<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>exh10-2.txt
<DESCRIPTION>AMEND. LOAN AGREE.
<TEXT>
EXHIBIT 10.2
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AMENDED AND RESTATED LOAN AGREEMENT
dated as of April 13, 2004
among
DEL LABORATORIES, INC.
DEL PHARMACEUTICALS, INC.
PARFUMS SCHIAPARELLI, INC.
ROYCE & RADER, INC.
565 BROAD HOLLOW REALTY CORP.
and
THE LENDERS NAMED HEREIN
$24,000,000
5.56% Senior Notes Due April 15, 2011
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<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. Exhibits and Section References ............................... 1
SECTION 2. Loans ......................................................... 2
SECTION 3. Effectiveness of Amendment and Restatement .................... 2
SECTION 4. Prepayment of Notes; Maturity ................................. 2
SECTION 4.1. Required Prepayments ............................... 2
SECTION 4.2. Optional Prepayments ............................... 3
SECTION 4.3. Special Prepayment Following
Restricted Asset Sale .............................. 3
SECTION 4.4. Special Prepayment Upon Change of Control .......... 4
SECTION 4.5. Manner of Making Special Prepayments ............... 4
SECTION 4.6. Obligation to Prepay after Notice .................. 5
SECTION 4.7. Application of Prepayments ......................... 5
SECTION 4.8. Presentation or Surrender of Notes ................. 5
SECTION 4.9. Note Purchase Prohibition .......................... 5
SECTION 5. Covenants ..................................................... 5
SECTION 5.1. Compliance with Laws, Etc. ......................... 5
SECTION 5.2. Reporting Requirements ............................. 5
SECTION 5.3. Taxes .............................................. 8
SECTION 5.4. Corporate Existence ................................ 8
SECTION 5.5. Maintenance of Properties and Insurance ............ 8
SECTION 5.6. Books of Record and Account ........................ 8
SECTION 5.7. Visitation ......................................... 8
SECTION 5.8. Performance and Compliance with Other Agreements ... 8
SECTION 5.9. [Intentionally Omitted.] ........................... 9
SECTION 5.10. Pension Funding .................................... 9
SECTION 5.11. Licenses; Trademarks ............................... 9
SECTION 5.12. New Subsidiaries ................................... 9
SECTION 5.13. [Intentionally Omitted.] ........................... 10
SECTION 5.14. [Intentionally Omitted.] ........................... 10
SECTION 5.15. Liens, Etc. ........................................ 10
SECTION 5.16. Debt ............................................... 11
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.17. Merger; Acquisitions ............................... 12
SECTION 5.18. Sale of Assets, Etc. ............................... 12
SECTION 5.19. Investments, Etc. .................................. 12
SECTION 5.20. Transactions With Affiliates ....................... 12
SECTION 5.21. Prepayment of Outstanding Debt ..................... 12
SECTION 5.22. Guarantees ......................................... 13
SECTION 5.23. Change of Business ................................. 13
SECTION 5.24. Fiscal Year ........................................ 13
SECTION 5.25. Over-Leverage Fee .................................. 13
SECTION 5.26. Accounting Policies ................................ 13
SECTION 5.27. Dividends, Etc. .................................... 13
SECTION 5.28. Change in Control .................................. 13
SECTION 5.29. Hazardous Material ................................. 14
SECTION 5.30. Limitations on Consolidated Foreign
Assets and Revenues ................................ 14
SECTION 5.31. Financial Requirements ............................. 14
SECTION 6. Definitions ................................................... 15
SECTION 6.1. Accounting Terms ................................... 23
SECTION 7. Remedies ...................................................... 24
SECTION 7.1. Events of Default; Acceleration .................... 24
SECTION 7.2. Other Remedies ..................................... 26
SECTION 7.3. Notice of Acceleration ............................. 26
SECTION 8. Communications; Payment of Notes .............................. 26
SECTION 9. First Offer Upon Transfer of Notes ............................ 27
SECTION 10. Amendment and Waiver .......................................... 28
SECTION 11. Registration, Transfer and Exchange of Notes .................. 28
SECTION 12. Lost Notes .................................................... 28
SECTION 13. Expenses ...................................................... 29
SECTION 14. Confidential Information ...................................... 29
SECTION 15. Successors and Assigns ........................................ 30
SECTION 16. Survival of Representations and Warranties .................... 30
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 17. Governing Law; Waiver of Jury Trial ........................... 31
SECTION 18. Reaffirmation, Restatement and Waivers ........................ 31
SECTION 19. [Intentionally Omitted] ....................................... 31
EXHIBIT A SENIOR NOTE OF DEL LABORATORIES, INC.
EXHIBIT B REPRESENTATIONS
EXHIBIT C CLOSING CONDITIONS
EXHIBIT D DOCUMENTS AND INFORMATION FURNISHED TO THE LENDERS
SCHEDULE D-1
SCHEDULE D-2
SCHEDULE D-3
SCHEDULE D-4
SCHEDULE D-5
SCHEDULE D-6
SCHEDULE D-7
SCHEDULE I
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<PAGE>
AMENDED AND RESTATED
LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of April 13, 2004,
(the or this "Agreement") among DEL LABORATORIES, INC., a Delaware corporation
(as further defined in Section 6, the "Company"), Del Pharmaceuticals, Inc., a
Delaware corporation ("DPI"), Parfums Schiaparelli, Inc., a New York corporation
("Parfums"), Royce & Rader, Inc., a Delaware corporation ("Royce"), 565 Broad
Hollow Realty Corp., a New York corporation ("Broad"), and the lender named in
Schedule I hereto (and with such other lenders as may become parties hereto in
accordance with the terms hereof, collectively, the "Lenders").
WHEREAS, Jackson National Life Insurance Company, as lender, and the
Company are parties to that certain Amended and Restated Loan Agreement dated
March 26, 2002, as amended by the First Amendment to Loan Agreement dated as of
November 10, 2003 (as so amended, the "Existing Loan Agreement"), pursuant to
which the Lenders made certain loans to the Company and the Company issued to
the Lenders its Notes (as defined in the Existing Loan Agreement) (the "Existing
Notes");
WHEREAS, Jackson National Life Insurance Company is the holder of
100% of the issued and outstanding Existing Notes; and
WHEREAS, the Company and the Lenders now desire to amend and restate
the Existing Loan Agreement and the Existing Notes to, among other things, (i)
extend the maturity date of the Existing Notes and reduce the interest rate due
with respect thereto, (ii) amend certain covenants and related definitions, and
(iii) make certain other changes to the Existing Loan Agreement and the Existing
Notes.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:
SECTION 1. EXHIBITS AND SECTION REFERENCES. This Agreement includes
the attached Schedule I and Exhibits A through D. Section numbers herein that
are preceded by a capital letter refer to sections in the Exhibit designated by
that letter.
<PAGE>
SECTION 2. LOANS. Each Lender has made a loan to the Company in the
amount set forth opposite such Lender's name in Schedule I (reduced to give
effect to any mandatory prepayments required pursuant to Section 4.1 hereof). On
the Restatement Effective Date, as defined below, the Company will amend and
restate the Existing Notes in the form of Exhibit A to this Agreement to
evidence its promise to repay the current outstanding principal amount of the
loans with interest. Reference in this Agreement to the "Notes" shall be a
reference to the Existing Notes as amended and restated in the form of Exhibit
A, or any Note or Notes delivered in substitution or exchange therefor pursuant
to the provisions of this Agreement. The Company will issue such amended and
restated Notes to the Lenders upon surrender by them of the Existing Notes for
cancellation by the Company. The aggregate principal amount of loans originally
made pursuant to this Agreement was $40,000,000, but the loan by each Lender is
a separate and several loan. As of the Restatement Effective Date, the aggregate
principal amount of loans outstanding is $24,000,000. To induce each Lender to
enter into this Agreement and to amend and restate its Existing Notes, the
Company makes the representations and warranties set forth in Exhibit B, Part
One, and the covenants and agreements hereinafter stated. Each Lender makes the
representation set forth in Exhibit B, Part Two.
SECTION 3. EFFECTIVENESS OF AMENDMENT AND RESTATEMENT. The terms and
provisions of this Agreement shall become effective (the "Restatement Effective
Date") on such date upon which (i) the Lenders shall have received payment of
all accrued interest on the outstanding principal amount of the Existing Notes
and other applicable fees and charges, and (ii) each of the closing conditions
listed on Exhibit C hereto shall have been satisfied in form and substance
reasonably satisfactory to the Lenders.
SECTION 4. PREPAYMENT OF NOTES; MATURITY. The Company will make
required, and may make optional, prepayments of the principal of the Notes as
hereinafter provided. The principal balance of the Notes not otherwise prepaid,
together with all accrued and unpaid interest thereon and other applicable fees
and charges, shall be due in full on April 15, 2011.
SECTION 4.1. REQUIRED PREPAYMENTS. So long as any of the Notes shall
be outstanding, there shall become due and payable, and the Company will prepay,
the following aggregate principal amount of the Notes (or the unpaid balances
thereof) on the dates indicated (each, a "Mandatory Prepayment Date"):
April 15, 2008 $6,000,0000
April 15, 2009 $6,000,0000
April 15, 2010 $6,000,0000
without prepayment charge, whether or not any optional prepayment has been or is
being made pursuant to Section 4.2 (subject to the next proviso), 4.3 or 4.4;
provided that, in the event that any prepayment shall have been made pursuant to
Section 4.3 or 4.4 (a "Special Prepayment"), then with respect to all subsequent
prepayments pursuant to this Section 4.1 the aggregate principal amount of Notes
to be prepaid on each subsequent Mandatory Prepayment Date shall be an amount
equal to the product of (i) the aggregate principal amount of the Notes to be
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prepaid on such Mandatory Prepayment Date (or the amount to which such number
shall have been theretofore reduced pursuant to this proviso by reason of a
prior Special Prepayment), times (ii) a fraction, the numerator of which shall
be the aggregate principal amount of the Notes outstanding immediately after
such Special Prepayment (before giving effect to any prepayment pursuant to
Section 4.2 or this Section 4.1 being made on the same day) and the denominator
of which shall be the aggregate principal amount of Notes outstanding
immediately prior to such Special Prepayment (before giving effect to any
prepayment pursuant to Section 4.2 or this Section 4.1 being made on the same
day).
SECTION 4.2. OPTIONAL PREPAYMENTS. The Company, upon not less than 30
or more than 60 days' prior written notice of the date and amount of optional
prepayment to the holders of the Notes, may prepay at any time all or from time
to time any part (in a multiple of $100,000) of the principal of the Notes, upon
payment of a prepayment charge equal to the excess, if any, of (a) the sum of
the present values, discounted semi-annually in accordance with accepted
financial practice at a rate per annum equal to the Treasury Yield plus
seventy-five hundredths percent (.75%), of each of (i) all remaining scheduled
payments and prepayments (whether at maturity or pursuant to Section 4.1) of the
principal amount to be prepaid pursuant to this Section 4.2 (any partial
prepayment pursuant to this Section 4.2 being deemed applied in satisfaction of
such scheduled payments and prepayments in inverse chronological order of their
due dates) plus (ii) all remaining payments of interest payable on such
principal amount according to the terms of the Notes to and including maturity
or the dates of such scheduled prepayments, as the case may be (assuming each
payment referred to in clauses (i) and (ii) above is made when due), over (b)
the principal amount to be prepaid pursuant to this Section 4.2.
SECTION 4.3. SPECIAL PREPAYMENT FOLLOWING RESTRICTED ASSET SALE. In
the event that the Company proposes to enter into a transaction or series of
transactions not permitted by Section 5.17 or 5.18 (a "Restricted Asset Sale"),
the Company shall, not less than 30 nor more than 90 days prior to such
Restricted Asset Sale, give each holder of any Notes written notice thereof by
telecopy confirmed by telephone in accordance with Section 8, such notice to
describe the proposed Restricted Asset Sale and the amount of the expected
proceeds thereof and request the consent of the holder or holders of the Notes
thereto. The Company may proceed with the Restricted Asset Sale only if the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes then outstanding consent in writing thereto.
Not more than 190 days following the first day on which the Company or
any of its Subsidiaries receives any proceeds from an approved Restricted Asset
Sale (the "Asset Sale Closing Date"), the Company shall give each holder of any
Notes a written notice (the "Offer Notice") by telecopy confirmed by telephone
in accordance with Section 8 containing the Company's unconditional and
irrevocable offer to prepay, on a date specified therein (the "Special
Prepayment Date"), which date shall be not less than 45 nor more than 60 days
following the date on which such notice is given, a principal amount of the
Notes equal to the sum of (a) 100% of the proceeds received by the Company and
its Subsidiaries from all sales of assets which individually or in the aggregate
disposed of a Substantial Part of the assets of the Company or a Subsidiary,
less (b) the amount of such proceeds which were reinvested by the Company within
180 days following their receipt in assets substantially similar to those assets
sold, up to the entire unpaid principal amount of the Notes, at the Prepayment
Price (as defined in Section 4.5) plus interest accrued to and including the
Special Prepayment Date. If the Company shall not within 30 days of the giving
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of such notice have received a written acceptance (which may be by telecopy or
other means of telecommunication) of such offer by such holder, such offer shall
be deemed to have been rejected by such holder, and the Company shall have no
further obligation to prepay the Notes of such holder as a consequence of such
Restricted Asset Sale.
SECTION 4.4. SPECIAL PREPAYMENT UPON CHANGE OF CONTROL. In the event
of a Change of Control, the Company shall not less than 15 days prior to such
event (or, if prior notice is not possible, immediately following the Company's
becoming aware of such Change of Control) give to each holder of any Notes
written notice thereof by telecopy confirmed by telephone in accordance with
Section 8, such notice to contain the Company's unconditional and irrevocable
offer to prepay, on a date specified therein (the "Special Prepayment Date"),
which date shall be not less than 60 nor more than 90 days following the date on
which such notice is given, all but not less than all the Notes held by such
holder, at the Prepayment Price (as defined in Section 4.5) plus interest
accrued to and including the Special Prepayment Date. If the Company shall not
within 30 days of the giving of such notice have received a written acceptance
(which may be by telecopy or other means of telecommunication) of such offer by
such holder, such offer shall be deemed to have been rejected by such holder,
and the Company shall have no further obligation to prepay the Notes of such
holder and such holder shall be deemed to have consented to the Change of
Control, as the case may be.
SECTION 4.5. MANNER OF MAKING SPECIAL PREPAYMENTS. In the case of any
acceptance of an offer to prepay Notes pursuant to Section 4.3 or Section 4.4,
the Company shall give a further written notice (a "Prepayment Notice") with
respect to such prepayment to each holder accepting the offer not more than 20
days nor less than 10 days prior to the Special Prepayment Date (as defined in
Section 4.3 or 4.4, as applicable) specifying (1) the Special Prepayment Date,
(2) the accrued interest to be paid to such holder, (3) the prepayment charge
component of the Prepayment Price (assuming, for purposes of such notice only,
that the applicable prepayment charge will be that which would be applicable if
the Notes were being prepaid on the date of such notice, it being understood,
however, that the actual prepayment charge to be paid may vary from the amount
specified in such notice), (4) the total amount of the Prepayment Price to be
paid to such holder (calculated using the same assumption set forth in the
foregoing clause (3)), and (5) the total aggregate principal amount of all Notes
(including those of such holder) to be prepaid by the Company. On the Special
Prepayment Date, the Company shall prepay the Notes held by such holder at the
Prepayment Price plus accrued interest to and including the Special Prepayment
Date.
The term "Prepayment Price" shall mean, with respect to any Notes to be
prepaid pursuant to Section 4.3 or 4.4, an amount equal to the sum of (a) either
(i) in the case of a prepayment made pursuant to Section 4.3, the amount
specified in the Offer Notice, or (ii) in the case of a prepayment made pursuant
to Section 4.4, the entire unpaid principal amount of such Notes, plus (b) a
prepayment charge equal to 50% of the prepayment charge which would be payable
under Section 4.2, if such Notes were being prepaid on the Special Prepayment
Date pursuant to Section 4.2.
For purposes of this Section 4, any prepayment pursuant to Section 4.3
shall be deemed to have preceded any prepayment pursuant to Section 4.1 or 4.2
occurring on the same day.
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SECTION 4.6. OBLIGATION TO PREPAY AFTER NOTICE. The principal amount
of the Notes designated for prepayment in any notice of optional prepayment
given pursuant to Section 4.2 or in any Prepayment Notice given pursuant to
Section 4.3 or 4.4 shall become due and payable on the date fixed for
prepayment, together with accrued interest and the amount of any prepayment
charge.
SECTION 4.7. APPLICATION OF PREPAYMENTS. Each prepayment pursuant to
Section 4.1, 4.2 or 4.3 of less than the entire unpaid amount of all outstanding
Notes shall be applied (in multiples of $1,000) pro rata (as nearly as may be,
with adjustments to equalize for prior prepayments) to all outstanding Notes
according to the respective unpaid principal amounts thereof.
SECTION 4.8. PRESENTATION OR SURRENDER OF NOTES. Subject to the
second paragraph of Section 8, the Company may, as a condition to making any
prepayment of a Note, require the holder thereof to present such Note, at the
place specified in the Note for payment of the principal thereof, for notation
thereon of the amount and date of such prepayment or, if such Note is prepaid in
full, to surrender the same at such price.
SECTION 4.9. NOTE PURCHASE PROHIBITION. Except as permitted by
Section 9, the Company will not, and will not permit any Subsidiary or Affiliate
to, directly or indirectly acquire any Note, by purchase or prepayment or
otherwise, except by way of payment or prepayment thereof by the Company or such
Subsidiary or Affiliate in accordance with the provisions of the Notes and of
this Agreement.
SECTION 5. COVENANTS. So long as any amount shall remain outstanding
under the Notes, the Company and each Guarantor will, unless the Required
Lenders shall otherwise consent in writing:
SECTION 5.1. COMPLIANCE WITH LAWS, ETC. Comply, and cause each
Subsidiary of the Company or any Guarantor to comply, in all material respects
with all applicable laws, rules, regulations and orders, where the failure to so
comply would be reasonably likely to result in a Material Adverse Change.
SECTION 5.2. REPORTING REQUIREMENTS. Furnish to the Lenders:
(A) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within ninety (90) days after the end of each fiscal
year of the Company, a copy of the audited consolidated and
unaudited consolidating (such consolidating statements to be
prepared by management of the Company) financial statements of
the Company and its Consolidated Subsidiaries for such year,
including balance sheets with related statements of income and
retained earnings and statements of cash flows, all in
reasonable detail and setting forth in comparative form the
figures for the previous fiscal year, together with an
unqualified opinion, prepared by independent certified public
accountants selected by the Company and reasonably
satisfactory to the Required Lenders, all such financial
statements to be prepared in accordance with GAAP.
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(B) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of each fiscal year of the
Company, a copy of the consolidated and consolidating
financial statements of the Company and its Consolidated
Subsidiaries for such quarter, including balance sheets with
related statements of income and retained earnings and
statements of cash flows, all in reasonable detail and setting
forth in comparative form the figures for the comparable
period for the previous fiscal year, all such financial
statements to be prepared by management of the Company in
accordance with GAAP.
(C) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies
of any reports submitted to the Company or any Guarantor by
independent certified public accountants in connection with
the examination of the financial statements of the Company and
the Guarantor made by such accountants.
(D) CERTIFICATE OF NO DEFAULT. Simultaneously with the
delivery of the financial statements referred to in Section
5.2(A) and (B), a certificate of the President or the Chief
Financial Officer of the Company, (1) certifying that no
Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the
action which is proposed to be taken with respect thereto; and
(2) with computations demonstrating compliance with the
covenants contained in Section 5.31.
(E) ACCOUNTANTS' REPORT. Simultaneously with the delivery of
the annual financial statements referred to in Section 5.2(A),
a certificate of the independent certified public accountants
who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they
have obtained no knowledge of any condition or event which
constitutes a Default or Event of Default, or if such
accountants shall have obtained knowledge of any such
condition or event, specify in such certificate each such
condition or event of which they have knowledge and the nature
and status thereof.
(F) NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits and proceedings before
any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign,
affecting the Company, any Guarantor or any Subsidiary of the
Company or any Guarantor which, if determined adversely to the
Company, such Guarantor or any such Subsidiary would be
reasonably likely to result in a Material Adverse Change.
(G) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as
possible and in any event within five (5) days after the
occurrence of each Default or Event of Default, a written
notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the
Company with respect thereto.
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(H) ERISA REPORTS. Promptly after the filing or receiving
thereof, copies of all reports, including annual reports, and
notices which the Company, any Guarantor or any Subsidiary of
the Company or any Guarantor, files with or receives from the
PBGC, the Internal Revenue Service or the U.S. Department of
Labor under ERISA; and as soon as possible after the Company,
any Guarantor or any such Subsidiary knows or has reason to
know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or the
Company, any Guarantor or any such Subsidiary has instituted
or will institute proceedings under Title IV of ERISA to
terminate any Plan, the Company or such Guarantor will deliver
to the Lenders a certificate of the President or the Chief
Financial Officer of the Company or such Guarantor setting
forth details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action the Company or
such Guarantor proposes to take with respect thereto.
(I) ENVIRONMENTAL NOTICES. Promptly after the receipt thereof,
a copy of any written claim, summons, charge or other notice
to the Company, any Guarantor or any Subsidiary of the Company
or any Guarantor alleging failure to comply with any federal,
state or local laws governing Hazardous Materials.
(J) MATERIAL ADVERSE CHANGE. Promptly, upon the occurrence
thereof, notice of a Material Adverse Change.
(K) REPORTS TO OTHER CREDITORS. Promptly after the furnishing
thereof, copies of any statement or report furnished to any
other party pursuant to the terms of any indenture, loan, or
credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this
Section 5.2.
(L) PROXY STATEMENTS, ETC. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports which the Company, any Guarantor or any
Subsidiary of the Company or any Guarantor sends to its
stockholders, and copies of all regular, periodic, and special
reports, and all registration statements which the Company or
such Guarantor or any such Subsidiary files with the SEC or
any governmental authority which may be substituted therefor,
or with any national securities exchange.
(M) NOTICE OF AFFILIATES. Promptly after any Person becomes an
Affiliate of the Company or any Guarantor (other than if such
Person becomes an Affiliate solely by virtue of a member of
management of the Company making an investment in such
Person), notice to the Lenders of such Affiliate, provided
that this clause (M) shall not require the Company or any
Guarantor to advise the Lenders of any changes in officers
other than executive officers.
(N) GENERAL INFORMATION. Such other information respecting the
condition or operations, financial or otherwise, of the
Company, any Guarantor or any Subsidiary of the Company or any
Guarantor as any Lender may from time to time reasonably
request.
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SECTION 5.3. TAXES. Pay and discharge, and cause each Subsidiary of
the Company or any Guarantor to pay and discharge, all taxes, assessments and
governmental charges upon it or them, its or their income and its or their
properties prior to the dates on which penalties are attached thereto, unless
and only to the extent that (i) such taxes shall be contested in good faith and
by appropriate proceedings by the Company, such Guarantor or any such
Subsidiary, as the case may be; (ii) there be adequate reserves therefor in
accordance with GAAP entered on the books of the Company, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings for the collection of such
taxes against the Company, such Guarantor or any such Subsidiary have been
commenced.
SECTION 5.4. CORPORATE EXISTENCE. Except as permitted by Section 5.17
of this Agreement, preserve and maintain, and cause each Subsidiary of the
Company or any Guarantor to preserve and maintain, their corporate existence and
good standing in the jurisdiction of their incorporation and the rights,
privileges and franchises of the Company, each Guarantor and each such
Subsidiary in each case where failure to so preserve or maintain would be
reasonably likely to result in a Material Adverse Change, except that any
inactive Subsidiary (that has no assets) may wind up, liquidate or dissolve with
at least thirty (30) days prior written notice to the Lenders.
SECTION 5.5. MAINTENANCE OF PROPERTIES AND INSURANCE. (i) Keep, and
cause each Subsidiary of the Company and any Guarantor to keep, the respective
properties and assets (tangible or intangible) that are useful and necessary in
its business, in good working order and condition, reasonable wear and tear
excepted; and (ii) maintain, and cause any such Subsidiary to maintain,
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning properties and doing business
in the same general areas in which the Company, any Guarantor and any such
Subsidiary may operate.
SECTION 5.6. BOOKS OF RECORD AND ACCOUNT. Keep, and cause each
Subsidiary of the Company and any Guarantor to keep, adequate records and proper
books of record and account in which complete entries will be made in a manner
to enable the preparation of financial statements in accordance with GAAP,
reflecting all financial transactions of the Company, such Guarantor, and any
such Subsidiary.
SECTION 5.7. VISITATION. At any reasonable time, and from time to
time, and upon prior notice, and, provided no Default or Event of Default then
exists, not more often than once during any calendar year, permit any Lenders or
representatives thereof, to examine and make copies of (except if such copies
would result in the loss of any attorney-client or other privilege) and
abstracts from the financial and accounting books and records of, and visit the
properties of, the Company, any Guarantor or any Subsidiary of the Company or
any Guarantor to discuss the affairs, finances and accounts of the Company, any
Guarantor or any such Subsidiary with any of the respective officers of the
Company, any Guarantor or any such Subsidiary or the Company's, any Guarantor's
or such Subsidiary's independent accountants.
SECTION 5.8. PERFORMANCE AND COMPLIANCE WITH OTHER AGREEMENTS.
Perform and comply in all material respects, and cause each Subsidiary of the
Company or any Guarantor to perform and comply in all material respects, with
each of the provisions of each and every agreement the failure to perform or
comply with which would be reasonably likely to result in a Material Adverse
Change.
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SECTION 5.9. [Intentionally Omitted.]
SECTION 5.10. PENSION FUNDING. Comply in all material respects, and
cause each Subsidiary of the Company or any Guarantor to comply in all material
respects, with the following and cause each ERISA Affiliate of the Company, any
Guarantor or any such Subsidiary to comply with the following:
(i) engage solely in transactions which would not subject any of such
entities to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Internal Revenue Code in either case in
an amount in excess of $25,000.00;
(ii) make full payment when due of all amounts which, under the
provisions of any Plan or ERISA, the Company, any Guarantor, any such Subsidiary
or any ERISA Affiliate of any of same is required to pay as contributions
thereto;
(iii) all applicable provisions of the Internal Revenue Code and the
regulations promulgated thereunder, including but not limited to Section 412
thereof, and all applicable rules, regulations and interpretations of the
Accounting Principles Board and the Financial Accounting Standards Board;
(iv) not fail to make any payments in an aggregate amount greater
than $25,000.00 to any Multiemployer Plan that the Company, any Guarantor, any
such Subsidiary or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto; or
(v) not take any action regarding any Plan which could result in the
occurrence of a Prohibited Transaction.
SECTION 5.11. LICENSES; TRADEMARKS. Maintain at all times, and cause
each Subsidiary of the Company or any Guarantor to maintain at all times, all
licenses or permits necessary to the conduct of its business or as may be
required by any governmental agency or instrumentality thereof, except for such
licenses or permits where the failure to so maintain would not be reasonably
likely to result in a Material Adverse Change, and take all steps necessary to
maintain the exclusive ownership of, and the rights to, all trademarks and
tradenames material to the business of the Company or a Subsidiary; provided,
however, that the Company and the Guarantors shall not be required to take such
steps, including, without limitation the renewal or continuation of trademark or
tradename registrations in the United States Trademark Office, if the Company or
the applicable Guarantor has provided the Lenders with a written statement
giving the reasons why such steps are not necessary and why such failure to
maintain such trademark or tradename would not result in a Material Adverse
Change.
SECTION 5.12. NEW SUBSIDIARIES. (i) Cause any Subsidiary (other than
a Foreign Subsidiary) of the Company or any Guarantor formed after the date of
this Agreement that is either actively running a business or owns any assets to
become a Guarantor and to become a party to this Agreement and the Guaranty as a
Guarantor.
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(ii) Cause any Foreign Subsidiary which, in the reasonable
determination of the Company and its professional advisors, if it became a
Guaranteeing Foreign Subsidiary would not result in adverse tax consequences to
the Company, to become a Guarantor and to become a party to this Agreement as a
Guarantor.
SECTION 5.13. [Intentionally Omitted.]
SECTION 5.14. [Intentionally Omitted.]
SECTION 5.15. LIENS, ETC. Not create, incur, assume or suffer to
exist, any Lien, upon or with respect to any of its properties, now owned or
hereafter acquired, except:
(A) [Intentionally Omitted];
(B) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(C) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established;
(D) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;
(E) Liens, deposits, or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(F) Liens described in Exhibit D-2, which Liens may be
renewed, extended or refinanced, without securing any additional Debt and on
terms no less favorable to the Company or applicable Guarantor than the original
terms;
(G) Judgment and other similar Liens arising in connection
with court proceedings (other than any judgment or order or combination of
judgments or orders for the payment of money, in excess of $500,000.00 in the
aggregate, which sum shall not be subject to full, complete and effective
insurance coverage (subject to deductibles), shall be rendered against the
Company, any Guarantor or any Subsidiary of the Company or any Guarantor and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect), provided the execution
or other enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings and for which adequate reserves are maintained;
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(H) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Company's or a Guarantor's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(I) [Intentionally Omitted];
(J) [Intentionally Omitted];
(K) [Intentionally Omitted]; and
(L) Purchase money Liens on any property hereafter acquired or
the assumption of any Lien on property existing at the time of such acquisition,
or a Lien incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease, provided that:
(i) Any property subject to any of the foregoing is acquired
by the Company or a Guarantor in the ordinary course of its
respective business and the Lien on any such property is
created contemporaneously with such acquisition;
(ii) The obligation secured by any Lien so created, assumed,
or existing shall not exceed one hundred (100%) percent of
lesser of cost or fair market value of the property acquired
as of the time of the Company or the Guarantor acquiring the
same;
(iii) Each such Lien shall attach only to the property so
acquired and fixed improvements thereon; and
(iv) The obligation secured by such Lien is permitted by the
provisions of Section 5.16 and the related expenditure is
permitted by the provisions of Section 5.31 (B).
SECTION 5.16. DEBT. Not create, incur, assume, or suffer to exist,
any Debt, except:
(A) Debt of the Company under this Agreement or the Notes;
(B) Debt described in Exhibit D-2, which Debt may be renewed,
extended or refinanced on terms no less favorable to the
Company or applicable Guarantor than the current terms of such
Debt;
(C) Subordinated Debt;
(D) Accounts payable to trade creditors for goods or services
and current operating liabilities (other than for borrowed
money), in each case incurred and paid in the ordinary course
of business;
(E) Debt of the Company or any Guarantor secured by purchase
money Liens permitted by Section 5.15(L);
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(F) Debt incurred under the Bank Credit Agreement in an
aggregate amount at any time outstanding not in excess of
$45,000,000;
(G) Intercompany Debt; (H) [Intentionally Omitted];
(I) [Intentionally Omitted];
(J) [Intentionally Omitted]; and
(K) short term unsecured Debt of up to $20,000,000.00 (i.e.,
indebtedness with a final maturity not exceeding 364 days from
the date of incurrence of such indebtedness).
SECTION 5.17. MERGER; ACQUISITIONS. (i) Other than in connection with
Permitted Acquisitions, not merge into, or consolidate with or into, or have
merged into it, any Person; and, for the purpose of this Section 5.17, the
acquisition or sale by the Company or any Guarantor by lease, purchase or
otherwise, of all, or substantially all, of the common stock or the assets of
any Person or of it shall be deemed a merger of such Person with the Company or
any Guarantor, provided that (x) the Company may merge with any Guarantor,
provided the Company is the surviving entity and (y) any Guarantor may merge
with any other Guarantor.
(ii) Not make any Acquisition other than a Permitted
Acquisition.
SECTION 5.18. SALE OF ASSETS, ETC. Not sell, assign, transfer, lease
or otherwise dispose of any of its assets, (including a sale leaseback
transaction) with or without recourse, except for (i) inventory disposed of in
the ordinary course of business; (ii) the sale or other disposition of assets no
longer used or useful in the conduct of its business; (iii) Permitted Equipment
Sales, (iv) a Permitted Real Estate Sale and (v) sales of assets between the
Company and a Guarantor or between Guarantors, or sale of assets by an inactive
Subsidiary of the Company or a Guarantor to the Company or a Guarantor.
SECTION 5.19. INVESTMENTS, ETC. Not make any Investment other than
Permitted Investments.
SECTION 5.20. TRANSACTIONS WITH AFFILIATES. Except as otherwise
expressly permitted by this Agreement or except in the ordinary course of
business and pursuant to the reasonable requirements of the Company's, a
Guarantor's or a Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or a Guarantor or a Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate, not enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, provided however, in no event shall the Company or any Guarantor
engage in any transaction with a Subsidiary of the Company or a Guarantor which
Subsidiary is not a Guarantor.
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SECTION 5.21. PREPAYMENT OF OUTSTANDING DEBT. Not pay, in whole or in
part, any outstanding Debt of the Company or a Guarantor, which by its terms is
not then due and payable other than (i) Debt owing to the Lenders, (ii)
Intercompany Debt, (iii) accounts payable and other trade payables, and (iv)
prepayment of loans under the Bank Credit Agreement.
SECTION 5.22. GUARANTEES. Not guaranty, or in any other way become
directly or contingently obligated for any Debt of any other Person (including
any agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Exhibit D-2 annexed hereto; or (iii) guarantees of
any Debt permitted under Section 5.16 of this Agreement.
SECTION 5.23. CHANGE OF BUSINESS. Not materially alter the nature of
its business.
SECTION 5.24. FISCAL YEAR. Not Change the ending date of its fiscal
year from December 31.
SECTION 5.25. OVER-LEVERAGE FEE. On each date (an "Over-Leverage
Certification Date") that the Company shall deliver to the Lenders a certificate
of compliance in accordance with Section 5.2(D) demonstrating that the Funded
Debt to EBITDA Ratio for the Company's four consecutive fiscal quarters most
recently ended exceeds 3.00:1.00, the Company shall pay to each Lender a fee
(the "Over-Leverage Fee") equal to 0.50% per annum of the daily outstanding
principal amount of such Lender's Notes for the fiscal quarter most recently
ended. The Over-Leverage Fee shall be payable from the first day of the fiscal
quarter covered by the certificate of compliance described above to and
including the Over-Leverage Certification Date and shall be payable in arrears
on the Over-Leverage Certification Date and shall be calculated on the basis of
a 360-day year of twelve 30-day months. In the event the Company shall fail to
deliver the certificate required under Section 5.2(D) when due, the due date of
such certificate shall automatically be deemed an Over-leverage Certification
Date.
SECTION 5.26. ACCOUNTING POLICIES. Not Change any accounting
policies, except as permitted by GAAP.
SECTION 5.27. DIVIDENDS, ETC. If an Event of Default has occurred and
is continuing, or after giving effect to the proposed action described in this
Section 5.27 an Event of Default would occur, not declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such, whether in cash, assets, or in obligations of the Company
or a Guarantor; or allocate or otherwise set apart any sum for the payment of
any dividend or distribution on, or for the purchase, redemption or retirement
of any shares of its capital stock; or make any other distribution by reduction
of capital or otherwise in respect of any share of its capital stock, except,
any Subsidiary may pay dividends to its shareholder(s).
SECTION 5.28. CHANGE IN CONTROL. (i) Not permit any Person or "group"
(within the meaning of Section 13(d)-3 under the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission as in effect on the date
hereof), other than the members of management of the Company and the directors
of the Company, each as in office on the date of this Agreement, to own more
than fifty (50%) percent of the outstanding voting securities of the Company.
(ii) Not permit any nominees other than nominees nominated by the existing board
of directors of the Company to hold a majority of the seats on the board of
directors of the Company.
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SECTION 5.29. HAZARDOUS MATERIAL. The Company, each Guarantor and
each Subsidiary of the Company or a Guarantor shall not cause or permit any
property owned or occupied by the Company, a Guarantor or any such Subsidiary to
be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials, except in compliance
with all applicable federal, state and local laws or regulations; nor shall the
Company, a Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on the part of the Company, such
Guarantor or any such Subsidiary or any tenant or subtenant, a release of
Hazardous Materials onto any property owned or occupied by the Company, such
Guarantor or any such Subsidiary or onto any other property other than in
compliance with all applicable federal, state and local laws or regulations; nor
shall the Company, the Guarantors and each such Subsidiary fail to comply in all
material respects with all applicable federal, state and local laws, ordinances,
rules and regulations, whenever and by whomever triggered, nor fail to obtain
and comply in all material respects with, any and all approvals, registrations
or permits required thereunder. The Company and the Guarantors shall execute any
documentation reasonably required by the Lenders in connection with the
representations, warranties and covenants contained in this paragraph and
Exhibit B to this Agreement.
SECTION 5.30. LIMITATIONS ON CONSOLIDATED FOREIGN ASSETS AND
REVENUES. (i) Not have more than fifteen (15%) percent of the consolidated
assets or revenues of the Company and its Consolidated Subsidiaries be located
in, or derived from, locations other than the United States.
(ii) Not have more than ten (10%) percent of the consolidated assets
or revenues of the Company and its Consolidated Subsidiaries be held by, or
produced by, any Foreign Subsidiary.
SECTION 5.31. FINANCIAL REQUIREMENTS. So long as any amount shall
remain outstanding under the Notes:
(A) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Company will
maintain Consolidated Tangible Net Worth ("CTNW") of not less than the amounts
set forth below for the periods set forth below (to be tested quarterly):
PERIOD MINIMUM CTNW
------ ------------
Closing Date to 12/30/04 $80,000,000.00
12/31/04 to 12/30/05 $80,000,000.00 PLUS 50% of the Company's
and for each succeeding period Consolidated Net Income for the fiscal
beginning on each December 31 year during which this Agreement remains
and ending on the next in effect. A net loss for any fiscal year
December 30 shall not reduce the minimum CTNW for such
year and any subsequent year.
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(B) CONSOLIDATED FIXED CHARGE RATIO. The Company will maintain at all times a
Consolidated Fixed Charge Ratio of not less than 1.25 to 1.00.
(C) FUNDED DEBT TO EBITDA RATIO. The Company will maintain at
all times a Funded Debt to EBITDA Ratio of not greater than 2.75 to 1.00 (to be
tested quarterly on a rolling four quarter basis).
SECTION 6. DEFINITIONS. The following defined terms have the
indicated meanings in this Agreement, unless the context otherwise requires:
"AFFILIATE" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
twenty (20%) percent or more of any class of voting stock of, or twenty (20%)
percent or more of the equity interest in, such Person; or (iii) a Person twenty
(20%) percent or more of the voting stock of which, or twenty (20%) percent or
more of the equity interest of which, is directly or indirectly beneficially
owned or held by such Person, provided, however, that with respect to the
Company or any Guarantor, no natural Person, and no trust, estate or other
entity which may hold assets of such natural Person for estate planning purposes
or upon such natural Person's death, shall be deemed an Affiliate of the Company
or a Guarantor. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.
"AGREEMENT" means this Amended and Restated Loan Agreement, as
amended, supplemented or modified from time to time.
"BANK CREDIT AGREEMENT" means that certain loan agreement dated as of
April 13, 2004 among the Company, DPI, Parfums, Royce, Broad, JPMorgan Chase
Bank, as Agent and as a lender, HSBC Bank USA as a lender and Branch Banking &
Trust Co., as a lender, as such agreement may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"BANK LENDERS" means the lenders from time to time party to the Bank
Credit Agreement.
"BROAD" means 565 Broad Hollow Realty Corp., a New York corporation.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City.
"CAPITAL EXPENDITURES" means as to any Person, the aggregate amount
of any expenditures (including purchase money debt and purchase money liens) by
such Person for assets (including fixed assets acquired under Capital Leases)
which it is contemplated will be used or usable in fiscal years subsequent to
the year of acquisition and that are required to be capitalized in accordance
with GAAP.
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"CAPITAL LEASE" means a lease which has been, or should be, in
accordance with GAAP, capitalized on the books of the lessee.
"CHANGE OF CONTROL" means the acquisition by any Person, other than a
member of the present management of the Company, and the Affiliates of such
Person of the right to vote, in the aggregate, more than 50% of the Company's
common stock or to elect more than 50% of the Board.
"CLOSING DATE" means the Restatement Effective Date (as defined in
Section C-3 on Exhibit C).
"COMPANY" means the corporation that originally executed this
Agreement as Company and any successor or transferee corporation.
"COMPETITOR" means any Person which is principally engaged in the
business of manufacturing cosmetics or pharmaceuticals and whose business
substantially competes with the business of the Company.
"CONSOLIDATED EBITDA" means, as to any Person, for any period, the
EBITDA of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE RATIO" means, as to the Company and its
Consolidated Subsidiaries, the ratio of (i) the sum of net income PLUS gross
interest expense PLUS income tax expense for the period PLUS depreciation PLUS
amortization to (ii) Consolidated Unfunded Capital Expenditures made during the
period PLUS dividends paid in cash PLUS open market stock repurchases (not
including non-cash accounting for stock options) PLUS the current portion of
Consolidated Funded Debt PLUS gross interest expense plus income tax expense.
The Consolidated Fixed Charge Coverage Ratio shall be measured for the four (4)
fiscal quarters then ended, except for the current portion of Consolidated
Funded Debt, which shall be measured for the next succeeding four (4) fiscal
quarters.
"CONSOLIDATED FUNDED DEBT" means, as to any Person, at any date, any
Funded Debt of such Person and its Consolidated Subsidiaries.
"CONSOLIDATED NET INCOME" means, with respect to the Company and its
Consolidated Subsidiaries, net income for a fiscal period, computed and
consolidated in accordance with GAAP.
"CONSOLIDATED SUBSIDIARIES" means, as to any Person, those
Subsidiaries of such Person which are consolidated with such Person in the
financial statements delivered pursuant to Section 5.2.
"CONSOLIDATED TANGIBLE NET WORTH" means, as to any Person, the excess
of (i) such Person's Consolidated Total Assets, less all intangible assets
properly classified as such in accordance with GAAP, including, but without
limitation, patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, permits and goodwill, over (ii) such Person's Consolidated
Total Liabilities.
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"CONSOLIDATED TOTAL ASSETS" means, as to any Person, at any date, the
aggregate net book value of the assets of such Person and its Consolidated
Subsidiaries at such date, after all appropriate adjustments in accordance with
GAAP (including without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization and excluding the amount of any
write-up or revaluation of any asset, other than those permitted under standard
cost accounting procedures), computed and consolidated in accordance with GAAP.
"CONSOLIDATED TOTAL LIABILITIES" means, as to any Person, at any
date, all of the liabilities of such Person and its Consolidated Subsidiaries at
such date, including all items which, in accordance with GAAP would be included
on the liability side of the balance sheet (other than capital stock, treasury
stock, capital surplus and retained earnings) computed and consolidated in
accordance with GAAP.
"CONSOLIDATED UNFUNDED CAPITAL EXPENDITURES" means, as to any Person,
the aggregate amount of the Unfunded Capital Expenditures by such Person and its
Consolidated Subsidiaries, computed and consolidated in accordance with GAAP.
"DPI" means Del Pharmaceuticals, Inc., a Delaware corporation.
"DEBT" means, as to any Person, all (i) indebtedness or liability of
such Person for borrowed money; (ii) indebtedness of such Person for the
deferred purchase price of property or services (including trade obligations);
(iii) obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) reimbursement obligations of such Person under letters of credit
issued for the account of such Person; (vi) reimbursement obligations of such
Person arising under acceptance facilities; (vii) guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any other Person, or otherwise to assure a creditor
against loss; (viii) obligations secured by any Lien on property owned by such
Person whether or not the obligations have been assumed; (ix) liabilities of
such Person under any preferred stock or other preferred equity instrument
which, at the option of the holder or upon the occurrence of one or more events,
is redeemable by such holder, or which, at the option of such holder is
convertible into Debt; and (x) all other liabilities recorded as such, or which
should be recorded as such, on such Person's financial statements in accordance
with GAAP.
"DEFAULT" means any of the events specified in Section 7 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.
"DOLLARS" AND THE SIGN "$" mean lawful money of the United States of
America.
"EBITDA" means, as to any Person, for any period, the sum of (i) net
income PLUS (ii) gross interest expense PLUS (iii) income tax expense PLUS (iv)
depreciation expenses PLUS (v) amortization of intangible assets.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which together with any other Person would be treated, with such
Person, as a single employer under Section 4001 of ERISA.
"EVENT OF DEFAULT" means any of the events specified in Section 7 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"EXISTING LOAN AGREEMENT" shall have the meaning assigned thereto in
the introductory paragraphs of this Agreement.
"EXISTING NOTES" shall have the meaning assigned thereto in the
introductory paragraphs of this Agreement.
"FOREIGN SUBSIDIARIES" means, with respect to the Company, those
Subsidiaries of the Company which are incorporated, formed or organized outside
of the United States.
"FUNDED DEBT" means (i) indebtedness or liability for borrowed money
having an original maturity of one year or more or which is extendable at option
of the Company for more than one year, including all of the outstanding Loans as
defined in and incurred under the Bank Credit Agreement; (ii) indebtedness or
liability for borrowed money permitted hereunder; (iii) the deferred purchase
price of property (excluding trade obligations); (iv) obligations as a lessee
under Capital Leases; (v) obligations to reimburse a letter of credit issuer for
draws; (vi) obligations under bankers acceptances; and (vii) all liabilities
under any preferred stock, which, at the option of the holder or upon occurrence
of certain events is redeemable by such holder or is convertible into debt.
"FUNDED DEBT TO EBITDA RATIO" means, as to the Company and its
Consolidated Subsidiaries for any period, the ratio of (i) Consolidated Funded
Debt (as of the last day of such period) to (ii) Consolidated EBITDA for such
period. The Funded Debt to EBITDA Ratio shall be measured for a period covering
the four (4) fiscal quarters then ended.
"GAAP" means Generally Accepted Accounting Principles.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means those generally
accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
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as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between the Company and the Required Lenders relating to
the determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes hereof by
the written opinion with respect thereto, delivered to the Lenders, of the
independent accountants selected by the Company and reasonably satisfactory to
the Required Lenders for the purpose of auditing the periodic financial
statements of the Company.
"GUARANTEEING FOREIGN SUBSIDIARIES" means those Foreign Subsidiaries
of the Company required to become a Guarantor pursuant to Section 5.12 of this
Agreement.
"GUARANTOR" OR GUARANTORS" means DPI, Parfums, Royce, and Broad, and
any other Person required to guarantee the obligations of the Company in
accordance with Section 5.12 of this Agreement.
"GUARANTY" OR "GUARANTIES" means the Joint Guaranty dated as of the
Restatement Effective Date in favor of the Lender made by DPI, Parfums, Royce,
and Broad, as such Joint Guaranty may be amended to include or be affirmed by
additional Guarantors, and any and all other guaranties executed and delivered
by one or more Guarantors pursuant to Exhibit C or Section 5.12 of this
Agreement.
"HAZARDOUS MATERIALS" means any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances,
or related materials regulated pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901 et. seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule or regulation related to the pollution or
protection of the environment.
"INTERCOMPANY DEBT" means Debt owing by the Company to any Guarantor
or from any Guarantor to the Company or from any Guarantor to any other
Guarantor.
"INVESTMENT" means any stock, evidence of Debt or other security of
any Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business) and any purchase of
(i) any security of another Person or (ii) any business or undertaking of any
Person or any commitment or option to make any such purchase, or any other
investment.
"LENDER OR LENDERS" shall have the meaning assigned thereto in the
introductory paragraphs hereof.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
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arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranties and
any other document executed or delivered pursuant to this Agreement.
"MATERIAL ADVERSE CHANGE" means, as to the Company alone, DPI alone,
any other Guarantor which has revenues or assets representing more than ten
(10%) percent of the Company's consolidated revenues or assets (a "Material
Guarantor") or the Company and its Consolidated Subsidiaries taken as a whole,
(i) a material adverse change in the financial condition, business, operations,
properties, prospects or results of operations of the Company alone, DPI alone,
a Material Guarantor alone, or the Company and its Consolidated Subsidiaries
taken as a whole (provided that the elimination of the inter-company payable
between the Company and DPI shall not, by virtue of such elimination alone, be
deemed a Material Adverse Change in either the Company or DPI) or (ii) any event
or occurrence which could have a material adverse effect on the ability of the
Company alone, DPI alone, a Material Guarantor alone, or the Company and its
Consolidated Subsidiaries taken as a whole to perform its or their obligations
under the Loan Documents.
"MULTIEMPLOYER PLAN" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Company or any ERISA Affiliate.
"NOTES" shall have the meaning assigned thereto in Section 2 of this
Agreement.
"OFFICER'S CERTIFICATE" means a certificate signed by the chief
executive officer or the chief financial officer of the Company, provided that
the Officer's Certificates delivered pursuant to Exhibit C must be signed by the
chief executive officer.
"OVER-LEVERAGE CERTIFICATION DATE" shall have the meaning assigned
thereto in Section 5.25 of this Agreement.
"OVER-LEVERAGE FEE" shall have the meaning assigned thereto in
Section 5.25 of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PARFUMS" means Parfums Schiaparelli, Inc., a New York corporation.
"PERMITTED ACQUISITION" means an acquisition or acquisitions by the
Company or any Subsidiary of the Company by merger, consolidation or purchase of
a voting majority of the stock of another Person or the purchase of all or
substantially all of the assets of another Person (or of a division or other
operating component of another Person) (an "Acquisition") if all of the
following conditions are met:
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(i) such Acquisition is identified as a "Permitted Acquisition" by
the Company in writing to the Lenders;
(ii) the Person to be acquired is domiciled in, has the majority of
its assets located in, and generates the majority of its revenues from sources
within, the United States;
(iii) the majority of such Person's revenue is derived from a line or
lines of business similar to the line or lines of business engaged in by the
Company as of the date hereof;
(iv) the Lenders shall have received, at least ten (10) Business Days
prior to the closing of such Acquisition, a certificate signed by the president
or the chief financial officer of the Company to the effect that (and including
calculations indicating that) on a pro forma basis after giving effect to such
Acquisition: (a) all representations and warranties contained in the Loan
Documents will remain true and correct in all material respects, (b) the Company
will remain in compliance with all covenants contained in the Loan Documents,
and (c) no Default or Event of Default has occurred and is continuing or will
occur as a result of the consummation of such Acquisition;
(v) the Lenders shall have received, at least ten (10) Business Days
prior to the closing of such Acquisition, (i) at least two (2) years of
historical financial statements of such Person, and (ii) a set of projections
(prepared on a consolidated and consolidating basis), setting forth in
reasonable detail the pro forma effect of such Acquisition and showing
compliance by the Company with all financial covenants set forth in this
Agreement for the remainder of the term of the Agreement. The projections to be
delivered hereunder shall include and specify the assumptions used to prepare
such projections; and
(vi) the aggregate consideration paid in connection with the
Acquisition(s) whether in cash, stock or otherwise does not exceed
$25,000,000.00.
"PERMITTED EQUIPMENT SALES" means sales by the Company or its
Consolidated Subsidiaries of equipment in an aggregate principal amount not
exceeding $500,000.00 during any fiscal year.
"PERMITTED INVESTMENTS" means, (i) direct obligations of the United
States of America or any governmental agency thereof, or obligations guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; (ii) time certificates of deposit
having a maturity of one year or less issued by any commercial bank organized
and existing under the laws of the United States or any state thereof and having
aggregate capital and surplus in excess of $500,000,000.00; (iii) money market
mutual funds having assets in excess of $2,500,000,000; (iv) commercial paper
rated not less than P-1 or A-1 or their equivalent by Moody's Investor Services,
Inc. or Standard & Poor's Corporation, respectively; (v) tax exempt securities
rated not less than Prime 2 or its equivalent by Moody's Investor Services, Inc.
or not less than A-1 or its equivalent by Standard & Poor's Corporation; (vi)
loans or advances between the Company and a Guarantor or between Guarantors;
(vii) deposits whether in Dollars or eurodollars, commercial paper, cash reserve
deposits, repurchase agreements or any similar short term investments made
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available by any Lender or any Affiliate of any Lender; (viii) investments in,
or loans or advances to, wholly owned domestic Subsidiaries, provided that any
such investment, loan or advance made after the date of this Agreement shall be
made only in a domestic Subsidiary which is a Guarantor; (ix) investments in, or
loans or advances to, Foreign Subsidiaries, provided any such single investment
(valued at cost), loan or advance shall not exceed $10,000,000.00 and all such
investments (valued at cost), loans and advances shall not exceed
$12,500,000.00; (x) loans or advances to employees of the Company or a Guarantor
which do not exceed $2,000,000.00 in the aggregate at any time; (xi) bonds
issued by the State of Israel in an aggregate amount not exceeding $250,000.00
(valued at cost) at any time; and (xii) Permitted Acquisitions.
"PERMITTED REAL ESTATE SALE" means the sale by the each of the
Company and Broad of (i) its real property and the improvements thereon located
at 565 Broad Hollow Road, Farmingdale, New York or (ii) the sale by the Company
of its real property and the improvements thereon located at 682 South 17th
Street, Newark, New Jersey provided that, in the case of either of such
properties, such sale shall (x) be for cash and (y) be in an arms length
transaction with a Person who or which is not an Affiliate of the Company.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or a federal, state or
local government, or a political subdivision thereof or any agency of such
government or subdivision.
"PLAN" means any employee benefit plan established or maintained by
the Company or any ERISA Affiliate.
"PROHIBITED TRANSACTION" means any non-exempt transaction set forth
in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time.
"REGULATION T" means Regulation T of the Board of Governors, as the
same may be amended and in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors, as the
same may be amended and in effect from time to time.
"REGULATION X" means Regulation X of the Board of Governors, as the
same may be amended and in effect from time to time.
"REPORTABLE EVENT" means any of the events set forth in Section 4043
of ERISA, other than an event for which the reporting requirements have been
waived.
"REQUIRED LENDERS" means Lenders holding at least 51% of the
aggregate unpaid principal amount of all Notes at the time outstanding. For the
purpose of determining whether the holders of outstanding Notes of the requisite
unpaid principal amount at any time have taken any action authorized by this
Agreement, any Notes owned by the Company or any Affiliate of the Company shall
not be deemed outstanding.
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"ROYCE" means Royce & Rader, Inc., a Delaware corporation.
"SEC" means the Securities and Exchange Commission or any
governmental body succeeding to such of its authority as may from time to time
be relevant to this Agreement and the transactions contemplated hereby.
"SUBORDINATED DEBT" means Debt of any Person, the repayment of which
the obligee has agreed in writing, on terms which have been approved by the
Required Lenders in advance in writing, shall be subordinate and junior to the
rights of the Lenders with respect to Debt owing from such Person to the
Lenders.
"SUBSIDIARY" means, as to any Person, any corporation, partnership,
limited liability company or joint venture whether now existing or hereafter
organized or acquired (i) in the case of a corporation, of which a majority of
the securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or more
Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company or joint venture or similar entity, of which a majority of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more Subsidiaries of such Person.
"TREASURY YIELD" means, with respect to any Note to be prepaid
pursuant to Section 4.2, 4.3 or 4.4, or which shall have been declared to be or
become immediately due and payable pursuant to Section 7.1, the yield to
maturity reported (for the latest day for which such yields shall have been so
reported as of 10:00 a.m. (New York City time) on the business day next
preceding the scheduled date of prepayment or the date of acceleration of such
Note (such scheduled date or date of acceleration being called the "Settlement
Date")) by Telerate Systems (or any successor or comparable service selected by
the holders of the Notes which are being prepaid or which have been accelerated,
if such report by Telerate Systems is unavailable) for actively traded U.S.
Treasury securities having a maturity closest to the remaining weighted average
life to final maturity (calculated in accordance with accepted financial
practice) as of such Settlement Date (A) of such Note, in the case of a
prepayment in full or acceleration of such Note, or (B) of the principal of such
Note that is to be prepaid (any partial prepayment being deemed applied in
satisfaction of required payments and prepayments of principal in inverse
chronological order of their due dates), in the case of a partial prepayment
pursuant to Section 4.2.
"UNFUNDED CAPITAL EXPENDITURES" means Capital Expenditures financed
other than by the incurrence of Debt, provided, however that any Capital
Expenditures financed by Revolving Credit Loans (as defined in the Bank Credit
Agreement) shall be considered Unfunded Capital Expenditures.
SECTION 6.1. ACCOUNTING TERMS. Except as otherwise herein
specifically provided, each accounting term used herein shall have the meaning
given to it under GAAP.
SECTION 7. REMEDIES.
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SECTION 7.1. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("Events of Default") shall occur and be continuing for any reason
whatsoever (and whether it shall be voluntary or involuntary or occur or be
effected by operation of law or otherwise):
(A) the Company defaults in the payment or prepayment when due
of any principal of, or prepayment charge on, any Note,
(B) the Company defaults for at least five Business Days in
the payment when due of any interest on any Note,
(C) the Company defaults in the observance of any agreement
contained in Sections 5.15, 5.16, 5.17, 5.18, 5.22, 5.25,
5.27, 5.30, and 5.31,
(D) the Company defaults in the observance of any other
agreement or covenant in this Agreement and shall not have
remedied the default within 30 days after written demand to
remedy the same has been given to the Company by the holder of
any Note,
(E) the Company, any Guarantor or any Subsidiary shall not pay
(or otherwise satisfy on terms consistent with the terms of
this Agreement) any other Debt in an aggregated principal
amount exceeding $500,000 when due, or any condition shall
exist permitting other Debt of the Company, any Guarantor or
any Subsidiary in an aggregate principal amount exceeding
$500,000 to become or be declared due prior to its stated
maturity, except, however, a condition in respect of a
Guarantee of the Company, any Guarantor or any Subsidiary if
the Company, such Guarantor or such Subsidiary shall duly
perform its obligations under such Guarantee,
(F) the Company, any Guarantor or any Subsidiary shall (1) be
generally not paying its debts as they become due, (2) file,
or consent by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any
jurisdiction, (3) make any assignment for the benefit of its
creditors, (4) consent to the appointment of a custodian,
receiver, trustee or other officer with similar powers of
itself or of any substantial part of its property, (5) be
adjudicated insolvent or be liquidated, or (6) take corporate
action for the purpose of any of the foregoing,
(G) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent
by the Company, any Guarantor or any Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property, or if an order for relief shall be entered in any
case or proceeding for liquidation or reorganization or
otherwise, to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, any Guarantor or any
Subsidiary, or if any petition for any such relief shall be
filed against the Company, any Guarantor or any Subsidiary and
such petition shall not be dismissed within 60 days,
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(H) final judgment shall be rendered against the Company, any
Guarantor or any Subsidiary for the payment of money in excess
of $500,000, and such judgment shall not be discharged or
execution thereon stayed pending appeal, within 30 days after
entry thereof, or, in the event of such a stay, such judgment
shall not be discharged within 30 days after such stay
expires,
(I) any material representation or warranty heretofore or
hereafter made by or on behalf of the Company herein or in any
certificate or other writing delivered under or pursuant to
this Agreement or in connection with any provision hereof or
related to the transactions contemplated hereby shall prove to
have been false or incorrect or breached in any material
respect on the date as of which made, or
(J) any Guaranty shall cease, other than in accordance with
its terms, to be in full force and effect or shall be declared
by a court or governmental authority of competent jurisdiction
to be void, voidable or unenforceable against any Guarantor,
or any Guarantor or the Company asserts any of the foregoing
in writing or before any court or governmental authority,
then (i) upon the occurrence of any Event of Default described in subsection (F)
or (G) with respect to the Company (other than such an Event of Default
described in subsection (F)(1) or described in subsection (F)(6) by virtue of
the reference in such clause (6) to such clause (1)), the unpaid principal
amount of the Notes, together with the accrued interest thereon and, to the
extent permitted by law, an amount equal to 50% of the prepayment charge that
would be payable if the Company were prepaying the Notes at the time pursuant to
Section 4.2, shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by the Company, or (ii) upon occurrence of any other
Event of Default, the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) may, by written notice to the Company, declare all of
the Notes to be, and the same shall forthwith become due and payable, together
with accrued interest thereon which shall be deemed matured and, to the extent
permitted by law, an amount equal to 50% of the prepayment charge that would be
payable if the Company were prepaying the Notes at the time pursuant to Section
4.2, provided that, during the existence of an Event of Default described in
Subsection (A) or (B) with respect to any Note, the holder of such Note may, by
written notice to the Company, declare such Note to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charges that would be payable if the Company were
prepaying such Note at the time pursuant to Section 4.2. If any holder of any
Note shall exercise the option specified in the proviso to the preceding
sentence, each other holder of any Note may, by written notice to the Company,
declare the principal of all Notes held by it to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charge that would be payable if the Company were prepaying
the Notes at the time pursuant to Section 4.2. Nevertheless, if at any time
after acceleration of the maturity of any Note or Notes, the Company shall pay
all arrears of interest and all payments on account of the principal and
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prepayment charge which shall have become due otherwise than by acceleration
(with interest on principal and prepayment charge and, to the extent permitted
by law, on overdue interest, at the rate specified in the Notes) and all Events
of Default (other than non-payment of principal of and accrued interest on the
Notes, an amount equal to prepayment charges as aforesaid, due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 9, then the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) by written notice to the Company, may rescind and annul
the acceleration and its consequences; but such action shall not affect any
subsequent Default or Event of Default or impair any right consequent thereon.
SECTION 7.2. OTHER REMEDIES. If any Default or Event of Default shall
have occurred and be continuing, the holder of any Note may proceed to protect
and enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific
performance of any agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy is intended to be
exclusive and each remedy shall be cumulative.
If the Company shall default in the payment of principal of, or
interest or prepayment charge on, any Note, or shall default in the performance
or observance of any agreement contained in this Agreement, it will pay to the
holder of any Note such amounts, to the extent lawful, as shall be sufficient to
pay the costs and expenses of collection or of otherwise enforcing any of such
holder's rights, including reasonable counsel fees.
SECTION 7.3. NOTICE OF ACCELERATION. If the maturity of any Note
shall be accelerated as provided in Section 7.1, the Company will give written
notice thereof to the holders of all outstanding Notes within one business day.
SECTION 8. COMMUNICATIONS; PAYMENT OF NOTES. All communications
provided for hereunder shall (except as otherwise provided by Section 4.3 and
4.4) be delivered, or mailed (by first-class mail, postage prepaid), addressed
(A) if to the Lender, at the Lender's address for the purpose thereof provided
in Schedule I, (B) if to any other Person who is the holder of a Note, at the
address of such Person for the purpose thereof as it appears on the register of
the Company maintained under Section 10, (C) if to the Company or any Guarantor,
c/o Del Laboratories, Inc., at 565 Broad Hollow Road, Farmingdale, NY 11735,
Attention: Chief Financial Officer, with a copy to Del Laboratories, Inc. at 178
EAB Plaza, 8th Floor, Uniondale, NY 11556, Attention: General Counsel. Any
address may be changed from time to time and shall be the most recent address
furnished in writing (1) if by any Lender or any other holder of a Note, to the
Company, or (2) if by the Company, to each Lender and to each holder of a Note.
Any communication shall be deemed to have been given when delivered or mailed,
as the case may be.
The Company agrees that, so long as any Lender or its nominee holds
any Note and notwithstanding any provision hereof or of the Notes to the
contrary, it will pay all sums becoming due thereon for principal, prepayment
charge and interest to such Lender in the manner provided for the Lender in
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Schedule I or in such other manner as such Lender may designate to the Company
in writing, without presentation of the Notes. Each Lender agrees that if it
sells or transfers any Note held by it, (i) such sale shall be made in
compliance with all applicable Federal and state securities laws, (ii) prior to
such disposition it will make a notation thereon of all principal payments
previously made, and (iii) it will not sell or transfer a Note to any
Competitor. The Company agrees that the provisions of this paragraph shall inure
to the benefit of any other institutional holder of any such Note which shall
have agreed to comply with the requirements of this paragraph.
SECTION 9. FIRST OFFER UPON TRANSFER OF NOTES. In the event that any
holder of a Note (a "Proposed Transferor") should wish to transfer its Note, or
any portion thereof, to another Person in a transaction which would result in
there being more than four holders of the Notes, the Proposed Transferor shall,
before making such transfer, deliver to the Company an offer (the "Offer") to
sell to the Company the Proposed Transferor's Note, or such portion of the Note
as the Proposed Transferor wishes to transfer. The Offer shall state the
purchase price upon which the Proposed Transferor will sell the Note, or portion
thereof, to the Company and shall remain open and irrevocable for a period of 30
days from the date of its delivery (the "Offer Period"). The Company may accept
the Offer by delivering to the Proposed Transferor within the Offer Period a
written notice of acceptance together with the purchase price specified in the
Offer in immediately available funds. In the event that the Company does not
accept the offer within the Offer Period, the Proposed Transferor shall be free
to sell or transfer its Note, or the portion thereof specified in the Offer, to
any Person for a purchase price not less than nine-five percent (95%) of the
purchase price specified in the Offer for a period of 90 days following the
expiration of the Offer Period subject to the restrictions contained in Section
8 hereof. Any portion of the Note not sold or transferred by the Proposed
Transferor during the 90 day period shall, at the expiration thereof, become
subject again to the transfer restrictions specified in this Section.
Any Note, or portion thereof, acquired by the Company pursuant to
this Section shall be immediately canceled. Neither the Company nor any of its
affiliates shall ever be deemed to be a holder of any Notes and no Notes
acquired or held by the Company or its affiliates shall be considered in
calculating the ownership of the Notes.
SECTION 10. AMENDMENT AND WAIVER. Except as otherwise expressly
provided herein, any provision of this Agreement or of the Notes may be amended
or waived if the Company shall obtain the written agreement thereto of the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes at the time outstanding, except that, without the written agreement of the
holder or holders of all the Notes at the time outstanding, no such amendment or
waiver shall extend the maturity of any Note or reduce the principal of, or the
rate of interest or any prepayment charge payable with respect to, any Note, or
affect the time or amount of any required prepayment or interest payment or
reduce the percentage of the unpaid principal amount of the Notes required with
respect to any amendment or waiver. Each holder of the Notes at the time or
thereafter outstanding shall be bound by any such amendment or waiver, whether
or not a notation thereof shall have been placed on the Note.
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No course of dealing between the Company and any Lender or the holder
of any Note, and no delay in exercising any rights hereunder or under any Note,
shall imply or otherwise operate as a waiver of any rights of any Lender or the
holder of any Note.
SECTION 11. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Company
will keep at its principal office a register in which it will provide for the
registration and registration of transfer of Notes, at its own expense
(excluding transfer taxes). If any Note is surrendered at said office or at the
place of payment named in the Note for registration of transfer or exchange
(accompanied in the case of registration of transfer by a written instrument of
transfer in form satisfactory to the Company duly executed by or on behalf of
the holder), the Company, at its expense, will deliver in exchange one or more
new Notes in any denominations (multiples of $1,000), as requested by the
holder, for the aggregate unpaid principal amount. Any Note or Notes issued in a
transfer or exchange shall carry the same rights to interest (unpaid and to
accrue) carried by the Note or Notes so transferred or exchanged so that there
will not be any loss or gain of interest on the Note or Notes surrendered. Each
holder of a Note shall promptly inform the Company of the transfer or assignment
of such Note, or any portion thereof.
SECTION 12. LOST NOTES. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction of any Note, and (in case of
loss, theft or destruction) of indemnity satisfactory to it (any Lender's or any
other institutional holder's undertaking to be satisfactory indemnity in case of
loss, theft or destruction of any Note owned by such Lender or by such other
institutional holder), and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will pay any unpaid principal, interest and prepayment
charge then or theretofore due and payable on such Note and will deliver in lieu
of such Note a new Note for the remaining unpaid principal amount thereof and
carrying the same rights to interest (unpaid and to accrue).
SECTION 13. EXPENSES. The Company agrees, whether or not the
transactions hereby contemplated are consummated, to pay all expenses incident
to the loans and related transactions and also in connection with any future
amendment of, or waiver under or with respect to (whether or not given), this
Agreement or any of the Notes, including in each case, without limitation, any
printing costs, and fees and expenses of Lenders' special counsel and of
Lender's local counsel, if any, for services to the Lenders in connection with
the loans and such other matters, and to reimburse each Lender for any
out-of-pocket disbursements for payment of the expenses mentioned.
The Company will also pay all taxes (including interest and
penalties) which may be payable in respect of the execution and delivery of this
Agreement or of any of the Notes (but not their transfer) or of any amendment
of, or waiver under or with respect to, this Agreement or of any of the Notes
and will save each Lender and all subsequent holders of the Notes harmless from
any loss or liability resulting from nonpayment or delay in payment of any such
tax.
The obligations of the Company under this Section shall survive the
payment of the Notes.
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SECTION 14. CONFIDENTIAL INFORMATION. The Company acknowledges that
the holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement to
(i) such holder's directors, officers, employees, agent and
professional consultants (other than a Competitor),
(ii) any other holder of any Note (other than a Competitor),
(iii) any Person (other than a Competitor) to which such
holder offers to sell such Note or any part thereof,
(iv) any Person (other than a Competitor) to which such holder
sells or offers to sell a participation in all or any part of such Note,
(v) any federal or state regulatory authority having
jurisdiction over such holder,
(vi) the National Association of Insurance Commissioners or
any similar organization, or
(vii) any other Person to which such delivery or disclosure
may be necessary or appropriate
(1) in compliance with any law, rule, regulation or order
applicable to such holder,
(2) in response to any subpoena or other legal process,
(3) in connection with any litigation to which such holder is
a party, or
(4) in order to protect such holder's investment in such Note.
; provided that to the extent such information is confidential, non-public
information of the Company, Lenders will instruct such persons to keep such
information as confidential in accordance with this Section 14.
The Lenders agree that any information concerning the Company or any
Subsidiary that has been supplied to them by the Company and conspicuously
identified in writing by the Company as confidential or the Company has
otherwise advised that such information is confidential, and which is not
information available to or obtainable by the public, shall be treated as
confidential by the Lenders in accordance with the procedures and standards that
the Lenders generally apply to information of a confidential nature. Any Lender
who discloses confidential information to any Person described in subsections
(iii), (iv), or (vii) shall promptly advise the Company of such disclosure. In
the event that any Lender receives a request or demand to disclose any
confidential information pursuant to any subpoena or court order, such Lender
agrees to the extent permitted by applicable law or if permitted by applicable
law, statute, rule or regulation to the extent such Lender determines in good
faith that it will not create any risk of liability to such Lender, that such
Lender will use its best efforts to promptly notify the Company of such request
so that the Company may seek a protective order or other appropriate relief or
remedy.
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The Company's sole remedy for any breach by a Lender of its
obligation under this Section shall be limited to obtaining injunctive relief
against further disclosures of confidential information. The Company may not
raise any Lender's breach of its obligations under this Section as a defense,
counterclaim or basis for setoff in any action brought against the Company to
enforce a holder's rights under its Note or under this Agreement.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by, the Company and each
Lender, and their respective successors and assigns, whether or not so
expressed; provided, however, that the benefits of Sections 8 (the second
paragraph thereof), 12 (as to satisfactory indemnity) and 13 shall be limited as
specifically provided therein, except that any other institutional investor
which is a holder of any of the Notes shall be entitled to the rights and
benefits thereunder as if it were a Lender.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company in connection with the transactions contemplated
hereby shall survive the execution and delivery of this Agreement and of the
Notes, regardless of any investigation at any time made by any Lender or on its
behalf. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company hereunder or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
of the Company hereunder.
SECTION 17. GOVERNING LAW; WAIVER OF JURY TRIAL. The Note, this
Agreement and (unless otherwise provided) all amendments, supplements, waivers
and consents relating thereto or hereto shall be governed by the laws of the
State of New York (without regard to the conflict of law provisions thereof).
THE COMPANY, EACH GUARANTOR, AND THE LENDERS WAIVE ALL RIGHTS TO
TRIAL BY JURY ON ANY CAUSE OF ACTION DIRECTLY OR INDIRECTLY INVOLVING THE TERMS,
COVENANTS OR CONDITIONS OF THIS AGREEMENT OR ANY LOAN DOCUMENT.
SECTION 18. REAFFIRMATION, RESTATEMENT AND WAIVERS. This Agreement constitutes
an amendment and restatement of the Existing Loan Agreement and the
current
outstanding indebtedness evidenced by the Existing Loan Agreement is continuing
indebtedness, and nothing herein shall be deemed to constitute a payment,
settlement or novation of such indebtedness evidenced by the Existing Loan
Agreement except to the extent provided herein, or to release or otherwise
adversely affect any lien, mortgage or security interest securing such
indebtedness or any rights of any Lender against any guarantor, surety or other
party primarily or secondarily liable for such indebtedness.
SECTION 19. [INTENTIONALLY OMITTED].
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<PAGE>
IN WITNESS WHEREOF, the Company, each Guarantor and each Lender have
executed this Agreement as of the day and year first above written.
DEL LABORATORIES, INC.
By /s/ Enzo Vialardi
Its: Executive Vice President and
Chief Financial Officer
DEL PHARMACEUTICALS, INC.
By /s/ Enzo Vialardi
Its: Executive Vice President and
Chief Financial Officer
PARFUMS SCHIAPARELLI, INC.
By /s/ Enzo Vialardi
Its: Executive Vice President and
Chief Financial Officer
ROYCE & RADER, INC.
By /s/ Enzo Vialardi
Its: Executive Vice President and
Chief Financial Officer
565 BROAD HOLLOW REALTY CORP.
By /s/ Enzo Vialardi
Its: Executive Vice President and
Chief Financial Officer
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<PAGE>
JACKSON NATIONAL LIFE INSURANCE COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
By: /s/ Mark L. Staub
Title:Vice President
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<PAGE>
EXHIBIT A
DEL LABORATORIES, INC.
Amended and Restated
5.56% Senior Note Due April 15, 2011
April 13, 2004
No. R- _ New York, New York
PPN 245091 B* 3
DEL LABORATORIES, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to the order of Jackson National Life
Insurance Company or its registered assigns, on or before April 15, 2011, the
principal sum of TWENTY-FOUR MILLION DOLLARS ($24,000,000) (or so much thereof
as shall not have been prepaid) and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid principal hereof from the
date hereof at the rate of 5.56% per annum, semiannually on April 15 and October
15 in each year, commencing with October 15, 2004, until such principal sum
shall have become due and payable (whether at maturity, at a required prepayment
date, or otherwise) and to pay on demand interest at the rate of 7.56% per annum
on any overdue principal and on any overdue prepayment charge and, to the extent
permitted by applicable law, on any overdue interest, from the due date thereof,
until the obligation of the Company with respect to the payment thereof shall be
discharged. Payments of principal, prepayment charges, and interest shall be
made in lawful money of the United States of America upon presentation hereof at
the office of the Company at 178 EAB Plaza, P.O. Box 9357, Uniondale, New York
11553-9357, or at such other place as the holder hereof shall have designated to
the Company in writing.
This Note is one of the Notes of the Company, aggregating $24,000,000
in original authorized principal amount, arising out of the Amended and Restated
Loan Agreement dated as of April 13, 2004 (the "Loan Agreement"), entered into
by the Company with the lenders named therein. This Note amends and restates the
promissory notes having an original aggregate principal amount of $36,000,000
issued under and pursuant to the Amended and Restated Loan Agreement dated March
26, 2002, as amended (the "Existing Notes") and replaces such Existing Notes in
their entirety. The indebtedness evidenced by the Existing Notes is continuing
indebtedness evidenced by this Note, and nothing herein shall be deemed to
constitute a payment, settlement or novation of the indebtedness evidenced by
the Existing Notes. The holder of this Note is entitled to enforce the
provisions of the Loan Agreement and to enjoy the benefits thereof.
The Company is required by such Loan Agreement to prepay this Note on
April 15, 2008 and on each April 15 thereafter to and including April 15, 2010,
as long as this Note is outstanding. The Company may, at its election, prepay
this Note, in whole or in part, and may under certain circumstances be required
to prepay this Note in whole, and the maturity hereof may be accelerated by the
holder of this Note or by holders of a percentage of the Notes outstanding
following an Event of Default, all as provided in such Loan Agreement, to which
reference is made for the terms and conditions of such provisions as to
prepayment and acceleration.
A-1
<PAGE>
Transfer of this Note is registrable on the note register of the
Company upon presentation at the principal office of the Company, accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, or on behalf of, the holder hereof. This Note may also be exchanged
at such offices for one or more Notes in any denominations (multiples of
$1,000), as requested by the holder, of a like aggregate unpaid principal
amount.
The transfer of this Note is subject to certain restrictions set forth
in Sections 8 and 9 of the Loan Agreement.
THE COMPANY HEREBY EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY
JURY IN ANY ACTION ON OR RELATED TO THIS NOTE, THE LIABILITIES HEREUNDER OR THE
ENFORCEMENT OF EITHER OR ALL OF THE SAME.
Prior to due presentment for registration of transfer, the Company and
any agent of the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment of principal
and prepayment charges and interest as herein provided and for all other
purposes.
DEL LABORATORIES, INC.
By:
Its:
A-2
<PAGE>
</TEXT>
</DOCUMENT>