CITIGROUP GLOBAL MARKETS INC. 390 Greenwich Street New York, New York 10013 | MORGAN STANLEY SENIOR FUNDING, INC. 1585 Broadway New York, New York 10036 |
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ROYAL BANK OF CANADA One Liberty Plaza New York, New York 10006 |
CONFIDENTIAL
December 20, 2011
Prestige Brands Holdings, Inc.
90 North Broadway
Irvington, New York 10533
Attention: Ron Lombardi
Project Prism
Commitment Letter
Ladies and Gentlemen:
You have advised Citi (as defined below), Morgan Stanley Senior Funding, Inc. (“MSSF”), Royal Bank of Canada (“Royal Bank”) and RBC Capital Markets1 (“RBCCM” and, together with Citi and MSSF, “we” and “us” or the “Commitment Parties”) that Prestige Brands Holdings, Inc. (“Holdings” or “you”), Prestige Brands, Inc. (the “Borrower”) and/or one or more of its subsidiaries intends to acquire (the “Acquisition”), directly or indirectly, a business previously identified to us by you as “Prism” (“Prism”). You have further advised us that, in connection with the foregoing, you intend to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description, the Summary of Principal Terms and Conditions attached hereto as Exhibit B (the “Senior Term Sheet”), the Summary of Principal Terms and Conditions attached hereto as Exhibit C (the “Unsecured Bridge Term Sheet”, and collectively with the Senior Term Sheet, the “Term Sheets”; this commitment letter, the Transaction Description, the Term Sheets and the Summary of Additional Conditions attached hereto as Exhibit D, collectively, the “Commitment Letter”).
1 RBC Capital Markets is a marketing name for the investment banking activities of Royal Bank of Canada.
For purposes of this Commitment Letter, “Citi” shall mean Citigroup Global Markets Inc., Citibank, N.A., Citigroup USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as Citi shall determine to be appropriate to provide the services contemplated herein.
1. Commitments.
In connection with the Transactions, each of Citi, MSSF and Royal Bank (together with any other initial lender that becomes a party hereto, each an “Initial Lender” and, collectively, the “Initial Lenders”) is pleased to advise you of its commitment to, severally and not jointly, provide45%, 45% and 10%, respectively, of the entire aggregate principal amount of each of the Credit Facilities, subject only to the satisfaction of the conditions set forth herein, in the sections entitled “Conditions to All Borrowings” in Exhibit B and Exhibit C hereto (limited on the Closing Date (as defined below) as indicated therein) and in Exhibit D hereto.
2. Titles and Roles.
It is agreed that (i) Citi, MSSF and RBCCM will act as joint lead arrangers and joint bookrunners for each of the Credit Facilities (collectively, the “Lead Arranger” or the “Lead Arrangers”), (ii) Citi will act as administrative agent and collateral agent (in such capacity, the “Senior Administrative Agent”) for the Senior Secured Credit Facilities, (iii) MSSF will act as administrative agent (in such capacity, the “Unsecured Bridge Administrative Agent” and, collectively with the Senior Administrative Agent, the “Administrative Agent”) for the Unsecured Bridge Facility and (iv) RBCCM will act as documentation agent for each of the Credit Facilities. It is further agreed that (i) in any Information Materials (as defined below) and all other offering or marketing materials in respect of the Senior Secured Credit Facilities, (x) Citi shall have “left side” designation and shall appear on the top left and shall hold the leading role and responsibility customarily associated with such “top left” placement and (y) MSSF will be placed immediately to the right of Citi and (ii) in any Information Materials (as defined below) and all other offering or marketing materials in respect of the Unsecured Bridge Facility, (x) MSSF shall have “left side” designation and shall appear on the top left and shall hold the leading role and responsibility customarily associated with such “top left” placement and (y) Citi will be placed immediately to the right of MSSF. You agree that no other agents, co-agents, arrangers or bookrunners will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any Lender (as defined below) in order to obtain its commitment to participate in the Credit Facilities unless you and we shall so agree.
3. Syndication.
The Lead Arranger reserves the right, prior to or after the Closing Date (as defined below), to syndicate all or a portion of the Initial Lenders’ respective commitments hereunder to a group of banks, financial institutions and other institutional lenders and investors (together with the Initial Lenders, the “Lenders”) identified by the Lead Arranger in consultation with you and, with respect to the Revolving Facility only, reasonably acceptable to the Lead Arranger and you (your consent not to be unreasonably withheld or delayed), and you agree to use commercially reasonable efforts to provide the Initial Lenders with a period of 15 consecutive business days commencing on or after January 3, 2012 following the receipt of the Information Memorandum (as defined below) in a form customarily delivered in connection with senior secured bank financings and senior unsecured bridge financings and prior to the Closing Date to syndicate the Credit Facilities; provided that (a) we agree not to syndicate our commitments to (i) certain banks, financial institutions and other institutional lenders (“Disqualified Institutions”) that have been specified to us by you or the Borrower in writing prior to the date hereof and (ii) competitors of you, Prism and your and its respective subsidiaries that have been specified to us by you or the Borrower in writing prior to the date hereof (“Disqualified Competitors” and, together, with Disqualified Institutions, “Disqualified Lenders”) and (b) notwithstanding the Lead Arranger’s right to syndicate the Credit Facilities and receive commitments with respect thereto, (i) no Initial Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund the Credit Facilities on the date of the consummation of the Acquisition with the proceeds of the initial funding under the Credit Facilities (the date of such funding, the “Closing Date”)) in connection with any syndication, assignment or participation of the Credit Facilities, including its commitments in respect thereof, until after the Closing Date has occurred, (ii) no assignment or novation by any Initial Lender shall become effective as between you and the Initial Lenders with respect to all or any portion of any Initial Lender’s commitments in respect of the Credit Facilities until the initial funding of the Credit Facilities and (iii) unless you otherwise agree in writing, each Initial Lender shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Credit Facilities, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred.
Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that the Initial Lenders’ commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, the Credit Facilities and in no event shall the commencement or successful completion of syndication of the Credit Facilities constitute a condition to the availability of the Credit Facilities on the Closing Date. The Lead Arranger may commence syndication efforts promptly upon the execution of this Commitment Letter and as part of their syndication efforts, it is their intent to have Lenders commit to the Credit Facilities prior to the Closing Date (subject to the limitations set forth in the preceding paragraph). Until the earlier of Successful Syndication (as defined in the Fee Letter) and the day that is 90 days following the Closing Date, you agree actively to assist (and use commercially reasonable efforts to cause Prism to assist) the Lead Arranger in completing a timely syndication that is reasonably satisfactory to us and you. Such assistance shall include, without limitation, (a) your using commercially reasonable efforts to ensure that any syndication efforts benefit materially from your existing lending and investment banking relationships and, to the extent practical and appropriate, Prism’s existing lending and investment banking relationships, (b) direct contact between senior management, certain representatives and certain advisors of you, on the one hand, and the proposed Lenders, on the other hand, (and your using commercially reasonable efforts to ensure such contact between senior management of Prism, on the one hand, and the proposed Lenders, on the other hand), in all such cases at times mutually agreed upon, (c) your assistance (including the use of commercially reasonable efforts to cause Prism to assist) in the preparation and delivery, prior to the date that is 15 consecutive business days prior to the Closing Date ending on the third business day prior to the Closing Date of the Information Materials (as defined below) and other customary offering and marketing materials to be used in connection with the syndication, (d) using your commercially reasonable efforts to procure, at your expense, prior to the date that is 15 consecutive business days prior to the Closing Date ending on the third business day prior to the Closing Date, ratings for the Credit Facilities and the Unsecured Notes from each of Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”), and a public corporate credit rating and a public corporate family rating in respect of the Borrower after giving effect to the Transactions from each of S&P and Moody’s, respectively, (e) the hosting, with the Lead Arranger, of a reasonable number of meetings to be mutually agreed upon of prospective Lenders at times and locations to be mutually agreed upon (and your using commercially reasonable efforts to cause the officers of Prism to be available for such meetings), (f) your using commercially reasonable efforts to provide prior to the date that is (i) 15 consecutive business days prior to the Closing Date ending on the third business day prior to the Closing Date, customary pro forma financial statements of the Borrower after giving effect to the Transactions (but excluding the impacts of any purchase accounting adjustments) and (ii) 15 consecutive business days prior to the Closing Date ending on the third business day prior to the Closing Date, customary forecasts of financial statements of the Borrower for each quarter for the first twenty four months following the Closing Date and for each year commencing with the first fiscal year following the Closing Date for the term of the Credit Facilities and (g) at any time prior to the earlier of Successful Syndication (as defined in the Fee Letter) or 90 days following the Closing Date, ensuring (or, in the case of Prism, your using commercially reasonable efforts to ensure) that there are no competing issues, offerings, placements or arrangements of debt securities or commercial bank or other credit facilities by or on behalf of you, Prism or any of your or its respective subsidiaries being offered, placed or arranged (other than the Unsecured Notes or debt securities issued in lieu of the Unsecured Notes) without the consent of the Lead Arranger, if such issuance, offering, placement or arrangement would materially impair the primary syndication of the Credit Facilities. Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, your obligations to assist in syndication efforts as provided herein (including the obtaining of the ratings referenced above) shall not constitute a condition to the commitments hereunder or the funding of the Credit Facilities on the Closing Date.
The Lead Arranger, in its capacities as such, will manage, in consultation with you, all aspects of any syndication of the Credit Facilities, including decisions as to the selection of institutions (which, in the case of the Revolving Facility, shall be reasonably acceptable to you (your consent not to be unreasonably withheld or delayed)) to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate (subject to your consent rights set forth in the second preceding paragraph and excluding Disqualified Lenders), the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist the Lead Arranger in its syndication efforts, you agree to promptly prepare and provide (and to use commercially reasonable efforts to cause Prism to provide) to us all customary information with respect to you, Prism and each of your and its respective subsidiaries and the Transactions, including all financial information and projections prepared by you (including financial estimates, financial models, forecasts and other forward-looking information, the “Projections”), as the Lead Arranger may reasonably request in connection with the structuring, arrangement and syndication of the Credit Facilities. For the avoidance of doubt, you will not be required to provide any information to the extent that the provision thereof would violate any law, rule or regulation, or any obligation of confidentiality binding on you, Prism or your or its respective affiliates; provided that you shall use commercially reasonable efforts to obtain the relevant consents under such obligations of confidentiality to allow for the provision of such information.
You hereby acknowledge that (a) the Lead Arranger will make available Information (as defined below), Projections and other offering and marketing material and presentations, including confidential information memoranda to be used in connection with the syndication of the Credit Facilities (collectively, the “Information Memorandum”) (such Information, Projections, other offering and marketing material and the Information Memorandum, collectively, with the Term Sheets, the “Information Materials”) on a confidential basis to the proposed syndicate of Lenders by posting the Information Materials on Intralinks, Debt X, SyndTrak Online or by similar electronic means and (b) certain of the Lenders may be “public side” Lenders (i.e. Lenders that do not wish to receive material non-public information (“MNPI”) with respect to you, your affiliates, Prism or your or its respective securities and who may be engaged in investment and other market related activities with respect to you, Prism or your or its respective securities) (each, a “Public Sider” and each Lender that is not a Public Sider, a “Private Sider”). You will be solely responsible for the contents of the Information Materials and each of the Commitment Parties shall be entitled to use and rely upon the information contained therein without responsibility for independent verification thereof.
At the request of the Lead Arranger, you agree to assist (and to use commercially reasonable efforts to cause Prism to assist) us in preparing an additional version of the Information Materials to be used in connection with the syndication of the Credit Facilities that consists exclusively of information that is publicly available and/or does not include MNPI with respect to you, Prism or any of your or its respective subsidiaries for the purpose of United States federal and state securities laws to be used by Public Siders. It is understood that in connection with your assistance described above, customary authorization letters will be included in any Information Materials that authorize the distribution thereof to prospective Lenders, represent that the additional version of the Information Materials does not include any MNPI and exculpate you, Prism and us with respect to any liability related to the use of the contents of such Information Materials or related offering and marketing materials by the recipients thereof. Before distribution of any Information Materials, you agree to use commercially reasonable efforts to identify that portion of the Information Materials that may be distributed to the Public Siders as “Public Information”, which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof. By marking Information Materials as “PUBLIC”, you shall be deemed to have authorized the Commitment Parties and the proposed Lenders to treat such Information Materials as not containing any MNPI (it being understood that you shall not be under any obligation to mark the Information Materials “PUBLIC”).
You acknowledge and agree that the following documents, without limitation, may be distributed to both Private Siders and Public Siders, unless you advise the Lead Arranger in writing (including by email) within a reasonable time prior to their intended distribution that such materials should only be distributed to Private Siders: (a) administrative materials prepared by the Lead Arranger for prospective Lenders (such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda), (b) term sheets and notification of changes in the Credit Facilities’ terms and conditions, (c) drafts and final versions of the Facilities Documentation and (d) publicly filed financial statements of you and your subsidiaries and financial statements of Prism and its subsidiaries of a type that would be publicly filed if Prism was a public reporting company. If you advise us in writing (including by email), within a reasonable period of time prior to dissemination, that any of the foregoing should be distributed only to Private Siders, then Public Siders will not receive such materials without your consent.
4. Information.
You hereby represent and warrant that (with respect to Information and Projections relating to Prism and its subsidiaries, to your knowledge) (a) all material written information and written data, other than the Projections and other than information of a general economic or industry specific nature (the “Information”), that has been or will be made available to any Commitment Party, directly or indirectly, by you or by any of your representatives on your behalf in connection with the transactions contemplated hereby, when taken as a whole, is or will be, when furnished, correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (giving effect to all supplements and updates thereto) and (b) the Projections contained in the Information Memorandum will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time such Projections are so furnished; it being understood that the Projections are as to future events and are not to be viewed as facts, the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any particular Projections will be realized and that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the earlier of Successful Syndication (as defined in the Fee Letter) or 90 days following the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information and the Projections contained in the Information Memorandum were being furnished, and such representations were being made, at such time, then you will (or, prior to the Closing Date, with respect to the Information and such Projections relating to Prism, will use commercially reasonable efforts to) promptly supplement the Information and such Projections such that (with respect to Information and Projections relating to Prism and its subsidiaries, to your knowledge) such representations and warranties are correct in all material respects under those circumstances. In arranging and syndicating the Credit Facilities, each of the Commitment Parties will be entitled to use and rely primarily on the Information and the Projections contained in the Information Memorandum without responsibility for independent verification thereof or for the accuracy or completeness of the Information or the Projections.
5. Fees.
As consideration for the commitments of the Initial Lenders hereunder and for the agreement of the Lead Arranger to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheets and in the Fee Letter dated the date hereof and delivered herewith with respect to the Credit Facilities (the “Fee Letter”). Once paid, such fees shall not be refundable except as otherwise agreed in writing.
The commitments of the Initial Lenders hereunder to fund the Credit Facilities on the Closing Date and the agreements of the Lead Arranger to perform the services described herein are subject solely to (a) the conditions set forth in the sections entitled “Conditions to All Borrowings” in Exhibit B hereto and Exhibit C hereto and (b) the conditions set forth in Exhibit D hereto, upon satisfaction (or waiver by all Commitment Parties) of such conditions, the initial funding of the Credit Facilities shall occur.
Notwithstanding anything in this Commitment Letter (including each of the exhibits attached hereto), the Fee Letter, the Facilities Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations relating to you, the Borrower, the Guarantors, Prism, your and their respective subsidiaries and your and their respective businesses the accuracy of which shall be a condition to the availability and funding of the Credit Facilities on the Closing Date shall be (A) such of the representations made by Prism with respect to Prism in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that you or the Borrower have the right to terminate your or its obligations under the Acquisition Agreement as a result of a breach of such representations in the Acquisition Agreement (to such extent, the “Specified Acquisition Agreement Representations”) and (B) the Specified Representations (as defined below) made by you and the Borrower in the Facilities Documentation and (ii) the terms of the Facilities Documentation shall be in a form such that they do not impair the availability or funding of the Credit Facilities on the Closing Date if the conditions set forth in the sections entitled “Conditions to All Borrowings” in Exhibit B and Exhibit C hereto and the conditions set forth in Exhibit D hereto are satisfied (it being understood that, to the extent any security interest in any Collateral (as defined in the Senior Term Sheet) is not or cannot be provided and/or perfected on the Closing Date (other than the pledge and perfection of the security interest in the equity interests of the Borrower and each of its material direct wholly-owned domestic restricted subsidiaries and other assets pursuant to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after your use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date, but instead shall be required to be delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed by the Senior Administrative Agent and the Borrower acting reasonably. For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower and the Guarantors (after giving effect to the Acquisition) set forth in the Facilities Documentation relating to organizational status, power and authority, due authorization, execution and delivery, enforceability and no conflicts with or consent under material law or charter documents, in each case, related to, the incurrence of the Loans, the provision of the Guarantees and the granting of security interests in the Collateral to secure the Credit Facilities; solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries on a consolidated basis; Federal Reserve margin regulations; the Investment Company Act; anti-terrorism laws and PATRIOT Act; subject to the parenthetical in the immediately preceding sentence, creation, validity and perfection of security interests in the Collateral; and the status of the Senior Secured Credit Facilities and the guaranties thereof as senior debt. This paragraph, and the provisions herein, shall be referred to as the “Certain Funds Provisions”.
To induce the Commitment Parties to enter into this Commitment Letter and the Fee Letter and to proceed with the documentation of the Credit Facilities, you agree (a) to indemnify and hold harmless each Commitment Party, their respective affiliates and the respective officers, directors, employees, agents, advisors and other representatives of each of the foregoing (each, an “Indemnified Person”), from and against any and all losses, claims, damages and liabilities of any kind or nature and reasonable and documented or invoiced out-of-pocket fees and expenses, joint or several, to which any such Indemnified Person may become subject to the extent arising out of, resulting from or in connection with, this Commitment Letter (including the Term Sheets), the Fee Letter, the Transactions or any related transaction contemplated hereby, the Credit Facilities or any use of the proceeds thereof or any claim, litigation, investigation or proceeding (including any inquiry or investigation) relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any such Indemnified Person is a party thereto, whether or not such Proceedings are brought by you, Prism, your or Prism’s equity holders, affiliates, creditors or any other third person, and to reimburse each such Indemnified Person upon demand for any reasonable and documented or invoiced out-of-pocket legal expenses of one firm of counsel for all such Indemnified Persons, taken as a whole and, if necessary, of a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all such Indemnified Persons, taken as a whole, and, solely in the case of a conflict of interest, one additional counsel in each applicable material jurisdiction to the affected Indemnified Persons) or other reasonable and documented or invoiced out-of-pocket fees and expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent that they have resulted from (i) the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s controlled affiliates or any of its or their respective officers, directors, employees, agents, advisors or other representatives, in each case who are involved in or aware of the Transactions (as determined by a court of competent jurisdiction in a final and non-appealable decision), (ii) a material breach of the obligations of such Indemnified Person or any of such Indemnified Person’s affiliates under this Commitment Letter, the Term Sheets, the Fee Letter or the Facilities Documentation or (iii) disputes between and among Indemnified Persons to the extent such disputes do not arise from any act or omission of you, Prism or any of your or Prism’s affiliates (other than claims against an Indemnified Person acting in its capacity as an agent or arranger or similar role hereunder or under the Credit Facilities unless such claims arise from the gross negligence, bad faith or willful misconduct of such Indemnified Person) and (b) to the extent that the Closing Date occurs, to reimburse each Commitment Party from time to time, upon presentation of a summary statement, for all reasonable and documented or invoiced out-of-pocket expenses (including but not limited to expenses of each Commitment Party’s consultants’ fees (to the extent any such consultant has been retained with your prior written consent (such consent not to be unreasonably withheld or delayed)), syndication expenses, travel expenses and reasonable fees, disbursements and other charges of a single counsel to the Commitment Parties identified in the Term Sheets and of a single local counsel to the Commitment Parties in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) and of such other counsel retained with your prior written consent (such consent not to be unreasonably withheld or delayed)), in each case incurred in connection with the Credit Facilities and the preparation, negotiation and enforcement of this Commitment Letter, the Fee Letter, the Facilities Documentation and any security arrangements in connection therewith (collectively, the “Expenses”). You acknowledge that we may receive a benefit, including without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto. The foregoing provisions in this paragraph shall be superseded in each case, to the extent covered thereby, by the applicable provisions contained in the Facilities Documentation upon execution thereof and thereafter shall have no further force and effect.
Notwithstanding any other provision of this Commitment Letter, (i) no Indemnified Person shall be liable for any damages arising from the use by others of information or other materials obtained through internet, electronic, telecommunications or other information transmission systems, except to the extent that such damages have resulted from the willful misconduct or gross negligence of such Indemnified Person or any of such Indemnified Person’s controlled affiliates or any of its or their respective officers, directors, employees, agents, advisors or other representatives, in each case who are involved in or aware of the Transactions as determined by a final, non-appealable judgment of a court of competent jurisdiction and (ii) without in any way limiting the indemnification obligations set forth above, none of us, you, Prism or any Indemnified Person shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Transactions (including the Credit Facilities and the use of proceeds thereunder), or with respect to any activities related to the Credit Facilities, including the preparation of this Commitment Letter, the Fee Letter and the Facilities Documentation.
You shall not be liable for any settlement of any Proceeding effected without your written consent (which consent shall not be unreasonably withheld, conditioned or delayed), but if settled with your written consent or if there is a final and non-appealable judgment by a court of competent jurisdiction for the plaintiff in any such Proceeding, in each case, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with and to the extent provided in the other provisions of this Section 7.
You shall not, without the prior written consent of any Indemnified Person (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability or claims that are the subject matter of such proceedings and (ii) does not include any statement as to or any admission of fault, culpability, wrong doing or a failure to act by or on behalf of any Indemnified Person.
8. Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.
You acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, Prism and your and its respective affiliates may have conflicting interests regarding the transactions described herein and otherwise. None of the Commitment Parties or their affiliates will use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or their other relationships with you in connection with the performance by them or their affiliates of services for other persons, and none of the Commitment Parties or their affiliates will furnish any such information to other persons, except to the extent permitted below. You also acknowledge that none of the Commitment Parties or their affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.
As you know, certain of the Commitment Parties may be full service securities firms engaged, either directly or through their affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, certain of the Commitment Parties and their respective affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of you, Prism and other companies which may be the subject of the arrangements contemplated by this letter for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities. Certain of the Commitment Parties or their affiliates may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, Prism or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof.
The Commitment Parties and their respective affiliates may have economic interests that conflict with those of you or Prism. You agree that the Commitment Parties will act under this letter as independent contractors and that nothing in this Commitment Letter or the Fee Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you, Prism, your and its respective equity holders or your and their respective affiliates. You acknowledge and agree that (i) the transactions contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial transactions between the Commitment Parties and, if applicable, their affiliates, on the one hand, and you, on the other, (ii) in connection therewith and with the process leading to such transaction each Commitment Party and its applicable affiliates (as the case may be) is acting solely as a principal and not as agents or fiduciaries of you, Prism, your and its management, equity holders, creditors, affiliates or any other person, (iii) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Commitment Parties or any of their respective affiliates have advised or are currently advising you or Prism on other matters) except the obligations expressly set forth in this Commitment Letter and the Fee Letter and (iv) you have consulted your own legal and financial advisors to the extent you deemed appropriate. You further acknowledge and agree that you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto. You agree that you will not claim that the Commitment Parties or their applicable affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with such transaction or the process leading thereto.
9. Confidentiality.
You agree that you will not disclose, directly or indirectly, the Fee Letter and the contents thereof or, prior to your acceptance hereof, this Commitment Letter, the Term Sheets, the other exhibits and attachments hereto and the contents of each thereof, or the activities of any Commitment Party pursuant hereto or thereto, to any person or entity without prior written approval of the Lead Arranger (such approval not to be unreasonably withheld or delayed), except (a) to your officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders on a confidential and need-to-know basis, (b) if the Commitment Parties consent in writing to such proposed disclosure or (c) pursuant to the order of any court or administrative agency in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities, in each case based on the reasonable advice of your legal counsel (in which case you agree, to the extent practicable and not prohibited by applicable law, to inform us promptly thereof prior to disclosure); provided that (i) you may disclose this Commitment Letter (but not the Fee Letter) and the contents hereof to the holders of Prism’s capital stock, Prism, its subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants or advisors, on a confidential and need-to-know basis, (ii) you may disclose the Commitment Letter and its contents (but not the Fee Letter) in any syndication or other marketing materials in connection with the Credit Facilities or in connection with any public filing relating to the Transactions, (iii) you may disclose the Term Sheets and the contents thereof, to potential Lenders and to rating agencies in connection with obtaining ratings for the Borrower and the Credit Facilities, (iv) you may disclose the aggregate fee amount contained in the Fee Letter as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts related to the Transactions to the extent customary or required in offering and marketing materials for the Credit Facilities or in any public filing relating to the Transactions and (v) to the extent portions thereof have been redacted in a manner to be reasonably agreed by us (including the portions thereof addressing fees payable to the Commitments Parties and/or the Lenders, marketing flex, caps and the securities demands), you may disclose the Fee Letter and the contents thereof to the holders of Prism’s capital stock, Prism, its subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants or advisors on a confidential and need-to-know basis.
The Commitment Parties and their affiliates will use all confidential information provided to them or such affiliates by or on behalf of you hereunder or in connection with the Acquisition and the related Transactions solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge, such information; provided that nothing herein shall prevent the Commitment Parties and their affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process or to the extent required by governmental and/or regulatory authorities, in each case, based on the advice of counsel (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (b) upon the request or demand of any regulatory authority having jurisdiction over the Commitment Parties or any of their respective affiliates (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or any regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by the Commitment Parties or any of their affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, Prism or any of your or its respective affiliates (including those set forth in this paragraph), (d) to the extent that such information is or was received by the Commitment Parties from a third party that is not, to the Commitment Parties’ knowledge, subject to contractual or fiduciary confidentiality obligations owing to you, Prism or any of your or its respective affiliates or related parties, (e) to the extent that such information is independently developed by the Commitment Parties, (f) to the Commitment Parties’ affiliates and to its and their respective directors, officers, employees, legal counsel, independent auditors, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential, (g) to potential or prospective Lenders, participants or assignees and to any direct or indirect contractual counterparty to any swap or derivative transaction relating to you or any of your subsidiaries, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), (h) for purposes of establishing a “due diligence” defense, (i) to ratings agencies, in connection with obtaining the ratings described above in this letter, in consultation and coordination with you or (j) to the extent you shall have consented to such disclosure in writing; provided that the disclosure of any such information to any Lenders or prospective Lenders or participants or prospective participants referred to above shall be made subject to the acknowledgment and acceptance by such Lender or prospective Lender or participant or prospective participant that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and each Commitment Party, including, without limitation, as agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes of such Commitment Party or customary market standards for dissemination of such type of information. The Commitment Parties’ and their affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the definitive documentation relating to the Credit Facilities upon the initial funding thereunder. The provisions of this paragraph shall terminate on the second anniversary of the date hereof.
10. Miscellaneous.
This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (other than by (i) subject to the limitations set forth in paragraph 3 above, an Initial Lender to any Lender or (ii) you, on or after the Closing Date, to the Borrower) without the prior written consent of each other party hereto (such consent not to be unreasonably withheld or delayed) (and any attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended to be solely for the benefit of the parties hereto (and Indemnified Persons) and are not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons to the extent expressly set forth herein). Subject to the limitations set forth in Section 3 above, the Commitment Parties reserve the right to employ the services of their affiliates or branches in providing services contemplated hereby and to allocate, in whole or in part, to their affiliates or branches certain fees payable to the Commitment Parties in such manner as the Commitment Parties and their affiliates or branches may agree in their sole discretion and, to the extent so employed, such affiliates and branches shall be entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of, the Commitment Parties hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter (including the exhibits hereto), together with the Fee Letter dated the date hereof, (i) are the only agreements that have been entered into among the parties hereto with respect to the Credit Facilities and (ii) supersede all prior understandings, whether written or oral, among us with respect to the Credit Facilities and sets forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; provided, however, that the interpretation of any provision of the Acquisition Agreement referred to in this Commitment Letter including the determination of the accuracy of any Specified Acquisition Agreement Representation shall be governed by, and construed in accordance with, English law, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that (i) this Commitment Letter is a binding and enforceable agreement with respect to the subject matter contained herein, notwithstanding that the availability and funding of the Credit Facilities is subject to conditions precedent, including the good faith negotiation of the Facilities Documentation by the parties hereto in a manner consistent with this Commitment Letter and (ii) the Fee Letter is a legally valid and binding agreement of the parties thereto with respect to the subject matter set forth therein.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER OR THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.
Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall only be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, and further agrees to not commence any such suit, action or proceeding other than in such New York State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby in any New York State or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action or proceeding brought in any such court.
We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each of us and each of the Lenders may be required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower and the Guarantors in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for each of us and the Lenders.
The indemnification, compensation (if applicable), reimbursement (if applicable), jurisdiction, governing law, venue, waiver of jury trial, syndication and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether Facilities Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Initial Lenders’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication thereof (including supplementing and/or correcting Information and Projections) prior to the Closing Date and (b) confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facilities Documentation to the extent covered thereby upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time. You may terminate this Commitment Letter and/or the Initial Lenders’ commitments with respect to the Credit Facilities (or portion thereof) hereunder at any time subject to the provisions of the preceding sentence.
Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning to the Commitment Parties, executed counterparts hereof and of the Fee Letter not later than 5:00 p.m., New York City time, on December 20, 2011 (together with an executed copy of the Acquisition Agreement). The Initial Lenders’ respective commitments and the obligations of the Lead Arranger hereunder will expire at such time in the event that the Commitment Parties have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, we agree to hold our commitment available for you until the earliest of (i) after execution of the Acquisition Agreement and prior to the consummation of the Transactions, the termination of the Acquisition Agreement in accordance with its terms, (ii) the consummation of the Acquisition with or without the funding of the Credit Facilities and (iii) 5:00 p.m., New York City time, on April 30, 2012 (such earliest time, the “Expiration Date”). Upon the occurrence of any of the events referred to in the preceding sentence, this Commitment Letter and the commitments of each of the Commitment Parties hereunder and the agreement of the Lead Arranger to provide the services described herein shall automatically terminate unless the Commitment Parties shall, in their discretion, agree to an extension in writing.
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We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.
| | Very truly yours, |
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| | CITIGROUP GLOBAL MARKETS INC. |
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| | By: | /s/ Caesar Wyszomirski |
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[Signature Page to Commitment Letter]
| | MORGAN STANLEY SENIOR FUNDING, INC. |
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| | By: | /s/ Paul Fossati |
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[Signature Page to Commitment Letter]
| | ROYAL BANK OF CANADA |
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| | By: | /s/ James S. Wolfe |
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| | | Head of US Leveraged Finance |
[Signature Page to Commitment Letter]
| Accepted and agreed to as of | |
| the date first above written: | |
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| PRESTIGE BRANDS HOLDINGS, INC. | |
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| By: | /s/ Ron Lombardi | |
| | Name: Ron Lombardi | |
| | Title: CFO | |
[Signature Page to Commitment Letter]
EXHIBIT A
Project Prism
Transaction Description
Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit A is attached (the “Commitment Letter”) or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the context in which it is used.
Prestige Brands Holdings, Inc. (“Holdings”), a company organized under the laws of the State of Delaware, Prestige Brands, Inc. (the “Borrower”), a company organized under the laws of the State of Delaware, and/or one or more of its subsidiaries intend to acquire (the “Acquisition”), directly or indirectly, a business previously identified to the Commitment Parties by you as “Prism” (“Prism”).In connection with the foregoing, it is intended that the following transactions shall be consummated substantially contemporaneously:
| a) | Pursuant to a business sale and purchase agreement, dated as of the date hereof, in relation to certain over-the-counter consumer healthcare brands and supporting business (together with all exhibits, schedules, and disclosure letters thereto, collectively, the “Acquisition Agreement”) entered into with Prism’s owners, Holdings (provided that on or prior to the Closing Date, Holdings will either (i) assign its rights and obligations under the Acquisition Agreement to the Borrower or a subsidiary Guarantor or (ii) contribute Prism to the Borrower or a subsidiary Guarantor) will acquire Prism (the “Acquisition”) through a sale and purchase transaction in accordance with the terms of the Acquisition Agreement. |
| b) | The Borrower will (i) obtain the senior secured credit facilities described in Exhibit B to the Commitment Letter (the “Senior Secured Credit Facilities”) and (ii) issue up to $290 million in senior unsecured notes (the “Unsecured Notes”) in a Rule 144A offering (with back-end registration), or in the event the Unsecured Notes cannot be issued on the Closing Date or less than $290 million of Unsecured Notes are issued on the Closing Date, obtain the senior unsecured bridge facility described in Exhibit C to the Commitment Letter (the “Unsecured Bridge Facility” and, together with the Senior Secured Credit Facilities, the “Credit Facilities”). |
| c) | The proceeds of the Credit Facilities (and/or the Unsecured Notes) on the Closing Date will be applied (i) to pay the consideration in connection with the Acquisition, (ii) to pay the fees and expenses incurred in connection with the Transactions (such fees and expenses, the “Transaction Costs”) and (iii) to refinance all of the existing indebtedness for borrowed money of the Borrower and its subsidiaries under that certain Credit Agreement (as amended, restated, supplemented or otherwise modified, the “Existing Credit Agreement”), dated as March 24, 2010, Prestige Brands, Inc., Prestige Brands Holdings, Inc. the Lenders and Issuers party thereto, Bank of America, N.A., as Administrative Agent, and the other agents party thereto (such refinancing of the Existing Credit Agreement, the “Refinancing”) (the amounts set forth in clauses (i) through (iii) above, collectively, the “Acquisition Costs”). |
The transactions described above (including the payment of Transaction Costs) are collectively referred to herein as the “Transactions”.
EXHIBIT B
Project Prism
Senior Secured Credit Facilities
Summary of Principal Terms and Conditions2
Borrower: | | Prestige Brands, Inc. (the “Borrower”). |
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Transactions: | | As set forth in Exhibit A to the Commitment Letter. |
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Administrative Agent and Collateral Agent: | | Citi will act as sole administrative agent and sole collateral agent (in such capacities, the “Administrative Agent”) for a syndicate of banks, financial institutions and other entities arranged by the Lead Arranger (as defined below) in consultation with the Borrower, and, in the case of the Revolving Facility, reasonably acceptable to the Borrower (excluding any Disqualified Lender) with respect to each of the Senior Secured Credit Facilities (together with the Initial Lenders, the “Lenders”), and will perform the duties customarily associated with such roles. |
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Lead Arranger and Bookrunner: | | Citi, MSSF and RBCCM will act as joint lead arrangers and joint bookrunners for the Senior Secured Credit Facilities (collectively, the “Lead Arranger”), and will perform the duties customarily associated with such role. |
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Syndication Agent: | | MSSF will act as syndication agent for the Senior Secured Credit Facilities. |
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Documentation Agent: | | RBCCM will act as documentation agent for the Senior Secured Credit Facilities. |
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Senior Secured Credit Facilities: | | (A) A senior secured term loan facility (the “Term Facility”) in an aggregate principal amount of $620 million plus, at the Borrower’s election, an amount sufficient to fund any original issue discount (“OID”) or upfront fees required to be funded in connection with (x) the “flex” provisions in the Fee Letter or (y) the issuance of the Unsecured Notes or any other debt securities pursuant to any offering by Holdings or any of its direct or indirect subsidiaries undertaken to finance the Acquisition (the “Securities”) (the loans thereunder, the “Term Loans”). The Term Loans will be offered with 200 basis points OID or upfront fees on the amount thereof. |
2 All capitalized terms used but not defined herein shall have the meaning given them in the Commitment Letter to which this Term Sheet is attached, including Exhibit A thereto.
| | | (B) A senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Secured Credit Facilities”) in an aggregate principal amount equal to $50 million. Lenders with commitments under the Revolving Facility are collectively referred to as “Revolving Lenders” and the loans thereunder, together with (unless the context otherwise requires) the swingline borrowings referred to below, are collectively referred to as “Revolving Loans”; and together with the Term Loans, the “Senior Secured Loans”. The Revolving Facility will be offered with 100 basis points of upfront fees on the commitments on the Closing Date. |
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Swingline Loans: | | In connection with the Revolving Facility, the Administrative Agent (in such capacity, the “Swingline Lender”) will make available to the Borrower a swingline facility under which the Borrower may make short-term borrowings in dollars upon same-day notice (in minimum amounts to be mutually agreed upon and integral multiples to be agreed upon) of up to an amount to be agreed. Except for purposes of calculating the commitment fee described below, any such swingline borrowings will reduce availability under the Revolving Facility on a dollar-for-dollar basis. |
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| | | Upon notice from the Swingline Lender, the Revolving Lenders will be unconditionally obligated to purchase participations in any swingline loan pro rata based upon their commitments under the Revolving Facility. |
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| | | If any Revolving Lender becomes a “defaulting Lender”, then the swingline exposure of such defaulting Lender will automatically be reallocated among the non-defaulting Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non-defaulting Lender does not exceed its commitments. In the event such reallocation does not fully cover the exposure of such defaulting Lender, the Swingline Lender may require the Borrower to repay such “uncovered” exposure in respect of the swingline loans and will have no obligation to make swingline loans to the extent such swingline loans would exceed the commitments of the non-defaulting Revolving Lenders. |
Incremental Facilities: | | The Senior Secured Credit Facilities will permit the Borrower to add one or more incremental term loan facilities to the Senior Secured Credit Facilities (each, an “Incremental Term Facility”) and/or increase commitments under the Revolving Facility (any such increase, an “Incremental Revolving Increase”) and/or add one or more incremental revolving credit facility tranches (each an “Incremental Revolving Facility”; the Incremental Term Facilities, the Incremental Revolving Increases and the Incremental Revolving Facilities are collectively referred to as “Incremental Facilities”) in an aggregate amount of up to the greater of (a)(i) $220 million plus (ii) all voluntary prepayments and commitment reductions of the Senior Secured Credit Facilities prior to such time minus (iii) amounts incurred pursuant to clause (iii) of the third paragraph under Negative Covenants and (b) the amount that would not, on a pro forma basis after giving effect to the incurrence of any such Incremental Facility (assuming (x) the full amount thereof is drawn and the commitments thereunder are fully utilized and (y) net cash proceeds of any loans under any Incremental Facility are not netted from indebtedness for purposes of calculating the Consolidated First Lien Net Leverage Ratio (as defined below)) and after giving effect to any acquisition consummated in connection therewith and all other appropriate pro forma adjustments, cause the Consolidated First Lien Net Leverage Ratio (to be defined in a manner consistent with the Documentation Principles (as defined below)) to exceed 4.00:1.00, subject solely to the following terms and conditions: (i) the Incremental Facilities will have the same guarantees as, and be secured on a pari passu basis by the same collateral securing, the Senior Secured Credit Facilities, (ii) the representations and warranties in the Credit Facilities Documentation shall be true and correct in all material respects on and as of the date of the incurrence of the Incremental Facilities (although any representations and warranties which expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective date or for the respective period, as the case may be), subject to customary “Sungard” limitations to the extent the proceeds of any Incremental Facility are being used to finance an acquisition, (iii) no existing Lender will be required to participate in any such Incremental Facility without its consent, (iv) no default or event of default under the Senior Secured Credit Facilities would exist after giving effect thereto, (v) the maturity date of any such Incremental Term Facility or Incremental Revolving Facility shall be no earlier than the maturity date of the Term Facility or the Revolving Facility, respectively, and, in the case of the Incremental Term Facility only, the weighted average life of such Incremental Term Facility shall be not shorter than the then remaining weighted average life of the Term Facility, (vi) in the case of an Incremental Revolving Increase, the maturity date of such Incremental Revolving Increase shall be the same as the maturity date of the Revolving Facility, such Incremental Revolving Increase shall require no scheduled amortization or mandatory commitment reduction prior to the final maturity of the Revolving Facility and the Incremental Revolving Increase shall be on the exact same terms and pursuant to the exact same documentation applicable to the Revolving Facility, (vii) the interest rate margins and (subject to clauses (v) and (vi), as appropriate) amortization schedule applicable to any Incremental Term Facility or Incremental Revolving Facility shall be determined by the Borrower and the lenders thereunder; provided that in the event that the interest rate margins for any Incremental Term Facility or Incremental Revolving Facility are higher than the interest rate margins for the Term Loans or the Revolving Facility by more than (in either case) 50 basis points, then the interest rate margins for the Term Loans or Revolving Commitments, as the case may be, shall be increased to the extent necessary so that such interest rate margins are equal to the interest rate margins for such Incremental Term Facility or Incremental Revolving Facility, as the case may be, minus 50 basis points; provided further that, in determining the interest rate margins applicable to the Incremental Term Facility and the Term Loans or the Incremental Revolving Facility and the Revolving Facility, (x) customary arrangement or commitment fees payable to the Lead Arranger (or its affiliates) in connection with the Term Loans or the Revolving Facility or to one or more arrangers (or their affiliates) of any Incremental Term Facility or Incremental Revolving Facility shall be excluded, (y) OID and upfront fees paid to the lenders thereunder shall be included (with OID being equated to interest based on assumed four-year life to maturity or, if shorter, the actual weighted average life to maturity) and (z) if the Incremental Facilities include an interest rate floor greater than the applicable interest rate floor under the existing Senior Secured Credit Facilities, such differential between interest rate floors shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the interest rate margin under the existing Senior Secured Credit Facilities shall be required, but only to the extent an increase in the interest rate floor in the existing Senior Secured Credit Facilities would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the interest rate margin) applicable to the existing Senior Secured Credit Facilities shall be increased to the extent of such differential between interest rate floors (all adjustments made pursuant to this clause (vii), the “MFN Adjustments”), (viii) any Incremental Term Facility or Incremental Revolving Facility shall be on terms and pursuant to documentation to be determined; provided that, to the extent such terms and documentation are not consistent with the Term Facility or the Revolving Facility, as the case may be (except to the extent permitted by clause (v) or (vii) above), they shall be reasonably satisfactory to the Administrative Agent and provided, further that (x) in no event shall any Incremental Term Facilities be permitted to be voluntarily or mandatorily prepaid prior to the repayment in full of the Term Loans, unless any such prepayment is accompanied by a ratable prepayment of Term Loans and (y) any Incremental Revolving Facility will be subject to pro rata borrowing, letter of credit participation and prepayment and commitment reduction provisions with the Revolving Facility and any other revolving facility under the Senior Secured Credit Facilities (the “Revolver Ratability Requirements”), (ix) each Incremental Facility shall be in such minimum amounts and subject to such notice provisions and other mechanics as are consistent with the Documentation Principles and (x) after giving effect to the incurrence of any Incremental Facilities, the Borrower shall be in pro forma compliance with the Financial Covenants referred to below for the most recently ended fiscal quarter of the Borrower for which financial statements were delivered. |
| Refinancing Facilities: | | The Credit Facilities Documentation will permit the Borrower to refinance loans under the Term Facility (or any Incremental Term Facility) or commitments under the Revolving Facility (or any Incremental Revolving Facility) from time to time, in whole or part, with one or more new term facilities (each, a “Refinancing Term Facility”) or new revolving credit facilities (each, a “Refinancing Revolving Facility”; the Refinancing Term Facilities and the Refinancing Revolving Facilities are collectively referred to as “Refinancing Facilities”), respectively, under the Credit Facilities Documentation with the consent of the Borrower, the Administrative Agent and the institutions providing such Refinancing Term Facility or Refinancing Revolving Facility or with one or more additional series of senior, senior subordinated or subordinated unsecured notes or loans or senior secured notes or loans that will be secured by the Collateral on a pari passu or junior basis with the Senior Secured Credit Facilities (and such notes or loans, “Refinancing Notes”), subject solely to the following terms and conditions: (i) customary intercreditor agreements are entered into, (ii) any Refinancing Term Facility or Refinancing Notes does not mature prior to the maturity date of, or have a shorter weighted average life than, loans under the Term Facility being refinanced, (iii) any Refinancing Revolving Facility does not mature (or require commitment reductions or amortization) prior to the maturity date of the revolving commitments being refinanced, (iv) none of the Borrower’s restricted subsidiaries is a borrower or guarantor with respect to any Refinancing Facility unless such restricted subsidiary is a Guarantor which shall have previously or substantially concurrently Guaranteed the Borrower Obligations, (v) the other terms and conditions of such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes (excluding pricing, fees, rate floors and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance; provided that if any such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes contains any financial maintenance covenants, such covenants shall not be tighter than (or in addition to) those contained in the Credit Facilities Documentation, (vi) delivery of certificates and information consistent with the Documentation Principles, and (vii) the proceeds of such Refinancing Facilities shall be applied, substantially concurrently with the incurrence thereof, to the pro rata prepayment of outstanding loans (and, in the case of the Revolving Facility, pro rata commitment reductions) under the applicable Senior Secured Credit Facility being so refinanced; provided that (x) in no event shall Refinancing Term Facilities be permitted to be voluntarily or mandatorily prepaid prior to the repayment in full of the Term Loans, unless any such prepayment is accompanied by a ratable prepayment of Term Loans and (y) any Refinancing Revolving Facility will be subject to the Revolver Ratability Requirements. |
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Purpose: | | (A) The proceeds of borrowings under the Term Facility will be used by the Borrower on the Closing Date, together with the proceeds from borrowings under the Revolving Facility, the proceeds from the Unsecured Bridge Facility and/or the Unsecured Notes and cash on hand at the Borrower and Prism, solely to pay the Acquisition Costs. |
| | | (B) The letters of credit and proceeds of Revolving Loans (except as set forth below) will be used by the Borrower and its subsidiaries for working capital and other general corporate purposes, including the financing of permitted acquisitions, and, subject to the limitation below under “Availability”, to finance a portion of the Acquisition Costs. |
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Availability: | | (A) The Term Facility will be available in a single drawing on the Closing Date. Amounts borrowed under the Term Facility that are repaid or prepaid may not be reborrowed. |
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| | | (B) The Revolving Facility (exclusive of letter of credit usage) will be made available on and after the Closing Date (i) in an aggregate principal amount up to $15 million (a) to finance the Transactions and the Acquisition Costs (including to fund OID or upfront fees in connection with the Senior Secured Credit Facilities other than as required to be funded under the flex provisions of the Fee Letter) and (b) for working capital needs, (ii) to fund any or all OID or upfront fees in connection with the Senior Secured Credit Facilities required to be funded under the flex provisions in the Fee Letter or in connection with the issuance of the Unsecured Notes, or any other Securities on the Closing Date and (iii) to backstop, replace or cash collateralize existing letters of credit. Additionally, letters of credit may be issued on the Closing Date in order to, among other things, backstop or replace letters of credit outstanding on the Closing Date under facilities no longer available at Prism or its subsidiaries as of the Closing Date. Otherwise, subject to the terms of the Credit Facilities Documentation, letters of credit and Revolving Loans will be available at any time prior to the final maturity of the Revolving Facility, in minimum principal amounts to be agreed upon. Amounts repaid under the Revolving Facility may be reborrowed. |
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Interest Rates and Fees: | | As set forth on Annex I hereto. |
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Default Rate: | | With respect to overdue principal, the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate applicable to ABR loans (as defined in Annex I) plus 2.00% per annum and in each case, shall be payable on demand. |
Letters of Credit: | | An aggregate amount to be agreed upon of the Revolving Facility will be available to the Borrower for the purpose of issuing letters of credit denominated in dollars. Letters of credit under the Revolving Facility will be issued by the Administrative Agent and/or other Revolving Lenders reasonably acceptable to the Borrower and the Administrative Agent (each an “Issuing Bank”). Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance and (b) the fifth business day prior to the final maturity of the Revolving Facility; provided that any letter of credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (b) above). The face amount of any outstanding letter of credit (and, without duplication, any unpaid drawing in respect thereof) will reduce availability under the Revolving Facility on a dollar-for-dollar basis. |
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| | | Drawings under any letter of credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of loans under the Revolving Facility) within one business day after notice of such drawing is received by the Borrower from the relevant Issuing Bank. The Revolving Lenders will be irrevocably and unconditionally obligated to acquire participations in each letter of credit, pro rata in accordance with their commitments under the Revolving Facility, and to fund such participations in the event the Borrower does not reimburse an Issuing Bank for drawings within the time period specified above. |
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| | | If any Revolving Lender becomes a “defaulting Lender”, then the letter of credit exposure of such defaulting Lender will automatically be reallocated among the non-defaulting Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non-defaulting Lender does not exceed its commitments. In the event that such reallocation does not fully cover the exposure of such defaulting Lender, the applicable Issuing Bank may require the Borrower to cash collateralize such “uncovered” exposure in respect of each outstanding letter of credit and will have no obligation to issue new letters of credit, or to extend, renew or amend existing letters of credit to the extent letter of credit exposure would exceed the commitments of the non-defaulting Revolving Lenders, unless such “uncovered” exposure is cash collateralized to the Issuing Bank’s reasonable satisfaction. |
Final Maturity and Amortization: | | (A) Term Facility The Term Facility will amortize in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount of the Term Facility, with the balance payable on the maturity date thereof. The Term Facility will mature on the date that is seven years after the Closing Date; provided that the Credit Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of the outstanding Term Loans upon the request of the Borrower and without the consent of any other Lender (it being understood that each Lender under a tranche of Term Loans that is being extended shall have the opportunity to participate in such extension on the same terms and conditions as each other Lender under such tranche). (B) Revolving Facility The Revolving Facility will mature, and lending commitments thereunder will terminate, on the date that is five years after the Closing Date; provided that the Credit Facilities Documentation shall provide the right of individual Lenders to agree to extend the maturity of their Revolving Commitments upon the request of the Borrower and without the consent of any other Lender (it being understood that each Revolving Lender under a tranche of Revolving Commitments that is being extended shall have the opportunity to participate in such extension on the same terms and conditions as each other Revolving Lender under such tranche). |
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Guarantees: | | All obligations of the Borrower (the “Borrower Obligations”) under the Senior Secured Credit Facilities and under any interest rate protection or other swap or hedging arrangements or cash management arrangements entered into with a Lender, the Administrative Agent or any affiliate of a Lender or the Administrative Agent (“Hedging /Cash Management Arrangements”) will be unconditionally guaranteed jointly and severally on a senior secured basis (the “Guarantees”) by Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned domestic restricted subsidiary of the Borrower (the “Guarantors”), provided that Guarantors shall not include,(a) any domestic subsidiary of a foreign subsidiary, (b) any domestic subsidiary that is a disregarded entity for U.S. federal income tax purposes substantially all of whose assets consist of capital stock and/or indebtedness of one or more foreign subsidiaries and any other assets incidental thereto, (c) unrestricted subsidiaries, (d) captive insurance companies, (e) not-for-profit subsidiaries, (f) special purpose entities, (g) immaterial subsidiaries (defined in a manner to be agreed) and (h) to the extent a guarantee is prohibited or restricted by applicable law whether on the Closing Date or thereafter or contract existing on the Closing Date or, with respect to subsidiaries acquired after the Closing Date, contract existing when such subsidiary was acquired (including any requirement to obtain governmental authority or third party consent) or would result in material adverse tax consequences as reasonably determined by Borrower in consultation with the Administrative Agent . |
| | | Notwithstanding the foregoing, subsidiaries may be excluded from the guarantee requirements in circumstances where the Borrower and the Administrative Agent reasonably agree that the cost of providing such a guarantee is excessive in relation to the value afforded thereby. |
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Security: | | Subject to the limitations set forth below in this section and subject to the Certain Funds Provision, the Borrower Obligations, the Guarantees and the Hedging/Cash Management Arrangements will be secured by: (a) perfected pledge of all the capital stock of the Borrower and a perfected pledge of all the capital stock in material wholly-owned restricted subsidiaries directly held by the Borrower or any Guarantor (which pledge, in the case of the capital stock of any foreign subsidiary of a domestic entity or of a domestic entity that is disregarded entity for U.S. federal income tax purposes substantially all of whose assets consist of capital stock and/or indebtedness of one or more foreign subsidiaries and any other assets incidental thereto, shall be limited to 65% of the stock of such foreign subsidiary or such domestic entity, as the case may be) and (b) perfected first priority security interests in, and mortgages on, substantially all tangible and intangible personal property and fee-owned real property of the Borrower and each subsidiary Guarantor (including but not limited to accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, intercompany notes in excess of an amount to be agreed and proceeds of the foregoing) (the items described in clauses (a) and (b) above, but excluding the Excluded Assets (as defined below), collectively, the “Collateral”). |
| | | Notwithstanding anything to the contrary, the Collateral shall exclude (including from any applicable security documents) the following: (i) any immaterial fee-owned real property and any leasehold interest (with no requirement to obtain landlord waivers, estoppels or collateral access letters), (ii) perfection of any motor vehicles and other assets subject to certificates of title, (iii) all commercial tort claims, (iv) any governmental licenses or state or local franchises, charters and authorizations to the extent security interest is prohibited thereby, (v) pledges and security interests prohibited or restricted by applicable law (including any requirement to obtain the consent of any governmental authority or third party), (vi) margin stock and equity interests in any person other than material wholly-owned restricted subsidiaries (other than immaterial and other excluded subsidiaries (to be defined consistent with the Documentation Principles), (vii) any lease, license or agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code or other applicable law notwithstanding such prohibition, (viii) any assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Borrower, in consultation with the Administrative Agent, (ix) letter of credit rights, except to the extent constituting a support obligation for other Collateral as to which perfection of the security interest in such other Collateral is accomplished solely by the filing of a UCC financing statement (it being understood that no actions shall be required to perfect a security interest in letter of credit rights, other than the filing of a Uniform Commercial Code financing statement), (x) cash and cash equivalents (other than proceeds of Collateral as to which perfection of the security interest in such proceeds is accomplished solely by the filing of a UCC financing statement), deposit and securities accounts (including securities entitlements and related assets) and (xi) any intent-to-use application trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law (the foregoing described in clauses (i) through (xi) are, collectively, the “Excluded Assets”). |
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| | | Notwithstanding the foregoing, assets will be excluded from the Collateral in circumstances where the cost of obtaining a security interest in such assets exceeds the practical benefit to the Lenders afforded thereby as reasonably determined by the Administrative Agent (in consultation with the Borrower). |
| | | Notwithstanding anything to the contrary, the Borrower and the subsidiary Guarantors shall not be required, nor shall the Administrative Agent be authorized, (i) to perfect the above-described pledges, security interests and mortgages by any means other than by (A) filings pursuant to the Uniform Commercial Code in the office of the secretary of state (or similar central filing office) of the relevant State(s) and filings in the applicable real estate records with respect to mortgaged properties or any fixtures relating to mortgaged properties, (B) filings in United States government offices with respect to intellectual property as expressly required in the Credit Facilities Documentation, (C) mortgages in respect of fee-owned real property with a fair market value in excess of an amount to be agreed or (D) delivery to the Administrative Agent to be held in its possession of all Collateral consisting of intercompany notes, stock certificates of the Borrower and its subsidiaries and instruments, in each case as expressly required in the Credit Facilities Documentation, (ii) to enter into any control agreements with respect to assets requiring perfection through control agreements or perfection by “control” (other than in respect of certificated equity interests in the Borrower and material wholly-owned restricted subsidiaries otherwise required to be pledged) (including without limitation deposit accounts and other bank or securities accounts) or (iii) to take any action in any non-U.S. jurisdiction in order to create any security interests in assets located or titled outside of the U.S. or to perfect any security interests in such assets, including any intellectual property registered in any non-U.S. jurisdiction (it being understood that, other than pledge agreements with respect to the equity interests of certain material foreign subsidiaries to be mutually agreed upon, there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction). |
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| | | All the above-described pledges, security interests and mortgages shall be created on terms to be set forth in the Credit Facilities Documentation, and none of the Collateral shall be subject to other pledges, security interests or mortgages (except permitted liens and other exceptions and baskets to be set forth in the Credit Facilities Documentation). |
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| | | The liens on the Collateral securing the Senior Secured Credit Facilities will be pari passu with the liens on the Collateral securing the Borrower’s existing 8.25% Senior Notes due 2018 (the “Existing Notes”). The priority of the security interests and related creditor rights between the Senior Secured Credit Facilities and the Existing Notes will be set forth in a customary intercreditor agreement (the “Intercreditor Agreement”) on terms and conditions to be mutually agreed. |
Mandatory Prepayments: | | Loans under the Term Facility shall be prepaid with: |
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| | | (a) Commencing with the fiscal year ending March 31, 2013, 50% of Excess Cash Flow (to be defined consistent with the Documentation Principles) with step-downs 25% and 0% based upon the achievement of Consolidated First Lien Net Leverage Ratio levels to be agreed; provided that, (i) in any fiscal year, any voluntary prepayments of loans under the Term Facility and loans under the Revolving Facility to the extent commitments thereunder are permanently reduced by the amount of such prepayments, other than prepayments funded with the proceeds of incurrences of indebtedness or from any Specified Equity Contribution, shall be credited against Excess Cash Flow prepayment obligations on a dollar-for-dollar basis for such fiscal year; provided that, in the case of Term Loans prepaid at a discount to par, any such reduction of the amount of Excess Cash Flow prepayments shall be equal to the amount spent to make such prepayment (as opposed to the face amount of the Term Loans so prepaid) and (ii) Excess Cash Flow shall be reduced for, among other things, cash used for capital expenditures, permitted investments, permitted acquisitions and certain restricted payments to be agreed, in each case, to the extent financed with internally generated funds and made during such fiscal year; |
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| | | (b) 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by the Borrower and its restricted subsidiaries (including insurance and condemnation proceeds and sale leaseback proceeds) in excess of an amount to be agreed, subject to exceptions to be agreed and subject to the right to reinvest 100% of such proceeds if such proceeds are reinvested (or committed to be reinvested) in the business (other than working capital, except for short term capital assets), including in permitted acquisitions or capital expenditures, within 12 months and, if so committed to be reinvested, so long as such reinvestment is actually completed within 180 days after of the end of such 12 month period, and other exceptions to be set forth in the Credit Facilities Documentation; and |
| | | (c) 100% of the net cash proceeds of issuances of debt obligations of the Borrower and its restricted subsidiaries after the Closing Date (excluding debt permitted under the Credit Facilities Documentation but including Refinancing Facilities and Refinancing Notes). |
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| | | In addition, in the event certain brands previously identified to the Lead Arranger (the “Split Brands”) are not acquired on or prior to the six month anniversary of the Closing Date, the Borrower shall within 5 business days of such anniversary (or such later date as is the end of the next concluding interest period) prepay Term Loans in an aggregate principal amount (the “Prepayment Amount”) of $45,000,000, or such lesser amount as constitutes the ratable portion of such $45,000,000 allocable as of the date hereof to such brand(s) not purchased based on a customary economic metric to be agreed. |
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| | | Mandatory prepayments shall be applied, without premium or penalty, subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period, on a pro rata basis to the Term Facility and any Incremental Term Facility under the Credit Facilities Documentation and to scheduled amortization payments thereof in direct order of maturity. |
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| | | Any Lender under the Term Facility may elect not to accept its pro rata portion of any mandatory prepayment under clauses (a) and (b) above (each a “Declining Lender”). Any prepayment amount declined by a Declining Lender may be retained by the Borrower. |
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| | | The loans under the Revolving Facility shall be prepaid and the letters of credit cash collateralized to the extent such extensions of credit exceed the amount of the commitments under the Revolving Facility. |
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| | | Prepayments from subsidiaries’ Excess Cash Flow and asset sale proceeds will be limited under the Credit Facilities Documentation to the extent such prepayments (including the repatriation of cash in connection therewith) would (a) be prohibited or delayed by applicable law; provided that the Borrower and its restricted subsidiaries shall take all commercially reasonable actions available under local law to permit such repatriation or (b) result in material adverse tax consequences; provided that, if not previously repatriated and applied to such prepayment within 12 months, an amount equal to the affected portion of Excess Cash Flow or asset sale proceeds (less the amount of additional taxes that would have been payable or reserved against if such amount had been repatriated) shall be applied to prepay the Term Facility or to other local indebtedness of restricted subsidiaries organized in the relevant jurisdiction. |
Voluntary Prepayments and Reductions in Commitments: | | Voluntary reductions of the unutilized portion of the Revolving Facility commitments and voluntary prepayments of borrowings under the Senior Secured Credit Facilities will be permitted at any time in minimum principal amounts to be agreed upon, without premium or penalty (except as provided below), subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period. |
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| | | All voluntary prepayments of the Term Facility and any Incremental Term Facility will be applied to the remaining amortization payments under the Term Facility or such Incremental Term Facility, as applicable, and may be applied to any of the Term Facility or any Incremental Term Facility, in any case, as directed by the Borrower (and absent such direction, in direct order of maturity thereof). |
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Documentation: | | The definitive documentation for the Senior Secured Credit Facilities (the “Credit Facilities Documentation”) shall be negotiated in good faith to finalize the Credit Facilities Documentation, giving effect to the Certain Funds Provision, as promptly as reasonably practicable, shall be based on the definitive documentation for Emdeon with changes determined to be reasonably necessary by the Lead Arrangers in light of market conditions at the time of syndication (provided that such modifications shall not be in contravention of any of the terms and conditions set forth in this Exhibit B), shall contain the terms and conditions set forth in this Exhibit B and, to the extent any terms are not set forth in this Exhibit B, shall otherwise be usual and customary for transactions of this kind, reflecting the operational and strategic requirements of the Borrower and its subsidiaries in light of their size, industries, practices and the Borrower’s proposed business plan (collectively, the “Documentation Principles”). The Credit Facilities Documentation shall contain only those payments, conditions to borrowing, mandatory prepayments, representations, warranties, covenants and events of default expressly set forth in this Exhibit B, and with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods consistent with the Documentation Principles as applied to transactions of this kind. |
Representations and Warranties: | | Limited to the following (to be applicable to Holdings, the Borrower and their restricted subsidiaries only): organization; existence, qualification and power; compliance with laws; authorization; no contravention with respect to the Credit Facilities Documentation; governmental authorization; binding effect of the Credit Facilities Documentation; financial statements; no material adverse effect (after the Closing Date); litigation; labor matters; ownership of property; environmental matters; taxes; ERISA compliance; subsidiaries; margin regulations; investment company act; disclosure; intellectual property; projections; creation, validity, perfection and priority of security interests in the Collateral (subject to permitted liens and the Certain Funds Provisions); status of the Senior Secured Credit Facilities as senior debt; no material undisclosed liabilities; anti-terrorism laws (including PATRIOT Act); and consolidated Closing Date solvency of the Borrower and its subsidiaries, subject, in the case of each of the foregoing representations and warranties, to customary qualifications and limitations for materiality to be provided in the Credit Facilities Documentation. |
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Conditions to Initial Borrowing: | | The availability of the initial borrowing and other extensions of credit under the Senior Secured Credit Facilities on the Closing Date will be subject solely to the applicable conditions set forth in the “Conditions to All Borrowings” section below and in Exhibit D to the Commitment Letter. |
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Conditions to All Borrowings: | | The making of each extension of credit under the Senior Secured Credit Facilities shall be conditioned upon (a) delivery of a customary borrowing notice, (b) the accuracy of representations and warranties in all material respects (subject, on the Closing Date, to the Certain Funds Provisions) and (c) after the Closing Date, the absence of defaults or events of default at the time of, or after giving effect to the making of, such extension of credit. |
The initial borrowings under the Credit Facilities shall be subject to the following conditions:
PRESTIGE BRANDS, INC.
Pursuant to the [Credit Agreement], the undersigned hereby certifies, solely in such undersigned’s capacity as [chief financial officer] [specify other officer with equivalent duties] of the Borrower, and not individually, as follows:
As of the date hereof, after giving effect to the consummation of the Transactions, including the making of the Loans under the Credit Agreement on the date hereof, and after giving effect to the application of the proceeds of such Loans:
For purposes of this Certificate, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
