have occurred, (B) the Company shall be the surviving
corporation of any merger involving the Company, (C) no Foreign
Subsidiary may merge with a Domestic Subsidiary unless the Domestic
98
Subsidiary shall be the surviving corporation in such merger, (D) no
Foreign Subsidiary any Capital Stock of which is pledged under a Pledge
Agreement may merge with another Subsidiary any Capital Stock of which
is not so pledged unless such first Foreign Subsidiary shall be the
surviving corporation in such merger, (E) no Domestic Subsidiary may
merge with another Subsidiary unless the surviving corporation in such
merger is a Guarantor and (F) no Borrower may merge with a Subsidiary
which is not a Borrower unless such Borrower is the surviving
corporation in such merger; and
(h) the merger of the Company with and into any newly
created corporation; provided that (i) such corporation is a "C"
corporation, (ii) the Capital Stock of such corporation is, at the time
of such merger, owned (beneficially and of record) by the same Persons
and in the same proportion by each such Person as is the Capital Stock
of the Company immediately prior to the creation of such corporation
(after giving effect to the conversion of preferred interests into
common interests), (iii) such corporation has no material assets (other
than its equity interest in the Company) or material liabilities prior
to such merger, (iv) the Agent holds a first priority, perfected
security interest in the Capital Stock of such corporation (other than
any shares owned by Persons who have not pledged their equity interests
in the Company), (v) such corporation agrees, in writing, to assume the
obligations of the Company hereunder, (vi) such merger is effected in
contemplation of an initial public offering of the Capital Stock of
such corporation or the owner of 100% of the Capital Stock of such
corporation and such initial public offering is consummated as promptly
as is practicable (and, in any event, within 30 Business Days)
following such merger and (vii) at the time of and immediately after
giving effect to such merger no Default or Event of Default shall have
occurred.
14.7 Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its Capital Stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its Capital Stock
or set aside any amount for any such purpose; provided, however, that (a) any
Subsidiary may declare and pay dividends or make other distributions to the
Company or to a Guarantor; (b) the Company may effect the Recapitalization; (c)
the Company may repurchase up to $1,000,000 of common interests from employees
(and their permitted transferees) pursuant to the Management Subscription
Agreements; (d) during such time as the Company is treated as a partnership for
United States federal income tax purposes, the Company may make distributions to
members from time to time in the amount equal to the amount of distributions
contemplated to be made pursuant to Section 5.5 of the LLC Agreement of the
Company (as in effect on the date hereof and as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
provisions of subsection 14.11(a)); provided that such dividends or
distributions may not be paid more than 10 days prior to the date upon which
quarterly estimated tax payments or annual tax payments (as applicable) are owed
by corporate Members pursuant to the Code.
14.8 Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
that as long as no Default or Event of Default shall have
99
occurred and be continuing, the Company or any Subsidiary may engage in any of
the foregoing transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties;
provided, however, that this subsection 14.8 shall not restrict:
(i) any transaction expressly permitted by subsection 14.5,
14.6 or 14.7;
(ii) the consummation of the Recapitalization;
(iii) the payment to Vestar of its investment banking advisory
fees in connection with the Recapitalization;
(v) the payment of amounts owing to Vestar pursuant to the
Vestar Management Agreement or to RPI pursuant to the RPI Consulting
Agreement; provided that (i) such amounts shall not be paid more than 3
Business Days prior to the date when due under the Vestar Management
Agreement or the RPI Consulting Agreement, as the case may be, and (ii)
during such time as any Event of Default is continuing under subsection
16(b) or (c), such payments shall not exceed $500,000 per annum to each
of Vestar and RPI; provided that amounts in excess thereof may accrue
(without interest) and be paid upon the cure or waiver of such Event of
Default; and
(vi) any license agreements between the Company and its
Subsidiaries pursuant to which any such Subsidiary licenses
intellectual property of the Company and/or any of its Subsidiaries.
14.9 Business of Company and Subsidiaries. Engage at any time
in any business which is not the same as, or similar, ancillary, complementary
or related to, the business in which the Company and its Subsidiaries are
engaged on the Closing Date.
14.10 Limitations on Certain Debt Payments and Interest
Payments. (a) Optionally prepay, repurchase or redeem or otherwise defease or
segregate funds with respect to any Indebtedness for borrowed money of the
Company (including the Senior Subordinated Indebtedness), other than
Indebtedness under this Agreement; or (b) make any payment on account of the
Senior Subordinated Indebtedness (other than as permitted by the Indenture with
respect thereto).
14.11 Amendment of Certain Documents; Certain Agreements. (a)
Permit any termination of, or any amendment or modification that, in the
reasonable judgment of the Agent, is adverse in any material respect to the
Lenders to, (i) the LLC Agreement of the Company (other than in connection with
a transaction contemplated by subsection 14.6(h)), (ii) the By-laws of the
Company, (iii) any Recapitalization Document (other than, subject to subsection
18.1, a Loan Document) or (iv) any Rate Protection Agreement.
(b) Without the prior written consent of the Required Lenders,
amend, supplement or otherwise modify the terms of (i) the Vestar Management
Agreement or the RPI Consulting Agreement in any manner which could reasonably
be expected to be adverse to the rights or interests of the Agent or the Lenders
or (ii) the Senior Subordinated Indebtedness.
100
(c) Permit any Subsidiary to enter into any indenture,
agreement or other instrument that restricts the ability of such Subsidiary to
pay dividends or make distributions on its Capital Stock, other than any
provisions of any document, instrument or agreement governing Indebtedness for
borrowed money of Foreign Subsidiaries of the Company.
14.12 Limitation on Capital Lease Obligations. Create or
suffer to exist any Capital Lease Obligation, except Capital Lease Obligations
incurred by the Company to finance the acquisition of equipment and other
property, so long as (a) the aggregate amount of Specified Obligation Usage
(after giving effect to the incurrence of such Capital Lease Obligations) does
not exceed $10,000,000 at any one time outstanding, (b) not more than $1,500,000
of such Capital Lease Obligation at one time shall at the time of its
incurrence, have an average life to maturity which is shorter than the average
life to maturity of the Domestic Term Loans outstanding at such time and (c)
none of the related leases shall contain financial covenants.
14.13 Capital Expenditures. Make or permit to be made Capital
Expenditures in excess of $8,000,000 (or, with respect to the period from
Closing Date through December 31, 1996, $6,600,000) in the aggregate during any
fiscal year of the Company; provided, however, that any unused amount of Capital
Expenditures permitted to be made during a fiscal year may be carried over to
the next fiscal year only (but not to any subsequent year thereafter) and shall
be deemed to be the last Capital Expenditures made during such next fiscal year.
14.14 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of any fiscal quarter ending during any period set forth below to be
less than the ratio set forth opposite such period:
Period Ratio
------------- ------------
04/01/99 - 12/30/99 0.70 to 1.0
12/31/99 - 12/30/00 0.85 to 1.0
12/31/00 - 06/29/01 1.00 to 1.0
06/30/01 - thereafter 1.05 to 1.0
; provided that, for purposes of determining compliance with the provisions of
this subsection 14.14, (x) the EBITDA for such period of four fiscal quarters of
any Person acquired by the Company during such period shall be included in the
EBITDA of the Company, on a pro forma basis as if the same had occurred on the
first day of such period and (y) the Fixed Charges for such period of such
Person shall be included in the Fixed Charges of the Company, on such a pro
forma basis, as if such Person had been acquired on the first day of such
period.
14.15 Interest Expense Coverage Ratio. Permit the Interest
Expense Coverage Ratio for any period of four consecutive fiscal quarters ending
on the last day of any fiscal quarter ending during any period set forth below
to be less than the ratio set forth opposite such period:
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Period Ratio
--------------- -----------
03/31/99 - 12/30/99 1.00 to 1.0
12/31/99 - 12/30/00 1.25 to 1.0
12/31/00 - 06/29/01 1.50 to 1.0
06/30/01 - thereafter 1.70 to 1.0
; provided that, for purposes of determining compliance with the provisions of
this subsection 14.15, (x) the EBITDA for such period of four fiscal quarters of
any Person acquired by the Company during such period shall be included in the
EBITDA of the Company, on a pro forma basis as if the same had occurred on the
first day of such period and (y) the Cash Interest Expense for such period of
such Person shall be included in the Cash Interest Expense of the Company, on
such a pro forma basis, as if such Person had been acquired on the first day of
such period.
14.16(a) Leverage Ratio. Permit the Leverage Ratio for the
period of four consecutive fiscal quarters ending on the last day of any fiscal
quarter ending during any period set forth below to be in excess of the ratio
set forth opposite such period:
Period Ratio
----------------- -----------
06/30/99 - 12/30/99 9.00 to 1.0
12/31/99 - 12/30/00 8.00 to 1.0
12/31/00 - 06/29/01 6.50 to 1.0
06/30/01 - thereafter 4.50 to 1.0
; provided that, for purposes of determining compliance with the provisions of
this subsection 14.16, (x) the EBITDA for such period of four fiscal quarters of
any Person acquired by the Company during such period shall be included in the
EBITDA of the Company, on a pro forma basis as if the same had occurred on the
first day of such period and (y) the Included Indebtedness for such period of
such Person shall be included in the Included Indebtedness of the Company, on
such a pro forma basis, as if such Person had been acquired on the first day of
such period.
14.16(b) Senior Leverage Ratio. Permit the Senior Leverage
Ratio for the period of four consecutive fiscal quarters ending on the last day
of any fiscal quarter ending during any period set forth below to be in excess
of the ratio set forth opposite such period:
Period Ratio
-------------- -----------
03/31/99 - 12/30/99 3.20 to 1.0
12/31/99 - thereafter 3.00 to 1.0
14.17 Landlord Lien Waivers. Permit more than $250,000 of
Inventory to be held at any location (other than at any of the Company's retail
stores) which is not owned by the Company or any of its Subsidiaries, unless the
owner (and, to the extent that the operator thereof would be entitled to a
warehouseman's or similar Lien on such Inventory by operation of law,
102
such operator) of such location has executed and delivered to the Agent a
Landlord's Lien Waiver, substantially in the form of Exhibit E.
14.18 Limitation on Preferred Equity. Incur, create, assume or
permit to exist any preferred stock or other analogous equity interests, other
than any such preferred stock or equity interest which does not provide for the
payment of a cash dividend or distribution during such time as the Commitments
remain in effect or any L/C Obligation is outstanding or amount is owing
hereunder.
14.19 Matters Relating to Remington Rand Corporation. Permit
Remington Rand Corporation to have any material assets (other than its equity
interests in Remington Corporation, L.L.C.) or liabilities (other than its
guarantee of the obligations hereunder and on account of the Senior Subordinated
Indebtedness), or to conduct any meaningful business, other than its ownership
of Remington Corporation, L.L.C.
14.20 Covenants of Other Borrowers. Each Borrower other than
the Company covenants and agrees with each Lender (including the Issuing Bank)
that it shall abide by the covenants of the Company set forth in this Section 14
to the extent the Company has covenanted to cause it to take or to refrain from
taking any action.
14.21 Payments in Respect of Accounts. The Company shall not,
nor shall it permit any of its Subsidiaries organized under the laws of the
United States or the United Kingdom to, instruct or otherwise permit any Person
obligated under any of the Accounts (as defined in the Security Agreements) to
remit any payment (whether by check, wire transfer or otherwise) to any account
other than a Lock Box Account (as defined in the Lock Box Agreement) established
by the Agent pursuant to a Lock Box Agreement, other than, in the case of
amounts owing to the UK Borrower and its Subsidiaries, payments which are made
through an alternate means which (in the reasonable judgment of the Agent) (a)
enables the Agent to maintain a perfected, first priority security interest in
such payments and the proceeds thereof and (b) provides for the application of
such proceeds in the same manner as payments deposited in a Lock Box Account.
The Company hereby agrees that it shall not, and shall not permit any of its
Subsidiaries to, cause or permit any amounts which are not Collateral to be
deposited in the Lock Box Accounts (as defined in the Lock-Box Agreement).
14.22 Bank Accounts. The Company shall not, nor shall it
permit any of its Subsidiaries to, establish or maintain, or permit to be
established or maintained, any bank accounts in the name of, or for the benefit
of, the Company or any of its Domestic Subsidiaries, other than (x) bank
accounts established or maintained with a Bank, (y) other bank accounts
containing operating funds required to cover substantially immediate payment
obligations (including, without limitation, payroll obligations) and (z) other
operating bank accounts which are debited on a daily basis so that they do not
contain any material overnight deposits.
14.23 Asset Coverage. The aggregate outstanding principal
amount of Indebtedness of the Company and its Subsidiaries on a consolidated
basis (other than the Senior Subordinated Indebtedness) shall not exceed at any
date the amount equal to 75% of the aggregate book value of all cash, Permitted
Investments, accounts receivable, inventory and
103
property, plant and equipment reflected in accordance with GAAP on the balance
sheet of the Company most recently delivered by the Company pursuant to
subsection 13.4(a) or (b).
SECTION 15. GUARANTEE
15.1 Guarantee. In order to induce the Lenders, the Issuing
Banks, the Co- Documentation Agents and the Agent to execute and deliver this
Agreement and to make the extensions of credit hereunder, and in consideration
thereof:
(a) The Company hereby unconditionally and irrevocably
guarantees to the Agent, for the ratable benefit of the Lenders, the
prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Subsidiary
Obligations. The Company further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by the Agent or by the
Lenders in enforcing, or obtaining advice of counsel in respect of, any
of their rights under this Section 15. Without limiting the generality
of the foregoing, the Company's liability shall extend to all amounts
that constitute part of the Subsidiary Obligations and would be owed by
the UK Borrower but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving the UK Borrower. This Guarantee shall
remain in full force and effect until the Commitments have terminated,
no L/C Obligations are outstanding and all amounts owing under this
Agreement have been paid in full, notwithstanding that from time to
time prior thereto the UK Borrower may be free from any obligations
hereunder.
(b) The Company agrees that whenever, at any time, or from
time to time, it shall make any payment to the Agent or any Lender on
account of its liability under this Section 15, it will notify the
Agent or such Lender in writing that such payment is made under this
Section 15 for such purpose. No payment or payments made by the UK
Borrower or any other Person or received or collected by the Agent or
any Lender from the UK Borrower or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application, at
any time or from time to time, in reduction of or in payment of the
Subsidiary Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Company hereunder which shall
remain obligated hereunder, notwithstanding any such payment or
payments (other than payments made by or received or collected from the
Company in respect of the Subsidiary Obligations) until the date upon
which all amounts owing under this Agreement have been paid in full.
15.2 Right of Set-Off. Upon the occurrence and continuance of
any Event of Default, the Agent and each Lender are hereby irrevocably
authorized by the Company at any time and from time to time without notice to
the Company, any such notice being hereby waived by the Company, to set off and
appropriate and apply 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 the Agent or such
Lender to or for the credit or the account of the Company, or any part thereof
in such amounts as the Agent or such Lender may
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elect, on account of the liabilities of the Company hereunder and claims of
every nature and description of the Agent or such Lender against the Company, in
any currency, whether arising hereunder or any other Loan Document or otherwise,
as the Agent or such Lender may elect, whether or not the Agent or such Lender
has made any demand for payment and although such liabilities and claims may be
contingent or unmatured. The Agent and each Lender shall notify the Company
promptly of any such set-off made by it and the application made by it of the
proceeds thereof; provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Agent and each
Lender under this subsection are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Agent or such
Lender may have.
15.3 No Subrogation. Notwithstanding any payment or payments
made by the Company hereunder, or any set-off or application of funds of the
Company by the Agent or any Lender, the Company shall not be entitled to be
subrogated to any of the rights of the Agent or any Lender against the UK
Borrower or against any collateral security or guarantee or right of offset held
by the Agent or any Lender for the payment of the Subsidiary Obligations, nor
shall the Company seek or be entitled to seek any contribution or reimbursement
from the UK Borrower in respect of payments made by the Company hereunder, until
the Commitments have terminated, no L/C Obligations are outstanding and all
amounts owing to the Agent and the Lenders by the UK Borrower have been paid in
full. If any amount shall be paid to the Company on account of such subrogation
rights at any time when the Commitments have not terminated, any L/C Obligations
are outstanding or all amounts owing hereunder shall not have been paid in full,
such amount shall be held by the Company in trust for the Agent and the Lenders,
segregated from other funds of the Company, and shall, forthwith upon receipt by
the Company, be turned over to the Agent in the exact form received by the
Company (duly indorsed by the Company to the Agent, if required), to be applied
against the Subsidiary Obligations, whether matured or unmatured, in such order
as the Agent may determine.
15.4 Amendments, etc. The Company shall remain obligated
hereunder notwithstanding that, without any reservation of rights against the
Company, and without notice to or further assent by the Company, any demand for
payment of any of the Subsidiary Obligations made by the Agent or any Lender may
be rescinded by the Agent or such Lender, and any of the Subsidiary Obligations
continued, and the Subsidiary Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Agent or any Lender, and this Agreement, any
other Loan Document and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Required Lenders or the Lenders, as the case may be, may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Agent or any Lender for the payment of the
Subsidiary Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Agent nor any Lender shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Subsidiary
Obligations or pursuant to this Section 15 or any property subject thereto.
15.5 Guarantee Absolute and Unconditional. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
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Subsidiary Obligations and notice of or proof of reliance by the Agent or any
Lender upon the guarantees contained in this Section 15 or acceptance of the
guarantee provisions of this Section 15; the Subsidiary Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred
in reliance upon the guarantees contained in this Section 15; and all dealings
between the UK Borrower or the Company, on the one hand, and the Agent and the
Lenders, on the other, shall likewise be conclusively presumed to have been had
or consummated in reliance upon the guarantees contained in this Section 15. The
Company waives (to the extent permitted by law) diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the UK
Borrower or the Company with respect to the Subsidiary Obligations. The
guarantees contained in this Section 15 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement, any other Loan Document or any of
the documents executed in connection therewith, any of the Subsidiary
Obligations or any collateral security therefor or guarantee or right of offset
with respect thereto at any time or from time to time held by the Agent or any
Lender, (b) any defense (including, without limitation, any statute of
limitations), set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the UK
Borrower against the Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the UK Borrower or the
Company) which constitutes, or might be construed to constitute, an equitable or
legal discharge of the UK Borrower for the Subsidiary Obligations, or of the
Company under the guarantees contained in this Section 15, in bankruptcy or in
any other instance. When the Agent or any Lender is pursuing its rights and
remedies hereunder against the Company, the Agent or any Lender may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against the UK Borrower or any other Person or against any collateral security
or guarantee for the Subsidiary Obligations or any right of offset with respect
thereto, and any failure by the Agent or any Lender to pursue such other rights
or remedies or to collect any payments from the UK Borrower or any such other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the UK Borrower or any such
other Person or of any such collateral security, guarantee or right of offset,
shall not relieve the Company of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as a
matter of law, of the Agent and the Lenders against the Company.
15.6 Reinstatement. Each of the guarantees contained in this
Section 15 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Subsidiary
Obligations is rescinded or must otherwise be restored or returned by the Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the UK Borrower or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
UK Borrower or any substantial part of their respective property, or otherwise,
all as though such payments had not been made.
15.7 Payments. The Company hereby agrees that the amounts
payable by the Company hereunder will be paid to the Agent without set-off or
counterclaim in Dollars or, with respect to the UK Loans, Pounds Sterling at the
office of the Agent specified in subsection 18.2 or at such other office as the
Agent shall designate in writing to the Company.
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SECTION 16. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) any representation or warranty made or deemed
made in any Loan Document, or any representation, warranty, statement
or information contained in any report, certificate, financial
statement or other instrument furnished pursuant to any Loan Document,
shall prove to have been false or misleading in any material respect
when so made, deemed made or furnished;
(b) default shall be made in the payment of any
principal of any Loan or reimbursement with respect to any
Reimbursement Obligation when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for payment
thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any
interest on any Loan or Reimbursement Obligation or any fee or any
other amount (other than an amount referred to in (b) above) due under
any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of five
Business Days;
(d) default shall be made in the due observance or
performance by the Company or any Subsidiary of any covenant, condition
or agreement contained in subsection 13.1(a), 13.4, 13.5 or 13.8 or in
Section 14;
(e) default shall be made in the due observance or
performance by the Company or any Subsidiary of any covenant, condition
or agreement contained in any Loan Document (other than those specified
in paragraph (b), (c) or (d) above) and such default shall continue
unremedied for a period of 30 days after notice thereof from the Agent
or any Lender to the Company;
(f) the Company or any Subsidiary shall (i) fail to
pay any amount of principal or interest due in respect of any
Indebtedness having a principal amount in excess of $5,000,000, when
and as the same shall become due and payable (after giving effect to
any applicable grace period), or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement
or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or
to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf (with or without the giving of notice, the lapse of
time or both) to cause, such Indebtedness to become due prior to its
stated maturity;
(g) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed seeking (i) relief in respect of
the Company or any Subsidiary, or of a substantial part of the property
or assets of the Company or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership, administration
or similar law or any analogous law of a foreign jurisdiction, (ii) the
appointment of a liquidator, receiver,
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administrative receiver, trustee, custodian, sequestrator, conservator
or similar official for the Company or any Subsidiary or for a
substantial part of the property or assets of the Company or a
Subsidiary or (iii) the winding-up or liquidation of the Company or any
Subsidiary; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(h) the Company or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership, administration or similar law or any
analogous law of a foreign jurisdiction, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner
(but within 60 days in any event), any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the
appointment of a liquidator, receiver, administrative receiver,
trustee, custodian, sequestrator, conservator, administrator or similar
official for the Company or any Subsidiary or for a substantial part of
the property or assets of the Company or any Subsidiary, (iv) file an
answer admit ting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its
inability, or fail generally, or deemed by any law to be unable, to pay
its debts as they become due, (vii) be deemed by United Kingdom law to
be insolvent or (viii) take any action for the purpose of effecting any
of the foregoing;
(i) one or more judgments for the payment of money in
an aggregate amount in excess of $5,000,000 (to the extent not covered
by insurance) shall be rendered against the Company, any Subsidiary or
any combination thereof and the same shall remain undischarged for a
period of 45 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Company or any
Subsidiary to enforce any such judgment;
(j) a Reportable Event or Reportable Events, or a
failure to make a required installment or other payment (within the
meaning of Section 412(n)(l) of the Code), shall have occurred with
respect to any Plan or Plans that could reasonably be expected to
result in liability of the Company, any Subsidiary or any ERISA
Affiliate to the PBGC or to a Plan and, within 30 days after the
reporting of any such Reportable Event to the Agent or after the
receipt by the Agent of the statement required pursuant to subsection
13.6(b)(iii), the Agent shall have notified the Company in writing that
(i) the Required Lenders have reasonably determined that, on the basis
of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination
of such Plan or Plans by the PBGC, (B) for the appointment by the
appropriate United States district court of a trustee to administer
such Plan or Plans or (C) for the imposition of a lien in favor of a
Plan and (ii) as a result thereof an Event of Default exists hereunder;
or a trustee shall be appointed by a United States district court to
administer any such Plan or Plans; or the PBGC shall institute
proceedings to terminate any Plan or Plans or give notice of its
intention to do so; and, in connection with any of the events set forth
in this paragraph (j), the liability that the
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Company, its Subsidiaries and its ERISA Affiliates could be reasonably
expected to incur would have a Material Adverse Effect;
(k) (i) the Company, any Subsidiary or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer
Plan (or otherwise shall know or have a reasonable basis to believe)
that it has incurred Withdrawal Liability to such Multiemployer Plan,
(ii) the Company, such Subsidiary or such ERISA Affiliate shall not
have reasonable grounds for contesting such Withdrawal Liability or
shall not in fact contest such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of the Withdrawal Liability
specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
unsatisfied Withdrawal Liabilities (determined as of the date or dates
of such notification), could be reasonably expected to have a Material
Adverse Effect;
(l) the Company, any Subsidiary or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer
Plan (or otherwise shall know or have a reasonable basis to believe)
that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of the ERISA, if solely as a
result of such reorganization or termination the aggregate annual
contributions of the Company, the Subsidiaries and the ERISA Affiliates
to all Multiemployer Plans that are then in reorganization or have been
or are being terminated have been or will be increased over the amounts
required to be contributed to such Multiemployer Plans for their most
recently completed plan years by an amount that could be reasonably
expected to have a Material Adverse Effect;
(m) there shall have occurred a Change in Control;
(n) any security interest purported to be created by
any Security Document shall cease to be, or shall be asserted by the
Company or any Subsidiary not to be, a valid, perfected, first priority
(except as otherwise expressly provided in the Credit Agreement or such
Security Document) security interest in the securities, assets or
properties covered thereby (other than a security interest in
securities, assets or properties having, in the aggregate, a fair
market value not in excess of $100,000), except to the extent that any
such loss of perfection or priority results from the failure of the
Agent to maintain possession of certificates representing securities
pledged under a Pledge Agreement;
(o) any Loan Document (including, without limitation,
the guarantees contained in Section 15 hereof) shall not be for any
reason, or shall be asserted by the Company or any Subsidiary not to
be, in full force and effect and enforceable in all mate rial respects
in accordance with its terms;
(p) the Subsidiary Obligations or the guarantees
thereof pursuant to Section 15 hereof or the Obligations (as defined in
the Subsidiaries Guarantee) or any Subsidiaries Guarantee shall cease
to constitute, or shall be asserted by the Company or any Guarantor not
to constitute, senior indebtedness under the subordination provisions
of any subordinated Indebtedness of the Company or such subordination
provisions shall be
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invalidated or otherwise cease to be a legal, valid and binding
obligation of the parties thereto, enforceable in accordance with its
terms; or
(q) any material provision of any Subsidiaries
Guarantee or of Section 15 hereof shall cease to be in full force and
effect and enforceable in accordance with its terms for any reason
whatsoever or the Company or any Guarantor shall contest or deny in
writing the validity or enforceability of any of its obligations under
any such Guarantee or the obligations guaranteed thereby shall cease to
be entitled to the material benefits of any other Loan Document for any
reason whatsoever;
then, and in every such event (other than an event with respect to any Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Agent may, and at the request of the Required
Lenders shall, by notice to the Company, take either or both of the following
actions, at the same or different times: (i) terminate forthwith any or all of
the Commitments and (ii) declare any or all of the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued fees and all other liabilities of the Borrowers accrued
hereunder (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to any Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued fees and all other liabilities of the
Borrowers accrued hereunder (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and under any
other Loan Document, shall automatically become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Company shall at such time deposit in a
cash collateral account opened by the Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. The Company hereby
grants to the Agent, for the benefit of the Issuing Bank and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Company under this Agreement and the other Loan Documents.
Amounts held in such cash collateral account shall be applied by the Agent to
the payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the Company
hereunder and under the Notes. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Company hereunder and under the Notes
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Company. The Company shall execute and deliver
to the Agent, for the account of the Issuing Bank and the L/C Participants, such
further documents and instruments as the Agent may request to evidence the
creation and perfection of the within security interest in such cash collateral
account.
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Except as expressly provided in this Section 16, presentment,
demand, protest or all other notice of any kind are hereby expressly waived by
each Borrower.
SECTION 17. THE AGENT
17.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent 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 or any other Loan Document, the Agent 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 Agent.
Neither any Co- Documentation Agent nor any Issuing Bank shall have any duties
or responsibilities hereunder 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 either Co-Documentation Agent or any Issuing Bank.
17.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
17.3 Exculpatory Provisions. Neither the 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 misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Company or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the 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 the Company or any other Person to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Company and its
Subsidiaries.
17.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation
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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, without limitation, counsel to the Company), independent accountants
and other experts selected by the Agent. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The 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 or (if required) the
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. The
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 (if required) the Lenders, 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.
17.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Company
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 Agent
receives such a notice, the Agent shall give notice thereof to the Lenders. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders or (if required) the
Lenders ; provided that unless and until the Agent shall have received such
directions, the 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.
17.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the 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 the Agent hereinafter
taken, including any review of the affairs of the Borrowers shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own 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 the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the 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
the Borrowers which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
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17.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent the Company is obligated and fails to
make reimbursement in respect thereof and without limiting the obligation of the
Company to do so), ratably according to their respective Commitment Percentages
in effect on the date on which indemnification is sought (or, to the extent that
the relevant Commitments have then been terminated, according to their
respective Commitment Percentages thereof immediately prior to such
termination), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
17.8 Agent in Its Individual Capacity. To the extent not
otherwise prohibited by the terms hereof (including Section 14), the Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Company and its Subsidiaries as though the Agent
were not the Agent hereunder and under the other Loan Documents. With respect to
the Loans made by it, and with respect to any Letter of Credit issued or
participated in by it, the Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
17.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
(provided that it shall have been approved by the Company), shall succeed to the
rights, powers and duties of the Agent hereunder. Effective upon such
appointment and approval, the term "Agent" shall mean such successor agent, and
the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 17 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
SECTION 18. MISCELLANEOUS
18.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with
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the Company (on behalf of the Borrowers) written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrowers hereunder or thereunder or
(b) waive, on such terms and conditions as the Required Lenders or the Agent, as
the case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) reduce the amount or extend the scheduled date of maturity
of any Loan or of payment of any installment thereof or the ultimate
expiration date of the Letter of Credit facility, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the aggregate amount or extend
the expiration date of any Lender's Commitment or amend the provisions
of subsection 10.9, in each case without the consent of each Lender
directly affected thereby;
(ii) (a) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition of
Required Lenders, or (b) consent to the assignment or transfer by the
Company of any of its rights and obligations under this Agreement and
the other Loan Documents or (c) release any significant Collateral or
guarantee obligations, in each case without the written consent of all
the Lenders;
(iii) amend, modify or waive any mandatory prepayment owing to
the Domestic Lenders, the UK Lenders, the Secured Supplemental Lenders
or the Unsecured Supplemental Lenders without the written consent of
the Domestic Lenders, the UK Lenders, the Secured Supplemental Lenders
or the Unsecured Supplemental Lenders, as the case may be;
(iv) amend, modify or waive any provision of Section 5 without
the written consent of the Domestic Swing Line Lender or any provision
of Section 8 without the written consent of the UK Swing Line Lender;
(v) amend, modify or waive any provision of Section 4 without
the written consent of each Issuing Bank directly affected thereby;
(vi) amend, modify or waive any provision of Section 17
without the written consent of the then Agent; or
(vii) increase the principal amount of the Loans and Letters
of Credit which constitute Primary Obligations (other than through
borrowings of Loans and issuances of Letters of Credit under the
Domestic Revolving Credit Commitments and the UK Revolving Credit
Commitments in effect on the Supplemental Closing Date), without the
written consent of each Secured Supplemental Lender (it being
understood that nothing contained in this clause (vii) shall be deemed
to restrict the right of the Agent to adjust the Domestic Borrowing
Base and the UK Borrowing Base pursuant to the authority granted in the
definition of each such term contained in subsection 1.1 hereof).
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Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Agent and all future holders of the Loans. In the case of any
waiver, the Borrowers, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
The Lenders hereby agree that the Agent may, in its
discretion, waive the provisions of subsection 12.2(f) with respect (and only
with respect) to the pledge of Capital Stock of any Foreign Subsidiary; provided
that the Company shall be required and hereby agrees to comply with such
provisions by no later than June 30, 1996 and that failure to so comply shall be
deemed an Event of Default hereunder.
18.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by certified or registered mail,
five days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed (y) as follows in the case of the Company, the UK Borrower
and the Agent and (z) as set forth in Schedule II, in the case of the other
parties hereto, or (in each such case) to such other address as may be hereafter
notified by the respective parties hereto:
The Company: Remington Products Company, L.L.C.
00 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx Xxxxxxxx
Fax: 203/000-0000
with a copy to:
Attention: Xxxxx Xxxxxx, Esq.
Fax: 203/000-0000
The UK Borrower: Remington Consumer Products Limited
Watermans House
Watermans Court
Xxxxxxxxx Crescent
The Causeway
Staines
Middlesex TW18 3DA
England
Attention: Chief Financial Officer
Fax: 000-00-0000-000000
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The Agent: with respect to UK Loans:
Chemical Bank
Trinity Tower
9 Xxxxxx Xxxx Street
London, England E19YT
Attention: Xxxxxxxx Xxxxxxx
Fax: 000-00-000-000-0000
with respect to other matters:
Chemical Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: 212/000-0000
in each case with a copy to:
Chemical Bank Agency Services Group
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Fax: 212/000-0000
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 3.2, 4.2, 5.1(a), 6.2, 7.2, 8.1(a), 9.2, 10.1, 10.2,
10.3 or 10.9 shall not be effective until received.
18.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
18.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
18.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Agent for all its out-of-pocket costs and expenses incurred
in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions
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contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Agent, (b) to pay or reimburse each
Lender and the Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including, without limitation, the
fees and disbursements of counsel to each Lender and of counsel to the Agent,
(c) to pay, indemnify, and hold each Lender and the Agent 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 taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Agent 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, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under any Environmental Law applicable to the operations of
the Company, any of its Subsidiaries or any of the Properties (all the foregoing
in this paragraph (d), collectively, the "indemnified liabilities"), provided
that the Company shall have no obligation hereunder to the Agent or any Lender
with respect to indemnified liabilities arising solely from the gross negligence
or willful misconduct of the Agent or any such Lender. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
18.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Agent and their respective successors and assigns,
except that no Borrower may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Each 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. 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
Borrowers and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. No Lender shall be entitled to create in
favor of any Participant, in the participation agreement pursuant to which 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 except for those specified in clauses (i) and (ii) of the
proviso to subsection 18.1. Each Borrower agrees that if amounts outstanding
under this Agreement are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant in any Loans owing by it or Commitments available to it
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shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
18.7 as fully as if it were a Lender hereunder. The Company also agrees that
each Participant shall be entitled to the benefits of subsections 10.11, 10.12
and 10.13, with respect to its participation in the Commitments and the Loans
outstanding from time to time, provided, that no Participant shall be entitled
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Company (on its own behalf and, to the extent applicable, as agent for
any affected Borrower) and the Agent (which in each case shall not be
unreasonably withheld), to an additional bank or financial institution (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,
substantially in the form of Exhibit H, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Company and the Agent) and delivered to the Agent
for its acceptance and recording in the Register, provided that, in the case of
any such assignment to any Lender or any affiliate thereof, or an additional
bank or financial institution, the aggregate principal amount of Loans, L/C
Obligations and Commitments being assigned is not less than $5,000,000 (or such
lesser amount as may be agreed to by the Company and the Agent). 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 any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Company shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by any Borrower, for any assignment
which occurs at any time when any of the events described in subsection 16(b),
(c), (g) or (h) shall have occurred and be continuing. Notwithstanding anything
to the contrary contained herein, (x) any assignment by a Domestic Lender of any
Commitment or Loan held by it shall be accompanied by an assignment to the same
Assignee of a ratable share of each other Commitment and Loan which it holds as
a Domestic Lender, (y) any assignment by a UK Lender of any Commitment or Loan
held by it shall be accompanied by an assignment to the same Assignee of a
ratable share of each other Commitment and Loan which it holds as a UK Lender;
for purposes of clarification, it is understood and agreed that any Supplemental
Lender who holds both Secured Supplemental Loans and Unsecured Supplemental
Loans need not assign such Loans ratably.
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(d) The Agent, on behalf of the Company, shall maintain at the
address of the Agent referred to in subsection 18.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amounts of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the 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 any Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Company and the Agent)
together with payment to the Agent of a registration and processing fee of
$3,500, the Agent shall (i) promptly accept such Assignment and Acceptance and
(ii) on the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Lenders, the Company and (to the extent applicable) any other
affected Borrowers.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 18.17, any and all financial information
in such Lender's possession concerning such Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of any Borrower pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of any
Borrower in connection with such Lender's credit evaluation of any Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
18.7 Adjustments; Set-off. (a) On the date of occurrence of
any Event of Default specified in subsection 16(g) or (h), each Lender (other
than the Supplemental Lenders) shall be deemed (solely as an inter-creditor
matter and without any obligation on the part of any Borrower) to have purchased
an interest in the obligations owing to each other Lender (other than the
Supplemental Lenders) (and, to the extent necessary after giving effect to any
actual recoveries on such obligations, shall actually fund such purchase) such
that, after giving effect to all such purchases or deemed purchases, each such
Lender is owed (directly or through such purchase or deemed purchase) its
Commitment Percentage (calculated with respect to all Commitments) of the
Domestic Term Loans, the UK Term Loans, the Domestic Revolving Credit Loans
(including, without limitation, reimbursement obligations in respect of any
outstanding Domestic Swing Line Loans), the UK Revolving Credit Loans
(including, without
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limitation, reimbursement obligations in respect of any outstanding UK Swing
Line Loans), the L/C Obligations and all amounts owing in respect thereof, but
in the case of Domestic Swing Line Loans, UK Swing Line Loans and L/C
Obligations excluding those with respect to which such Lender is not required to
make Domestic Revolving Credit Loans or UK Revolving Credit Loans, as the case
may be, or purchase participating interests pursuant to subsection 5.1(f),
8.1(f) or 4.4(d), respectively. Each Lender hereby acknowledges and agrees that
its agreement contained in this subsection 18.7(a) shall be irrevocable and
unconditional.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of any of its Loans or Reimbursement
Obligations owing to it under any Commitment, or interest thereon, pursuant to a
guarantee or otherwise, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off or otherwise), in a greater proportion
than any such payment to and collateral received by any other Lender, if any, in
respect of such other Lender's Loans or Reimbursement Obligations, as the case
may be, of the same Facility owing to it under such Commitment or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's similar Loans or Reimbursement
Obligations of the same Facility, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders which hold such
Commitment of the same Facility; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. Each Borrower
agrees that each Lender so purchasing a portion of another Lender's Loans or
Reimbursement Obligations may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
purchasing Lender were the direct holder of such portion.
(c) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to any
Borrower, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by any
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of such Borrower. Each Lender agrees
promptly to notify the affected Borrower and the 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.
18.8 Mortgaged Property Casualty and Condemnation. (a)
Notwithstanding any other provision of this Agreement or the Security Documents,
the Agent is authorized, at its option (for the benefit of the Lenders, other
than the Unsecured Supplemental Lenders), to collect and receive, to the extent
payable to the Company or any of its Subsidiaries, all insurance proceeds,
damages, claims and rights of action under any insurance policies with respect
to any casualty or other insured damage ("Casualty") to any portion of any
Mortgaged Property (collectively, "Insurance Proceeds"), unless the amount of
the related Insurance Proceeds is less
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than $10,000,000 and an Event of Default shall not have occurred and be
continuing. The Company agrees to notify the Agent, in writing, promptly after
the Company or any Subsidiary obtains notice or knowledge of any Casualty to a
Mortgaged Property, which notice shall set forth a description of such Casualty
and the Company's good faith estimate of the amount of related damages. The
Company agrees, subject to the foregoing limitations, to, and to cause each
Subsidiary to, endorse and transfer or cause to be endorsed or transferred any
Insurance Proceeds received by it or any of its Subsidiaries to the Agent.
(b) The Company will notify the Agent immediately
upon obtaining knowledge of the institution of any action or proceeding for the
taking of any Mortgaged Property, or any part thereof or interest therein, for
public or quasi-public use under the power of eminent domain, by reason of any
public improvement or condemnation proceeding, or in any other manner (a
"Condemnation"). No settlement or compromise of any claim in connection with any
such action or proceeding shall be made without the consent of the Agent, which
consent shall not be unreasonably withheld. The Agent is authorized, at its
option (for the benefit of the Unsecured Supplemental Lenders), to collect and
receive all proceeds of any such Condemnation (in each case, the "Condemnation
Proceeds") unless the amount of the Condemnation Proceeds is less than
$10,000,000 and an Event of Default shall not have occurred and be continuing.
The Company agrees to execute or cause to be executed such further assignments
of any Condemnation Proceeds required to be received by the Agent as the Agent
may reasonably require.
(c) In the event of a Condemnation of all or
substantially all of any Mortgaged Property (which determination shall be made
by the Agent in its reasonable discre tion), unless the Company shall have
notified the Agent in writing promptly after such Condemnation that it intends
to replace the related Mortgaged Property (and no Default or Event of Default
shall have occurred and be continuing at the time of such election), the Agent
may deem such event to be a Prepayment Event, and shall apply the Condemnation
Proceeds received as a result of such Condemnation (less the reasonable costs,
if any, incurred by the Agent or the Company in the recovery of such
Condemnation Proceeds, including reasonable attorneys' fees, other charges and
disbursements (the Lenders having agreed to reimburse the Company from such
Condemnation Proceeds such costs incurred by the Company)) to prepay obligations
outstanding under this Agreement to the extent required under subsection 10.2,
with any remaining Condemnation Proceeds being returned to the Company. If the
Company shall elect to replace a Mortgaged Property as contemplated above, (i)
the replacement property shall be of utility comparable to that of the replaced
Mortgaged Property and (ii) the insufficiency of any Condemnation Proceeds to
defray the entire expense of the related location, acquisition and replacement
of such replacement property shall in no way relieve the Company of its
obligation to complete the construction or acquisition of any replacement
property if the Company shall have made such election and shall have acquired
the related real property. Any condemnation of substantially all of a Mortgaged
Property is referred to herein as a "`substantially all' Condemnation".
(d) In the event of any Condemnation of the
Mortgaged Property, or any part thereof (other than a total or "substantially
all" Condemnation described in paragraph (c) above and subject to the provisions
of paragraph (f) below), the Agent shall apply the Condemnation Proceeds (to the
extent it receives such proceeds), first, in the case of a partial
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Condemnation, to the repair or restoration of any integrated structure subject
to such Condemnation and, second, shall apply the remainder of such Condemnation
Proceeds (less the reasonable costs, if any, incurred by the Agent and the
Company in the recovery of such Condemnation Proceeds, including reasonable
attorneys' fees (the Lender having agreed to reimburse the Company from such
Condemnation Proceeds such costs incurred by the Company)) to prepay obligations
outstanding under this Agreement to the extent required under subsection 10.2,
with any remaining Condemnation Proceeds being returned to the Company.
(e) In the event of any Casualty of the improvements
of any Mortgaged Property and so long as no Default or Event of Default has
occurred and is continuing, the Company shall have the option to either:
(i) restore the Mortgaged Property to a condition
substantially similar to its condition immediately prior to such
Casualty and to invest the balance, if any, of any Insurance Proceeds
in equipment, vehicles or other assets used in the Company's principal
lines of business within 180 days after the receipt thereof, provided,
however, that the Company, pending such reinvestment, promptly deposits
such excess Insurance Proceeds in a cash collateral account established
with (or otherwise reasonably satisfactory to) the Agent for the
benefit of the Lenders (other than the Unsecured Supplemental Lenders),
or
(ii) direct the Agent to apply the related Insurance
Proceeds to prepay obligations outstanding under this Agreement to the
extent required under subsection 10.2, with any remaining Insurance
Proceeds being returned to the Company.
It is understood that any excess Insurance Proceeds that are not reinvested in
the Company's existing lines of business as contemplated above will be applied
to prepay obligations out standing under this Agreement to the extent required
under subsection 10.2.
If required to do so, the Company shall make the election
contemplated by the immediately preceding paragraph by notifying the Agent
promptly after the later to occur of (A) 30 days after the Company and its
insurance carrier reach a final determination of the amount of any Insurance
Proceeds and (B) 60 days after the occurrence of the Casualty. If the Company
shall be required or shall elect to restore the Mortgaged Property, the
insufficiency of any Insurance Proceeds or Condemnation Proceeds to defray the
entire expense of such restoration shall in no way relieve the Company of such
obligation to so restore if it is so required or once such election has been
made. In the event the Company shall be required to restore or shall notify the
Agent of its election to restore, the Company shall diligently and continuously
prosecute the restoration of the Mortgaged Property to completion. In the
circumstance where the Company shall be required to restore or shall so elect to
restore and no Event of Default has occurred and is continuing the Company shall
not be required to comply with the requirements of paragraph (f) below in
connection with such restoration (except as required by clauses (f)(ii)(A) and
(B)), so long as the cost of such restoration shall be less than $500,000. In
the event of a Casualty where the Company is required to make the election set
forth above and the Company either shall fail to notify the Agent of its
election within the period set forth above or shall elect not to restore the
Mortgaged Property, the Agent shall (after being reimbursed for all reasonable
costs of recovery of such Insurance Proceeds including reasonable attorneys'
fees and after reimbursing the Company for all such reasonable costs incurred by
the Company) apply such
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Insurance Proceeds to prepay obligations outstanding under this Agreement to the
extent required under subsection 10.2. In addition, upon such prepayment, the
Company shall be obligated to place the remaining portion, if any, of the
Mortgaged Property in a safe condition that is otherwise in compliance with the
requirements of applicable Governmental Authorities and the provisions of this
Agreement and the Company Mortgage.
(f) Except as otherwise specifically provided in
this subsection 18.8, all Insurance Proceeds and all Condemnation Proceeds
recovered by the Agent (i) are to be applied to the restoration of the
applicable Mortgaged Property (or, if permitted in the event of a total or
"substantially all" Condemnation as contemplated in paragraph (c) above, to the
location, acquisition and construction of a replacement for the applicable
Mortgaged Property) (less the reasonable cost, if any, to the Agent of such
recovery and of paying out such proceeds, including reasonable (x) attorneys'
fees, (y) other charges and (z) disbursements and costs allocable to inspecting
the Work (as defined below)), (ii) shall be applied by the Agent to the payment
of the cost of restoring or replacing the Mortgaged Property so damaged,
destroyed or taken or of the portion or portions of the Mortgaged Property not
so taken (the "Work") and (iii) shall be paid out from time to time to the
Company as and to the extent the Work (including the location and acquisition of
any replacement of any Mortgaged Property) progresses (as certified by the
Company) for the payment thereof, but subject to each of the following
conditions:
(A) the Company must promptly commence the
restoration process or the location, acquisition and replacement
process (in the case of a total or "substantially all" Condemnation) in
connection with the Mortgaged Property;
(B) upon completion thereof, the improvements shall
(I) be in compliance with all requirements of applicable Governmental
Authorities such that all representations or warranties of the Company
relating to the compliance of such Mortgaged Property with applicable
laws, rules or regulations in this Agreement or the Security Documents
will be correct in all respects and (II) be at least equal in value and
general utility to the improvements that were on such Mortgaged
Property (or that were on the Mortgaged Property that has been
replaced, if applicable) prior to the Casualty or Condemnation, and in
the case of a Condemnation, subject to the affect of such Condemnation;
(C) there shall be no Default or Event of Default
that has occurred and is continuing; and
(D) after commencing the Work, the Company shall
continue to perform the Work diligently and in good faith to
completion.
Upon completion of the Work and payment in full therefor, the Agent will
disburse to the Company the amount of any Insurance Proceeds or Condemnation
Proceeds then or thereafter in the hands of the Agent on account of the Casualty
or Condemnation that necessitated such Work to be applied (x) to prepay
obligations outstanding under this Agreement to the extent required under
subsection 10.2, with any excess being returned to the Company, or (y) to be
reinvested in the Company's principal lines of business within 180 days after
the receipt thereof; provided, however, that the Company, pending such
reinvestment, promptly deposits such amounts in a
123
cash collateral account established with the Agent for the benefit of the
Lenders (other than the Unsecured Supplemental Lenders).
(g) Notwithstanding any other provisions of this
subsection 18.8, if the Company shall have elected to replace a Mortgaged
Property in connection with a total or "sub stantially all" Condemnation as
contemplated in paragraph (c) above, all Condemnation Proceeds held by the Agent
in connection therewith shall be applied to prepay obligations outstanding under
this Agreement to the extent required under subsection 10.2 if (i) the Company
notifies the Agent that it does not intend to replace the related Mortgaged
Property, (ii) an officer of the Company shall not have notified the Agent in
writing that the Company has acquired or has entered into a binding contract to
acquire land upon which it will construct the replacement property within six
months after the related Condemnation or (iii) the Company shall have not
notified the Agent and the Agent in writing that it has begun construction of
the replacement structures within one year after the related Condemnation. Any
funds not required to be applied in accordance with subsection 10.2 shall be
returned to the Company.
(h) Nothing in this subsection 18.8 shall prevent
the Agent from applying at any time all or any part of the Insurance Proceeds or
Condemnation Proceeds to the curing of any Event of Default under this
Agreement.
18.9 Matters Relating to Certain Borrowers. (a) The UK
Borrower shall at all times maintain in New York, New York a Person acting as
agent to receive on its behalf and on behalf of its respective property service
of copies of the summons and complaint and any other process which may be served
in any action or proceeding described in subsection 18.14(a) in any New York
State or Federal court described in subsection 18.14(a). Such process agent
initially shall be Xxxxx Xxxxxx, Esq. with an address at c/o Remington Products
Company, L.L.C., 00 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000; the UK Borrower
shall provide prompt written notice to the Agent of any change in such process
agent or any change of address thereof.
(b) The obligations of the Company under any Note due to any
party hereto or any other amount owing hereunder shall, notwithstanding any
judgment in a currency (the "judgment currency") other than Dollars, be
discharged only to the extent that on the Business Day following receipt by such
party or such holder (as the case may be) of any sum adjudged to be so due in
the judgment currency such party or such holder (as the case may be) may in
accordance with normal banking procedures purchase Dollars with the judgment
currency; if the amount of Dollars so purchased is less than the sum originally
due to such party or such holder (as the case may be) in Dollars, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such party of such holder (as the case may be) against such loss, and
if the amount of Dollars so purchased exceeds the sum originally due to any
party to this Agreement or any holder of Notes (as the case may be), such party
or such holder (as the case may be) agrees to remit to the Company such excess.
(c) The obligations of the UK Borrower under any Note due to
any party hereto or any other amount owing hereunder shall, notwithstanding any
judgment in a currency (the "judgment currency") other than Pounds Sterling, be
discharged only to the extent that on the Business Day following receipt by such
party or such holder (as the case may be) of any sum adjudged to be so due in
the judgment currency such party or such holder (as the case may be)
124
may in accordance with normal banking procedures purchase Pounds Sterling with
the judgment currency; if the amount of Pounds Sterling so purchased is less
than the sum originally due to such party or such holder (as the case may be) in
Pounds Sterling, the UK Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such party of such holder (as
the case may be) against such loss, and if the amount of Pounds Sterling so
purchased exceeds the sum originally due to any party to this Agreement or any
holder of Notes (as the case may be), such party or such holder (as the case may
be) agrees to remit to the UK Borrower such excess.
(d) Notwithstanding anything to the contrary contained herein,
the UK Borrower's liability hereunder and under the other Loan Documents shall
be limited to the UK Loans, interest thereon and fees and other amounts directly
relating thereto. The UK Borrower shall have no obligation hereunder with
respect to the payment of any amounts owing with respect to the Domestic Loans
or the Letters of Credit.
18.10 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Company and the Agent.
18.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
18.12 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
18.13 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
18.14 Submission To Jurisdiction; Waivers. Each Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement 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
from any thereof and, in the case of the UK Borrower, to the
jurisdiction of the English courts;
125
(b) 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 court and
agrees not to plead or claim the same;
(c) 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 such Borrower at its address set forth in subsection 18.2
or at such other address of which the Agent shall have been notified
pursuant thereto;
(d) 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
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
18.15 Acknowledgements. 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) neither the Agent nor any Lender has any fiduciary
relationship with or duty to any Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agent and the Lenders, on one hand, and
any Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among any Borrower and the
Lenders.
18.16 WAIVERS OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE BORROWERS, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
18.17 Confidentiality. Each Lender agrees to keep confidential
any written or oral non-public information (a) provided to it by or on behalf of
the Company or any of its Subsidiaries pursuant to or in connection with this
Agreement or (b) obtained by such Lender based on a review of the books and
records of the Company or any of its Subsidiaries; provided that nothing herein
shall prevent any Lender from disclosing any such information (i) to the Agent
or any other Lender, (ii) to any Transferee or prospective Transferee which
agrees to
126
comply with the provisions of this subsection, (iii) to its employees,
directors, Affiliates, agents, attorneys, accountants and other professional
advisors, (iv) upon the request or demand of any Governmental Authority having
jurisdiction over such Lender, (v) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been publicly disclosed other than in breach
of this Agreement, or (vii) in connection with the exercise of any remedy
hereunder.
127
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.
REMINGTON PRODUCTS COMPANY, L.L.C.
By:
Title:
REMINGTON CONSUMER PRODUCTS
LIMITED
By:
Title:
CHEMICAL BANK, as Administrative Agent, as a
Lender and as (or on behalf of) the Issuing Bank
By:
Title:
128
BANQUE NATIONALE DE PARIS, as a Co-
Documentation Agent and as a Lender
By:
Title:
FLEET NATIONAL BANK, as a Co-
Documentation Agent and as a Lender
By:
Title:
CORESTATES BANK, N.A.
By:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:
Title:
FIRST UNION BANK OF CONNECTICUT
By:
Title:
XXXXXX FINANCIAL, INC.
By:
Title:
PEOPLE'S BANK
By:
Title:
129
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
THE PROVIDENT BANK
By:
Title:
1
SCHEDULE I
COMMITMENTS
Domestic Domestic UK Revolving Secured Unsecured
Term Loan Revolving Credit UK Term Loan Credit Supplemental Supplemental
Lender Commitments Commitments Commitments Commitments Loans Loans
------------------------- ----------- ------------- ----------------- ------------------- ------------ -----------
Chemical Bank $531,417.00 $5,314,171.00 (pound)790,605.60 (pound)3,162,422.47 --- ---
Banque Nationale de Paris 442,847.00 4,428,475.00 658,838.46 2,635,352.50 --- ---
Fleet National Bank 442,847.00 4,428,475.00 658,838.46 2,635,352.50 --- ---
Corestates Bank, N.A. 454,546.00 4,545,455.00 301,182.75 1,204,731.65 --- ---
The First National Bank of Boston 454,546.00 4,545,455.00 301,182.75 1,204,731.65 7,500,000 7,500,000
First Union Bank of Connecticut 454,546.00 4,545,455.00 301,182.75 1,204,731.65 --- ---
Xxxxxx Financial, Inc. 588,235.00 5,882,353.00 -- -- --- ---
People's Bank 588,235.00 5,882,353.00 -- -- --- ---
PNC Bank. National Association 454,546.00 4,545,455.00 301,182.75 1,204,731.65 --- ---
The Provident Bank 588,235.00 5,882,353.00 --- --- --- ---
----------- ------------ -------------- --------------- ---------- ----------
$5,000,000.00 $50,000,000.00 (pound)3,313,013.52 (pound)13,252,054.07 $7,500,000 $7,500,000
1
SCHEDULE II
ADDRESS FOR NOTICES
BANQUE NATIONALE DE PARIS
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
THE CHASE MANHATTAN BANK
(f/k/a CHEMICAL BANK)
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
FIRST UNION NATIONAL BANK (as
successor by merger with CORESTATES
BANK, N.A.)
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
BANK BOSTON, N.A. (f/k/a THE FIRST
NATIONAL BANK OF BOSTON)
000 Xxxxxxx Xxxxxx, XX 01-09-06
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
FIRST UNION NATIONAL BANK (f/k/a
FIRST UNION BANK OF CONNECTICUT)
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
FLEET NATIONAL BANK
Xxx Xxxxxxx Xxxxxx
XX/XX/X00X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
PEOPLE'S BANK
Bridgeport Center
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
PNC BANK, NATIONAL
ASSOCIATION
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
THE PROVIDENT BANK
Xxx Xxxx Xxxxxx Xxxxxx
Xxxx Xxxx 000X
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
2
ANNEX I
REMINGTON PRODUCTS COMPANY, L.L.C.
REMINGTON CONSUMER PRODUCTS LIMITED
US$85,000,000.00
UK(pound)16,565,067.59
CREDIT AND GUARANTEE AGREEMENT
May 23, 1996
FLEET NATIONAL BANK
and
BANQUE NATIONALE DE PARIS,
AS CO-DOCUMENTATION AGENTS,
CHEMICAL BANK,
AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
Page
-----
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 40
SECTION 2. THE DOMESTIC TERM LOANS 41
2.1 Domestic Term Loans 41
2.2 Procedure for Domestic Term Loan Borrowing 41
2.3 Amortization of Domestic Term Loans 41
2.4 Evidence of Debt 42
2.5 Use of Proceeds of Domestic Term Loans 43
SECTION 3. THE DOMESTIC REVOLVING CREDIT LOANS 43
3.1 Domestic Revolving Credit Loans 43
3.2 Procedure for Domestic Revolving Credit Loan Borrowing 43
3.3 Repayment of Domestic Revolving Credit Loans 44
3.4 Evidence of Debt 44
3.5 Use of Proceeds of Domestic Revolving Credit Loans 44
SECTION 4. LETTER OF CREDIT SUB-FACILITY 45
4.2 Procedure for Issuance of Letters of Credit under this Agreement 45
4.3 Fees, Commissions and Other Charges 46
4.4 L/C Participations 46
4.5 Reimbursement Obligation 48
4.6 Obligations Absolute 48
4.7 Letter of Credit Payments 49
4.8 Application 49
SECTION 5. AMOUNT AND TERMS OF
DOMESTIC SWING LINE SUB-FACILITY 49
5.1 Domestic Swing Line Commitments 49
5.2 Participations 51
5.3 Use of Proceeds of Domestic Swing Line Loans 52
SECTION 6. THE UK TERM LOANS 52
6.1 UK Term Loans 52
6.2 Procedure for UK Term Loan Borrowing 52
6.3 Amortization of UK Term Loans 52
6.4 Evidence of Debt 53
6.5 Use of Proceeds of UK Term Loans 54
SECTION 7. THE UK REVOLVING CREDIT LOANS 54
7.1 UK Revolving Credit Loans 54
i
7.2 Procedure for UK Revolving Credit Loan Borrowing 54
7.3 Repayment of UK Revolving Credit Loans 55
7.4 Evidence of Debt 55
7.5 Use of Proceeds of UK Revolving Credit Loans 56
SECTION 8. AMOUNT AND TERMS OF
UK SWING LINE SUB-FACILITY 56
8.1 UK Swing Line Commitments 56
8.2 Participations 58
8.3 Use of Proceeds of UK Swing Line Loans 58
SECTION 9. THE SUPPLEMENTAL LOANS 58
9.1 Supplemental Loans 58
9.2 Procedure for Supplemental Loan Borrowing 59
9.3 Repayment of Supplemental Loans 59
9.4 Evidence of Debt 59
9.5 Use of Proceeds of Supplemental Loans 60
9.6 Collateral for Supplemental Loans 60
SECTION 10. CERTAIN PROVISIONS APPLICABLE TO THE LOANS
AND LETTERS OF CREDIT 61
10.1 Termination or Reduction of Commitments 61
10.2 Optional and Mandatory Prepayments 61
10.3 Conversion and Continuation Options 62
10.4 Minimum Amounts of Tranches 63
10.5 Interest Rates and Payment Dates for Loans 63
10.6 Inability to Determine Interest Rate 64
10.7 Commitment Fee; Other Fees 65
10.8 Computation of Interest and Fees 65
10.9 Pro Rata Treatment and Payments 66
10.10 Illegality 67
10.11 Requirements of Law 68
10.12 Taxes 70
10.13 Indemnity 71
10.14 Determinations 71
11. REPRESENTATIONS AND WARRANTIES 72
11.1 Organization; Powers 72
11.2 Authorization 72
11.3 Enforceability 73
11.4 Approvals 73
11.5 Financial Statements 73
11.6 No Material Adverse Change 74
11.7 Title to Properties; Possession Under Leases 75
11.8 Subsidiaries 75
ii
11.9 Litigation; Compliance with Laws 75
11.10 Agreements 76
11.11 Federal Reserve Regulations 76
11.12 Investment Company Act; Public Utility Holding Company Act 76
11.13 Tax Returns 76
11.14 No Material Misstatements 76
11.15 Employee Benefit Plans 77
11.16 Environmental Matters 77
11.17 Insurance 78
11.18 Solvency 78
11.19 Labor Matters 79
11.20 Capitalization 79
11.21 Security Documents 79
11.22 Location of Real Property and Leased Premises 80
11.23 Recapitalization 80
11.24 Regulation H 80
SECTION 12. CONDITIONS PRECEDENT 81
12.1 Each Extension of Credit 81
12.2 Initial Extensions of Credit 81
SECTION 13. AFFIRMATIVE COVENANTS 86
13.1 Existence; Businesses and Properties 86
13.2 Insurance 86
13.3 Obligations and Taxes 87
13.4 Financial Statements, Reports, etc 87
13.5 Litigation and Other Notices 91
13.6 ERISA 91
13.7 Maintaining Records; Access to Properties and Inspections 92
13.8 Use of Proceeds 92
13.9 Compliance with Environmental Laws 92
13.10 Preparation of Environmental Reports 92
13.11 Further Assurances 92
13.12 Additional Guarantees 93
13.13 Additional Stock Pledges 93
13.14 Additional Security Agreements 94
13.15 Rate Protection Agreements 94
13.16 Material Contracts 95
13.17 Surveys and Zoning 95
13.18 Cash Management System 95
13.19 Patents, Trademarks and Copyrights 95
13.20 Covenants of Other Borrowers 95
SECTION 14. NEGATIVE COVENANTS 95
14.1 Indebtedness 96
iii
14.2 Liens 97
14.3 Limitation on Guarantee Obligations 99
14.4 Sale and Leaseback Transactions 100
14.5 Investments, Loans and Advances 100
14.6 Mergers, Consolidations and Sales of Assets 101
14.7 Dividends and Distributions 102
14.8 Transactions with Affiliates 103
14.9 Business of Company and Subsidiaries 103
14.10 Limitations on Certain Debt Payments and Interest Payments 103
14.11 Amendment of Certain Documents; Certain Agreements 104
14.12 Limitation on Capital Lease Obligations 104
14.13 Capital Expenditures 104
14.14 Fixed Charge Coverage Ratio 104
14.15 Interest Expense Coverage Ratio 105
14.16(a) Leverage Ratio 105
14.16(b) Senior Leverage Ratio 106
14.17 Landlord Lien Waivers 106
14.18 Limitation on Preferred Equity 106
14.19 Matters Relating to Remington Rand Corporation 106
14.20 Covenants of Other Borrowers 106
SECTION 15. GUARANTEE 107
15.1 Guarantee 107
15.2 Right of Set-Off 108
15.3 No Subrogation 108
15.4 Amendments, etc 108
15.5 Guarantee Absolute and Unconditional 109
15.6 Reinstatement 110
15.7 Payments 110
SECTION 16. EVENTS OF DEFAULT 110
SECTION 17. THE AGENT 114
17.1 Appointment 114
17.2 Delegation of Duties 114
17.3 Exculpatory Provisions 115
17.4 Reliance by Agent 115
17.5 Notice of Default 115
17.6 Non-Reliance on Agent and Other Lenders 116
17.7 Indemnification 116
17.8 Agent in Its Individual Capacity 117
17.9 Successor Agent 117
SECTION 18. MISCELLANEOUS 117
18.1 Amendments and Waivers 117
iv
18.2 Notices 118
18.3 No Waiver; Cumulative Remedies 120
18.4 Survival of Representations and Warranties 120
18.5 Payment of Expenses and Taxes 120
18.6 Successors and Assigns; Participations and Assignments 121
18.7 Adjustments; Set-off 123
18.8 Mortgaged Property Casualty and Condemnation 124
18.9 Matters Relating to Certain Borrowers 128
18.10 Counterparts 129
18.11 Severability 129
18.12 Integration 129
18.13 GOVERNING LAW ` 129
18.14 Submission To Jurisdiction; Waivers 129
18.15 Acknowledgements 130
18.16 WAIVERS OF JURY TRIAL 130
18.17 Confidentiality 131
SCHEDULES
Schedule I Commitments
Schedule II Addresses for Notices
Schedule III Indebtedness
Schedule IV Liens
Schedule V Title Exceptions and Condemnation Proceedings
Schedule VI Litigation
Schedule VII Labor Matters
Schedule VIII Real Property (Owned and Leased)
Schedule IX UCC Filing Offices
Schedule X Insurance
Schedule XI Subsidiaries
Schedule XII Local Counsel
Schedule XIII Shareholders
Schedule XIV Borrowing Base Materials
Schedule XV Recapitalization Documents
Schedule XVI MLA Cost
EXHIBITS
Exhibit A-1 Form of Domestic Term Loan Note
Exhibit A-2 Form of Domestic Revolving Credit Note
Exhibit A-3 Form of UK Term Loan Note
Exhibit A-4 Form of UK Revolving Credit Note
Exhibit A-5A Form of Unsecured Supplemental Loan Note
Exhibit A-5B Form of Secured Supplemental Loan Note
v
Exhibit A-6 Form of Domestic Swing Line Note
Exhibit A-7 Form of UK Swing Line Note
Exhibit B Form of Members Limited Recourse Pledge Agreement
Exhibit C-1 Form of Company Pledge Agreement
Exhibit C-2 Form of Company Security Agreement
Exhibit D-1 Form of Subsidiaries Guarantee
Exhibit D-2 Form of Subsidiaries Pledge Agreement
Exhibit D-3 Form of Subsidiaries Security Agreement
Exhibit D-4 Form of Subsidiaries Trademark Security Agreement
Exhibit D-5 Form of Subsidiaries Patent Security Agreement
Exhibit E Form of Landlord's Lien Waiver
Exhibit F INTENTIONALLY OMITTED
Exhibit G Form of Lock Box Agreement
Exhibit H Form of Assignment and Acceptance
Exhibit I-1 Form of Domestic Borrowing Base Certificate
Exhibit I-2 Form of UK Borrowing Base Certificate
Exhibit J-1 Form of Domestic Swing Line Loan Participation Certificate
Exhibit J-2 Form of UK Swing Line Loan Participation Certificate
vi
