“Funding Losses” has the meaning specified therefor inSection 2.13(b)(ii).
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States (or with respect to Lander Canada, Canada), consistently applied.
“Governing Documents” means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.
“Governmental Authority” means any federal, state, provincial, local, or other governmental or administrative body, instrumentality, board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.
“Guarantors” means (a) Lander Canada and (b) each Subsidiary of a Borrower that executes a Guaranty after the Closing Date in accordance withSection 5.16, and “Guarantor” means any one of them.
“Guaranty” means (a) means that certain general continuing guaranty executed and delivered by each Guarantor, in favor of Administrative Agent, for the benefit of the Lender Group, in form and substance satisfactory to Administrative Agent, and (b) any other guaranty at any time executed and delivered by any other Guarantor in favor of Administrative Agent, for the benefit of the Lender Group, whether by execution of a joinder to the guaranty described in the foregoing clause (a) or otherwise.
“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.
“Hedge Agreement” means any and all agreements, or documents now existing or hereafter entered into by any Credit Party or any of its Subsidiaries that provide for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging such Credit Party’s or any of its Subsidiaries’ exposure to fluctuations in interest or exchange rates, loan, credit exchange, security, or currency valuations or commodity prices.
“Holdout Lender” has the meaning specified therefor inSection 14.2(a).
“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its Subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations owing under Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (f) above.
“Indemnified Liabilities” has the meaning specified therefor inSection 10.3.
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“Indemnified Person” has the meaning specified therefor inSection 10.3.
“Information Receipt Election” has the meaning specified therefor inSection 5.27.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“Intellectual Property” has the meaning specified therefor in the Security Agreement.
“Intercompany Subordination Agreement” means a subordination agreement executed and delivered by the Credit Parties, each of their respective Subsidiaries, and Administrative Agent, the form and substance of which is satisfactory to Administrative Agent.
“Intercreditor Agreement” means an intercreditor agreement executed and delivered by Administrative Agent, Collateral Agent and First Lien Agent, and acknowledged and consented to by each Borrower, as amended, modified, supplemented or restated from time to time.
“Interest Expense” means, for any period, the aggregate of the interest expense of Parent and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 or 6 months thereafter;provided,however, that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, or 3 or 6 months after the date on which the Interest Period began, as applicable, and (e) Borrowers (or Administrative Borrower on behalf thereof) may not elect an Interest Period which will end after the Maturity Date.
“Inventory” means inventory (as that term is defined in the Code).
“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, or capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business consistent with past practice), purchases or other acquisitions of Indebtedness, Stock, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.
“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.
“Lander Canada” means Lander Co. Canada Limited, an Ontario limited company.
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“Lender” and “Lenders” have the respective meanings set forth in the preamble to the Agreement, and shall include any other Person made a party to the Agreement in accordance with the provisions ofSection 13.1.
“Lender Group” means, individually and collectively, each of the Lenders and each Agent.
“Lender Group Expenses” means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by a Credit Party or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) fees or charges paid or incurred by an Agent in connection with the Lender Group’s transactions with the Credit Party or their respective Subsidiaries, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter), real estate surveys, real estate title policies and endorsements, and environmental audits, (c) reasonable costs and expenses incurred by Administrative Agent in the disbursement of funds to Borrowers or other members of the Lender Group (by wire transfer or otherwise), (d) charges paid or incurred by Administrative Agent resulting from the dishonor of checks, (e) reasonable costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) reasonable audit fees and expenses of Administrative Agent related to any inspections or audits to the extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter, (g) reasonable costs and expenses of third party claims or any other suit paid or incurred by the Lender Group in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or the Lender Group’s relationship with any Credit Party or any Subsidiary of a Credit Party, (h) Administrative Agent’s (and, if an Event of Default shall have occurred and be continuing, the Lenders’) reasonable costs and expenses (including attorneys fees) incurred in advising, structuring, drafting, reviewing, administering, syndicating (including rating the Term Loans), or amending the Loan Documents, (i) each Agent’s and each Lender’s reasonable costs and expenses (including attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning any Credit Party or any Subsidiary of a Credit Party or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any Remedial Action concerning the Collateral and (j) each Agent’s and each Lender’s costs and expenses (including attorneys, accountants, consultants, and other advisors fees and expenses) incurred following the occurrence and during the continuance of an Event of Default or an “Event of Default” (as such term is defined in the First Lien Credit Agreement).
“Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.
“Leverag e Ratio” means, as of any date of determination, (a) the amount of Parent’s Funded Indebtedness as of such date,divided by (b) TTM EBITDA;provided, that (i) for the three-month period ended May 31, 2007, TTM EBITDA for purposes of this definition shall equal EBITDA for such three-month period multiplied by four, (ii) for the six-month period ended August 31, 2007, TTM EBITDA for purposes of this definition shall equal EBITDA for such six-month period multiplied by two, and (iii) for the nine-month period ended November 30, 2007, TTM EBITDA for purposes of this definition shall equal EBITDA for such nine-month period multiplied by 4/3.
“LIBOR Deadline” has the meaning specified therefor inSection 2.13(b)(i).
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“LIBOR Notice” means a written notice in the form ofExhibit L-1.
“LIBOR Option” has the meaning specified therefor inSection 2.13(a).
“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the greater of (a) the rate per annum determined by Administrative Agent bydividing (i) the Base LIBOR Rate for such Interest Period, by (ii) 100%minus the Reserve Percentage and (b) 5.00% per annum. The LIBOR Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage.
“LIBOR Rate Loan” means each portion of the Term Loans that bears interest at a rate determined by reference to the LIBOR Rate.
“LIBOR Rate Margin” means, as of any date of determination, in the case of Term Loans that are LIBOR Rate Loans, 9.00 percentage points per annum.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.
“Loan Account” has the meaning specified therefor inSection 2.10.
“Loan Documents” means the Agreement, the Canadian Guarantee, the Canadian Security Agreement, the Cash Management Agreements, the Control Agreements, the Copyright Security Agreement, the Fee Letter, the Guaranty, the Intercompany Subordination Agreement, the Mortgages, the Patent Security Agreement, the Intercreditor Agreement, the Security Agreement, the Third Lien Intercreditor Agreement, the Trademark Security Agreement, any note or notes executed by a Borrower in connection with the Agreement and payable to a member of the Lender Group, and any other agreement entered into, now or in the future, by any Credit Party or any of their Subsidiaries, and the Lender Group in connection with the Agreement.
“Material Adverse Change” means (a) a material adverse change in the business, operations, results of operations, assets, liabilities or condition (financial or otherwise) of Borrowers and any of the Credit Parties and their respective Subsidiaries, taken as a whole, (b) a material impairment of the Credit Parties’ ability to perform their obligations under the Loan Documents or of the Lender Group’s ability to enforce the Obligations or realize upon the Collateral, or (c) a material impairment of the enforceability or priority of the Collateral Agent’s Liens with respect to the Collateral as a result of an action or failure to act on the part of a Credit Party or a Subsidiary of a Credit Party.
“Material Contract” means, with respect to any Person, (i) the Acquisition Documents, (ii) the First Lien Loan Documents, (iii) the Third Lien Loan Documents, (iv) the Calgon License Documents, (v) material contracts as defined in Item 601 of Regulation S-K of the Rules and Regulations of the SEC, and (vi) all other contracts or agreements material to the business, operations, condition (financial or otherwise), performance, or properties of such Person or such Subsidiary, in effect on the date of determination, the loss of which, either individually or in the aggregate, reasonably could be expected to result in a Material Adverse Change.
“Maturity Date” has the meaning specified therefor inSection 3.3.
“MNPI” has the meaning specified therefor inSection 5.27.
“Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.
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“Mortgage Policy” has the meaning specified therefor inSchedule 3.1(w).
“Mortgages” means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a Borrower or a Subsidiary of a Borrower in favor of Collateral Agent, in form and substance satisfactory to Administrative Agent, that encumber the Real Property Collateral.
“M2 Consulting Agreement” means Letter Agreement dated May 27, 2005 between M2 Holdings LLC (as assignee of The Hermes Group LLC) and Lander Company.
“Multiemployer Plan” means a “multiemployer plan” (within the meaning of Section 3(37) of ERISA) to which any Credit Party, any of their respective Subsidiaries, or any ERISA Affiliate makes, is making, or is obligated or has ever been obligated to make, contributions.
“Net Cash Proceeds” means:
(a) with respect to any sale or disposition by any Credit Party or a Subsidiary of a Credit Party of property or assets, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of any Credit Party or a Subsidiary of a Credit Party, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to any Agent or any Lender under the Agreement or the other Loan Documents and (B) Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by such Credit Party or such Subsidiary of a Credit Party in connection with such sale or disposition and (iii) taxes paid or payable to any taxing authorities by such Credit Party or such Subsidiary of a Credit Party in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of a Credit Party or a Subsidiary of a Credit Party, and are properly attributable to such transaction; and
(b) with respect to the issuance or incurrence of any Indebtedness by any Credit Party or a Subsidiary of a Credit Party, or the issuance by any Credit Party or a Subsidiary of a Credit Party of any shares of its Stock, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Credit Party or such Subsidiary in connection with such issuance or incurrence, after deducting therefrom only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by such Credit Party or such Subsidiary in connection with such issuance or incurrence, (ii) taxes paid or payable to any taxing authorities by such Credit Party or such Subsidiary in connection with such issuance or incurrence, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of a Credit Party or Subsidiary of a Credit Party, and are properly attributable to such transaction; and
(c) with respect to Extraordinary Receipts received by any Credit Party or a Subsidiary of a Credit Party, the aggregate amount of cash or Cash Equivalents received (directly or indirectly) from time to time by or on behalf of such Credit Party or such Subsidiary in connection therewith, after deducting therefrom only (i) reasonable costs and expenses related to the collection thereof incurred by such Credit Party or such Subsidiary, (ii) sales, transfer and other similar taxes paid or payable by such Person or such Subsidiary in connection therewith, and (iii) net income taxes to be paid or payable by such Credit Party or such Subsidiary in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements), in each case, to the extent, but only to the extent, that the amounts so deducted are (x) actually paid to a Person that, except in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Credit Party or such Subsidiary and (y) properly attributable to such transaction.
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“New Securities” means the “New Securities” as defined in the Third Lien Notes, as in effect on the date hereof without any amendment or modification thereto.
“Obligations” means all loans (including Term Loans), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities (including all amounts charged to Borrowers’ Loan Account pursuant to the Agreement), obligations (including indemnification obligations), fees (including the fees provided for in the Fee Letter), charges, costs, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), lease payments, guaranties, covenants, and duties of any kind and description owing by Borrowers to the Lender Group pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that Borrowers are required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents. Any reference in the Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
“Originating Lender” has the meaning specified therefor inSection 13.1(e).
“Parent” has the meaning specified therefor in the preamble to the Agreement.
“Participant” has the meaning specified therefor inSection 13.1(e).
“Participant Register” has the meaning set forth inSection 13.1(i).
“Patent Security Agreement” has the meaning specified therefor in the Security Agreement.
�� “Pension Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (a) that is or was at any time maintained or sponsored by any Credit Party, any of their respective Subsidiaries, or any ERISA Affiliate or to which any Credit Party, any of their respective Subsidiaries, or any ERISA Affiliate has ever made, or was obligated to make, contributions, and (b)that is or was subject to Section 412 of the IRC, Section 302 of ERISA or Title IV of ERISA.
“Permitted Acquisition” means (a) a Permitted Cash Acquisition, or (b) a Permitted Non-Cash Acquisition, as the context requires.
“Permitted Cash Acquisition” means any Acquisition as to which each of the following is applicable;
(a) such Acquisition qualifies as a Permitted Non-Cash Acquisition except that the consideration payable in respect of the proposed Acquisition includes some form of consideration other than solely the consideration specified in clause (b) of the definition of Permitted Non-Cash Acquisition;
(b) Parent has provided Administrative Agent with forecasted balance sheets, profit and loss statements, and cash flow statements of the Person to be acquired, all prepared on a basis consistent with such Person’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the 3 year period following the date of the proposed Acquisition (on a year by year basis, and for the 1 year period following the date of the proposed Acquisition, on a month by month basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Administrative Agent;
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(c) Parent shall have Excess Availability plus Qualified Cash in an amount equal to at least $9,000,000 immediately after giving effect to the consummation of the proposed Acquisition,
(d) subject to compliance with clauses (f) and (g) below, the assets being acquired (other than ade minimisamount of assets in relation to the assets being acquired) are located within the United States, Canada or the United Kingdom, or the Person whose Stock is being acquired is organized in a jurisdiction located within the United States, Canada or the United Kingdom,
(e) with respect to such Acquisition, (i) the purchase consideration payable in any consideration other than Permitted Non-Cash Consideration in respect of all Permitted Cash Acquisitions, in the aggregate (including the proposed Acquisition and including deferred payment obligations) shall not exceed $11,000,000 in the aggregate;provided,however, that the purchase price of any single Permitted Cash Acquisition or series of related Permitted Cash Acquisitions that is payable in consideration other than Permitted Non-Cash Consideration shall not exceed $5,500,000 in the aggregate, and (ii) the purchase consideration payable in respect of all Permitted Cash Acquisitions that is composed of Permitted Non-Cash Consideration shall not exceed $27,500,000 in the aggregate;
(f) in the case of an Asset Acquisition (and notwithstanding any contrary provisions ofSection 5.16 or any other contrary provision of the Agreement), Borrower or the Guarantor, as applicable, shall have executed and delivered any and all documentation reasonably requested by Administrative Agent in order to provide Collateral Agent with a second priority perfected security interest, subject to Permitted Liens, in such assets, and
(g) in the case of a Stock Acquisition (and notwithstanding any contrary provisions ofSection 5.16 or any other contrary provision of the Agreement), (i) the Person whose Stock is being acquired shall have executed and delivered any and all documentation reasonably requested by Administrative Agent in order to become a Guarantor, (ii) the Person whose Stock is being acquired shall have executed and delivered any and all documentation reasonably requested by Administrative Agent in order to provide Collateral Agent with a second priority perfected security interest, subject to Permitted Liens, in the assets of such Person, and (iii) the owner of the Stock subject to such Stock Acquisition shall have executed and delivered any and all documentation reasonably requested by Administrative Agent in order to provide Collateral Agent with a second priority perfected security interest in such Stock.
“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured lender) business judgment.
“Permitted Dispositions” means (a) sales or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business, (b) sales of Inventory to buyers in the ordinary course of business, (c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents, (d) the licensing to a Person in the United States, on a non-exclusive basis, and to a Person outside the United States, on an exclusive or a non-exclusive basis, in each case, in the ordinary course of business, to make, use, sell, import and export products covered under patents, trademarks, copyrights and other intellectual property rights owned or controlled by a Credit Party, (e) sales or other dispositions set forth onSchedule P-1 and (f) the abandonment of Trademarks and Patents owned by any Credit Party that in the judgment of the applicable Credit Party are no longer necessary or beneficial in the operation of the business of such Credit Party or any Subsidiary of such Credit Party, except with respect to material Trademarks in the U.S., including, without limitation, Lander, Healing Garden, Ogilvie, Baby Magic, Mr. Bubble, Mr. Bubble design, Dorothy Gray, Tussy, TEK and Bianca, and as to which such Credit Party shall have provided Administrative Agent with prior written notice of such abandonment and obtained the consent of the Administrative Agent at least ten (10) Business Days prior to such abandonment, such consent not to be unreasonably withheld;provided, that if Administrative Agent shall not have objected to such abandonment within five (5) Business Days after receipt of such notice, Administrative Agent shall be deemed to have consented to such abandonment.
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“Permitted Holder” means each of Prentice, MarNan, LLC, Dana Holdings, LLC, Coty, Inc. and each of their respective Affiliates.
“Permitted Investments” means (a) Investments in cash and Cash Equivalents, (b) Investments in negotiable instruments for collection, (c) advances made in connection with purchases of goods or services in the ordinary course of business, (d) Investments received in settlement of amounts due to any Credit Party or any Subsidiary of a Credit Party effected in the ordinary course of business or owing to a Credit Party or any Subsidiary of a Credit Party as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of any Credit Party or any Subsidiary of a Credit Party and (e) Investments in Subsidiaries that are Credit Parties.
“Permitted Liens” means (a) Liens held by Collateral Agent to secure the Obligations, (b) Liens for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet delinquent, or (ii) do not have priority over the Collateral Agent’s Liens and the underlying taxes, assessments, or charges or levies and are the subject of Permitted Protests, (c) judgment Liens that do not constitute an Event of Default underSection 7.7 of the Agreement, (d) Liens set forth onSchedule P-2, provided that any such Lien only secures the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof, (e) the interests of lessors under operating leases, (f) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof, (g) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (h) Liens on amounts deposited in connection with obtaining worker’s compensation or other unemployment insurance, (i) Liens on amounts deposited in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money, (j) Liens on amounts deposited as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of business, (k) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof, (l) Liens of the First Lien Agent securing the First Lien Indebtedness (but only to the extent such Liens remain subject to the Intercreditor Agreement), (m) Liens of the Third Lien Agent securing the Third Lien Indebtedness (but only to the extent such Liens remain subject to the Third Lien Intercreditor Agreement), and (n) Liens securing Indebtedness permitted underSection 6.1(g).
“Permitted Non-Cash Acquisition” means any Acquisition so long as:
(a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual,
(b) the consideration payable in respect of the proposed Acquisition shall be composed solely of Permitted Non-Cash Consideration;
(c) no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clauses (d) or (l) ofSection 6.1 and no Liens will be incurred, assumed, or would exist with respect to the assets of Parent or its Subsidiaries as a result or such Acquisition other than Liens permitted under clause (f) of the definition of Permitted Liens;
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(d) Parent has provided Administrative Agent with written confirmation, supported by reasonably detailed calculations, that on apro forma basis, created by adding the historical combined financial statements of Parent (including the combined financial statements of any other Person or assets that were the subject of a prior Permitted Acquisition during the relevant period) to the historical consolidated financial statements of the Person to be acquired (or the historical financial statements related to the assets to be acquired) pursuant to the proposed Acquisition (adjusted to eliminate expense items that would not have been incurred and to include income items that would have been recognized, in each case, if the combination had been accomplished at the beginning of the relevant period; such eliminations and inclusions to be mutually and reasonably agreed upon by Parent and Administrative Agent), Parent and its Subsidiaries (i) would have been in compliance with the financial covenants inSection 6.16 for the 12 month period ended immediately prior to the proposed date of consummation of such proposed Acquisition, and (ii) are projected to be in compliance with the financial covenants inSection 6.16 for the 12 month period ended one year after the proposed date of consummation of such proposed Acquisition, together with copies of all such historical financial statements of the Person or assets being acquired,
(e) Parent has provided Administrative Agent with written notice of the proposed Acquisition at least 30 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Administrative Agent,
(f) the assets being acquired (other than ade minimis amount of assets in relation to Parent and its Subsidiaries’ total assets), or the Person whose Stock is being acquired, are useful in or engaged in, as applicable, the business of Parent and its Subsidiaries or a business reasonably related thereto, and
(g) the subject assets or Stock, as applicable, are being acquired directly by Borrowers or one of their Subsidiaries that is a Guarantor, and (i) in the case of an Asset Acquisition, Borrowers or such Guarantor, as applicable, shall have executed and delivered or authorized, as applicable, any and all documentation reasonably requested by the Administrative Agent in order to include the newly acquired assets within the collateral hypothecated under the Loan Documents, and (ii) in the case of a Stock Acquisition, Borrowers or the Guarantor, as applicable, shall have complied withSection 5.16 of the Agreement.
“Permitted Non-Cash Consideration” means (a) common Stock of Parent, (b) Permitted Preferred Stock of Parent, or (c) proceeds of Indebtedness incurred pursuant to clause (l) ofSection 6.1.
“Permitted Preferred Stock” means and refers to any Preferred Stock issued by Parent (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Stock.
“Permitted Protest” means the right of any Credit Party or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on a Credit Party’s or any of its Subsidiaries’ books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by any Credit Party or any of its Subsidiaries, as applicable, in good faith, and (c) Administrative Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of the Collateral Agent’s Liens.
“Permitted Purchase Money Indebtedness” means, as of any date of determination, Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount outstanding at any one time not in excess of $550,000.
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“Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.
“Plan” means (a) an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan which is or was at any time during the past six years maintained or sponsored by any Credit Party or any of their respective Subsidiaries or to which Borrower or any of its Subsidiaries during the past six years has made, or was obligated to make, contributions, (b) a Pension Plan, or (c) a Qualified Plan.
“PPSA” means the Personal Property Security Act of Ontario (as amended and in effect from time to time), or analogous legislation of the applicable Canadian province in respect to Lander Canada.
“Preferred Stock” means, as applied to the Stock of any Person, the Stock of any class or classes (however designated) that is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Stock of any other class of such Person.
“Prencen Group” means Prencen Lending LLC, Prencen LLC and/or Prencen Capital Management, L.P.
“Prencen Securities Purchase Agreement” means that certain Third Amended and Restated Securities Purchase Agreement dated as of February 9, 2007 by and among Parent, Prencen LLC and Prencen Lending LLC.
“Prencen Third Lien Note” means that certain secured convertible promissory note (as the same may be amended from time to time) in the initial aggregate principal amount of $91,000,000 (less the initial aggregate principal amount of the Watershed Third Lien Note) issued by Parent to Prencen Lending LLC, which secured convertible promissory note shall be secured by a third lien on the assets of Borrowers.
“Prentice” means Prentice Capital Management, LP.
“Prohibited Preferred Stock” means any Preferred Stock that by its terms is mandatorily redeemable or subject to any other cash payment obligation (including any obligation to pay dividends, other than dividends of shares of Preferred Stock of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of Preferred Stock of the same class and series or of shares of common stock).
“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Parent’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.
“Pro Rata Share” means, as of any date of determination, with respect to a Lender’s obligation to make the Term Loans and right to receive payments of interest, fees, and principal with respect thereto and with respect to all other matters as to a particular Lender (including the indemnification obligations arising underSection 15.7), (i) prior to the making of the Term Loans, the percentage obtained by dividing (y) such Lender’s Term Loan Commitment, by (z) the aggregate amount of all Lenders’ Term Loan Commitments, and (ii) from and after the making of the Term Loans, the percentage obtained by dividing (y) the principal amount of such Lender’s portion of the Term Loans by (z) the principal amount of the Term Loans.
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“Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.
“Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Borrowers and their Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is the subject of a Control Agreement and is maintained by a branch office of the bank or securities intermediary located within the United States.
“Qualified Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (a) that is or was at any time maintained or sponsored by any Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate or to which any Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate has ever made, or was ever obligated to make, contributions, and (b) that is intended to be tax qualified under Section 401(a) of the IRC.
“Real Property” means any estates or interests in real property now owned or hereafter acquired by any Credit Party or a Subsidiary of any Credit Party and the improvements thereto.
“Real Property Collateral” means the Real Property identified onSchedule R-1 and any Real Property hereafter acquired by a Credit Party or any Subsidiary of a Credit Party.
“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as: (a) the terms and conditions of such refinancings, renewals, or extensions do not, in Administrative Agent’s reasonable judgment, materially impair the prospects of repayment of the Obligations by Borrowers or materially impair Borrowers’ creditworthiness, (b) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, (c) such refinancings, renewals, or extensions do not result in an increase in the interest rate with respect to the Indebtedness so refinanced, renewed, or extended, (d) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are materially more burdensome or restrictive to Borrowers, (e) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and (f) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.
“Register” has the meaning specified therefor inSection 13.1(h).
“Registered Loan” means any loan recorded on the Register pursuant toSection 13.1(h).
“Registered Note” has the meaning specified therefor inSection 2.16.
“Related Fund” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor (and any swap counterparty to such Lender or any of its Affiliates).
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“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials authorized by Environmental Laws.
“Replacement Lender” has the meaning specified therefor inSection 14.2(a).
“Report” has the meaning specified therefor inSection 15.16.
“Required Prepayment Date” has the meaning specified therefor inSection 2.4(d)(iii).
“Required Lenders” means, at any time, those Lenders whose aggregate Pro Rata Shares exceed 50.1%.
“Reserve Percentage” means, on any day, for any Lender, the maximum percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental Authority) for determining the reserve requirements (including any basic, supplemental, marginal, or emergency reserves) that are in effect on such date with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not required or directed under applicable regulations to maintain such reserves, the Reserve Percentage shall be zero.
“Revolver Usage” means, as of any date of determination, “Revolver Usage” as such term is defined in the First Lien Credit Agreement, as amended, modified, supplemented, restated, renewed, extended, refinanced or replaced from time to time in accordance with the terms thereof and the terms of the Agreement and the Intercreditor Agreement.
“SEC” means the United States Securities and Exchange Commission and any successor thereto.
“Securities Account” means a securities account (as that term is defined in the Code).
“Securities Purchase Agreements” means the Prencen Securities Purchase Agreement and the Watershed Securities Purchase Agreement.
“Security Agreement” means a security agreement, in form and substance satisfactory to Administrative Agent, executed and delivered by Borrowers and Guarantors (other than Lander Canada) to Administrative Agent.
“Seller” has the meaning specified in the Recitals.
“Seller Note” means that certain Promissory Note owing from Parent to Coty, Inc. in connection with the consummation of the transactions contemplated by the Acquisition Agreement.
“Solvent” means (a) with respect to any Person that is a United States citizen or is organized under the laws of any state of the United States or the District of Columbia, that at the time of determination: (i) the assets of such Person, at a fair valuation, are in excess of the total amount of its debts (including, without limitation, contingent liabilities); (ii) the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; (iii) it is then able to pay its debts (including, without limitation, contingent debts and other commitments) as they mature; and (iv) it is not
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engaged in a business or transaction, and is not about to engage in a business or transaction, for which it has unreasonably small capital, or (b) with respect to any Person that is a Canadian citizen or is organized under the laws of Canada or any province or territory thereof, on a particular date, that such Person is not an “insolvent person” (as such term is defined in the Bankruptcy and Insolvency Act (Canada)) or a “debtor company” (as defined in the Companies’ Creditors Arrangement Act (Canada)). For purposes of determining whether a Person is Solvent, the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“S&P” has the meaning specified therefor in the definition of Cash Equivalents.
“Stated Value” means the (a) aggregate principal amount of any convertible debt securities of Parent plus (b) the aggregate stated value of any convertible preferred securities of Parent.
“Stock” means all shares, options, warrants, interests, participations, equity interests, or other equivalents or similar instruments (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).
“Subsidiary” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.
“Taxes” has the meaning specified therefor inSection 16(a).
“Term Loans” has the meaning specified therefor inSection 2.2.
“Term Loan Amount” means $50,000,000.
“Term Loan Commitment” means, with respect to each Lender, its Term Loan Commitment, and, with respect to all Lenders, their Term Loan Commitments, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading onSchedule C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions ofSection 13.1.
“Third Lien Agent” means WFF, in its capacity as collateral agent pursuant to the Third Lien Loan Documents, together with its successors and assigns acting in such capacity.
“Third Lien Indebtedness” means any and all Indebtedness of any Borrower, any Guarantor or their respective Subsidiaries arising under or in connection with any Third Lien Loan Document, in an aggregate amount not to exceed $190,000,000(including any additional Indebtedness incurred thereunder in connection with PIK interest payments).
“Third Lien Intercreditor Agreement” means an intercreditor agreement executed and delivered by Administrative Agent, Collateral Agent, First Lien Agent, Third Lien Agent and Third Lien Lenders, and acknowledged and consented to by each Borrower, as amended, modified, supplemented or restated from time to time.
“Third Lien Lenders” means the Persons from time to time party to the Third Lien Loan Documents as lenders.
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“Third Lien Loan Documents” means (a) the Prencen Lending Note, (b) the Watershed Third Lien Note, (c) the Prencen Securities Purchase Agreement, (d) the “Transaction Documents” as such term is defined in the Prencen Securities Purchase Agreement, (e) the Watershed Securities Purchase Agreement and (f) the “Transaction Documents” as such term is defined in the Watershed Securities Purchase Agreement, in each case, as amended, modified, supplemented, restated, renewed, extended, refinanced or replaced from time to time in accordance with the terms thereof and the terms of the Agreement and the Third Lien Intercreditor Agreement.
“Third Lien Notes” means the Prencen Lending Note and the Watershed Third Lien Note.
“Trademark Security Agreement” has the meaning specified therefor in the Security Agreement.
“Transition Services Agreement” means the Transition Services Agreement dated as of February 9, 2007 between Ascendia Brands and Coty US LLC.
“Triggering Event” means (a) an Event of Default has occurred, or (b) as of any date of determination, the sum of Excess Availabilityplus Qualified Cash at any time is less than $10,000,000.
“TTM EBITDA” means, as of any date of determination, EBITDA of Parent determined on a consolidated basis in accordance with GAAP, for the 12 month period most recently ended.
“TTM PF EBITDA” means TTM EBITDA, adjusted in a manner consistent with the methodology used by CTS in the report delivered to Administrative Agent prior to the Closing Date.
“United States” means the United States of America.
“Voidable Transfer” has the meaning specified therefor inSection 17.8.
“Watershed Administrative” means Watershed Administrative, LLC, a Delaware limited liability company.
“Watershed Lenders” means Watershed Capital Asset Management, L.L.C. and funds managed by Watershed Asset Capital Management, L.L.C.
“Watershed Securities Purchase Agreement” means that certain Securities Purchase Agreement dated as of February 9, 2007 by and among Parent and the Watershed Lenders.
“Watershed Third Lien Note” means that certain convertible promissory note (as the same may be amended from time to time) issuable by Parent to the Watershed Lenders upon exercise of the Watershed Lenders’ right, at the closing of the Acquisition Transaction, to purchase up to $10,000,000 in aggregate principal amount of said convertible promissory note, which convertible promissory note shall be secured by a third lien on the assets of Borrowers.
“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.
“WFF” means Wells Fargo Foothill, Inc., a California corporation
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Schedule 3.1
The obligation of each Lender to make its initial extension of credit provided for in the Agreement is subject to the fulfillment, to the satisfaction of Administrative Agent and each Lender (the making of such initial extension of credit by any Lender being conclusively deemed to be its satisfaction or waiver of the following), of each of the following conditions precedent:
(a) the Closing Date shall occur on or before February 9, 2007;
(b) Administrative Agent shall have received a letter duly executed by each Borrower and each Guarantor authorizing Collateral Agent to file appropriate financing statements in such office or offices as may be necessary or, in the opinion of Administrative Agent, desirable to perfect the security interests to be created by the Loan Documents;
(c) Administrative Agent shall have received evidence that appropriate financing statements have been duly filed in such office or offices as may be necessary or, in the opinion of Administrative Agent, desirable to perfect the Collateral Agent’s Liens in and to the Collateral, and Administrative Agent shall have received searches reflecting the filing of all such financing statements;
(d) Administrative Agent shall have received each of the following documents, in form and substance satisfactory to Administrative Agent, duly executed, and each such document shall be in full force and effect:
(i) the Canadian Guarantee,
(ii) the Canadian Security Agreement,
(iii) Cash Management Agreements,
(iv) the Control Agreements,
(v) a disbursement letter executed and delivered by Borrowers to Administrative Agent regarding the extensions of credit to be made on the Closing Date, the form and substance of which is satisfactory to Administrative Agent, (which disbursement letter shall provide for the payments to be made by the Borrowers on the Closing Date and provide that any payment made to M2 Holdings, LLC on the Closing Date shall not exceed $2,700,000),
(vi) the Fee Letter ,
(vii) the Intercompany Subordination Agreement,
(viii) the Mortgages,
(ix) the Patent Security Agreement,
(x) a letter, in form and substance satisfactory to Administrative Agent, from the Existing Lender to Administrative Agent respecting the amount necessary to repay all of the obligations of the Credit Parties and their respective Subsidiaries owing to Existing Lender and obtain a release of all of the Liens existing in favor of Existing Lender in and to the assets of the Credit Parties and their Subsidiaries, together with termination statements and other documentation evidencing the termination by Existing Lender of its Liens in and to the properties and assets of the Credit Parties and their Subsidiaries,
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(xi) the Intercreditor Agreement,
(xii) the Security Agreement, together with all certificates representing the shares of Stock pledged thereunder, as well as Stock powers with respect thereto endorsed in blank,
(xiii) the Seller Note,
(xiv) the Third Lien Intercreditor Agreement, and
(xv) the Trademark Security Agreement.
(e) Administrative Agent shall have received a certificate from the Secretary of each Borrower (i) attesting to the resolutions of such Borrower’ Board of Directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is a party, (ii) authorizing specific officers of such Borrower to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Borrower;
(f) Administrative Agent shall have received copies of each Borrower’ Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Borrower;
(g) Administrative Agent shall have received a certificate of status with respect to each Borrower, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing in such jurisdiction;
(h) Administrative Agent shall have received certificates of status with respect to each Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Borrower) in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that such Borrower is in good standing in such jurisdictions;
(i) Administrative Agent shall have received a certificate from the Secretary of each Guarantor (i) attesting to the resolutions of such Guarantor’ Board of Directors authorizing its execution, delivery, and performance of the Loan Documents to which such Guarantor is a party, (ii) authorizing specific officers of such Guarantor to execute the same and (iii) attesting to the incumbency and signatures of such specific officers of Guarantor;
(j) Administrative Agent shall have received copies of each Guarantor’ Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Guarantor;
(k) Administrative Agent shall have received a certificate of status with respect to each Guarantor, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Guarantor, which certificate shall indicate that such Guarantor is in good standing in such jurisdiction;
(l) Administrative Agent shall have received certificates of status with respect to each Guarantor, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Guarantor) in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that such Guarantor is in good standing in such jurisdictions;
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(m) Administrative Agent shall have received a certificate of insurance, together with the endorsements thereto, as are required by Section 5.8, the form and substance of which shall be satisfactory to Administrative Agent;
(n) [intentionally omitted];
(o) Administrative Agent shall have received an opinion of Credit Parties’ counsel in form and substance satisfactory to Administrative Agent;
(p) [intentionally omitted];
(q) Administrative Agent shall be satisfied, in its discretion, with the results of its due diligence with respect to the general affairs, management (including key personnel), prospects, financial position, stockholders’ equity, capitalization, results of operations of the Credit Parties and the Acquisition and the tax, accounting, legal, regulatory and other issues relevant to the Credit Parties and the Acquisition;
(r) Administrative Agent shall have received completed reference checks with respect to Credit Parties’ senior management, the results of which are satisfactory to Administrative Agent in its sole discretion;
(s) Administrative Agent shall have received a finalized quality of earnings report (performed by CTS Capital Advisors), the results of which are satisfactory to Administrative Agent in its sole discretion and which support no less than $40,000,000 of the Credit Parties’ TTM PF EBITDA;
(t) Administrative Agent shall have received an appraisal of Borrowers’ and their Subsidiaries’ Inventory and a brand valuation, performed by a valuation firm acceptable to Administrative Agent, with the results of the inventory appraisal and brand valuation each acceptable to Administrative Agent;
(u) Administrative Agent shall have received a set of Projections of the Parent and its Subsidiaries for the 3 year period following the Closing Date (on a year by year basis, and for the 1 year period following the Closing Date, on a month by month basis), in form and substance (including as to scope and underlying assumptions) satisfactory to Administrative Agent;
(v) Credit Parties shall have paid all Lender Group Expenses incurred in connection with the transactions evidenced by this Agreement;
(w) Administrative Agent shall have received mortgagee title insurance policies (or marked commitments to issue the same) for the Real Property Collateral issued by a title insurance company satisfactory to Administrative Agent (each a “ Mortgage Policy” and, collectively, the “ Mortgage Policies”) in amounts satisfactory to Administrative Agent assuring Administrative Agent that the Mortgages on such Real Property Collateral are valid and enforceable first priority mortgage Liens on such Real Property Collateral free and clear of all defects and encumbrances except Permitted Liens, and the Mortgage Policies otherwise shall be in form and substance satisfactory to Administrative Agent; provided, however, that Administrative Agent shall be responsible for one-half of the premium for such policy and one-half of the recording tax with respect to such Mortgage;
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(x) Administrative Agent shall have received copies of each Material Contract, together with a certificate of the Secretary of Administrative Borrower certifying each such document as being a true, correct, and complete copy thereof, and the results of Administrative Agent’ and its counsel’ review thereof, and of the Credit Parties’ corporate structure upon consummation of the Acquisition Transaction, shall be satisfactory to Administrative Agent;
(y) Credit Parties and each of their respective Subsidiaries shall have received all licenses, approvals or evidence of other actions required by any Governmental Authority and (ii) all necessary shareholder and third party approvals, in each case in connection with the execution and delivery by Credit Parties or their respective Subsidiaries of the Loan Documents or with the consummation of the transactions contemplated thereby;
(z) Administrative Agent shall have received confirmation that those portions of the Credit Parties’ capital structure that are not a part of the credit facility set forth in the Loan Documents are no less than $70,000,000 in equity or subordinated debt, and subject to terms satisfactory to Administrative Agent;
(aa) Administrative Agent shall have received copies of each Acquisition Document, together with a certificate of the Secretary of Administrative Borrower certifying that as of the Closing Date (i) each such document is a true, correct, and complete copy thereof, (ii) such documents have been entered into by the Credit Parties in compliance with all Applicable Laws and all necessary approvals and are in full force and effect, and (iii) there is no (A) litigation, investigation or proceeding (judicial or administrative) pending or, to the best knowledge of each Credit Party, threatened, against any Credit Party, or any of their respective Subsidiaries by any Governmental Authority arising out of the transactions contemplated by or effected in connection with the Acquisition Documents or the Loan Documents, (B) injunction, writ or restraining order restraining or prohibiting the transactions contemplated by the Acquisition Documents or the consummation of the financing arrangements contemplated under the Loan Documents, or (C) suit, action, investigation, proceeding (judicial or administrative) or ERISA Event pending or, to the best knowledge of each Credit Party, threatened against any Credit Party or any of their respective Subsidiaries which could reasonably be expected to cause a Material Adverse Change;
(bb) all applicable waiting periods with respect to consummation of the Acquisition Transaction shall have expired and Credit Parties and each of their respective Subsidiaries shall have received all licenses, approvals or evidence of other actions required by any Governmental Authority or other Person in connection with the execution and delivery by the Credit Parties of the Loan Documents, the Acquisition Documents, and with the consummation of the transactions contemplated thereby;
(cc) simultaneously with the extensions of the credit by the Lenders to the Credit Parties on the Closing Date, the parties to the Acquisition Documents shall have consummated all transactions contemplated thereby and furnished to Administrative Agent evidence thereof in form and substance satisfactory to Administrative Agent;
(dd) in the opinion of Administrative Agent, (i) no law or regulation restrains, prevents or imposes material adverse conditions upon any aspect of the Acquisition Transaction and (ii) no claim, action, suit, investigation, litigation or proceeding is pending or threatened in any court or before any Governmental Authority which relates to the transactions contemplated hereby or by the Acquisition Documents or which may have a material adverse effect on the Acquisition Transaction or the ability of the Credit Parties to perform the terms of the Loan Documents;
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(ee) Administrative Agent shall have received (i) duly executed copies of the First Lien Loan Documents, the form and substance of which shall be reasonably satisfactory to Administrative Agent, together with copies of all necessary consents and approvals required to be obtained in connection therewith, and (ii) evidence, in form and substance satisfactory to Administrative Agent, that all of the conditions to funding set forth in the First Lien Credit Agreement have been satisfied;
(ff) Administrative Agent shall have received (i) duly executed copies of the Third Lien Loan Documents, the form and substance of which shall be reasonably satisfactory to Administrative Agent, together with copies of all necessary consents and approvals required to be obtained in connection therewith, and (ii) evidence, in form and substance satisfactory to Administrative Agent, that all of the conditions to funding set forth in the Third Lien Loan Documents have been satisfied;
(gg) Administrative Agent shall have received a duly executed copy of the Calgon License Documents, the form and substance of which shall be reasonably satisfactory to Administrative Agent;
(hh) [intentionally omitted];
(ii) Administrative Agent shall have received interim financial statements for the year-to-date period ending November 30, 2006, and such financial statements shall be in form and substance satisfactory to Administrative Agent;
(jj) Administrative Agent shall have received a certificate from the chief financial officer of Ascendia in form and substance satisfactory to Administrative Agent, supporting the conclusions that after giving effect to the Acquisition and the related transactions contemplated hereby, that the Credit Parties and each Subsidiary of a Credit Party, taken as a whole, are Solvent;
(kk) the Administrative Borrower and each of its Subsidiaries shall have made all filings required to be made by it with the SEC and all securities exchanges;
(ll) all transactions between the Borrowers and Prentice shall have been duly reviewed and approved, including approval by the independent members of the Board of Directors of the Borrowers, and Administrative Agent shall have received a fairness opinion from a recognized firm acceptable to Administrative Agent in connection with the restructuring of the Existing Convertible Notes;
(mm) Prentice shall have (i) waived all outstanding penalties and fees under its existing registration rights agreement with the Borrowers, (ii) confirmed to Administrative Agent the amount of the prepayment premium and penalties payable to it with respect to the Existing Convertible Notes and (iii) on the Closing Date confirmed to Administrative Agent its receipt of the prepayment premium and penalties payable to it with respect to the Existing Convertible Notes;
(nn) [intentionally omitted]; and
(oo) all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Administrative Agent.
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Schedule 5.2
Provide Administrative Agent (and if so requested by Administrative Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Administrative Agent:
| Weekly | (a) an Account roll-forward with supporting details supplied from sales journals, collection journals, credit registers and any other records,
(b) notice of all claims, offsets, or disputes asserted by Account Debtors with respect to Credit Parties’ and their respective Subsidiaries’ Accounts,
(c) copies of invoices together with corresponding shipping and delivery documents, and credit memos together with corresponding supporting documentation, with respect to invoices and credit memos in excess of an amount determined in the sole discretion of Administrative Agent, from time to time,
(d) Inventory system/perpetual reports specifying the cost and the wholesale market value of the Credit Parties’ and their respective Subsidiaries’ Inventory, by category, with additional detail showing additions to and deletions therefrom (delivered electronically in an acceptable format, if Credit Parties have implemented electronic reporting), and
(e) a detailed report regarding Credit Parties’ and their Subsidiaries’ cash and Cash Equivalents, including an indication of which amounts constitute Qualified Cash.
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| Monthly (no later than the 10th day of each month) | (f) a Borrowing Base Certificate,
(g) a detailed aging, by total, of Credit Parties’ Accounts, together with a reconciliation to Credit Parties’ general ledger accounts and supporting documentation for any reconciling items noted (delivered electronically in an acceptable format, if Credit Parties have implemented electronic reporting),
(h) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, if Credit Parties have not implemented electronic reporting,
(i) a detailed Inventory system/perpetual report together with a reconciliation to Credit Parties’ general ledger accounts (delivered electronically in an acceptable format, if Credit Parties have implemented electronic reporting),
(j) a detailed calculation of Inventory categories that are not eligible for the Borrowing Base, if Credit Parties have not implemented electronic reporting,
(k) a summary aging, by vendor, of Credit Parties’ and their respective Subsidiaries’ accounts payable and any book overdrafts (delivered electronically in an acceptable format, if Credit Parties have implemented electronic reporting) and an aging, by vendor, of any held checks, together with a reconciliation to Credit Parties’ general ledger accounts,
(l) a monthly Account roll-forward, in a format acceptable to Administrative Agent in its discretion, tied to the beginning and ending account receivable balances of Credit Parties’ general ledgers, |
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(m) reporting of any deemed dividend tax liability,
(n) rent roll; and
(o) proof of payment by Credit Parties of any applicable taxes, including real estate, ad valorem and Canadian taxes.
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| Monthly (no later than the 30th day of each month) | (p) a reconciliation of Accounts, trade accounts payable, and Inventory of Credit Parties’ general ledger accounts to their monthly financial statements including any book reserves related to each category.
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| Quarterly | (q) a report regarding Credit Parties’ and their respective Subsidiaries’ accrued, but unpaid,ad valoremtaxes.
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| Annually | (r) a detailed list of Credit Parties’ and their respective Subsidiaries’ customers, with address and contact information.
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| Promptly upon receipt thereof by any Borrower or any Affiliate of a Borrower | (s) copies of any Acquisition Documents not previously delivered to Administrative Agent and any notices or material correspondences received from any Governmental Authority in connection with the Acquisition Transaction. |
| Promptly upon request by Administrative Agent | (t) copies of purchase orders and invoices for Inventory and Equipment acquired by Credit Parties or their Subsidiaries, and
(u) such other reports as to the Collateral or the financial condition of Credit Parties and their Subsidiaries, as Administrative Agent may reasonably request.
|
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Schedule 5.3
Deliver to Administrative Agent, with copies to each Lender, each of the financial statements, reports, or other items set forth set forth below at the following times in form satisfactory to Administrative Agent:
| as soon as available, but in any event within 30 days (45 days in the case of a month that is the end of one of Parent’s fiscal quarters) after the end of each month during each of Parent’s fiscal years | (a) an unaudited consolidated and consolidating balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period, together with a comparison to (i) the Projections for such monthly period and (ii) the corresponding monthly period of the prior fiscal year, and
(b) a Compliance Certificate, including any updated schedules, if any. |
| as soon as available, but in any event within 90 days after the end of each of Parent’s fiscal years | (c) consolidated and consolidating financial statements of Parent and its Subsidiaries for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Administrative Agent and certified, without any qualifications (including any (A) “going concern” or like qualification or exception, (B) qualification or exception as to the scope of such audit, or (C) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 6.18), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, and statement of cash flow and, if prepared, such accountants’ letter to management), and
(d) a Compliance Certificate, including any updated schedules, if any.
|
| as soon as available, but in any event within 30 days prior to the start of each of Parent’s fiscal years, | (e) copies of Parent’s Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Administrative Agent, in its Permitted Discretion, for the forthcoming 3 years, year by year, and for the forthcoming fiscal year, month by month, certified by the chief financial officer of Administrative Borrower as being such officer’s good faith estimate of the financial performance of Parent and its Subsidiaries during the period covered thereby. |
| within 2 Business Days after filing by any Credit Party, | (f) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports,
(g) any other filings made by any Credit Party with the SEC, and
(h) any other information that is provided by Parent to its shareholders generally. |
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| promptly, but in any event within 5 days after a Credit Party has knowledge of any event or condition that constitutes a Default or an Event of Default, | (i) notice of such event or condition and a statement of the curative action that Credit Parties proposes to take with respect thereto. |
| promptly after the commencement thereof, but in any event within 5 Business Days after the service of process with respect thereto on any Credit Party or any Subsidiary of a Credit Party, | (j) notice of all actions, suits, or proceedings brought by or against any Credit Party or any Subsidiary of a Credit Party before any Governmental Authority which reasonably could be expected to result in a Material Adverse Change. |
| promptly , but in any event within 5 Business Days after a Credit Party has knowledge of such event or condition | (k) notice of any labor negotiations affecting any Credit Party that could reasonably be expected to result in a strike, labor dispute, work slow down or stoppage, and
(l) notice of the cancellation or termination of any Material Contract. |
| upon the request of Administrative Agent, | (m) any other information reasonably requested relating to the financial condition of Credit Parties or their respective Subsidiaries. |
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