THIS IS A CONFIRMING COPY OF THE CURRENT REPORT ON FORM 8-K OF CONAIR
CORPORATION (FILE NO. 1-8919) FILED IN PAPER FORM ON MARCH 6, 1995.
Page 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: March 6, 1995
FEBRUARY 20, 1995
(Date of earliest event reported)
CONAIR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8919 11-1950030
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
150 MILFORD ROAD, EAST WINDSOR, NEW JERSEY 08520
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (609) 426-1300
N/A
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On February 20, 1995, Conair Corporation (the
"Company") completed the acquisition effective February 18,
1995, of all the issued and outstanding capital stock of
BaByliss S.A., a French company, pursuant to Stock Purchase
Agreements (the "Agreements") with Jean-Pierre Feldblum and
Financiere de l'Europe Occidentale S.A. (the "Selling
Shareholders"). The purchase price pursuant to a price
adjustment provision in the Agreements based upon the 1994
Consolidated Net Income of BaByliss cannot be more than FRF
198 million (approximately 38 million U.S. dollars) nor less
than FRF 178 million (approximately 34 million U.S.
dollars). The amount of the purchase price was determined
in arm's-length negotiations between the Company and the
Selling Shareholders. The Company financed the purchase
price by amending its existing loan agreement with its
banks.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
Exhibits
1. English translation of original French
language Stock Purchase Agreement dated January 22, 1995,
between the Company and Jean-Pierre Feldblum.
2. English translation of original French
language Stock Purchase Agreement dated January 22, 1995,
between the Company and Financiere de l'Europe Occidentale.
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3. English translation from original French
language February 18, 1995 amendment to Stock Purchase
Agreement between the Company and Financiere de l'Europe
Occidentale, dated January 22, 1995.
4. Amended and Restated Credit Agreement by and
among the Company, Continental Conair Ltd., the Company's
wholly-owned Hong Kong subsidiary and the banks' signators
thereto dated October 1, 1994.
5. First Amendment to the Amended and Restated
Credit Agreement dated February 17, 1995.
Signature pursuant to the requirements of the
Securities and Exchange Act of 1934, Conair Corporation has
duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONAIR CORPORATION
BY: /s/ Patrick P. Yannotta
-----------------------------------------
PATRICK P. YANNOTTA, Senior Vice President
DATED: MARCH 6, 1995
TRANSLATED FROM FRENCH
FOR INFORMATION ONLY
22 January 1995
Mr. JEAN-PIERRE FELDBLUM
CONAIR CORPORATION
STOCK PURCHASE AGREEMENT
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
PARIS
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FINAL/22.01.95
c:\AN06\PJ\C009.CON
THIS AGREEMENT is made on 22 January 1995
BETWEEN
(1) MR. JEAN-PIERRE FELDBLUM, residing at 11 bis rue Alb<e'>ric Magnard,
75116, Paris (the VENDOR)
(2) CONAIR, a Delaware corporation whose registered office is at 150
Milford Road, East Winsdor, New Jersey, United States of America,
represented by Mr. Leandro P. Rizzuto, Chairman and President, duly
empowered (the PURCHASER)
WHEREAS
(A) The Vendor holds 9,287 shares, representing 41.66% of the share
capital of Babyliss SA, a SOCI<e'>T<e'> ANONYME with a capital of FRF
2,229,000, whose registered office is at 29, rue de Bagneux, 92120
Montrouge and which is registered at the Company and Commercial Registry
of Nanterre under number B 612 021 923 and which is more particularly
described in Schedule A (the HOLDING COMPANY).
(B) The Holding Company has subsidiaries in England, Belgium, Holland,
Spain and Germany; these subsidiaries are more particularly described in
Schedule A (the SUBSIDIARIES).
(C) The Vendor has agreed to sell to the Purchaser the 9,287 shares
mentioned above for the consideration and upon the terms set out in this
Agreement.
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IT IS AGREED AS FOLLOWS:
DEFINITIONS
1.1 In this Agreement, the following expressions shall have the
following meanings:
ACCOUNTING PRINCIPLES means, in respect of each Company, the accounting
principles generally accepted in the jurisdiction of the relevant
country, as applied on a constant basis by such Company and, as regards
the consolidated accounts of the Holding Company, the accounting
principles generally accepted in France for consolidation purposes, as
applied on a constant basis by such Holding Company;
1993 ACCOUNTS means the balance sheet and the profit and loss account and
schedules of the Companies at 31 December 1993, as appearing in Schedule
E;
BALANCE means the part of the price to be temporarily held in escrow, as
mentioned in article 4.3 (b);
CLAIM means any claim against the Vendor under the Warranties, pursuant
to article 9;
COMPANIES means the Holding Company and the Subsidiaries, and COMPANY
means any one of them;
COMPLETION means completion of the sale and purchase of the Shares under
this Agreement;
COMPLETION DATE means 18 February 1995 or any other date which may be
agreed in writing for Completion;
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1993 CONSOLIDATED ACCOUNTS means the consolidated balance sheet, the
consolidated profit and loss account and schedules of the Holding Company
at 31 December 1993, as appearing in Schedule E;
DEPOSIT has the meaning given to it in article 2.4;
ESCROW means Lazards Fr<e`>res et Cie, 121 boulevard Haussmann, Paris;
ESCROW AGREEMENT means the agreement made this day between the Escrow,
the Purchaser and the Vendor, as mentioned in articles 2.4 and 3.4;
HOLDING COMPANY means Babyliss SA, as more particularly described in
Schedule A, Part I;
INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks,
trade names and signs, design rights, copyrights (including rights in
computer software), rights in know-how and other intellectual property
rights, in each case whether registered or unregistered, and including
applications for the grant of any of such rights, and all rights or forms
of protection having equivalent or similar effect anywhere in the world;
PROPERTY means the real property of the Holding Company held under a
CR<e'>DIT-BAIL (finance lease), particulars of which are set forth in
Appendix 12 (of Schedule C);
PURCHASE PRICE means the price payable by the Purchaser to the Vendor
under article 2.2, subject to possible adjustment under article 3;
REFERENCE CONSOLIDATED NET INCOME is defined in Schedule B;
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SECURITY INTEREST means any security interest of any nature whatsoever
including any mortgage, lien, pledge, preferential ranking or other
encumbrance burdening the assets of the Companies;
SHARES means all of the 9,287 shares issued by the Holding Company, and
which are held by the Vendor or by the directors of the Holding Company;
SUBSIDIARIES means the companies which are more fully described in
Schedule A, Part II;
VENDOR'S GUARANTEES means the guarantees, assurances, comfort letters or
other commitments made by the Vendor concerning the obligations of the
Companies, as set forth in Schedule D;
WARRANTED SHARES means the Shares as well as the shares in the
Subsidiaries held by the Holding Company, as set forth in Schedule A;
WARRANTIES means the representations and warranties set forth in Schedule C.
1.2 In this Agreement:
(a) the headings are inserted for convenience only and shall not affect
the meaning of this Agreement; and
(b) any reference to a document IN THE AGREED FORM means the version of
the document as agreed between the parties, duly initialed for the
purpose of identification.
SALE AND PURCHASE OF THE SHARES AND PRICE
2.1 On the Completion Date, the Purchaser shall purchase, and the Vendor
shall sell, the Shares free of all security
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interests, options, D<e'>MEMBREMENT (life interest, usufruct, remainder)
or any other third party rights.
2.2 Subject to the price adjustment under article 3 below, the total
price payable by the Purchaser to the Vendor for the Shares shall be the
sum of FRF 74,154,800.
2.3 The Purchaser confirms that it currently has at its disposal the
necessary funds and a firm commitment from a BANQUE DE PREMIER PLAN
(major bank) enabling it to pay in cash on the Completion Date the total
price set out above. The Purchaser has delivered to the Vendor in this
regard an attestation concerning this financing commitment.
2.4 A deposit which is deductible from the Purchase Price shall be
delivered to the Escrow on the date hereof by banker's draft in an amount
of FRF 3,745,190, to be held by the Escrow under the terms of the Escrow
Agreement (the DEPOSIT). On the Completion Date this amount shall be
supplemented by an amount of FRF 3,745,190, which is deductible from the
Purchase Price, to be delivered to the Escrow by the Purchaser by
banker's draft (the SUPPLEMENT). Any amounts finally due by the Vendor
on account of the Warranties shall be deducted from the Deposit and from
the Supplement and repaid by the Escrow to the Purchaser in accordance
with the Escrow Agreement. The Escrow Agreement further provides that
the Deposit and the Supplement (remaining after deduction of any sums
which may be due by the Vendor) shall be released up to fifty percent
(50%) by the Escrow and delivered to the Vendor on 31 December 1995, and
the balance of the Deposit and of the Supplement at 31 December 1996
shall be released by the Escrow and delivered to the Vendor on that date.
It is stipulated that if, for reasons attributable to the Purchaser, the
Completion does not occur on the Completion Date, the Vendor shall
nevertheless be finally entitled to the Deposit as a lump sum indemnity
for immobilization, unless the Purchaser should demonstrate that
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the DIRECTION DU TR<e'>SOR (Treasury Department) notified Purchaser of its
opposition to the present sale and purchase in light of the regulations
relating to foreign investments in France, and notwithstanding the
content of article 5.4 below.
ADJUSTMENT TO THE PURCHASE PRICE
ADJUSTMENT PRINCIPLE
3.1 It is agreed that the Purchase Price shall be adjusted as follows in
function of the Reference Consolidation 1994 Net Income, as this
expression is defined in Schedule B.
AMOUNT OF REFERENCE ADJUSTED PURCHASE PRICE
CONSOLIDATED NET INCOME
(IN FRANCS) (IN FRANCS)
________________________ _______________________
17,100,000 or more 74,154,800
between 17,100,000 and between 74,154,800 and
15,500,000 65,822,800 (prorata)
15,500,000 or less 65,822,800
3.2 In accordance with the above chart, the Purchase Price as adjusted
cannot in any event be less than FRF 65,822,800 nor be greater than FRF
74,154,800.
3.3 The adjustment, if any, shall be deducted from the Balance and
immediately repaid as a price reduction to the Purchaser, in accordance
with the terms of the Escrow Agreement.
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ADJUSTMENT PROCEDURE
3.4 The Vendor shall have the Holding Company establish consolidated
accounts for the financial year ended 31 December 1994. These accounts
shall be established in accordance with the Accounting Principles and
must be unconditionally certified by the statutory auditors of the
Holding Company (hereafter the 1994 CONSOLIDATED ACCOUNTS).
3.5 As soon as the 1994 Consolidated Accounts are available to the
Vendor, he shall deliver them to the Purchaser along with (i) the
certificates of the statutory auditors provided for at article 3.4 above
and (ii) a statement indicating the final amount of the price as
determined under articles 3.1 to 3.2 above. All of the above must be
sent at the latest by 31 March 1995.
3.6 The Purchaser shall have 30 days in which to notify the Vendor of
any modification which must be made to the 1994 Consolidated Accounts or
to the statement mentioned in article 3.5 (ii) above. The absence of any
response from the Purchaser within this time shall be deemed his accord.
3.7 The parties undertake to assure that their respective accountants
cooperate in order to reach an agreement on the 1994 Consolidated
Accounts (as established pursuant to article 3.4 above) and the final
Purchase Price. As from the notice mentioned in article 3.6 above, the
parties undertake to meet as soon as a dispute shall have been identified
in order to reach such agreement.
3.8 If the parties do not reach an agreement within 5 days after having
met pursuant to article 3.7 above, the 1994 Consolidated Accounts shall
be finally prepared by an international auditing firm chosen jointly by
the parties and the conclusions of this firm shall be finally binding on the
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parties. If the parties cannot agree on the appointment of the
auditing firm, one can be designated by the President of the TRIBUNAL DE
COMMERCE (Commercial Court) of Paris deciding upon the petition of the
most diligent party. In any event, the accountant must be designated at
the latest by 31 May 1995, and must have rendered his conclusions at the
latest by 30 June 1995. In his conclusions the accountant must indicate
the final amount of the Purchase Price, determined in accordance with
articles 3.1 and 3.2 above. The expenses and fees incurred in connection
with the appointment and mission of the accountant shall be equally
divided between the Vendor and the Purchaser.
COMPLETION DATE
4.1 The sale and purchase of the Shares shall occur on the Completion
Date, subject to the condition precedent set out in article 5 below which
must be satisfied by that date.
4.2 On the Completion Date, the Vendor shall deliver or cause to be
delivered to the Purchaser:
(a) executed ORDRES DE MOUVEMENT (share transfer forms) into the name of
the Purchaser in respect of the Shares;
(b) the share transfer register and shareholder accounts, all minute
books and other statutory books (which shall be up-to-date except
for the Completion transactions) of the Holding Company;
(c) a letter of resignation in the agreed form executed by the directors
of the Holding Company required to resign by the Purchaser;
(d) minutes of a meeting of the board of directors of the Holding
Company approving the sale and purchase,
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acknowledging the resignation of the relevant directors and
convening a general meeting of the shareholders in order to appoint
new directors.
4.3 The Purchaser shall on the Completion Date:
(a) deliver to the Vendor a banker's draft made payable to the Vendor in
an amount of FRF 59,174,040;
(b) deliver to the Escrow a banker's draft made payable to the Escrow in
an amount representing the balance of the Purchase Price (taking
account of the Deposit and of the Supplement), being FRF 7,490,380,
to be held in Escrow under the terms of the Escrow Agreement (the
BALANCE).
The amounts, if any, which may reduce the Purchase Price under the
adjustment clause provided in article 3 above will be deducted from
the Balance and repaid by the Escrow to the Purchaser in accordance
with the Escrow Agreement, and the remaining amount will be released
concurrently by the Escrow and delivered to the Vendor.
CONDITIONS PRECEDENT
5.1 The sale and purchase of the Shares is subject to the condition
precedent of the receipt by the Purchaser of a letter from the Treasury
Department of the Ministry for the Economy (DIRECTION DU TR<e'>SOR DU
MINIST<e`>RE DE L'ECONOMIE) indicating that the Treasury Department has
no objection concerning the acquisition of the Shares by the Purchaser,
unless the Treasury Department does not reply within one month following
the filing of the prior notification required by the regulations in force
relating to direct foreign investments in France, which lack of reply is
deemed Ministry approval.
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COMIT<e'> D'ENTREPRISE
5.2 The Vendor has assured that the obligation to consult with the
COMIT<e'> D'ENTREPRISE (Staff Representative Committee) of the Holding
Company has been fulfilled.
WAIVER
5.3 The Vendor and the Purchaser may in writing waive the condition
precedent provided for in article 5.1 above.
LAPSE
5.4 If the condition precedent provided for in article 5.1 above is not
satisfied (or has not been waived) by the Completion Date, at the latest,
this Agreement (except for articles 13, 14, 17 and 18) shall
automatically lapse and be of no further effect, and the parties shall
have no indemnity (other than, if applicable, under the above-mentioned
articles).
However, if the condition precedent is not fulfilled by 18 February 1995,
and to the extent that each party has been diligent in order to complete
such condition, the Completion shall be postponed to a later date which
cannot in any event be later than 18 March 1995 (except by agreement of
the parties). If at this date the condition is still not fulfilled in
spite of the efforts of both parties, the Purchaser shall recover the
Deposit.
5.5.5If Completion takes place in accordance with article 4 above, the
parties will be deemed to have waived any condition precedent which is
unsatisfied and which has not been expressly waived.
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VENDOR'S GUARANTEES
6. The Purchaser, in cooperation with the Vendor, shall assure the
release of the Vendor from all of the Vendor's Guarantees upon
Completion. If the case should arise, the Purchaser undertakes to
indemnify the Vendor against all losses, damages or costs (including
legal costs) relating to one of the Vendor's Guarantees arising after
Completion.
VENDOR'S OBLIGATIONS
7.1 As of today and until Completion, the Vendor undertakes:
(a) to manage the Companies en BON P<e`>RE DE FAMILLE (in a responsible
and reasonable manner);
(b) not to act, and to assure that the Companies shall not act, in a
manner which is inconsistent with the provisions of this Agreement
or the completion of the obligations contemplated hereunder;
(c) not to approve or proceed with any dividend distribution by the
Companies;
(d) to assure that no change is made to the STATUTS (by-laws) of the
Companies;
(e) to assure that no increase in the remuneration paid by the Companies
to their employees or directors is approved, except for the annual
salary increase at the Holding Company, which occurs each year in
February, and which shall not exceed 2% of the total payroll;
(f) to assure that no off-balance sheet undertaking is made by the
Companies.
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(g) to assure that the Companies undertake no substantial obligations,
acquire no substantial assets, conclude no subtantial agreements and
make no substantial order of finished products for more than FRF
250,000 without the agreement of the Purchaser.
7.2 The Vendor shall not, for a period of five years after Completion,
carry on any activity or contemplate any business whose activities
compete with the activities engaged in by the Companies on the Completion
Date.
7.3 The Vendor shall not, for a period of two years following the end of
his working at the Holding Company, directly or indirectly hire, entice
away or solicit any person who was employed by the Companies in
managerial or skilled work at any time during the twelve months prior to
the end of his working at the Holding Company.
7.4 Except as may be required by law and in such circumstances only
after prior consultation with the Purchaser, the Vendor shall not as of
today disclose or use to the detriment of the Companies any trade secret
or other confidential information of a technical nature which he holds in
relation to the Companies or their affairs.
7.5 Concerning the balance of the price which might be payable by the
Holding Company for the acquisition by the latter of the Nyhar shares
from Ouborg Beheer BV (being NLG 500,000 maximum), it is expressly agreed
that the Vendor shall be responsible for paying half of said balance (by
paying the assignee, Ouborg Beheer BV or the Holding Company, according
to the instructions to be given to him by the latter). The Vendor
certifies that the Holding Company has effectively paid to Ouborg Beheer
BV an amount of NLG 1,500,000 for this acquisition. In addition, it is
expressly agreed that any Claim of the Purchaser arising
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from this last representation shall not be subject to article 9.1 (b) below.
7.6 As of the date of this Agreement, the Vendor shall give access to
the Purchaser (and its advisors) to all information and documents
concerning the Companies which the latter may wish to consult.
7.7 The Vendor shall make his best efforts to cooperate with the
Companies in order to attenuate the consequences of the non-performance
by the Companies of their obligations arising under certain of their
loans.
REPRESENTATIONS AND WARRANTIES
8.1 The Vendor represents and warrants to the Purchaser in the terms of
the Warranties.
8.2 Subject to article 9, the Vendor undertakes to indemnify the
Purchaser against all losses, damages or costs (including legal costs)
suffered by the Purchaser or the Companies and which result from facts
arising from a breach of the Warranties.
8.3 The Purchaser represents and warrants to the Vendor that it has
obtained all authorizations (administrative, corporate or other) to enter
into and perform this Agreement, except for the conditions precedent
mentioned in article 5.
8.4 The Vendor shall renew all of its Warranties on the day of
Completion.
LIMITATIONS ON REPRESENTATIONS AND WARRANTIES
9.1 The Vendor shall not be held for any Claim except under the
following conditions:
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(a) the Vendor must receive from the Purchaser a written notice
containing details of the Claim, as well as the Purchaser's estimate
of the amount of such Claim (to the extent that such estimation is
possible). Said notification must be made:
(i) at the latest following a period of 30 days after the
expiration of the legal prescription which applies to the
subject matter of the Claim, if it arises from one of the tax
or social security contributions Warranties; and
(ii) at the latest on 31 December 1996, if the Claim relates to any
other Warranty;
(b) the individual amount of each Claim shall be taken into account only
if it exceeds FRF 50,000 and the aggregate amount of the Claims must
exceed FRF 1,500,000 (in which case the Vendor shall only be liable
for the excess).
9.2 The Vendor shall only be liable for up to 41.66% of the amount of
the Claims. In addition, the aggregate amount of the liability of the
Vendor shall not exceed the amount of the Purchase Price.
9.3 Furthermore, the Vendor shall be exempted under the following
conditions:
(a) to the extent that the matter giving rise to such Claim is
specifically disclosed in the Schedules hereto;
(b) to the extent that such matter, specifically disclosed, is provided
or reserved for in the 1993 Accounts or in the 1993 Consolidated
Accounts;
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9.4 If the Purchaser becomes aware after the Completion Date of a claim
or a threat of a claim made by a third party against the Companies
(particularly any NOTIFICATION DE CONTR<o^>LE FISCAL (notice of tax
inspection)), and if such claim or threat of a claim is capable of
entitling the Purchaser to make a Claim against the Vendor (THIRD PARTY
CLAIM):
(a) the Purchaser shall give notice of such Third Party Claim to the
Vendor as soon as possible and in any event within fifteen days of
the date upon which the Companies become aware of it. The Purchaser
shall assure that the Vendor is given access to all reasonable
information and assistance to investigate such Third Party Claim and
a failure by the Purchaser to respect its obligations under this
article 9.4 (a) shall exempt the Vendor from liability in respect of
the Third Party Claim, to the extent that such failure prevents the
Vendor from defending his interests;
(b) neither the Purchaser nor the Companies shall make any admission of
liability, nor execute or accept an agreement or settlement in
respect of a Third Party Claim, without prior consultation with and
prior written consent of the Vendor (which shall not be unreasonably
withheld or delayed);
(c) the Purchaser shall undertake or assure that the Companies engage
all steps or proceedings as the Vendor may consider reasonable and
necessary in order to answer the Third Party Claim or to attenuate
its impact (without prejudice to being indemnified by the Vendor
against all reasonable costs incurred in this connection).
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9.5 Any sum due by the Vendor for a Claim shall be reduced by:
(a) the amount corresponding to any provision or reserve (including a
provision taken into account to calculate the net value of an asset)
appearing in the 1993 Accounts and which would turn out to be
unnecessary or excessive;
(b) any amount recovered with respect to any debt identified as
irrecoverable in the 1993 Accounts; and,
(c) to the extent that any liability is discharged in an amount lower
than the amount appearing in the 1993 Accounts, the amount of the
difference;
provided that no amount shall be taken into account more than once
pursuant to this article 9.5.
In addition, the items mentioned at points (a), (b) and (c) above shall
not be taken into account except to the extent (i) that they are of the
same nature as those which arise from the Claim in question (for example,
if the Claim arises from a provision on inventory, only another provision
on useless inventory may be taken into consideration), and (ii) after
taking account of the percentage of the Purchaser's direct or indirect
holding in the Subsidiary concerned.
9.6 If an adjustment under article 9.5 is recognized after the
indemnification of the Purchaser by the Vendor following one or several
Claims, the Purchaser shall immediately reimburse to the Vendor a sum
equivalent to the amount of the reduction which would have been applied
if this fact had been known at the time of the Claim.
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9.7 The Vendor shall not be liable for any Claim relating to the
taxation of the Companies:
(a) to the extent that a tax surplus was paid by the Companies prior to
the Completion Date, and if such tax surplus is reimbursed to the
Companies after the Date of Completion; or
(b) to the extent that this Claim results from or is aggravated by a
failure of the Companies with respect to the exercise of a claim, a
declaration, an option, an abandonment of action or any other
decision subsequent to the Completion Date and which has been taken
into account for the computation of the provision for taxes in the
1993 Accounts.
9.8 The Vendor shall not be liable in respect of a Claim which would
result from facts (acts or omissions) attributable to the Purchaser or to
the Companies after the Completion Date.
9.9 The Vendor cannot be held in respect of a Claim which would be the
result of a regulation not in force at the Completion Date (including a
change of administrative practice whose application is retroactive, a
change of references, methods of calculation, or the rates of taxation in
effect on the date of this Agreement).
9.10 Nothing in this Agreement shall exempt the Purchaser and the
Companies from doing all that will be necessary in order to attenuate the
consequences of facts which could give rise to a Claim.
9.11 In the event that the Companies or the Purchaser should be entitled
to be reimbursed, by a third party, a sum which, moreover, is subject to
a Claim, the Purchaser shall notify this to the Vendor as quickly as
possible and, if requested by
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the Vendor, the Purchaser will make reasonable efforts to attempt to be
compensated by the third party before turning against the Vendor, and any
subsequent Claim shall be limited to the portion of the damage which exceeds
the amount recuperated from such third party.
9.12 If the Vendor indemnifies the Purchaser and the Purchaser, or the
Companies, subsequently recovers from a third party a sum which pertains
to such Claim (including by way of insurance), the Purchaser shall
immediately reimburse to the Vendor:
(a) an amount equivalent to the sum paid by such third party (less
costs); or
(b) if the amount paid by the third party is greater than the amount
paid by the Vendor in respect of the Claim, the amount that the
Vendor will have paid to the Purchaser.
9.13 The sole remedy of the Purchaser for any breach of any of the
Warranties or any other breach of this Agreement by the Vendor shall be
an action for damages in accordance with this article 9 and the Purchaser
shall not be entitled to terminate this Agreement.
ENTIRE AGREEMENT
10. This Agreement constitutes the entire agreement between the parties
in connection with the sale and purchase of the Shares.
MODIFICATIONS
11. Any modification of this Agreement shall be made by the parties in
writing and signed by the parties.
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ASSIGNMENT
12. Neither party shall be entitled to assign the benefit of any
provision whatsoever of this Agreement without the prior written approval
of the other party. The Purchaser may however assign its rights and
obligations arising under this Agreement to a subsidiary of the Purchaser
or to a bank in guarantee of the financing of this transaction, it
however being understood that the Purchaser shall at all times remain
jointly and severally liable with the assignee in respect of all the
obligations arising under this Agreement.
COSTS
13.1 Each of the parties shall pay its own costs incurred in connection
with the negotiation, preparation and implementation of this Agreement.
13.2 The registration fees in connection with this Agreement shall be
paid by the Purchaser.
INVALIDITY
14. The invalidity or unenforceability of any of the provisions of this
Agreement shall not have any effect on the other provisions herein.
FURTHER ASSURANCE
15. The Vendor undertakes to do whatever is necessary, execute any
document, for the purpose of giving to the Purchaser the full benefit of
all of the provisions of this Agreement.
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NOTICES
16.1 Any notice under this Agreement shall be in writing and signed by,
or on behalf of, the party giving it and shall be delivered by registered
letter with return receipt requested or by personal delivery to the
address and to the attention of the other party, in accordance with
article 17.2 (or to any other address or to the attention of any other
person that should be notified, in appropriate cases, under this
Agreement). A notice shall be deemed to have been received at the time
of signature of the return receipt.
16.2 The addresses of the parties for the purpose of article 16.1 are as
follows:
THE VENDOR: to the address contained in the heading of this
Agreement
THE PURCHASER: Conair Corporation, 1 Cummings Point Road,
Stamford, CT06904
To the attention of: Richard A. Margulies, Vice President
GOVERNING LAW AND ARBITRATION
GOVERNING LAW
17.1 This Agreement is governed by and shall be construed in accordance
with the laws of France.
17.2 With the exception of article 3.8 concerning the Purchase Price
adjustment procedure, all disputes shall be settled under the Rules of
Arbitration of the International Chamber of Commerce in Paris by three
arbitrators appointed in accordance with those rules. The arbitration
shall take place in Geneva and be conducted in the French language. The
decision of the
<PAGE>
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arbitrators shall be final and binding upon the parties
who shall not contest, or appeal, against it. The costs of the
arbitration proceedings shall be borne by the parties in the proportions
determined by the arbitrators.
SCHEDULES
18.1 All documents and information appearing in any one of the schedules
hereto shall be deemed to appear in any other relevant schedule.
18.2 It is agreed that the schedules hereto can be initialed for
identification by Mr. John Kilroy, M. Philippe Jambrun, Ms. Val<e'>rie
Masset-Branche, Ms. Katia Ch<e'>ron on behalf of the Purchaser and by Mr.
Philippe B<e'>rard, Ms. Isabelle MacElhone, Mr. Arnaud P<e'>r<e`>s or Ms.
Sophie Rey on behalf of the Vendor.
Done in Paris, in three original counterparts
On 22 January 1995
_______________________ _______________________
for CONAIR Mr. Jean-Pierre Feldblum
Mr. Leandro P. Rizzuto
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SCHEDULE A
THE HOLDING COMPANY AND THE SUBSIDIARIES
I. DETAILS OF THE HOLDING COMPANY
1. NAME: BABYLISS S.A.
2. DATE OF INCORPORATION: 20 February 1961
3. PLACE OF INCORPORATION: Paris
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
5. REGISTERED NUMBER: B 612 021 923
6. REGISTERED OFFICE: 29 rue de Bagneux,
92120 Montrouge
7. DIRECTORS: Jean-Pierre Feldblum
Josette Perron
Cristal S.A. (represented
by Alfred Robert Simon)
8. CORPORATE CAPITAL: FRF 2,229,000
9. SHAREHOLDERS: Cristal S.A.
Jean-Pierre Feldblum
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: Auditors: Almeras Albert,
Loeper Pierre
Deputies: Cabinet Dauge et
Associ<e'>s
12. TAX RESIDENCE: France
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Page 23
II. DETAILS OF SUBSIDIARIES
1. NAME: SOFAC S.A.
2. DATE OF INCORPORATION: 2 August 1988
3. PLACE OF INCORPORATION: Valenciennes
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
5. REGISTERED NUMBER: B 347 595 480
6. REGISTERED OFFICE: ZI 2 de Valenciennes
A<e'>roport
rue Louis Dacquin
59220 Rouvignies
7. DIRECTORS: Henri Smal
FACO (represented by
Olivier Smal)
Babyliss S.A. (represented
by Josette Perron)
Jean-Pierre Feldblum
8. CORPORATE CAPITAL: FRF 2,000,000
9. SHAREHOLDERS: Babyliss S.A.
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: Auditors: Albert Almeras
Deputies: Yves Laflaqui<e`>re
12. TAX RESIDENCE: France
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1. NAME: BABYLISS ESPANA S.A.
2. DATE OF INCORPORATION: 26 January 1990
3. PLACE OF INCORPORATION: Madrid
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
5. REGISTERED NUMBER: A-7935 2662
6. REGISTERED OFFICE: Calle Argumosano, 24
Madrid
7. DIRECTORS: Carmelo Atienza de la Guerra
Maria de la Cruz Atienza dela Guerra
J.P. Feldblum
Josette Perron
8. CORPORATE CAPITAL: PTS 20,000,000
9. SHAREHOLDERS: Babyliss S.A. (represented
by J.P. Feldblum)
Maria de la Cruz Atienza de
la Guerra
Clemente Atienza Garcia
Carmelo Atienza de la Guerra
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: none
12. TAX RESIDENCE: Spain
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1. NAME: NYHAR B.V.
2. DATE OF INCORPORATION: 17 May 1982
3. PLACE OF INCORPORATION: The Netherlands
4. TYPE OF COMPANY: B.V.
5. REGISTERED NUMBER: 53823 BREDA
6. REGISTERED OFFICE: Baronielaan 1
4818 PA Breda
7. DIRECTORS: A.C. Ouborg
8. CORPORATE CAPITAL: DFL 50,000
9. SHAREHOLDERS: Ouborg Beheer B.V.
Babyliss S.A.
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: M.J. de Geus C.P.A.
Ebben Slaats de Jonge
Heuvel 21
4901 KB Oosterhout
12. TAX RESIDENCE: The Netherlands
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Page 26
1. NAME: FACO S.A.
2. DATE OF INCORPORATION: 6 December 1972
3. PLACE OF INCORPORATION: Li<e`>ge, Belgium
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
5. REGISTERED NUMBER: 116.914 Li<e`>ge
6. REGISTERED OFFICE: 25 avenue de l'Ind<e'>pendance
B-4020 Li<e`>ge-Wandre
7. DIRECTORS: J.P. Feldblum
Olivier Smal
Henri Smal
Josette Perron
8. CORPORATE CAPITAL: FB 25,000,000
9. SHAREHOLDERS: Babyliss S.A.
bearer shares
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: SCC Ernst & Young
(Mr. Kowalski)
91 rue Jean D'Outremeuse
4020 Li<e`>ge
12. TAX RESIDENCE: Belgium
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Page 27
1. NAME: BABYLISS (UK) LIMITED
2. DATE OF INCORPORATION: 17 September 1973
3. PLACE OF INCORPORATION: England
4. TYPE OF COMPANY: Limited Liability Company
5. REGISTERED NUMBER: 1134488
6. REGISTERED OFFICE: Prospect Place
Mill Lane GI34 2QB
7. DIRECTORS: J.A. Broom
J.P. Feldblum
8. COMPANY SECRETARY: Anthony Mann
9. CORPORATE CAPITAL: <pound-sterling> 80,000
10. SHAREHOLDERS: Babyliss S.A.
J.A. Broom
11. END OF FISCAL YEAR: 31 December
12. STATUTORY AUDITORS: Sheen, Stickland
4 High Street
Alton GI34 1BU
13. TAX RESIDENCE: England
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Page 28
1. NAME: BABYLISS DEUTSCHLAND GMBH
2. DATE OF INCORPORATION: 2 March 1988
3. PLACE OF INCORPORATION: Germany
4. TYPE OF COMPANY: GmbH
5. REGISTERED NUMBER: HR B 22808
6. REGISTERED OFFICE: Eichsfelchr. Str. 23
40595 D<u">sseldorf
7. JOINT MANAGERS: Dieter Paul
J.P. Feldblum
8. CORPORATE CAPITAL: DM 600,000
9. PARTNERS: Babyliss S.A.
Dieter Paul
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: Mr. B<u">hler,
SteverBeratungsb<u">ro Helnecke &
B<u">hler GmbH
12. TAX RESIDENCE: Germany
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Page 29
1. NAME: CONTINENTAL PRODUCTS S.A.
2. DATE OF INCORPORATION: 31 May 1991
3. PLACE OF INCORPORATION: Valenciennes, France
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
5. REGISTERED NUMBER: B 382 012 482 (91 B 185)
6. REGISTERED OFFICE: ZI de Prouvy-Rouvignies
Rue Louis Dacquin
59220 Rouvignies
7. DIRECTORS: H. Smal
J.P. Feldblum
Conair Corp. (represented by L.P.
Rizzuto)
R. Margulies
8. SUBSCRIBED CAPITAL: FRF 500,000
9. SHAREHOLDERS: Sofac S.A.
Conair Corp.
R. Margulies
J.P. Feldblum
H. Smal
J. Smal
O. Smal
J. Perron
10. END OF FISCAL YEAR: 31 December
11. STATUTORY AUDITORS: BDA, 185 avenue Charles de Gaulle
92200 Neuilly-sur-Seine
12. TAX RESIDENCE: France
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SCHEDULE B
Reference Consolidated Net Income
The Reference Consolidated Net Income of the Holding Company and its
Subsidiaries for 1994 shall be established by reference to the Accounting
Principles, applied by the Company in a constant manner from one fiscal
year to the other by the Holding Company.
The Reference Consolidated Net Income is composed of:
1. the net income after taking into account financial items,
extraordinary items, tax, the mandatory employee share participation
scheme and minority interests. The list of revenues and non-recurring
costs (whether exceptional or not) is set out in Schedule B1.
Furthermore, for the purposes of the calculation of the Reference
Consolidated Net Income:
2. the provision in the amount of FF. 1,200,000 (before tax effect) set
out in Schedule B1, representing the depreciation of a leasehold interest
shall be taken into account only in the amount of FF. 400,000 (before tax
effect), equalling the amount of provision already made in the 1993
Accounts.
3. The extraordinary profits other than those set out in Schedule B1
shall not be taken into account (nor the corresponding tax charges).
4. A net bonus of FF. 500,000 payable to Madame Perron for 1994
together with the corresponding social charges and tax deductions
relating thereto shall be taken into account.
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Page 31
5. 75% of Nyhar shall be included in the consolidation for the whole
year of 1994.
6. Harny and its scandinavian subsidiaries shall not be included in the
consolidation.
7. Any partial or total amortization of the acquisition differential
(goodwill) of FACO, if any, shall be subject to contra-entry.
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SCHEDULE B1
Reference Consolidated Net Income
NON-RECURRENT COSTS IN 1994
BABYLISS S.A. KFRF
Incentive fees 100
DGCCRF fine 77
Fees computer investment 133
Other commissions paid 500
Sponsoring JL Desforges 50
Transport on purchases 196
Orly-Valenciennes moving 44
Salaries 926
Leasehold interest depreciation 1.200
Harny loss 454
Other extraordinary (net) costs 172
TOTAL 3.852
BABYLISS DEUTSCHLAND GMBH KDEM KFRF
Moving 112 381
TOTAL 112 381
SOFAC S.A. KFRF
Salaries 67
Extraordinary costs 126
TOTAL 193
BABYLISS (U.K.) LTD KGBM KFRF
Dispute 10 83
TOTAL 10 83
FACO S.A. KBEC KFRF
Pension plan 2.073 344
TOTAL 2.073 344
TOTAL COMPANIES 4.853
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SCHEDULE C
The Representations and Warranties
The Warranties contained in this Schedule are subject to the limitations
stated in article 9.
THE COMPANY AND THE WARRANTED SHARES
1.1
(a) All of the Warranted Shares are fully paid and, on the Completion
Date, shall be free from all security interests, options,
D<e'>MEMBREMENT (life interest, usufruct, remainder), claims,
restrictions of any nature whatsoever or any other third party
rights and shall be transferred with all the rights attached thereto
at that date.
No right of pre-emption nor any other right of any nature whatsoever
in connection with the Warranted Shares shall be exercised which
could obstruct Completion. With the exception of the pre-emption
right in the by-laws of the Subsidiaries, there is no pre-emption
right on the Warranted Shares. As from the Completion Date, the
Purchaser shall have the right to exercise or collect any right
attached to the Warranted Shares, including and without limitation,
the right to receive all dividends, all distributions or proceeds
declared, paid or made by the Companies.
(b) The Vendor undertakes that any right of pre-emption in connection
with the Shares shall, if appropriate, be made the subject of an
irrevocable waiver.
(c) The Vendor has the power and legal capacity to sign and perform this
Agreement.
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Page 34
(d) The signature and performance by the Vendor of his obligations
hereunder:
(i) shall not constitute a breach of any clause whatsoever of
the Companies' corporate documents; or
(ii) shall not constitute a breach or default with regard to
any document to which the Vendor or a Company is a party
or by virtue of which the Vendor or the Companies are
bound; or
(iii) shall not constitute a breach of a judicial or
administrative decision or of a rule applicable to the
Companies.
(e) The Vendor shall have on the Completion Date full and entire
ownership of 9,287 shares of the Holding Company.
(f) The Companies were duly constituted and the information in respect
of the Companies set out in Schedule A is true and accurate.
(g) The Companies do not hold any interest in any other businesses than
those appearing in Appendix 1.1 (g) and other than Cook Service and
Quality (30%).
FINANCIAL MATTERS
THE ACCOUNTS
2.1(a) The 1993 Accounts and the 1993 Consolidated Accounts were
established in accordance with the Accounting Principles and they
truly reflect the financial position of the Companies, given that
the Holding Company and its statutory auditors decided not to
amortize the goodwill of Faco in an amount of
<PAGE>
Page 35
FRF 2,587,000. It is however stipulated that if the Purchaser
establishes that this goodwill should have been amortized in order to
comply with the Accounting Principles, he may bring a Claim in
application of Article 8 above. In addition, it is expressly agreed
that any Claim of the Purchaser in this regard shall not be subject
to article 9.1(b) above and therefore if this Claim should prevail,
it shall be indemnified franc for franc.
(b) The 1994 Consolidated Accounts shall be established in accordance
with the Accounting Principles, and shall truly reflect the
financial position of the Companies, while taking account of the
remark mentioned at paragraph 2.1(a) above concerning Faco.
(c) The unaudited interim accounts which were provided to the
Purchaser were established in good faith and the Vendor has no
reason to believe that they were not accurate on the date at which
they were established.
POSITION SINCE 31 DECEMBER 1993
2.2
(a) Since 31 December 1993, and except for Continental Products S.A.,
there has been no material adverse change in the patrimonial,
financial or trading position of the Companies and during this
period the activities of the Companies have been carried on in an
ordinary business manner. Since 31 December 1993, there has been
no material adverse change in the prospects of the Companies, it
being stipulated that the Vendor does not make any Warranty in
this respect for the period as of the date hereof.
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Page 36
(b) Since 31 December 1993, and except as disclosed in Appendix
2.2(b):
(i) no contract, liability or commitment at long term, or of
an unusual nature, has been entered into by the Companies
for an amount in excess of FRF 2,000,000;
(ii) the Companies have not purchased, sold or promised to
purchase or to sell any asset having a value in excess of
FRF 500,000;
(iii) no debtor of the Companies has been released from its debt
against payment of an amount inferior to the book value of
the debt, and no amount receivable by the Companies in
excess of FRF 300,000 has been deferred for payment,
subordinated or been subject to a total or partial
provision;
(iv) the Companies have not repaid any borrowing or other
indebtedness in advance of its maturity.
(v) the Companies have not declared or paid any dividend or
proceeded with any distribution of any nature whatsoever
to their shareholders, or proceeded with any reimbursement
or repurchase of their own shares;
(vi) the Companies have not waived any material right under any
contract which must figure in a Schedule to this
Agreement;
(vii) the Companies have not modified their accounting methods
or practices, nor their amortization policies or rates;
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Page 37
(viii) the Companies have not modified their commercial policies
in a material manner;
(ix) the Companies have not granted loans or advances to any of
their shareholders, managers, employees or consultants,
other than in the normal course of business;
(x) with the exception of Harny, Nyhar and Sofac, the
Companies have not acquired nor have they disposed of
assets other than in the normal course of business;
(xi) with the exception of intervening transactions concerning
Harny, Nyhar and Sofac, there is no change to the
corporate or shareholding structure concerning the
Companies.
ACCOUNTING AND OTHER RECORDS
2.3
(a) The statutory books are complete and accurate, books of account
and other records of the Companies are up-todate and are in
compliance with all applicable laws and the Accounting Principles.
(b) The records and accounting systems (including computer software)
are not dependent upon equipment which are not the property, or
not under the control of, the Companies, and the data and
information concerning the Companies are recorded, archived,
maintained, and operated directly by the Companies.
(c) The Companies hold all the licenses necessary to operate the
software which they use and do not share any user rights in
respect of such software with any third person.
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ACCOUNTS RECEIVABLE-INDEBTEDNESS
ACCOUNTS RECEIVABLE OF THE COMPANIES
3.1
(a) The Companies have no accounts receivable other than those
incurred in the normal course of business.
(b) Subject to possible provisions made in compliance with the
Accounting Principles, client accounts receivable appearing in the
1993 Accounts and those recorded since 31 December 1993 are, on
the date hereof, reasonably considered to be recoverable in a
global amount corresponding to their net book value.
DEBTS OWED BY THE COMPANIES
3.2
(a) On 16 December 1994, the Companies have no debts other than loans
as at 16 December 1994, details of which are included in Appendix
3.2(a); since 16 December 1994 and until the date of the present
Agreement, none of the Companies has agreed any new significant
indebtedness other than in the ordinary course of business, except
for that which appears in Appendix 3.2 (a).
(b) The Companies have received no requests for repayment concerning
their debts which are payable on demand, or any request for
advance repayment of their term debts and, since 31 December 1993,
have not proceeded with the advance repayment of any important
loans except for the repayment of the shareholder's advance
granted to the Holding Company and an amount borrowed by SOFAC.
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Page 39
(c) On 16 December 1994, the Companies have undertaken no obligations
off the balance sheet except those presented in Appendix.
REGULATORY MATTERS
LICENSES
4.
(a) The Companies have obtained all licenses and authorizations
required for carrying on their businesses.
(b) The Companies comply with their principal obligations under the
licenses and authorizations referred to in paragraph(a).
(c) The Companies have always complied with applicable laws and
regulations in force, including those relating to trade and
competition.
THE COMPANIES' ASSETS
OWNERSHIP
5.1
(a) For the purposes of this paragraph 5.1, the term ASSET shall not
include the Property, to which the provisions of paragraph 12
below shall apply, but includes all the other real property
mentioned in Appendix 5.1 (a). Although the property titles to
the real property of the Holding Company on the rue de Lourmel in
Paris, as well as the property titles to the real property of
SOFAC in Valenciennes, could not be included in Appendix 5.1 (a),
the Vendor warrants that the Companies concerned are the full
owners of such property. The Vendor and the Purchaser shall
cooperate
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Page 40
to assure that these Companies obtain their property
titles as soon as possible.
(b) Except as set out in Appendix 5.1(b), all the assets included in
the 1993 Accounts, or acquired since 31 December 1993 (other than
goods sold in the ordinary course of business), are the full
property of the Companies. These assets are not subject to any
security interest, D<e'>MEMBREMENT (life interest, usufruct,
remainder), lease agreement, finance lease, title retention
provision, payment on deferred terms or any agreement to that
effect except for:
(i) leasing agreements or finance leases for a unitary amount
of less than FRF 200,000 per annum or FRF 4,000,000 per
annum for the aggregate of such agreements;
(ii) title retention provisions concerning goods supplied to
the Companies in the ordinary course of business;
(iii) security interests appearing in the 1993 Accounts and
liens arising by operation of law;
(iv) assigned client accounts receivable for which the assignee
(e.g. factoring agent) has available means of recourse
against the assignor.
(c) The inventory of the Companies is valued in accordance with the
Accounting Principles at its cost price or at its probable market
value, if lower.
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POSSESSION AND FACILITIES BELONGING TO THIRD PARTIES
5.2
(a) All of the assets owned by the Companies, or for which the
Companies have a right of use, are in the possession, or under the
control, of the Companies.
(b) Where any asset is used, but not owned, by a Company or any
facilities or services are provided to the Company by any third
party, the Company has not received notice of early termination of
the agreements relating thereto.
FIXED ASSETS
5.3 Each fixed asset included in the Accounts or acquired by the
Companies since the Accounting Date (other than assets presently
sold during the normal course of business) is held in full ownership
by the Companies and is free from any third party rights. All the
factories and equipment (including fixed installations), vehicles
and office equipment (the individual value of which exceeds FRF
100,000) used by the Companies of their activities are in good
working order and well maintained taking length of service into
account, have been regularly serviced, are fully operational and are
capable of being properly used for their activities, and none of
these assets is, to the knowledge of the Vendor, dangerous or
obsolete.
INSURANCE
5.4
(a) Appendix 5.4(a) contains a copy of the insurance policies in the
names of the Companies. Such insurance policies are in effect.
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(b) No significant claim exists under these insurance policies.
INTELLECTUAL PROPERTY RIGHTS
REGISTERED RIGHTS
6.1 Appendix 6.1 contains a list of all Intellectual Property Rights
registered (or for which registration has been requested) in France or
abroad and which are owned or used by the Companies. The Companies are
the sole legal owners of such Intellectual Property Rights. Such rights
are not subject to any security interest. There exists no other
significant Intellectual Property Rights of the Companies.
INFRINGEMENT
6.2 As far as the Vendor is aware, and except for matters listed in
Appendix 6.2, the Companies are not infringing third party Intellectual
Property Rights or using in an illicit manner confidential information
disclosed to the Companies (or to the Vendor). Likewise, as far as the
Vendor is aware, no third party is infringing on any Intellectual
Property Rights of the Companies.
CONTRACTUAL MATTERS
IMPORTANT CONTRACTS
7.1 Other than as set out in Appendix 7.1, there exists no important
agreement:
(a) for which the acquisition of the Shares by the Purchaser and the
performance of the terms of this Agreement would be capable of:
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Page 43
(i) relieving the other party from its obligations or
entitling him to exercise any right of termination; or
(ii) putting the Companies in breach under such agreement or
causing them to give up a right or increasing one of their
obligations;
(b) which was entered into otherwise than under normal market
conditions (including, without limitation, in respect of shared
facilities);
(c) which confers any right upon a third party to require the issuance
of any shares, debentures or other securities of the Companies now
or at any time in the future;
(d) under which the Companies have guaranteed the performance of an
obligation by any third party.
There exists no shareholders agreement to which one of the Companies is a
party other than those relating to Faco (Mr. Smal), Babyliss U.K. (Mr.
Broom), Nyhar B.V. (Mr. Ouborg) and Babyliss Deutschland GmbH (Mr.
Dieter);
Except for the agreement concluded with Dickson concerning China, there
exist no licensing, manufacturing or joint venture agreements other than
those appearing in the appendices to this Agreement.
There exist no written agreements with clients and suppliers. The
commissions, discounts and other renumerations, if any, involving
shipments of products made by suppliers since the 1st January 1995 belong
to the Purchaser.
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CONTRACTS WITH DIRECTORS
7.2 Other than as set out in Appendix 7.2, the agreements coming under
articles 101 ET SEQ. of the French law on commercial companies (or the
equivalent legislation in other jurisdictions) were concluded in
accordance with the provisions of the aforesaid articles (or with the
applicable provisions of foreign legislation).
NON-PERFORMANCE
7.3 The Vendor has no knowledge of any material defaults under any
agreements to which the Companies are a party, whether by the Companies
or by the other party or parties thereto, whether existent or potential.
STATE OF ECONOMIC DEPENDANCE
7.4 Other than as set out in Appendix 7.4, the Companies have not
completed more than 10% of their sales or purchases with any one party
during each of the preceding two financial years (ending 31 December
1994).
LITIGATION
8. Other than as set out in Appendix 8, the Companies are not a party
to (or otherwise implicated in) any pending judicial proceedings,
arbitration or administrative proceedings. The Companies have not
received notice that such proceedings are envisaged, nor that any
administrative inquiry is in progress or imminent, and the Vendor is not
aware of threats of such proceedings or investigations. At the present
time, the Companies are not subject to any outstanding judicial, arbitral
or governmental decision whatsoever.
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ENVIRONMENT
9. The Companies are in compliance with the laws or regulations
relating to the environment, hygiene, health or safety. The Companies
have taken all useful steps to prevent any damage to the environment
which could give rise to a third party claim, render any land used by the
Companies or any of their sites unusable or capable of being subject to a
decontamination order or similar procedure.
DIRECTORS AND EMPLOYEES
EMPLOYEES
10.1 Appendix 10 includes:
(a) a list of all employees of the Companies, showing the remuneration
and other benefits;
(b) a statement of all the agreements between the Companies and the
trade unions or other bodies representing the employees;
(c) copies of the employment contracts of all employees of the
Companies whose annual salary exceeds FRF 250,000.
PRIOR NOTICE
10.2 There exist no written or unwritten employment contract (or
contract for services) which cannot be terminated by the Companies with a
prior notice of three months or less, with the exception of executives,
for whom the prior notice is six months.
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COMPLIANCE
10.3 The Companies have with regard to each of their employees (and so
far as relevant with regard to each of their former employees) complied
with the essential provisions of the law, regulations, collective
agreements and judicial decisions concerning their working conditions or
the relations between the Companies and their employees or any
representative trade union. With the exception of Laurence Bros, whose
dismissal is in progress, all of the employees of the Companies
effectively work for said Companies; the latter pay no amounts having
the characteristics of salary to persons who do not really work for the
Companies.
INCENTIVE SCHEMES
10.4 Other than as set out in Appendix 10.4, the Companies have not
adopted any share incentive scheme, share option or profit sharing
scheme, share sale or purchase scheme, bonus or commission arrangements
for their executives or employees, except for rules concerning mandatory
employee (incentive scheme under French law).
RETIREMENT
10.5 Appendix 10.5 contains information on the cases in which the
Companies have undertaken to provide retirement or other pensions to
their current or former employees.
PAYMENTS ON TERMINATION
10.6 The Companies have not incurred any liability for the breach of,
or arising from the termination of, any employment or service contract,
except to the extent that such should appear in the 1993 Accounts or in
Appendix 10.6.
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INSOLVENCY PROCEEDINGS
11. The Companies have not been placed under the control of an
ADMINISTRATEUR JUDICIAIRE (receiver). The Companies are not subject to a
R<e`>GLEMENT AMIABLE (compromise with creditors), REDRESSEMENT JUDICIAIRE
(administrative order), LIQUIDATION JUDICIAIRE (judicial liquidation) or
any other similar procedure.
REAL PROPERTY
12.
(a) The Holding Company holds legal title or a valid right of
occupation to the Property (as described in Appendix 12(a)), free
from all mortgages or other rights in favour of third parties.
(b) The occupation and use of the Property by the Holding Company is
in conformity with all PLANS D'URBANISME (zoning laws).
(c) The Property of the Holding Company has not been subject to
measures forbidding its occupation.
(d) The Holding Company has obtained all the building permits
necessary for works completed on the Property.
(e) No administrative authority has ordered that works be completed on
the Property.
(f) To the Vendor's knowledge, there is no provision or regulation
which would prevent the Holding Company from disposing of the
Property.
(g) The Holding Company has not received notice that it has failed to
observe an essential clause of the finance lease concerning the
Property.
<PAGE>
Page 48
The preceding warranties are, to the Vendor's knowledge, also applicable
to the other real properties used by the Holding Company and the
Subsidiaries.
TAXATION - SOCIAL SECURITY
13. The Companies have fulfilled their obligations to file tax returns
and social security declarations and have paid all taxes and social
security charges within the regulatory time limits.
BANKING POWERS
14. A complete list of persons authorized to sign on the bank accounts
of the Companies is set out in Appendix 14.
SUBSIDIES
15. The Companies have not received any grants or governmental aids
other than those set out in Appendix 15.
PRODUCTS LIABILITY
16.
(a) The Companies have not manufactured, sold or supplied products or
provided services which are substantially non-compliant with
applicable laws, rules and standards, which are defective or
dangerous and which are insufficiently covered by civil liability
insurance.
(b) The Companies have not received any notice or warning that the
Companies are in violation of the laws, regulations or relevant
standards with regard to consumer protection.
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Page 49
(c) The Companies are not under the obligation, and have not been
required during these last three years, to recall one or several
of their products from their clients or ultimate consumers and, to
the Vendor's knowledge, no such recall is foreseeable at the
present time, except for in the United Kingdom (i) the recall of
products from Boots Plc in 1994, (ii) approximately 1,500 salon
hairdryers, and in Germany, a recall of a hair clipper
manufactured by Conair, because of a motor noise problem.
VENDOR INTERESTS
17. The Vendor does not hold, directly or indirectly, any shareholding
or any interest of any nature whatsoever in a business competitor,
distributor, commercial agent or client of the Companies. The Vendor
does not possess, either directly or indirectly, any asset used by the
Companies in the running of their businesses.
The Vendor can exercise no claim of any nature whatsoever against the
Companies, and the Companies are not indebted to the Vendor, except for
debts which could result from the normal exercise by the Vendor of his
activities and functions.
To the Vendor's knowledge, the above representations are equally
applicable to his descendants, the Management of Babyliss S.A. and its
directors.
REPRESENTATIONS AND WARRANTIES
18. For the purposes of this acquisition taken as a whole, the above
Warranties contain no material inaccuracy or omission.
<PAGE>
Page 50
SCHEDULE D
Vendor's Guarantees
<PAGE>
SCHEDULE E
Copy of the 1993 Accounts, the 1993 Consolidated Accounts
and the Interim Accounts ending September 1994
c:\AN06\PJ\C009.CON
TRANSLATED FROM FRENCH
FOR INFORMATION ONLY
22 January 1995
FINANCIERE DE L'EUROPE OCCIDENTALE
CONAIR CORPORATION
STOCK PURCHASE AGREEMENT
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
PARIS
<PAGE>
Page 1
FINAL/22.01.95
c:\AN06\PJ\C011.CON
THIS AGREEMENT is made on 22 January 1995
BETWEEN
(1) FINANCIERE DE L'EUROPE OCCIDENTALE SA, a Luxembourg SOCI<e'>T<e'>
ANONYME whose registered office is at 15, boulevard Roosevelt, L.2000
Luxembourg, registered at the Commercial Registry, Section B no. 25124,
represented by Mr. Robert Simon (the VENDOR)
(2) CONAIR, a Delaware corporation whose registered office is at 150
Milford Road, East Winsdor, New Jersey, United States of America,
represented by Mr. Leandro P. Rizzuto, Chairman and President, duly
empowered (the PURCHASER)
WHEREAS
(A) The Vendor holds 50 shares of the Swiss company Cristal Gesellschaft
f<u">r Beteiligungen und Finanzierungen S.A., whose registered office is
at Steinengraben 22, B<a^>le, Switzerland (c/o Experta Treuhand AG) and
which is registered at the Commercial Registry of B<a^>le-ville
(CRISTAL). Cristal has as it sole purpose (i) the holding of 13,003
shares of Babyliss S.A. (the HOLDING COMPANY), which exercises in Europe
an activity in the area of small electric appliances designed for hair
and body care and (ii) the holding of 50 shares of the Swiss company
Blitog, whose registered office is at Baarerstrasse 12, Zoug, Switzerland
(c/o Experta Treuhand AG) and which is registered under the number 1591
at the Commercial Registry of the Canton of Zoug (BLITOG).
(B) The Purchaser, wishing to purchase the entire share capital of the
Holding Company, concluded on this day an
<PAGE>
Page 2
agreement under which it acquired the balance of the shares of the Holding
Company held by Mr. Jean-Pierre Feldblum (the JPF AGREEMENT).
(C) The Holding Company has subsidiaries in England, Belgium, Holland,
Spain and Germany; these subsidiaries are more particularly described in
Schedule A (the SUBSIDIARIES).
(D) The Vendor has agreed to sell to the Purchaser the 50 shares
mentioned above for the consideration and upon the terms set out in this
Agreement.
IT IS AGREED AS FOLLOWS:
DEFINITIONS
1.1 In this Agreement, the following expressions shall have the
following meanings:
ACCOUNTING PRINCIPLES means, in respect of each Company, the accounting
principles generally accepted in the jurisdiction of the relevant
country, as applied on a constant basis by such Company and, as regards
the consolidated accounts of the Holding Company, the accounting
principles generally accepted in France for consolidation purposes, as
applied on a constant basis by such Holding Company;
1993 ACCOUNTS means the balance sheet and the profit and loss account and
schedules of Cristal, Blitog and the Companies at 31 December 1993, as
appearing in Schedule D;
BALANCE means the part of the price to be temporarily held in escrow, as
mentioned in article 4.3 (b);
BLITOG SHARES means the 50 shares representing 100% of the share capital
of Blitog;
<PAGE>
Page 3
CLAIM means any claim against the Vendor under the Warranties, pursuant
to article 9;
COMPANIES means the Holding Company and the Subsidiaries, and COMPANY
means any one of them;
COMPLETION means completion of the sale and purchase of the Cristal
Shares under this Agreement;
COMPLETION DATE means 18 February 1995 or any other date which may be
agreed in writing for Completion;
CRISTAL CLAIM means any claim against the Vendor under the Warranties,
pursuant to article 9.A;
CRISTAL SHARES means the 50 shares representing 100% of the share capital
of Cristal;
CRISTAL WARRANTIES means the representations and warranties set forth in
Schedule C1;
1993 CONSOLIDATED ACCOUNTS means the consolidated balance sheet, the
consolidated profit and loss account and schedules of the Holding Company
at 31 December 1993, as appearing in Schedule D;
DEPOSIT has the meaning given to it in article 2.4;
ESCROW means Lazards Fr<e`>res et Cie, 121 boulevard Haussmann, Paris;
ESCROW AGREEMENT means the agreement made this day between the Escrow,
the Purchaser and the Vendor, as mentioned in articles 2.4 and 3.4;
<PAGE>
Page 4
HOLDING COMPANY means Babyliss SA, as more particularly described in
Schedule A, Part III;
INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks,
trade names and signs, design rights, copyrights (including rights in
computer software), rights in know-how and other intellectual property
rights, in each case whether registered or unregistered, and including
applications for the grant of any of such rights, and all rights or forms
of protection having equivalent or similar effect anywhere in the world;
PROPERTY means the real property of the Holding Company held under a
CR<e'>DIT-BAIL (finance lease), particulars of which are set forth in
Appendix 12 (of Schedule C);
PURCHASE PRICE means the price payable by the Purchaser to the Vendor
under article 2.2, subject to possible adjustment under article 3;
REFERENCE CONSOLIDATED NET INCOME is defined in Schedule B;
SECURITY INTEREST means any security interest of any nature whatsoever
including any mortgage, lien, pledge, preferential ranking or other
encumbrance burdening the assets of the Companies;
SHARES means all of the 9,287 shares issued by the Holding Company, and
which are held by Mr. Jean-Pierre Feldblum or by the directors of the
Holding Company;
SUBSIDIARIES means the companies which are more fully described in
Schedule A, Part III;
<PAGE>
Page 5
WARRANTED SHARES means the Shares as well as the shares in the
Subsidiaries held by the Holding Company, as set forth in Schedule A;
WARRANTIES means the representations and warranties set forth in Schedule
C.
1.2 In this Agreement:
(a) the headings are inserted for convenience only and shall not affect
the meaning of this Agreement; and
(b) any reference to a document IN THE AGREED FORM means the version of
the document as agreed between the parties, duly initialed for the
purpose of identification.
SALE AND PURCHASE OF THE SHARES AND PRICE
2.1 On the Completion Date, the Purchaser shall purchase, and the Vendor
shall sell, the Shares free of all security interests, options,
D<e'>MEMBREMENT (life interest, usufruct, remainder) or any other third
party rights.
2.2 Subject to the price adjustment under article 3 below, the total
Purchase Price payable by the Purchaser to the Vendor for the Cristal
Shares shall be the sum of FRF 123,845,200. It is stipulated that the
Purchase Price shall be reduced by the counter-value in French francs of
an amount of CHF 5,227,000 on the working day prior to the Completion
Date, as calculated by reference to the rate indicated in the Financial
Times of that day.
2.3 The Purchaser confirms that it currently has at its disposal the
necessary funds and a firm commitment from a BANQUE DE PREMIER PLAN
(major bank) enabling it to pay in cash on the Completion Date the total
price set out above. The
<PAGE>
Page 6
Purchaser has delivered to the Vendor in this regard an attestation
concerning this financing commitment.
2.4 A deposit which is deductible from the Purchase Price shall be
delivered to the Escrow on the date hereof by banker's draft in an amount
of FRF 6,254,810, to be held by the Escrow under the terms of the Escrow
Agreement (the DEPOSIT). On the Completion Date this amount shall be
supplemented by an amount of FRF 6,254,810, which is deductible from the
Purchase Price, to be delivered to the Escrow by the Purchaser by
banker's draft (the SUPPLEMENT). Any amounts finally due by the Vendor
on account of the Warranties shall be deducted from the Deposit and from
the Supplement and repaid by the Escrow to the Purchaser in accordance
with the Escrow Agreement. The Escrow Agreement further provides that
the Deposit and the Supplement (remaining after deduction of any sums
which may be due by the Vendor) shall be released up to fifty percent
(50%) by the Escrow and delivered to the Vendor on 31 December 1995, and
the balance of the Deposit and of the Supplement at 31 December 1996
shall be released by the Escrow and delivered to the Vendor on that date.
It is stipulated that if, for reasons attributable to the Purchaser, the
Completion does not occur on the Completion Date, the Vendor shall
nevertheless be finally entitled to the Deposit as a lump sum indemnity
for immobilization, unless the Purchaser should demonstrate that the
DIRECTION DU TR<e'>SOR (Treasury Department) notified Purchaser of its
opposition to the present sale and purchase in light of the regulations
relating to foreign investments in France, and notwithstanding the
content of article 5.4 below.
<PAGE>
Page 7
ADJUSTMENT TO THE PURCHASE PRICE
ADJUSTMENT PRINCIPLE
3.1 It is agreed that the Purchase Price shall be adjusted as follows in
function of the Reference Consolidation 1994 Net Income, as this
expression is defined in Schedule B.
AMOUNT OF REFERENCE ADJUSTED PURCHASE PRICE
CONSOLIDATED NET INCOME
(IN FRANCS) (IN FRANCS)
________________________ _______________________
17,100,000 or more 123,845,200
between 17,100,000 and between 123,845,200 and
15,500,000 112,177,200 (prorata)
15,500,000 or less 112,177,200
3.2 In accordance with the above chart, the Purchase Price as adjusted
cannot in any event be less than FRF 112,177,200 nor be greater than FRF
123,845,200.
3.3 The adjustment, if any, shall be deducted from the Balance and
immediately repaid as a price reduction to the Purchaser, in accordance
with the terms of the Escrow Agreement.
ADJUSTMENT PROCEDURE
3.4 The adjustement procedure shall be that provided for in the JPF
Agreement and the Reference Consolidated Net Income shall be that finally
retained in application of said agreement.
COMPLETION DATE
4.1 The sale and purchase of the Cristal Shares shall occur on the
Completion Date, subject to the condition precedent set
<PAGE>
Page 8
out in article 5 below which must be satisfied by that date. In any event, the
completion of the present sale and purchase must occur the same day as that of
the JPF Agreement, unless the parties should agree otherwise.
4.2 On the Completion Date, the Vendor shall deliver or cause to be
delivered to the Purchaser:
(a) the shares certificates representing the fifty (50) bearer Cristal
Shares;
(b) the share certificates representing the fifty (50) bearer Blitog
Shares;
(c) all minute books and other statutory books (which shall be up-to-
date except for the Completion transactions) of Cristal;
(d) a letter of resignation in the agreed form executed by the directors
of Cristal required to resign by the Purchaser;
(e) if necessary, the minutes of a meeting of the board of directors of
Cristal approving the sale and purchase, acknowledging the
resignation of the relevant directors and convening a general
meeting of the shareholders in order to appoint new directors.
4.3 The Purchaser shall on the Completion Date:
(a) deliver to the Vendor a banker's draft made payable to the Vendor in
an amount of FRF 98,825,960, reduced by the counter-value in French
francs of an amount of CHF 5,227,000 on the working day prior to the
Completion Date;
<PAGE>
Page 9
(b) deliver to the Escrow a banker's draft made payable to the Escrow in
an amount representing the balance of the Purchase Price (taking
account of the Deposit and of the Supplement), being FRF 12,509,620,
to be held in Escrow under the terms of the Escrow Agreement (the
BALANCE).
The amounts, if any, which may reduce the Purchase Price under the
adjustment clause provided in article 3 above will be deducted from
the Balance and repaid by the Escrow to the Purchaser in accordance
with the Escrow Agreement, and the remaining amount will be released
concurrently by the Escrow and delivered to the Vendor.
CONDITION PRECEDENT
5.1 The sale and purchase of the Cristal Shares is subject to the
condition precedent of the completion of the JPF Agreement.
WAIVER
5.2 The Vendor and the Purchaser may in writing waive the condition
precedent provided for in article 5.1 above.
LAPSE
5.3 If the condition precedent provided for in article 5.1 above is not
satisfied (or has not been waived) by the Completion Date, at the latest,
this Agreement (except for articles 13, 16 and 17) shall automatically
lapse and be of no further effect, and the parties shall have no
indemnity (other than, if applicable, under the above-mentioned
articles).
5.4 However, if the condition precedent is not fulfilled by 18 February
1995, and to the extent that each party has been diligent in order to
complete such condition, the Completion shall be postponed to a later
date which cannot in any event
<PAGE>
Page 10
be later than 18 March 1995 (except by agreement of the parties). If at
this date the condition is still not fulfilled in spite of the efforts of
both parties, the Purchaser shall recover the Deposit.
5.5 If Completion takes place in accordance with article 4 above, the
parties will be deemed to have waived any condition precedent which is
unsatisfied and which has not been expressly waived.
SHAREHOLDERS ADVANCES
6.1 On the Completion Date the Purchaser shall make available to Cristal
an amount of CHF 5,227,000 to enable Cristal to reimburse to the Vendor
an amount of CHF 5,227,000 in full settlement of the shareholders
advances granted by the Vendor to Cristal.
6.2 On the Completion Date, the Vendor shall reimburse to Blitog an
amount of CHF 212,800 in full settlement of all the advances which Blitog
has granted to the Vendor.
VENDOR'S OBLIGATIONS
7.1 As of today and until Completion, the Vendor undertakes:
(a) to manage the Companies, Cristal and Blitog en BON P<e`>RE DE
FAMILLE (in a responsible and reasonable manner);
(b) not to act, and to assure that the Companies shall not act, in a
manner which is inconsistent with the provisions of this Agreement
or the completion of the obligations contemplated hereunder;
(c) not to approve or proceed with any dividend distribution by the
Companies, Cristal or Blitog;
<PAGE>
Page 11
(d) to assure that no change is made to the STATUTS (by-laws) of the
Companies, of Cristal or of Blitog;
(e) to assure that no off-balance sheet undertaking is made by the
Companies, Cristal and Blitog;
(f) to assure that the Companies, Cristal or Blitog undertake no
substantial obligations, acquire no substantial assets, conclude no
subtantial agreements and make no substantial order of finished
products for more than FRF 250,000 without the agreement of the
Purchaser.
7.2 Except as may be required by law and in such circumstances only
after prior consultation with the Purchaser, the Vendor shall not as of
today disclose or use to the detriment of the Companies, of Cristal or of
Blitog any trade secret or other confidential information of a technical
nature which he holds in relation to the Companies, Cristal or Blitog and
their affairs.
7.3 As of the date of this Agreement, the Vendor shall give access to
the Purchaser (and its advisors) to all information and documents
concerning the Companies which the latter may wish to consult.
7.4 The Vendor shall make his best efforts to cooperate with the
Companies in order to attenuate the consequences of the non-performance
by the Companies of their obligations arising under certain of their
loans.
REPRESENTATIONS AND WARRANTIES / AND CRISTAL WARRANTIES
8.1 The Vendor represents and warrants to the Purchaser in the terms of
the Warranties and Cristal Warranties.
8.2 Subject to article 9, the Vendor undertakes to indemnify the
Purchaser against all losses, damages or costs (including legal costs)
suffered by the Purchaser or the Companies and
<PAGE>
Page 12
which result from facts arising from a breach of the Warranties.
Subject to article 9.A, the Vendor undertakes to indemnify the Purchaser
franc for franc against all losses, damages or costs (including legal
costs) suffered by the Purchaser, Cristal or Blitog and which result from
facts arising from a breach of the Warranties and Cristal Warranties.
8.3 The Purchaser represents and warrants to the Vendor that it has
obtained all authorizations (administrative, corporate or other) to enter
into and perform this Agreement, except for the conditions precedent
mentioned in article 5.
8.4 The Vendor shall renew all of its Warranties and Cristal Warranties
on the day of Completion.
LIMITATIONS ON REPRESENTATIONS AND WARRANTIES
9.1 The Vendor shall not be held for any Claim except under the
following conditions:
(a) the Vendor must receive from the Purchaser a written notice
containing details of the Claim, as well as the Purchaser's estimate
of the amount of such Claim (to the extent that such estimation is
possible). Said notification must be made:
(i) at the latest following a period of 30 days after the
expiration of the legal prescription which applies to the
subject matter of the Claim, if it arises from one of the tax
or social security contributions Warranties; and
(ii) at the latest on 31 December 1996, if the Claim relates to any
other Warranty;
<PAGE>
Page 13
(b) the individual amount of each Claim shall be taken into account only
if it exceeds FRF 50,000 and the aggregate amount of the Claims must
exceed FRF 1,500,000 (in which case the Vendor shall only be liable
for the excess).
9.2 The Vendor shall only be liable for up to 58.34% of the amount of
the Claims. In addition, the aggregate amount of the liability of the
Vendor shall not exceed the amount of the Purchase Price.
9.3 Furthermore, the Vendor shall be exempted under the following
conditions:
(a) to the extent that the matter giving rise to such Claim is
specifically disclosed in the Schedules hereto;
(b) to the extent that such matter, specifically disclosed, is provided
or reserved for in the 1993 Accounts or in the 1993 Consolidated
Accounts;
9.4 If the Purchaser becomes aware after the Completion Date of a claim
or a threat of a claim made by a third party against the Companies
(particularly any NOTIFICATION DE CONTR<o^>LE FISCAL (notice of tax
inspection)), and if such claim or threat of a claim is capable of
entitling the Purchaser to make a Claim against the Vendor (THIRD PARTY
CLAIM):
(a) the Purchaser shall give notice of such Third Party Claim to the
Vendor as soon as possible and in any event within fifteen days of
the date upon which the Companies become aware of it. The Purchaser
shall assure that the Vendor is given access to all reasonable
information and assistance to investigate such Third Party Claim and
a failure by the Purchaser to respect its obligations under this
article 9.4 (a) shall exempt the Vendor from liability in respect of
the Third Party Claim, to the
<PAGE>
Page 14
extent that such failure prevents the Vendor from defending his interests;
(b) neither the Purchaser nor the Companies shall make any admission of
liability, nor execute or accept an agreement or settlement in
respect of a Third Party Claim, without prior consultation with and
prior written consent of the Vendor (which shall not be unreasonably
withheld or delayed);
(c) the Purchaser shall undertake or assure that the Companies engage
all steps or proceedings as the Vendor may consider reasonable and
necessary in order to answer the Third Party Claim or to attenuate
its impact (without prejudice to being indemnified by the Vendor
against all reasonable costs incurred in this connection).
9.5 Any sum due by the Vendor for a Claim shall be reduced by:
(a) the amount corresponding to any provision or reserve (including a
provision taken into account to calculate the net value of an asset)
appearing in the 1993 Accounts and which would turn out to be
unnecessary or excessive;
(b) any amount recovered with respect to any debt identified as
irrecoverable in the 1993 Accounts; and,
(c) to the extent that any liability is discharged in an amount lower
than the amount appearing in the 1993 Accounts, the amount of the
difference;
provided that no amount shall be taken into account more than once
pursuant to this article 9.5.
In addition, the items mentioned at points (a), (b) and (c) above shall
not be taken into account except to the extent (i)
<PAGE>
Page 15
that they are of the same nature as those which arise from the Claim in
question (for example, if the Claim arises from a provision on inventory, only
another provision on useless inventory may be taken into consideration), and
(ii) after taking account of the percentage of the Purchaser's direct or
indirect holding in the Subsidiary concerned.
9.6 If an adjustment under article 9.5 is recognized after the
indemnification of the Purchaser by the Vendor following one or several
Claims, the Purchaser shall immediately reimburse to the Vendor a sum
equivalent to the amount of the reduction which would have been applied
if this fact had been known at the time of the Claim.
9.7 The Vendor shall not be liable for any Claim relating to the
taxation of the Companies:
(a) to the extent that a tax surplus was paid by the Companies prior to
the Completion Date, and if such tax surplus is reimbursed to the
Companies after the Date of Completion; or
(b) to the extent that this Claim results from or is aggravated by a
failure of the Companies with respect to the exercise of a claim, a
declaration, an option, an abandonment of action or any other
decision subsequent to the Completion Date and which has been taken
into account for the computation of the provision for taxes in the
1993 Accounts.
9.8 The Vendor shall not be liable in respect of a Claim which would
result from facts (acts or omissions) attributable to the Purchaser or to
the Companies after the Completion Date.
9.9 The Vendor cannot be held in respect of a Claim which would be the
result of a regulation not in force at the
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Completion Date (including a change of administrative practices whose
application is retroactive, a change of references, methods of calculation,
or the rates of taxation in effect on the date of this Agreement).
9.10 Nothing in this Agreement shall exempt the Purchaser and the
Companies from doing all that will be necessary in order to attenuate the
consequences of facts which could give rise to a Claim.
9.11 In the event that the Companies or the Purchaser should be entitled
to be reimbursed, by a third party, a sum which, moreover, is subject to
a Claim, the Purchaser shall notify this to the Vendor as quickly as
possible and, if requested by the Vendor, the Purchaser will make
reasonable efforts to attempt to be compensated by the third party before
turning against the Vendor, and any subsequent Claim shall be limited to
the portion of the damage which exceeds the amount recuperated from such
third party.
9.12 If the Vendor indemnifies the Purchaser and the Purchaser, or the
Companies, subsequently recovers from a third party a sum which pertains
to such Claim (including by way of insurance), the Purchaser shall
immediately reimburse to the Vendor:
(a) an amount equivalent to the sum paid by such third party (less
costs); or
(b) if the amount paid by the third party is greater than the amount
paid by the Vendor in respect of the Claim, the amount that the
Vendor will have paid to the Purchaser.
9.13 The sole remedy of the Purchaser for any breach of any of the
Warranties or any other breach of this Agreement by the Vendor shall be
an action for damages in accordance with this
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article 9 and the Purchaser shall not be entitled to terminate this Agreement.
LIMITATIONS ON CRISTAL WARRANTIES
9.A.1 The Vendor shall not be held for any Claim except under the
following conditions:
(a) the Vendor must receive from the Purchaser a written notice
containing details of the Cristal Claim, as well as the Purchaser's
estimate of the amount of such Cristal Claim (to the extent that
such estimation is possible). Said notification must be made:
(i) at the latest following a period of 30 days after the
expiration of the legal prescription which applies to the
subject matter of the Cristal Claim, if it arises from one of
the Cristal Warranties relating to tax or social security
contributions; and
(ii) at the latest on 31 December 1996, if the Claim relates to any
other Cristal Warranty;
(b) the individual amount of each Claim shall be taken into account
franc for franc.
9.A.2 The Vendor shall only be liable for up to 100% of the amount of
the Cristal Claims. In addition, the aggregate amount of the liability
of the Vendor for the Cristal Claims shall not exceed the amount of the
Purchase Price.
9.A.3 Furthermore, the Vendor shall be exempted under the following
conditions:
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Page 18
(a) to the extent that the matter giving rise to such Cristal Claim is
specifically disclosed in the Schedules hereto;
(b) to the extent that such matter, specifically disclosed, is provided
or reserved for in the 1993 Accounts of Cristal or of Blitog;
9.A.4 If the Purchaser becomes aware after the Completion Date of a
claim or a threat of a claim made by a third party against Cristal or
Blitog (particularly any NOTIFICATION DE CONTR<o^>LE FISCAL (notice of
tax inspection)), and if such claim or threat of a claim is capable of
entitling the Purchaser to make a Cristal Claim against the Vendor (THIRD
PARTY CLAIM):
(a) the Purchaser shall give notice of such Third Party Claim to the
Vendor as soon as possible and in any event within fifteen days of
the date upon which the Company becomes aware of it. The Purchaser
shall assure that the Vendor is given access to all reasonable
information and assistance to investigate such Third Party Claim and
a failure by the Purchaser to respect its obligations under this
article 9.A.4 (a) shall exempt the Vendor from liability in respect
of the Third Party Claim, to the extent that such failure prevents
the Vendor from defending his interests;
(b) neither the Purchaser, Cristal nor Blitog shall make any admission
of liability, nor execute or accept an agreement or settlement in
respect of a Third Party Claim, without prior consultation with and
prior written consent of the Vendor (which shall not be unreasonably
withheld or delayed);
(c) the Purchaser shall undertake or assure that Cristal and Blitog
engage all steps or proceedings as the Vendor may consider
reasonable and necessary in order to answer the
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Third Party Claim or to attenuate its impact (without prejudice to being
indemnified by the Vendor against all reasonable costs incurred in
this connection).
9.A.5Any sum due by the Vendor for a Claim shall be reduced by:
(a) the amount corresponding to any provision or reserve (including a
provision taken into account to calculate the net value of an asset)
appearing in the 1993 Accounts of Cristal or Blitog which would turn
out to be unnecessary or excessive;
(b) any amount recovered with respect to any debt identified as
irrecoverable in the 1993 Accounts of Cristal or Blitog; and,
(c) to the extent that any liability is discharged in an amount lower
than the amount appearing in the 1993 Accounts of Cristal or Blitog,
the amount of the difference;
provided that no amount shall be taken into account more than once
pursuant to this article 9.A.5.
In addition, the items mentioned at points (a), (b) and (c) above shall
not be taken into account except to the extent that they are of the same
nature as those which arise from the Cristal Claim in question (for
example, if the Claim arises from a provision on inventory, only another
provision on useless inventory may be taken into consideration).
9.A.6 If an adjustment under article 9.A.5 is recognized after the
indemnification of the Purchaser by the Vendor following one or several
Cristal Claims, the Purchaser shall immediately reimburse to the Vendor a
sum equivalent to the
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amount of the reduction which would have been applied if this fact
had been known at the time of the Cristal Claim.
9.A.7 The Vendor shall not be liable for any Claim relating to the
taxation of Cristal or Blitog:
(a) to the extent that a tax surplus was paid by Cristal or Blitog prior
to the Completion Date, and if such tax surplus is reimbursed to
Cristal or Blitog after the Date of Completion; or
(b) to the extent that this Cristal Claim results from or is aggravated
by a failure of Cristal or Blitog with respect to the exercise of a
claim, a declaration, an option, an abandonment of action or any
other decision subsequent to the Completion Date and which has been
taken into account for the computation of the provision for taxes in
the 1993 Accounts of Cristal or Blitog.
9.A.8 The Vendor shall not be liable in respect of a Claim which
would result from facts (acts or omissions) attributable to the
Purchaser, Cristal or Blitog after the Completion Date.
9.A.9 The Vendor cannot be held in respect of a Cristal Claim which
would be the result of a regulation not in force at the Completion Date
(including a change of administrative practices whose application is
retroactive, a change of references, methods of calculation, or the rates
of taxation in effect on the date of this Agreement).
9.A.10 Nothing in this Agreement shall exempt the Purchaser, Cristal
or Blitog from doing all that will be necessary in order to attenuate the
consequences of facts which could give rise to a Cristal Claim.
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9.A.11 In the event that the Companies, Cristal or Blitog should be
entitled to be reimbursed, by a third party, a sum which, moreover, is
subject to a Cristal Claim, the Purchaser shall notify this to the Vendor
as quickly as possible and, if requested by the Vendor, the Purchaser
will make reasonable efforts to attempt to be compensated by the third
party before turning against the Vendor, and any subsequent Cristal Claim
shall be limited to the portion of the damage which exceeds the amount
recuperated from such third party.
9.A.12 If the Vendor indemnifies the Purchaser for a Cristal Claim and
the Purchaser, Cristal or Blitog subsequently recovers from a third party
a sum which pertains to such Cristal Claim (including by way of
insurance), the Purchaser shall immediately reimburse to the Vendor:
(a) an amount equivalent to the sum paid by such third party (less
costs); or
(b) if the amount paid by the third party is greater than the amount
paid by the Vendor in respect of the Cristal Claim, the amount that
the Vendor will have paid to the Purchaser.
9.A.13 The sole remedy of the Purchaser for any breach of any of the
Cristal Warranties or any other breach of this Agreement by the Vendor
shall be an action for damages in accordance with this article 9.A and
the Purchaser shall not be entitled to terminate this Agreement.
ENTIRE AGREEMENT
10. This Agreement constitutes the entire agreement between the parties
in connection with the sale and purchase of the Shares.
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MODIFICATIONS
11. Any modification of this Agreement shall be made by the parties in
writing and signed by the parties.
ASSIGNMENT
12. Neither party shall be entitled to assign the benefit of any
provision whatsoever of this Agreement without the prior written approval
of the other party. The Purchaser may however assign its rights and
obligations arising under this Agreement to a subsidiary of the Purchaser
or to a bank in guarantee of the financing of this transaction, it
however being understood that the Purchaser shall at all times remain
jointly and severally liable with the assignee in respect of all the
obligations arising under this Agreement.
COSTS
13. Each of the parties shall pay its own costs incurred in connection
with the negotiation, preparation and implementation of this Agreement.
INVALIDITY
14. The invalidity or unenforceability of any of the provisions of this
Agreement shall not have any effect on the other provisions herein.
FURTHER ASSURANCE
15. The Vendor undertakes to do whatever is necessary, execute any
document, for the purpose of giving to the Purchaser the full benefit of
all of the provisions of this Agreement.
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NOTICES
16.1 Any notice under this Agreement shall be in writing and signed by,
or on behalf of, the party giving it and shall be delivered by registered
letter with return receipt requested or by personal delivery to the
address and to the attention of the other party, in accordance with
article 16.2 (or to any other address or to the attention of any other
person that should be notified, in appropriate cases, under this
Agreement). A notice shall be deemed to have been received at the time
of signature of the return receipt.
16.2 The addresses of the parties for the purpose of article 16.1 are as
follows:
THE VENDOR: to the address contained in the heading of this
Agreement
THE PURCHASER: Conair Corporation, 1 Cummings Point Road,
Stamford, CT06904
To the attention of: Richard A. Margulies, Vice President
GOVERNING LAW AND ARBITRATION
GOVERNING LAW
17.1 This Agreement is governed by and shall be construed in accordance
with the laws of France.
ARBITRATION CLAUSE
17.2 With the exception of article 3.8 concerning the Purchase Price
adjustment procedure, all disputes shall be settled under the Rules of
Arbitration of the International Chamber of
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Commerce in Paris by three arbitrators appointed in accordance with those
rules. The arbitration shall take place in Geneva and be conducted in the
French language. The decision of the arbitrators shall be final and binding
upon the parties who shall not contest or appeal against it. The costs of the
arbitration proceedings shall be borne by the parties in the proportions
determined by the arbitrators.
SCHEDULES
18.1 All documents and information appearing in any one of the schedules
hereto shall be deemed to appear in any other relevant schedule.
Similarly, all documents and information appearing in the schedules to
the JPF Agreement shall be deemed to appear in the schedules hereto.
18.2 It is agreed that the schedules hereto can be initialed for
identification by Mr. John Kilroy, M. Philippe Jambrun, Ms. Val<e'>rie
Masset-Branche, Ms. Katia Ch<e'>ron on behalf of the Purchaser and by Mr.
Philippe B<e'>rard, Ms. Isabelle MacElhone, Mr. Arnaud P<e'>r<e`>s or Ms.
Sophie Rey on behalf of the Vendor.
Done in Paris, in two original counterparts
On 22 January 1995
______________________ _____________________________________
for CONAIR for FINANCIERE DE L'EUROPE OCCIDENTALE Mr.
Leandro P. Rizzuto Mr. Robert Simon
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SCHEDULE A
CRISTAL, BLITOG, THE HOLDING COMPANY AND THE SUBSIDAIRIES
I. DETAILS OF CRISTAL
1. NAME: CRISTAL GESELLSCHAFT F<u">R
BETEILIGUNGEN UND
FINANZIERUNGEN SA
2. PLACE OF INCORPORATION: CH-4000 B<a^>le
3. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
4. REGISTERED OFFICE: Steinengraben 22 - 4002 B<a^>le
5. DIRECTORS: Hans K<u">pfer; Robert Simon
6 CORPORATE CAPITAL: CHF 50,000
7. SHAREHOLDERS: Financi<e`>re de l'Europe
Occidentale SA
15 Bd Roosevelt
L2000 Luxembourg
8. END OF FISCAL YEAR: 31/12
9. STATUTORY AUDITORS: Deloitte Touche Experta SA
10. TAX RESIDENCE: Switzerland, B<a^>le
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II. DETAILS OF BLITOG
1. NAME: BLITOG SA
3. PLACE OF INCORPORATION: CH-6300 Zoug
4. TYPE OF COMPANY: SOCI<e'>T<e'> ANONYME
6. REGISTERED OFFICE: 6300 Zoug
7. DIRECTORS: Erwin Andermatt;
Philippe Steiger
8. CORPORATE CAPITAL: CHF 50,000
9. SHAREHOLDERS: Cristal Gesellschaft f<u">r
Beteiligungen und
Finanzierungen SA
10. END OF FISCAL YEAR: 31/12
11. STATUTORY AUDITORS: Deloitte Touche Experta SA
12. TAX RESIDENCE: Switzerland, Zoug
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III. DETAILS OF THE HOLDING COMPANY AND THE SUBSIDIARIES
(see JPF Agreement)
<PAGE>
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SCHEDULE B
Reference Consolidated Net Income
The Reference Consolidated Net Income of the Holding Company and its
Subsidiaries for 1994 shall be established by reference to the Accounting
Principles, applied by the Company in a constant manner from one fiscal
year to the other by the Holding Company.
The Reference Consolidated Net Income is composed of:
1. the net income after taking into account financial items,
extraordinary items, tax, the mandatory employee share participation
scheme and minority interests. The list of revenues and non-recurring
costs (whether exceptional or not) is set out in Schedule B1.
Furthermore, for the purposes of the calculation of the Reference
Consolidated Net Income:
2. the provision in the amount of FF. 1,200,000 (before tax effect) set
out in Schedule B1, representing the depreciation of a leasehold interest
shall be taken into account only in the amount of FF. 400,000 (before tax
effect), equalling the amount of provision already made in the 1993
Accounts.
3. The extraordinary profits other than those set out in Schedule B1
shall not be taken into account (nor the corresponding tax charges).
4. A net bonus of FF. 500,000 payable to Madame Perron for 1994
together with the corresponding social charges and tax deductions
relating thereto shall be taken into account.
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5. 75% of Nyhar shall be included in the consolidation for the whole
year of 1994.
6. Harny and its scandinavian subsidiaries shall not be included in the
consolidation.
7. Any partial or total amortization of the acquisition differential
(goodwill) of FACO, if any, shall be subject to contra-entry.
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SCHEDULE B1
Reference Consolidated Net Income
NON-RECURRENT COSTS IN 1994
BABYLISS S.A. KFRF
Incentive fees 100
DGCCRF fine 77
Fees computer investment 133
Other commissions paid 500
Sponsoring JL Desforges 50
Transport on purchases 196
Orly-Valenciennes moving 44
Salaries 926
Leasehold interest depreciation 1.200
Harny loss 454
Other extraordinary (net) costs 172
TOTAL 3.852
BABYLISS DEUTSCHLAND GMBH KDEM KFRF
Moving 112 381
TOTAL 112 381
SOFAC S.A. KFRF
Salaries 67
Extraordinary costs 126
TOTAL 193
BABYLISS (U.K.) LTD KGBM KFRF
Dispute 10 83
TOTAL 10 83
FACO S.A. KBEC KFRF
Pension plan 2.073 344
TOTAL 2.073 344
TOTAL COMPANIES 4.853
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SCHEDULE C
The Representations and Warranties
The Warranties contained in this Schedule are subject to the limitations
stated in article 9.
THE COMPANY AND THE WARRANTED SHARES
1.1
(a) All of the Warranted Shares are fully paid and, on the Completion
Date, shall be free from all security interests, options,
D<e'>MEMBREMENT (life interest, usufruct, remainder), claims,
restrictions of any nature whatsoever or any other third party
rights and shall be transferred with all the rights attached thereto
at that date.
No right of pre-emption nor any other right of any nature whatsoever
in connection with the Warranted Shares shall be exercised which
could obstruct Completion. With the exception of the pre-emption
right in the by-laws of the Subsidiaries, there is no pre-emption
right on the Warranted Shares. As from the Completion Date, the
Purchaser shall have the right to exercise or collect any right
attached to the Warranted Shares, including and without limitation,
the right to receive all dividends, all distributions or proceeds
declared, paid or made by the Companies.
(b) The Vendor undertakes that any right of pre-emption in connection
with the Shares shall, if appropriate, be made the subject of an
irrevocable waiver.
(c) The Vendor has the power and legal capacity to sign and perform this
Agreement.
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(d) The signature and performance by the Vendor of his obligations
hereunder:
(i) shall not constitute a breach of any clause whatsoever of
the Companies' corporate documents; or
(ii) shall not constitute a breach or default with regard to
any document to which the Vendor or a Company is a party
or by virtue of which the Vendor or the Companies are
bound; or
(iii) shall not constitute a breach of a judicial or
administrative decision or of a rule applicable to the
Companies.
(e) The Vendor warrants that on the Completion Date Cristal shall have
full and entire ownership of 13,003 shares of the Holding Company.
(f) The Companies were duly constituted and the information in respect
of the Companies set out in Schedule A is true and accurate.
(g) The Companies do not hold any interest in any other businesses than
those appearing in Appendix 1.1 (g) and other than Cook Service and
Quality (30%).
FINANCIAL MATTERS
THE ACCOUNTS
2.1(a) The 1993 Accounts and the 1993 Consolidated Accounts were
established in accordance with the Accounting Principles and they
truly reflect the financial position of the Companies, given that
the Holding Company and its statutory auditors decided not to
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Page 33
amortize the goodwill of Faco in an amount of FRF 2,587,000. It
is however stipulated that if the Purchaser establishes that this
goodwill should have been amortized in order to comply with the
Accounting Principles, he may bring a Claim in application of
Article 8 above. In addition, it is expressly agreed that any
Claim of the Purchaser in this regard shall not be subject to
article 9.1(b) above.
(b) The 1994 Consolidated Accounts shall be established in accordance
with the Accounting Principles, and shall truly reflect the
financial position of the Companies, while taking account of the
remark mentioned at paragraph 2.1(a) above concerning Faco.
(c) The unaudited interim accounts which were provided to the
Purchaser were established in good faith and the Vendor has no
reason to believe that they were not accurate on the date at which
they were established.
POSITION SINCE 31 DECEMBER 1993
2.2
(a) Since 31 December 1993, and except for Continental Products S.A.,
there has been no material adverse change in the patrimonial,
financial or trading position of the Companies and during this
period the activities of the Companies have been carried on in an
ordinary business manner. Since 31 December 1993, there has been
no material adverse change in the prospects of the Companies, it
being stipulated that the Vendor does not make any Warranty in
this respect for the period as of the date hereof.
(b) Since 31 December 1993, and except as disclosed in Appendix
2.2(b):
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(i) no contract, liability or commitment at long term, or of
an unusual nature, has been entered into by the Companies
for an amount in excess of FRF 2,000,000;
(ii) the Companies have not purchased, sold or promised to
purchase or to sell any asset having a value in excess of
FRF 500,000;
(iii) no debtor of the Companies has been released from its debt
against payment of an amount inferior to the book value of
the debt, and no amount receivable by the Companies in
excess of FRF 300,000 has been deferred for payment,
subordinated or been subject to a total or partial
provision;
(iv) the Companies have not repaid any borrowing or other
indebtedness in advance of its maturity.
(v) the Companies have not declared or paid any dividend or
proceeded with any distribution of any nature whatsoever
to their shareholders, or proceeded with any reimbursement
or repurchase of their own shares;
(vi) the Companies have not waived any material right under any
contract which must figure in a Schedule to this
Agreement;
(vii) the Companies have not modified their accounting methods
or practices, nor their amortization policies or rates;
(viii) the Companies have not modified their commercial policies
in a material manner;
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(ix) the Companies have not granted loans or advances to any of
their shareholders, managers, employees or consultants,
other than in the normal course of business;
(x) with the exception of Harny, Nyhar and Sofac, the
Companies have not acquired nor have they disposed of
assets other than in the normal course of business;
(xi) with the exception of intervening transactions concerning
Harny, Nyhar and Sofac, there is no change to the
corporate or shareholding structure concerning the
Companies.
ACCOUNTING AND OTHER RECORDS
2.3
(a) The statutory books are complete and accurate, books of account
and other records of the Companies are up-todate and are in
compliance with all applicable laws and the Accounting Principles.
(b) The records and accounting systems (including computer software)
are not dependent upon equipment which are not the property, or
not under the control of, the Companies, and the data and
information concerning the Companies are recorded, archived,
maintained, and operated directly by the Companies.
(c) The Companies hold all the licenses necessary to operate the
software which they use and do not share any user rights in
respect of such software with any third person.
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ACCOUNTS RECEIVABLE-INDEBTEDNESS
ACCOUNTS RECEIVABLE OF THE COMPANIES
3.1
(a) The Companies have no accounts receivable other than those
incurred in the normal course of business.
(b) Subject to possible provisions made in compliance with the
Accounting Principles, client accounts receivable appearing in the
1993 Accounts and those recorded since 31 December 1993 are, on
the date hereof, reasonably considered to be recoverable in a
global amount corresponding to their net book value.
DEBTS OWED BY THE COMPANIES
3.2
(a) On 16 December 1994, the Companies have no debts other than loans
as at 16 December 1994, details of which are included in Appendix
3.2(a); since 16 December 1994 and until the date of the present
Agreement, none of the Companies has agreed any new significant
indebtedness other than in the ordinary course of business, except
for that which appears in Appendix 3.2 (a).
(b) The Companies have received no requests for repayment concerning
their debts which are payable on demand, or any request for
advance repayment of their term debts and, since 31 December 1993,
have not proceeded with the advance repayment of any important
loans except for the repayment of the shareholder's advance
granted to the Holding Company and an amount borrowed by SOFAC.
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(c) On 16 December 1994, the Companies have undertaken no obligations
off the balance sheet except those presented in Appendix.
REGULATORY MATTERS
LICENSES
4.
(a) The Companies have obtained all licenses and authorizations
required for carrying on their businesses.
(b) The Companies comply with their principal obligations under the
licenses and authorizations referred to in paragraph(a).
(c) The Companies have always complied with applicable laws and
regulations in force, including those relating to trade and
competition.
THE COMPANIES' ASSETS
OWNERSHIP
5.1
(a) For the purposes of this paragraph 5.1, the term ASSET shall not
include the Property, to which the provisions of paragraph 12
below shall apply, but includes all the other real property
mentioned in Appendix 5.1 (a). Although the property titles to
the real property of the Holding Company on the rue de Lourmel in
Paris, as well as the property titles to the real property of
SOFAC in Valenciennes, could not be included in Appendix 5.1 (a),
the Vendor warrants that the Companies concerned are the full
owners of such property. The Vendor and the Purchaser shall
cooperate
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to assure that these Companies obtain their property
titles as soon as possible.
(b) Except as set out in Appendix 5.1(b), all the assets included in
the 1993 Accounts, or acquired since 31 December 1993 (other than
goods sold in the ordinary course of business), are the full
property of the Companies. These assets are not subject to any
security interest, D<e'>MEMBREMENT (life interest, usufruct,
remainder), lease agreement, finance lease, title retention
provision, payment on deferred terms or any agreement to that
effect except for:
(i) leasing agreements or finance leases for a unitary amount
of less than FRF 200,000 per annum or FRF 4,000,000 per
annum for the aggregate of such agreements;
(ii) title retention provisions concerning goods supplied to
the Companies in the ordinary course of business;
(iii) security interests appearing in the 1993 Accounts and
liens arising by operation of law;
(iv) assigned client accounts receivable for which the assignee
(e.g. factoring agent) has available means of recourse
against the assignor.
(c) The inventory of the Companies is valued in accordance with the
Accounting Principles at its cost price or at its probable market
value, if lower.
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POSSESSION AND FACILITIES BELONGING TO THIRD PARTIES
5.2
(a) All of the assets owned by the Companies, or for which the
Companies have a right of use, are in the possession, or under the
control, of the Companies.
(b) Where any asset is used, but not owned, by a Company or any
facilities or services are provided to the Company by any third
party, the Company has not received notice of early termination of
the agreements relating thereto.
FIXED ASSETS
5.3 Each fixed asset included in the Accounts or acquired by the
Companies since the Accounting Date (other than assets presently
sold during the normal course of business) is held in full ownership
by the Companies and is free from any third party rights. All the
factories and equipment (including fixed installations), vehicles
and office equipment (the individual value of which exceeds FRF
100,000) used by the Companies of their activities are in good
working order and well maintained taking length of service into
account, have been regularly serviced, are fully operational and are
capable of being properly used for their activities, and none of
these assets is, to the knowledge of the Vendor, dangerous or
obsolete.
INSURANCE
5.4
(a) Appendix 5.4(a) contains a copy of the insurance policies in the
names of the Companies. Such insurance policies are in effect.
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(b) No significant claim exists under these insurance policies.
INTELLECTUAL PROPERTY RIGHTS
REGISTERED RIGHTS
6.1 Appendix 6.1 contains a list of all Intellectual Property Rights
registered (or for which registration has been requested) in France or
abroad and which are owned or used by the Companies. The Companies are
the sole legal owners of such Intellectual Property Rights. Such rights
are not subject to any security interest. There exists no other
significant Intellectual Property Rights of the Companies.
INFRINGEMENT
6.2 As far as the Vendor is aware, and except for matters listed in
Appendix 6.2, the Companies are not infringing third party Intellectual
Property Rights or using in an illicit manner confidential information
disclosed to the Companies (or to the Vendor). Likewise, as far as the
Vendor is aware, no third party is infringing on any Intellectual
Property Rights of the Companies.
CONTRACTUAL MATTERS
IMPORTANT CONTRACTS
7.1 Other than as set out in Appendix 7.1, there exists no important
agreement:
(a) for which the acquisition of the Shares by the Purchaser and the
performance of the terms of this Agreement would be capable of:
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(i) relieving the other party from its obligations or
entitling him to exercise any right of termination; or
(ii) putting the Companies in breach under such agreement or
causing them to give up a right or increasing one of their
obligations;
(b) which was entered into otherwise than under normal market
conditions (including, without limitation, in respect of shared
facilities);
(c) which confers any right upon a third party to require the issuance
of any shares, debentures or other securities of the Companies now
or at any time in the future;
(d) under which the Companies have guaranteed the performance of an
obligation by any third party.
There exists no shareholders agreement to which one of the Companies is a
party other than those relating to Faco (Mr. Smal), Babyliss U.K. (Mr.
Broom), Nyhar B.V. (Mr. Ouborg) and Babyliss Deutschland GmbH (Mr.
Dieter);
Except for the agreement concluded with Dickson concerning China, there
exist no licensing, manufacturing or joint venture agreements other than
those appearing in the appendices to this Agreement.
There exist no written agreements with clients and suppliers. The
commissions, discounts and other renumerations, if any, involving
shipments of products made by suppliers since the 1st January 1995 belong
to the Purchaser.
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CONTRACTS WITH DIRECTORS
7.2 Other than as set out in Appendix 7.2, the agreements coming under
articles 101 ET SEQ. of the French law on commercial companies (or the
equivalent legislation in other jurisdictions) were concluded in
accordance with the provisions of the aforesaid articles (or with the
applicable provisions of foreign legislation).
NON-PERFORMANCE
7.3 The Vendor has no knowledge of any material defaults under any
agreements to which the Companies are a party, whether by the Companies
or by the other party or parties thereto, whether existent or potential.
STATE OF ECONOMIC DEPENDANCE
7.4 Other than as set out in Appendix 7.4, the Companies have not
completed more than 10% of their sales or purchases with any one party
during each of the preceding two financial years (ending 31 December
1994).
LITIGATION
8. Other than as set out in Appendix 8, the Companies are not a party
to (or otherwise implicated in) any pending judicial proceedings,
arbitration or administrative proceedings. The Companies have not
received notice that such proceedings are envisaged, nor that any
administrative inquiry is in progress or imminent, and the Vendor is not
aware of threats of such proceedings or investigations. At the present
time, the Companies are not subject to any outstanding judicial, arbitral
or governmental decision whatsoever.
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ENVIRONMENT
9. The Companies are in compliance with the laws or regulations
relating to the environment, hygiene, health or safety. The Companies
have taken all useful steps to prevent any damage to the environment
which could give rise to a third party claim, render any land used by the
Companies or any of their sites unusable or capable of being subject to a
decontamination order or similar procedure.
DIRECTORS AND EMPLOYEES
EMPLOYEES
10.1 Appendix 10 includes:
(a) a list of all employees of the Companies, showing the remuneration
and other benefits;
(b) a statement of all the agreements between the Companies and the
trade unions or other bodies representing the employees;
(c) copies of the employment contracts of all employees of the
Companies whose annual salary exceeds FRF 250,000.
PRIOR NOTICE
10.2 There exist no written or unwritten employment contract (or
contract for services) which cannot be terminated by the Companies with a
prior notice of three months or less, with the exception of executives,
for whom the prior notice is six months.
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COMPLIANCE
10.3 The Companies have with regard to each of their employees (and so
far as relevant with regard to each of their former employees) complied
with the essential provisions of the law, regulations, collective
agreements and judicial decisions concerning their working conditions or
the relations between the Companies and their employees or any
representative trade union. With the exception of Laurence Bros, whose
dismissal is in progress, all of the employees of the Companies
effectively work for said Companies; the latter pay no amounts having
the characteristics of salary to persons who do not really work for the
Companies.
INCENTIVE SCHEMES
10.4 Other than as set out in Appendix 10.4, the Companies have not
adopted any share incentive scheme, share option or profit sharing
scheme, share sale or purchase scheme, bonus or commission arrangements
for their executives or employees, except for rules concerning mandatory
employee (incentive scheme under French law).
RETIREMENT
10.5 Appendix 10.5 contains information on the cases in which the
Companies have undertaken to provide retirement or other pensions to
their current or former employees.
PAYMENTS ON TERMINATION
10.6 The Companies have not incurred any liability for the breach of,
or arising from the termination of, any employment or service contract,
except to the extent that such should appear in the 1993 Accounts or in
Appendix 10.6.
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INSOLVENCY PROCEEDINGS
11. The Companies have not been placed under the control of an
ADMINISTRATEUR JUDICIAIRE (receiver). The Companies are not subject to a
R<e`>GLEMENT AMIABLE (compromise with creditors), REDRESSEMENT JUDICIAIRE
(administrative order), LIQUIDATION JUDICIAIRE (judicial liquidation) or
any other similar procedure.
REAL PROPERTY
12.
(a) The Holding Company holds legal title or a valid right of
occupation to the Property (as described in Appendix 12(a)), free
from all mortgages or other rights in favour of third parties.
(b) The occupation and use of the Property by the Holding Company is
in conformity with all PLANS D'URBANISME (zoning laws).
(c) The Property of the Holding Company has not been subject to
measures forbidding its occupation.
(d) The Holding Company has obtained all the building permits
necessary for works completed on the Property.
(e) No administrative authority has ordered that works be completed on
the Property.
(f) To the Vendor's knowledge, there is no provision or regulation
which would prevent the Holding Company from disposing of the
Property.
(g) The Holding Company has not received notice that it has failed to
observe an essential clause of the finance lease concerning the
Property.
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The preceding warranties are, to the Vendor's knowledge, also applicable
to the other real properties used by the Holding Company and the
Subsidiaries.
TAXATION - SOCIAL SECURITY
13. The Companies have fulfilled their obligations to file tax returns
and social security declarations and have paid all taxes and social
security charges within the regulatory time limits.
BANKING POWERS
14. A complete list of persons authorized to sign on the bank accounts
of the Companies is set out in Appendix 14.
SUBSIDIES
15. The Companies have not received any grants or governmental aids
other than those set out in Appendix 15.
PRODUCTS LIABILITY
16.
(a) The Companies have not manufactured, sold or supplied products or
provided services which are substantially non-compliant with
applicable laws, rules and standards, which are defective or
dangerous and which are insufficiently covered by civil liability
insurance.
(b) The Companies have not received any notice or warning that the
Companies are in violation of the laws, regulations or relevant
standards with regard to consumer protection.
<PAGE>
Page 47
(c) The Companies are not under the obligation, and have not been
required during these last three years, to recall one or several
of their products from their clients or ultimate consumers and, to
the Vendor's knowledge, no such recall is foreseeable at the
present time, except for in the United Kingdom (i) the recall of
products from Boots Plc in 1994, (ii) approximately 1,500 salon
hairdryers, and in Germany, a recall of a hair clipper
manufactured by Conair, because of a motor noise problem.
VENDOR INTERESTS
17. The Vendor does not hold, directly or indirectly, any shareholding
or any interest of any nature whatsoever in a business competitor,
distributor, commercial agent or client of the Companies. The Vendor
does not possess, either directly or indirectly, any asset used by the
Companies in the running of their businesses.
The Vendor can exercise no claim of any nature whatsoever against the
Companies, and the Companies are not indebted to the Vendor, except for
debts which could result from the normal exercise by the Vendor of his
activities and functions.
To the Vendor's knowledge, the above representations are equally
applicable to the Management of Babyliss S.A. and its directors.
REPRESENTATIONS AND WARRANTIES
18. For the purposes of this acquisition taken as a whole, the above
Warranties contain no material inaccuracy or omission.
<PAGE>
Page 48
SCHEDULE C1
The Cristal Warranties
The Cristal Warranties contained in this Schedule are subject to the
limitations stated in article 9.A.
CRISTAL AND BLITOG-SHARES
1.1
(a) All of the Cristal and Blitog Shares are fully paid and, on the
Completion Date, shall be free from all security interests, options,
D<e'>MEMBREMENT (life interest, usufruct, remainder), claims,
restrictions of any nature whatsoever or any other third party
rights and shall be transferred with all the rights attached thereto
at that date. Cristal and Blitog are not required to increase their
share capital in order to comply with the applicable legislation.
No right of pre-emption nor any other right of any nature whatsoever
in connection with the Cristal and Blitog Shares shall be exercised
which could obstruct Completion. As from the Completion Date, the
Purchaser shall have the right to exercise or collect any right
attached to the Cristal and Blitog Shares, including and without
limitation, the right to receive all dividends, all distributions or
proceeds declared, paid or made by the Companies.
(b) The Vendor undertakes that any right of pre-emption in connection
with the Cristal Shares shall, if appropriate, be made the subject
of an irrevocable waiver.
<PAGE>
Page 49
(c) The Vendor has the power and legal capacity to sign and perform this
Agreement, and has obtained all the authorizations required to this
effect.
(d) The signature and performance by the Vendor of his obligations
hereunder:
(i) shall not constitute a breach of any clause whatsoever of
Cristal's or Blitog's corporate documents; or
(ii) shall not constitute a breach or default with regard to
any document to which the Vendor, or Cristal or Blitog, is
a party or by virtue of which the Vendor, or Cristal or
Blitog, are bound; or
(iii) shall not constitute a breach of a judicial or
administrative decision or of a rule applicable to Cristal
or Blitog;
(e) The Vendor shall have on the Completion Date full and entire
ownership of 50 shares of Cristal.
(f) Cristal and Blitog were duly constituted and the information in
their respect set forth in Schedule A is true and accurate.
(g) Cristal holds no interest in any other businesses than the Holding
Company and Blitog. Blitog has no shareholdings.
<PAGE>
Page 50
FINANCIAL MATTERS
THE ACCOUNTS
2.1
(a) The 1993 Accounts were established in accordance with the Accounting
Principles and they truly reflect the financial position of Cristal
and Blitog.
(b) The 1994 Consolidated Accounts of Cristal and Blitog shall be
established in accordance with the Accounting Principles, and
shall truly reflect the financial position of Cristal and Blitog.
POSITION SINCE 31 DECEMBER 1993
2.2
(a) Since 31 December 1993, there has been no material adverse change
in the patrimonial, financial or trading position of Cristal or
Blitog and during this period the activities of Cristal or Blitog
have been carried on in an ordinary business manner. Since
31 December 1993, there has been no material adverse change in the
prospects of Cristal or Blitog.
(b) Since 31 December 1993:
(i) no contract, liability or commitment at long term, or of
an unusual nature, has been entered into by Cristal or
Blitog (except for the acquisition of Blitog by Cristal);
(ii) Cristal and Blitog have not purchased, sold or promised to
purchase or to sell any asset;
(iii) no debtor of Cristal or Blitog has been released from its
debt against payment of an
<PAGE>
Page 51
amount inferior to the book value of the debt, and no amount
receivable by Cristal or Blitog has been deferred for payment,
subordinated or been subject to a total or partial provision;
(iv) Cristal or Blitog have no borrowings or other debt, except
for shareholders' current accounts.
(v) except for the distribution of a dividend of CHF 48,000 by
Blitog, Cristal and Blitog have not declared or paid any
dividend or proceeded with any distribution of any nature
whatsoever to their shareholders, or proceeded with any
reimbursement or repurchase of their own shares;
(vi) Cristal or Blitog have not waived any material right under
any contract which must figure in a schedule to this
Agreement;
(vii) Cristal or Blitog have not modified their accounting
methods or practices, nor their amortization policies or
rates;
(viii) Cristal or Blitog have not granted loans or advances to
any of their shareholders, managers, employees or
consultants, other than in the normal course of business
and except for a loan of FRF 212,800 owed by the Vendor to
Blitog;
(ix) Cristal and Blitog have not acquired, nor have they
disposed of, assets other than in the normal course of
business;
<PAGE>
Page 52
(x) with the exception of intervening transactions concerning
the acquisition of Blitog by Cristal, there is no change
to the corporate or shareholding structure concerning
Cristal or Blitog.
ACCOUNTING AND OTHER RECORDS
2.3
(a) The statutory books are complete and accurate, books of account
and other records of Cristal or Blitog are up-todate and are in
compliance with all applicable laws and the Accounting Principles.
(b) Cristal and Blitog hold all the licenses necessary to operate the
software which they use and do not share any user rights in
respect of such software with any third person.
ACCOUNTS RECEIVABLE-INDEBTEDNESS
ACCOUNTS RECEIVABLE OF CRISTAL AND BLITOG
3.1
(a) Cristal and Blitog have no accounts receivable other than those
incurred in the normal course of business.
(b) Subject to possible provisions made in compliance with the
Accounting Principles, client accounts receivable appearing in the
1993 Accounts of Cristal and Blitog and those recorded since 31
December 1993 are, on the date hereof, reasonably considered to be
recoverable in a global amount corresponding to their net book
value.
<PAGE>
Page 53
DEBTS OWED BY THE COMPANIES
3.2
(a) Cristal and Blitog have no debt (except for shareholders'
advances).
(b) Cristal and Blitog have undertaken no obligations off the balance
sheet.
REGULATORY MATTERS
LICENSES
4.
(a) Cristal and Blitog have obtained all licenses and authorizations
required for carrying on their businesses.
(b) Cristal and Blitog comply with their principal obligations under
the licenses and authorizations referred to in paragraph(a).
(c) Cristal and Blitog have always complied with applicable laws and
regulations in force.
THE ASSETS OF CRISTAL AND BLITOG
OWNERSHIP
5.1 Except for the shareholding of Cristal in the Holding Company and
the Intellectual Property Rights of Blitog, Cristal has no assets.
<PAGE>
Page 54
INSURANCE
5.4 Cristal and Blitog have subscribed no insurance policies and,
consequently, no significant claim exits under any such insurance
policies.
INTELLECTUAL PROPERTY RIGHTS
REGISTERED RIGHTS
6.1 Appendix 6.1 contains a list of all Intellectual Property Rights
registered (or for which registration has been requested) in Switzerland
or abroad and which are owned or used by Blitog. Blitog is the sole
legal owner of such Intellectual Property Rights. Such rights are not
subject to any security interest. There exists no other significant
Intellectual Property Rights for Cristal and Blitog.
INFRINGEMENT
6.2 As far as the Vendor is aware, Cristal and Blitog are not
infringing third party Intellectual Property Rights or using in an
illicit manner confidential information disclosed to the Companies (or to
the Vendor). Likewise, as far as the Vendor is aware, no third party is
infringing on any Intellectual Property Rights of Cristal and Blitog.
CONTRACTUAL MATTERS
IMPORTANT CONTRACTS
7.1 There exists no important agreement:
(a) for which the acquisition of the Cristal Shares by the Purchaser
and the performance of the terms of this Agreement would be
capable of:
<PAGE>
Page 55
(i) relieving the other party from its obligations or
entitling him to exercise any right of termination; or
(ii) putting Cristal and Blitog in breach under such agreement
or causing them to give up a right or increasing one of
their obligations;
(b) which was entered into otherwise than under normal market
conditions (including, without limitation, in respect of shared
facilities);
(c) which confers any right upon a third party to require the issuance
of any shares, debentures or other securities of Cristal and
Blitog now or at any time in the future;
(d) under which Cristal or Blitog have guaranteed the performance of
an obligation by any third party.
There exists no shareholders agreement to which Cristal or Blitog is a
party.
There exist no licensing, manufacturing or joint venture agreements other
than those appearing in the Appendix 7.1.
CONTRACTS WITH DIRECTORS
7.2 There exist no agreements coming under the provisions of Swiss law
equivalent to articles 101 ET SEQ. of the French law on commercial
companies.
NON-PERFORMANCE
7.3 The Vendor has no knowledge of any material defaults under any
agreements to which Cristal or Blitog are a party,
<PAGE>
Page 56
whether by Cristal or Blitog or by the other party or parties thereto,
whether existent or potential.
LITIGATION
8. Cristal and Blitog are not a party to (or otherwise implicated in)
any pending judicial proceedings, arbitration or administrative
proceedings. Cristal and Blitog have not received notice that such
proceedings are envisaged, nor that any administrative inquiry is in
progress or imminent, and the Vendor is not aware of threats of such
proceedings or investigations. At the present time, Cristal and Blitog
are not subject to any outstanding judicial, arbitral or governmental
decision whatsoever.
ENVIRONMENT
9. Cristal and Blitog are in compliance with the laws or regulations
relating to the environment, hygiene, health or safety. Cristal and
Blitog have taken all useful steps to prevent any damage to the
environment which could give rise to a third party claim.
EMPLOYEES
10.1 Cristal and Blitog have no employees.
INSOLVENCY PROCEEDINGS
11. Cristal and Blitog have not been placed under the control of an
ADMINISTRATEUR JUDICIAIRE (receiver). Cristal and Blitog are not subject
to a R<e`>GLEMENT AMIABLE (compromise with creditors), REDRESSEMENT
JUDICIAIRE (administrative order), LIQUIDATION JUDICIAIRE (judicial
liquidation) or any other similar procedure.
<PAGE>
Page 57
REAL PROPERTY
12. Neither Cristal or Blitog own or lease any real property.
TAXATION
13. Cristal and Blitog have fulfilled their obligations to file tax
returns and have paid all taxes within the regulatory time limits.
BANKING POWERS
14. In Cristal and Blitog, only the two directors, acting jointly or
with power of attorney, are authorized to operate the bank accounts.
SUBSIDIES
15. Cristal and Blitog have not received any grants or governmental
aids.
PRODUCTS LIABILITY
16. Cristal and Blitog manufacture no products.
VENDOR INTERESTS
17. The Vendor does not hold, directly or indirectly, any shareholding
or any interest of any nature whatsoever in a business competitor,
distributor, commercial agent or client of Cristal or Blitog. The Vendor
does not possess, either directly or indirectly, any asset used by
Cristal or Blitog in the running of their businesses.
The Vendor can exercise no claim of any nature whatsoever against Cristal
or Blitog, and Cristal or Blitog are not indebted to the Vendor, except
for debts which could result
<PAGE>
Page 58
from the normal exercise by the Vendor of his activities and functions.
CRISTAL WARRANTIES
18. For the purposes of this acquisition taken as a whole, the above
Cristal Warranties contain no material inaccuracy or omission.
<PAGE>
Page 59
SCHEDULE D
Copy of the 1993 Accounts and the 1993 Consolidated Accounts
(for the accounts of the Holding Company and the Subsidiairies, and for
the 1993 Consolidated Accounts, see JPF Agreement)
c:\AN06\PJ\C011.CON
TRANSLATED FROM FRENCH
FOR INFORMATION ONLY
AMENDMENT OF FEBRUARY 18, 1995 TO THE SHARE PURCHASE AGREEMENT OF JANUARY
22, 1995
BETWEEN
(1) FINANCIERE DE L'EUROPE OCCIDENTALE, a Luxembourg corporation whose
registered office is at 15 boulevard Roosevelt, L 2000 Luxembourg,
registered at the Commercial Registry, Section B n* 25124,
represented by Mr. Robert Simon, duly authorized (the Vendor), and
(2) CONAIR CORPORATION, a Delaware corporation whose headquarters are at
150 Milford Road, East Windsor, New Jersey, United States,
represented by Mr. Leandro P. Rizzuto, Chairman and President, duly
authorized (the Purchaser).
WHEREAS
(A) Cristal Gesellschaft f<u">r Beteiligungen is a Swiss SOCI<e'>T<e'>
ANONYME with a capital of CHF 50,000, whose registered office is at
Steinengraben, 22, B<a^>le (c/o Experta Treuhand AG), registered at
the Commercial Registry of B<a^>le (Cristal).
(B) The Vendor and the Purchaser executed on January 22, 1995 a share
purchase agreement (the Share Purchase Agreement) relating to 50
shares of Cristal.
(C) The Vendor and the Purchaser have agreed to rectify certain terms of
the Share Purchase Agreement, the other terms of the said agreement
remaining unchanged.
<PAGE>
Page 2
IT IS THEREFORE AGREED AS FOLLOWS:
DEFINITIONS
At article 1.1, on page 3, it should read:
"CRISTAL CLAIM means any claim against the Vendor under the Cristal
Warranties, pursuant to article 9A;"
instead of: "CRISTAL CLAIM means any claim against Cristal under the
Warranties, pursuant to article 9A."
ARTICLE 2.2
At article 2.2, on page 3, it should read:
"Subject to the price adjustment under article 3 below, the total
Purchase Price payable by the Purchaser to the Vendor for the Cristal
Shares shall be the sum of FRF 123,845,200. It is stipulated that the
Purchase Price shall be reduced by the counter-value in French francs of
an amount of CHF 5,227,000, as calculated by reference to the rate of
4.1180 French francs per 1 Swiss franc."
instead of: "Subject to the price adjustment under article 3 below, the
total Purchase Price payable by the Purchaser to the Vendor for the
Cristal Shares shall be the sum of FRF 123,845,200. It is stipulated
that the Purchase Price shall be reduced by the counter-value in French
francs of an amount of CHF 5,227,000 on the working day prior to the
Completion Date, as calculated by reference to the rate indicated in the
FINANCIAL TIMES of that day."
<PAGE>
Page 3
ARTICLE 4.3(A)
At article 4.3(a), on page 5, it should read:
"deliver to the Vendor a banker's draft made payable to the Vendor in an
amount of FRF 98,825,960, reduced by the counter-value in French francs
of an amount of CHF 5,227,000 on the business day prior to the Completion
Date, as calculated by reference to the rate of 4.1180 French francs per
1 Swiss franc;"
instead of: "deliver to the Vendor a banker's draft made payable to the
Vendor in an amount of FRF 98,825,960, reduced by the counter-value in
French francs of an amount of CHF 5,227,000 on the working day prior to
the Completion Date;"
ARTICLE 6.2
At article 6.2, on page 6, it should read:
"On the Completion Date, the Purchaser shall pay to the Vendor an amount
of CHF 212,800 to enable the Vendor to reimburse to Blitog an amount of
CHF 212,800 in full and final settlement of all advances that Blitog
granted to the Vendor;"
instead of: "On the Completion Date, the Vendor shall reimburse to
Blitog an amount of CHF 212,800 in full and final settlement of all
advances that Blitog granted to the Vendor;"
ARTICLE 2.2 B(VIII) OF SCHEDULE C1
At article 2.2 b(viii) of Schedule C1, on page 34, it should read:
"...except for a loan of CHF 212,800 granted by Blitog to the Vendor;"
instead of: "except for a loan of FRF 212,800 owed by Blitog to the
Vendor;"
<PAGE>
Page 4
Done in Paris in 2 originals
On February 18, 1995
____________________ __________________
FINANCIERE DE CONAIR CORPORATION
L'EUROPE OCCIDENTALE
[c:\sm\pj\amend.feo]
_____________________________________________________________
AMENDED AND RESTATED CREDIT AGREEMENT
between
CONAIR CORPORATION
and
CONTINENTAL CONAIR LIMITED
and
THE BANKING INSTITUTIONS NAMED HEREIN
with
CORESTATES BANK, N.A.
as Agent
and
CHEMICAL BANK NEW JERSEY, NATIONAL ASSOCIATION
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION, NEW JERSEY
as Co-Agents
October 1, 1994
_____________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
I. THE CREDIT................................................ 1
1.1The Loans............................................. 1
(a) Revolving Credit Loans. ....................... 1
(b) Short Term Loans. ............................. 3
(c) Renewal of Trade Finance Line. ................ 4
(e) Pro Rata Participation. ....................... 5
(f) Obligation to Repay. ......................... 5
1.2 The Notes........................................... 5
(a) Revolving Credit Notes......................... 5
(b) Short Term Notes............................... 6
(c) Amounts of Loans............................... 6
1.3 Funding Procedures.................................. 6
1.4 Letters of Credit................................... 7
(a) General Requirements........................... 7
(b) Minimum Stated Amount.......................... 8
(c) Limit on Certain Letters of Credit............. 9
(d) Letter of Credit Requests...................... 9
(e) Letter of Credit Participations................ 9
(f) Agreement to Repay Letter of Credit Drawings,
Collateral, etc................................ 13
1.5 Bankers' Acceptances................................ 14
(a) General Requirements........................... 14
(b) Payment........................................ 15
(c) Bankers' Acceptance Requests................... 15
(d) Bankers' Acceptance Participations............. 16
1.6 Steamship Indemnities; Trade Collateral............. 18
(a) General Requirements........................... 18
(b) Steamship Indemnity Requests................... 18
(c) Steamship Indemnity Participations............. 19
(d) Agreement to Repay Steamship Indemnity Drawings,
Collateral, etc................................ 20
(e) Trade Collateral............................... 21
1.8 Reduction and Termination of Aggregate Revolving Loan
Commitment and STL/BA Sublimit...................... 22
1.9 Prepayments......................................... 23
(a) Base Rate Loans and Short Term Loans. ......... 23
(b) LIBO Rate Loans................................ 24
1.10 Payments............................................ 24
(a) LIBO Loans..................................... 24
(b) Base Rate Loans................................ 24
(d) Application of Payments, Payment Administration, Etc.
24
(e) Net Payments. ................................ 25
<PAGE>
Page ii
1.11 Interest............................................ 26
(a) Base Rate...................................... 26
(b) LIBO Rate...................................... 27
(c) Bankers' Acceptance Rate....................... 28
(d) Conversions of Loans........................... 28
(e) Default Rate................................... 29
(f) Applicable Margins............................. 29
(g) Computations................................... 30
1.12 Reports as to Loans, Letters of Credit and Bankers' Acceptances
and Steamship Indemnities............................30
1.13 Annual Allocation Fee............................... 31
1.14 Changes in Circumstances; Yield Protection.......... 31
1.15 Illegality.......................................... 33
II. REPRESENTATIONS AND WARRANTIES........................... 33
2.1 Organization, Standing.............................. 33
2.2 Corporate Authority, Etc............................ 34
2.3 Validity of Documents............................... 34
2.4 Litigation.......................................... 34
2.5 ERISA............................................... 34
2.6 Financial Statements................................ 36
2.7 Margin Regulations.................................. 37
2.8 Not in Default...................................... 37
2.9 Taxes. ............................................. 37
2.10 Permits, Licenses, Etc.............................. 37
2.11 Compliance With Laws................................ 37
2.12 Solvency............................................ 38
2.13 Amounts Owed to or from Affiliates; Intercompany Agreements
39
(a) Affiliates..................................... 39
(b) Intercompany Agreements........................ 39
(c) Dividends...................................... 39
2.14 Title to Assets..................................... 39
2.15 Insurance. ......................................... 40
2.16 No Burdensome Agreements............................ 41
2.17 Subsidiaries, Etc................................... 41
2.18 Disclosure Generally................................ 41
III. CONDITIONS PRECEDENT..................................... 41
3.1 All Loans........................................... 41
(a) Documents...................................... 41
(b) Covenants; Representations..................... 42
(c) Limits......................................... 42
(d) Defaults....................................... 42
<PAGE>
Page iii
3.2 Conditions to First Loan, Letter of Credit or Bankers'
Acceptance.......................................... 42
(a) Articles, Bylaws............................... 42
(b) Evidence of Authorization...................... 42
(c) Legal Opinions................................. 42
(d) Incumbency..................................... 43
(e) Notes. ........................................ 43
(f) Intercompany Agreements........................ 43
(g) Fees........................................... 43
(h) Projections.................................... 43
(i) Senior Notes................................... 43
(j) Consents....................................... 43
(k) Change......................................... 44
(l) Pending or Threatened Litigation............... 44
(m) Rating......................................... 44
(n) Subordinated Indebtedness...................... 44
IV. AFFIRMATIVE COVENANTS.................................... 44
4.1 Financial Statements and Reports.................... 45
(a) Annual Statements. ............................ 45
(b) Quarterly Statements. ......................... 45
(c) No Default. ................................... 46
(d) Compliance. ................................... 46
(e) Cash Flow Projections.......................... 46
(f) ERISA. ........................................ 47
(g) Material Changes. ............................. 47
(h) Other Information.............................. 47
4.2 Insurance; Taxes and Other Charges.................. 47
(a) Insurance...................................... 47
(b) Taxes and Other Charges........................ 47
4.3 Corporate Existence................................. 47
4.4 Compliance with ERISA............................... 48
4.5 Compliance with Regulations. ....................... 49
4.6 Notice of Events.................................... 49
4.7 Inspection Rights................................... 50
4.8 Short Term Loans Outstanding........................ 50
4.9 GAAP................................................ 50
4.10 Use of Proceeds..................................... 50
4.11 Domestic Subsidiaries. ............................. 50
4.12 Subsidiary Dividends. .............................. 51
4.13 Registration. ..................................... 51
V. NEGATIVE COVENANTS....................................... 51
5.1 Merger, Consolidation............................... 51
5.2 Indebtedness for Borrowed Money..................... 51
<PAGE>
Page iv
5.3 Liens. ............................................ 53
5.4 Guarantees. ........................................ 53
5.5 Sale of Stock and Indebtedness of Subsidiaries...... 54
5.6 Restrictions on Subsidiary Dividends................ 54
5.7 Sale of Receivables................................. 54
5.8 Judgment, Attachment................................ 54
5.9 Restricted Payments................................. 55
5.10 Margin Stock........................................ 55
5.11 Loans, Advances and Investments..................... 55
5.12 Transfer of Assets.................................. 57
5.13 Transactions with Conair Affiliates................. 57
5.14 Modification of Loan Agreements or Policies......... 57
5.15 Discontinuance or Change of Business................ 58
5.16 Capital Expenditures. .............................. 58
5.17 Current Ratio. ..................................... 58
5.18 Tangible Net Worth. ................................ 58
5.20 Fixed-Charge Coverage Ratio......................... 58
5.21 Maintenance of Cash Coverage Ratio.................. 59
VI. DEFAULT.................................................. 59
6.1 Events of Default................................... 59
(a) Principal, Interest or Other Amounts........... 59
(b) Covenants...................................... 59
(c) Representations, Warranties, Etc............... 59
(d) Cross Default.................................. 60
(e) Bankruptcy, Etc................................ 60
(f) Certain Other Defaults......................... 60
(g) Judgments...................................... 60
(h) ERISA.......................................... 60
(i) Environmental Matters.......................... 61
VII. AGENT................................................... 61
7.1 Appointment and Authorization....................... 61
7.2 Duties and Obligations.............................. 62
7.3 The Agent as a Bank................................. 63
7.4 Independent Credit Decisions........................ 63
7.5 Indemnification..................................... 63
7.6 Successor Agent..................................... 63
7.7 Allocations Made By Agent........................... 64
VIII. CERTAIN DEFINITIONS.................................... 64
8.1 Definitions......................................... 64
<PAGE>
Page v
IX. MISCELLANEOUS............................................ 73
9.1 Waiver.............................................. 73
9.2 Amendments.......................................... 74
9.3 Governing Law....................................... 74
9.4 Assignment.......................................... 74
9.5 Captions............................................ 74
9.6 Notices............................................. 74
9.7 Sharing of Collections, Proceeds and Set-Offs; Application
of Payments......................................... 75
9.8 Expenses of the Agent; Indemnification of the Agent and the
Banks............................................... 76
9.9 Survival of Warranties and Certain Agreements....... 77
9.10 Severability........................................ 77
9.11 Banks' Obligations Several; Independent Nature of Banks'
Rights.............................................. 77
9.12 No Fiduciary Relationship........................... 77
9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS...... 77
9.14 WAIVER OF JURY TRIAL................................ 78
9.15 Counterparts; Effectiveness......................... 79
9.16 Use of Defined Terms................................ 79
9.17 Accounting Terms.................................... 79
9.18 Confidentiality..................................... 79
EXHIBITS
A Commitments
B Revolving Credit Note
C Short Term Note
D Loan Requests
E Borrowers Daily Report
F Bank Daily Report
G Agent Weekly Report
H Agent Monthly Report
I Opinion of Counsel for Conair
J Pledge Agreement
K Guarantee Agreement
L Intercreditor and Collateral Agency Agreement
<PAGE>
Page vi
SCHEDULES
1.4(a)(1) Letters of Credit
1.13 Annual Allocation Fee
2.4 Litigation
2.6 Liabilities
2.13 Intercompany Debt; Intercompany Agreements; Etc.
2.14 Existing Permitted Liens
2.17 Subsidiaries
5.2 Other Indebtedness for Borrowed Money
5.4 Existing Guarantees
5.13 Transaction with Affiliates
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 1,
1994 (this "AGREEMENT"), is entered into by and among CONAIR CORPORATION
("CONAIR"), a Delaware corporation, CONTINENTAL CONAIR LIMITED ("CCL"), a
Hong Kong corporation, the banking institutions signatories hereto
(collectively, the "BANKS" and individually a "BANK") and CORESTATES BANK,
N.A., as agent for the Banks under this Agreement (in such capacity, the
"AGENT") and CHEMICAL BANK NEW JERSEY, NATIONAL ASSOCIATION and FIRST
FIDELITY BANK, NATIONAL ASSOCIATION, NEW JERSEY, as co-agents for the Banks
under this Agreement (in such capacity, the "CO-AGENTS"). Conair and CCL
are sometimes referred to herein collectively as the "BORROWERS" and
individually as a "BORROWER."
WITNESSETH:
WHEREAS, the Borrowers and the Banks are parties to a Credit
Agreement, dated as of October 20, 1992, as amended (the "1992 Credit
Agreement"), providing for an unsecured reducing revolving credit facility
with an initial maximum principal amount of $20,000,000, which revolving
credit facility was used to repurchase certain subordinated debt of Conair
and is used to provide working capital to Conair, and a trade finance line
facility with an initial maximum principal amount of $60,000,000 to provide
the Borrowers with certain letters of credit, bankers' acceptances and
certain other financial accommodations, as provided herein; and
WHEREAS, the Borrower, the Banks and the Agent have agreed to amend
the 1992 Credit Agreement as provided herein, and to restate the 1992
Credit Agreement as so amended.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
I. THE CREDIT
1.1 THE LOANS.
(a) REVOLVING CREDIT LOANS. (1) Subject to the terms and
conditions hereof, each Bank agrees, severally and not jointly with the
other Banks, to make revolving credit loans (collectively called the
"REVOLVING CREDIT LOANS" and individually a "REVOLVING CREDIT LOAN") to
Conair from time to time during the period commencing the date hereof and
ending on June 30, 1997, or on any earlier date as provided in Section 6.1
hereof (the "REVOLVER TERMINATION DATE"), in principal amounts not to
exceed at any time outstanding in the aggregate the amount set forth
opposite the name of each such Bank on Exhibit A hereto under the caption
"REVOLVING LOAN COMMITMENT", as reduced from time to time as set forth on
such Exhibit A (each such amount, as the same may be reduced pursuant to
Section 1.8 hereof, being hereinafter called such Bank's "Revolving Loan
Commitment" and collectively, the Banks' "AGGREGATE REVOLVING LOAN
COMMITMENT"). The failure of any one or more of the Banks to make
Revolving Credit Loans in accordance with its or their obligations shall
not relieve the other Banks of their several
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obligations under this subsection, but in no event shall the aggregate
amount at any one time outstanding which any Bank shall be required
to lend under this Section 1.1(a) exceed the sum of the amount of
such Bank's Revolving Loan Commitment at that time.
(2) Conair may request Revolving Credit Loans at either the Base Rate
or LIBO Rate options described in Section 1.1. Conair may request and have
Revolving Credit Loans outstanding at any one time which involve any
combination of such interest rate options in such amounts as they may
determine, subject to the terms and conditions hereof, including the
requirement concerning minimum Loan requests, and provided, however, that
(i) no request may be made which would require more than one interest rate
option or more than one Interest Period (defined in Section 1.1) to apply
to a single Revolving Credit Loan, and (ii), in the case of LIBO Rate
Loans, (a) not more than five such Loans may be outstanding at any one
time, in the aggregate, (b) no LIBO Rate Loan may have an Interest Period
extending beyond June 30, 1997, and (c) no LIBO Rate Loan may have an
Interest Period extending beyond a date scheduled for the reduction of the
Aggregate Revolving Credit Loan Commitment if such Loan would cause the
aggregate amount of all LIBO Rate Loans having Interest Periods ending
after the date scheduled for reduction to exceed the Aggregate Revolving
Credit Commitment that will be in effect immediately after such date.
Revolving Credit Loans based on the Base Rate are herein sometimes
collectively referred to herein as "BASE RATE LOANS." Revolving Credit
Loans based on the LIBO Rate are sometimes called "LIBO RATE LOANS."
"LOAN" means any type of Revolving Credit Loan or Short Term Loan as the
context requires.
(3) Except for Revolving Credit Loans which exhaust the full
remaining amount of the Aggregate Revolving Loan Commitment, conversions
which result in the conversion of all Revolving Credit Loans subject to a
particular interest rate option, and conversions made pursuant to Section
1.15 hereof, each Loan when made and each conversion of Loans of one type
into Loans of another type hereunder shall be in an amount at least equal
to $1,750,000 or, if greater, then in such minimum amount plus $1,000,000
multiples. Within the limits of the Aggregate Revolving Loan Commitment,
Conair may borrow, prepay (in accordance with Section 1.9) and reborrow
Revolving Credit Loans.
(4) All Revolving Credit Loans shall, in any event, be repaid by
Conair on the Revolver Termination Date.
(5) If any principal of a LIBO Rate Loan shall become due (whether
upon prepayment or acceleration) prior to the last day of the Interest
Period applicable to such LIBO Rate Loan, Conair shall pay to each Bank
making such LIBO Rate Loan, in addition to the principal and interest then
to be paid, such additional amounts as may be necessary to compensate such
Bank for all direct and indirect costs and losses (including losses
resulting from redeployment of prepaid or unborrowed funds at rates lower
than the cost of such funds to such Bank) incurred or sustained by such
Bank (the "ADDITIONAL AMOUNT") as a result of such termination. The
Additional Amount (which each Bank shall take reasonable measures to
minimize) shall be specified in a written notice or certificate delivered
to Conair by the Agent in the form provided by each Bank sustaining such
costs or losses. Such notice or certificate shall contain a calculation
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in reasonable detail of the Additional Amount to be compensated and shall be
conclusive as to the facts and the amounts stated therein, absent manifest
error.
(6) Immediately upon the making of a LIBO Rate Loan, each Bank
making such LIBO Rate Loan shall be deemed to have sold and transferred to
each other Bank, and each other Bank shall be deemed irrevocably and
unconditionally to have purchased and received from each Bank making such
LIBO Rate Loan, without recourse or warranty, an undivided interest and
participation, to the extent of such Bank's Commitment Percentage in such
LIBO Rate Loan and the obligations of Conair under this Agreement with
respect thereto. Upon any change in the Commitments of the Banks, it is
hereby agreed that, with respect to all outstanding LIBO Rate Loans there
shall be an automatic adjustment to the participations pursuant to this
Section 1.1(c) to reflect the new Commitment Percentages of the assigning
and assignee Banks.
(7) In the event that Conair shall not have paid in cash to the
Bank making a LIBO Rate Loan the full amount of principal of or interest or
Additional Amount on such LIBO Rate Loan when due, the Agent shall promptly
notify each Bank of such failure, and each Bank shall promptly and
unconditionally pay to the Agent for the account of the each Bank making
such LIBO Rate Loans the amount of such Bank's Commitment Percentage of
such unpaid amount in U.S. dollars and in same day funds. If the Agent so
notifies, prior to 11:00 A.M. (Philadelphia time) on any Banking Business
Day, any Bank required to fund a payment due on a LIBO Rate Loan, such Bank
shall make its required payment on the same Banking Business Day. If and
to the extent such Bank shall not have so made its Commitment Percentage of
the amount of such payment available to the Agent, such Bank agrees to pay
to the Agent, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to
the Agent, at the Federal Funds Rate. The failure of any Bank to make
available to the Agent its Commitment Percentage of any payment due on a
LIBO Rate Loan shall not relieve any other Bank of its obligation hereunder
to make available to the Agent its Commitment Percentage of any payment due
on a LIBO Rate Loan on the date required, as specified above; but no Bank
shall be responsible for the failure of any other Bank to make available to
the Agent such other Bank's Commitment Percentage of any such payment.
(8) Whenever the Agent receives a payment of any amount due with
respect to a LIBO Rate Loan as to which the Agent has received for the
account of each Bank that made such LIBO Rate Loan any payments from the
Banks pursuant to clause (7) above, the Agent shall promptly pay to each
Bank which has paid its Commitment Percentage thereof, in U.S. dollars and
in same day funds, an amount equal to such Bank's Commitment Percentage
thereof.
(b) SHORT TERM LOANS. (1) Subject to the terms and the
conditions of this Agreement, each Bank agrees, severally and not jointly
with the other Banks, to provide loans (herein called "SHORT TERM LOANS")
to Conair, from time to time during the period commencing the date hereof
and ending on the Trade Finance Termination Date, as requested by Conair,
provided that:
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(i) the aggregate maximum amount of all Short Term Loans
outstanding at any time shall not exceed the least of (A)
$15,000,000; (B) such amount, if any, that when added to the then
outstanding amount of Bankers' Acceptances, equals 50% of the
Aggregate Trade Finance Commitment at such time, as reduced from
time to time pursuant to Section 1.8 (the "STL/BA SUBLIMIT");
(C) such amount, if any, that, when added to the then outstanding
amount of Bankers' Acceptances and Letters of Credit
Outstandings, equals the Aggregate Trade Finance Commitment; and
(ii) each Bank's commitment to make a Short Term Loan shall
not exceed the product of $15,000,000 multiplied by such Bank's
Commitment Percentage ("SHORT TERM LOAN COMMITMENT").
(2) Short Term Loans shall bear interest at the Base Rate plus the
Base Rate Margin.
(3) Within the foregoing limits, Conair may request Short Term Loans
without regard to any minimum amount, repay them and request new Short Term
Loans.
(4) All Short Term Loans shall, in any event, be repaid by Conair on
the Trade Finance Termination Date.
(5) The failure of any one or more of the Banks to make Short Term
Loans in accordance with its or their obligations shall not relieve the
other Banks of their several obligations under this subsection, but in no
event shall the aggregate amount at any time outstanding which any Bank
shall be required to lend under this Section 1.1(b) exceed the sum of such
Bank's Short Term Loan Commitment at that time.
(c) RENEWAL OF TRADE FINANCE LINE. On or before the one hundred
twentieth (120th) day prior to the Trade Finance Termination Date (but not
prior to the one hundred fiftieth (150th) day), Conair, on behalf of all
the Borrowers may request, by notice to the Banks, that the Banks extend
the Trade Finance Termination Date by an additional 364 days. The
Borrowers, upon such request, shall provide the Agent and the Banks with
such information regarding the Borrowers and their compliance with this
Agreement as the Agent and the Banks may reasonably request. If the Banks
unanimously, in writing and in the exercise of their sole and absolute
discretion, agree to such extension within sixty (60) calendar days after
receiving such notice and receipt by the Agent and the Banks of all such
requested information, the Agent shall advise the Borrowers and the Banks,
in writing, that the Trade Finance Termination Date has been so extended
and this Agreement shall be deemed amended to such extent. If the Trade
Finance Termination Date is so extended, the Borrowers shall be entitled to
make a new extension request on or before the one hundred twentieth (120th)
day prior to the expiration of such extended Trade Finance Termination Date
(but not prior to the one hundred fiftieth (150th) day). This request may
be similarly renewed for so long as the Banks unanimously, and in the
exercise of their sole and absolute discretion, agree to such extensions,
but no such extension shall extend beyond June 30, 1997. In connection
with any request for an extension, the Borrowers may request an
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increase or other modification to the Aggregate Trade Finance Commitment
which shall become effective if the Banks unanimously agree to such
request in writing and in the exercise of their sole and absolute discretion.
(d) RENEWAL OF SEASONAL TRADE FINANCE LINE. At the time of
delivery to the Banks of the financial statements required by Section
4.1(a) for the fiscal year ended December 31, 1994, Conair, on behalf of
all the Borrowers, may request, by notice to the Banks, that each Bank
renew its Seasonal Trade Finance Commitment for the period from May 15,
1995 to November 30, 1995. The Borrowers, upon such request, shall provide
the Agent and the Banks with such information regarding the Borrowers as
the Agent and the Banks may reasonably request. If the Banks unanimously,
in writing and in the exercise of their sole and absolute discretion, agree
to such renewal within sixty (60) calendar days after receiving such notice
and receipt by the Agent and the Banks of all such requested information,
the Agent shall advise the Borrowers and the Banks, in writing, that the
Seasonal Trade Finance Commitment has been so renewed for the period from
May 15, 1995 to November 30, 1995 and this Agreement shall be deemed
amended to such extent. In connection with any request for an extension,
the Borrowers may request an increase or other modification to the Seasonal
Trade Finance Commitments of the Banks which shall become effective if the
Banks unanimously agree to such request in writing and in the exercise of
their sole and absolute discretion.
(e) PRO RATA PARTICIPATION. All Base Rate Loans and Short Term
Loans shall be made by the Banks simultaneously and PRO RATA, according (i)
in the case of the Base Rate Loans in accordance with the Revolving Loan
Commitments and (ii) in the case of the Short Term Loans in accordance with
the Short Term Loan Commitments. LIBO Rate Loans shall be made by the
Banks in the manner provided by Section 1.3 below and each Bank's
obligation to make LIBO Rate Loans shall be subject to its Revolving Loan
Commitment.
(f) OBLIGATION TO REPAY. The Agent's failure to deliver any
bill, statement or invoice with respect to amounts due under this Section
or under any Loan Document shall not affect the Borrowers' obligation to
pay any installment of principal, interest or any other amount under this
Agreement when due and payable.
1.2 THE NOTES.
(a) REVOLVING CREDIT NOTES. The Revolving Credit Loans made by
each Bank shall all be evidenced by a single promissory note of Conair (the
"REVOLVING CREDIT NOTE") in principal face amount equal to such Bank's
Revolving Loan Commitment, payable to the order of such Bank and otherwise
in the form attached hereto as Exhibit B. The Revolving Credit Notes
shall be dated the date the first Revolving Credit Loan is made, shall
bear interest at the rate per annum and be repayable as to principal and
interest in accordance with the terms hereof and as specified in such Notes.
The Revolving Credit Notes shall mature upon the Revolver Termination
Date and, upon maturity each outstanding Revolving Credit Loan evidenced
thereby shall be due and payable.
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(b) SHORT TERM NOTES. The Short Term Loans made by each Bank
shall all be evidenced by a single promissory note of Conair (a "SHORT TERM
NOTE"), in the principal amount equal to such Bank's Percentage Commitment
of $15,000,000, payable to the order of such Bank and otherwise in
substantially the form of Exhibit C attached hereto. The Short Term Notes
shall be dated the date the first Short Term Loan is made, shall bear
interest at the rate per annum and be repayable as to the principal and
interest in accordance with the terms hereof and as specified in such Note.
The Short Term Notes shall mature upon the Trade Finance Termination Date
and, upon maturity each outstanding Short Term Loan evidenced thereby shall
be due and payable.
(c) AMOUNTS OF LOANS. The Agent shall maintain records of all
Loans evidenced by the Revolving Credit Notes and Short Term Notes and of
all payments thereon, which records shall be conclusive absent manifest
error.
1.3 FUNDING PROCEDURES.
(a) Each request for a Revolving Credit Loan or a Short Term
Loan or the conversion or renewal of an interest rate with respect to a
Loan shall be made not later than 11:00 a.m. on a Banking Business Day by
delivery to the Agent of a written request signed by Conair, or in the
alternative a telephone request followed promptly by written confirmation
of the request, in substantially the form reasonably requested by the Agent
from time to time, the date and amount of the Loan to be made, converted or
renewed, selecting the interest rate option applicable thereto, specifying,
in the case of LIBO Rate Loans, the Interest Period and the allocation of
such LIBO Rate Loan among the Banks. Conair may make no more than eight
(8) requests for new Loans in any one calendar month. Until such time as
the Agent shall reasonably direct the use of a different form of request,
the form of request attached hereto as Exhibit D-1 shall be used to request
the making, conversion or renewal of Revolving Credit Loans and the form of
request attached hereto as Exhibit D-2 shall be used to request the making
or renewal of Short Term Loans. Each request shall be received not less
than one Banking Business Day prior to the date of the proposed borrowing,
conversion or renewal in the case of Base Rate Loans, and three London
Banking Business Days prior to the date of the proposed borrowing,
conversion or renewal in the case of LIBO Rate Loans. "BANKING BUSINESS
DAY" shall mean any day on which all the Banks and the Federal Reserve Bank
for the Third Federal Reserve District are open for business. "LONDON
BANKING BUSINESS DAY" shall mean any day on which both the Agent and
commercial banks in London, England are open for business dealings in
eurodollar deposits. No request shall be effective until actually received
by the Agent.
(b) Upon receipt of a request for a Loan and if the conditions
precedent provided herein shall be satisfied at the time of such request,
the Agent promptly shall notify each Bank of such request and, in the case
of a Base Rate Loan or Short Term Loan, of such Bank's ratable share of
such Loan, or, in the case of a LIBO Rate Loan, of such Bank's allocated
portion of such Loan. Upon receipt by the Agent the request for a Loan
shall not be revocable by Conair.
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(c) Not later than 1:00 P.M. (Philadelphia time) on the date of
each Loan, each Bank shall make available (except as provided in clause (d)
below) its share of such Loan, in immediately available funds, to the Agent
at its address specified on the signature pages hereof. Unless an officer
of the Agent active on the Borrowers' accounts knows that any applicable
condition specified herein has not been satisfied, the Agent will make the
funds so received from the Banks immediately available to Conair on the
date of each Loan by a credit to the account of Conair at the Agent's
aforesaid address.
(d) Unless the Agent shall have been notified by any Bank at
least one Banking Business Day prior to the date of the making, conversion
or renewal of any LIBO Loan, or by 3:00 P.M. (Philadelphia time) on the
date a Base Rate Loan or Short Term Loan is requested, that such Bank does
not intend to make available to the Agent such Bank's portion of the total
amount of the Loan to be made, converted or renewed on such date, the Agent
may assume that such Bank has made such amount available to the Agent on
the date of the Loan and the Agent may, in reliance upon such assumption,
make available to Conair a corresponding amount. If and to the extent such
Bank shall not have so made such funds available to the Agent, such Bank
agrees to repay the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to Conair until the date such amount is repaid to the Agent,
at the customary rate set by the Agent for the correction of errors among
banks for three Banking Business Days, and thereafter at the Base Rate. If
such Bank shall repay to the Agent such corresponding amount, such amounts
so repaid shall constitute such Bank's Loan for purposes of this Agreement.
If such Bank does not repay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify Conair, and Conair
shall immediately pay such corresponding amount to the Agent, without any
prepayment penalty or premium, but with interest on the amount repaid, for
each day from the date such amount is made available to Conair until the
date such amount is repaid to the Agent, at the rate of interest applicable
at the time to such Loan. Nothing herein shall be deemed to relieve any
Bank of its obligation to fulfill its Revolving Loan Commitment or Short
Term Loan Commitment hereunder or to prejudice any rights which Conair may
have against any Bank as a result of any default by such Bank hereunder.
(e) If the Banks make, convert or renew a Loan on a day on which
all or any part of an outstanding Loan from the Banks is to be repaid, each
Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank
to the Agent as provided in clause (c).
1.4 LETTERS OF CREDIT.
(a) GENERAL REQUIREMENTS.
(1) Subject to and upon the terms and conditions herein set
forth, Conair, on behalf of itself or on behalf of CCL, may request a Bank
(which, in the case of all Standby Letters of Credit, shall be CoreStates
Bank, N.A. ("CORESTATES")) at any time and from time to
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time prior to the Trade Finance Termination Date, to issue, and subject to
the terms and conditions contained herein such Bank (the "ISSUING BANK")
shall issue, for the account of the Borrower, one or more Letters of Credit
in such form as is approved by the Issuing Bank in its sole discretion. In
addition, all Letters of Credit issued by any of the Banks and existing on
the effective date of this Agreement (which Letters of Credit are set forth
on Schedule 1.4(a)(1) hereto) shall be deemed to be a part of, and subject to
the terms and conditions of, this Agreement.
(2) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings, face amount of Bankers' Acceptances, any Steamship Indemnity
Outstandings, and outstanding principal amount of Short Term Loans at such
time, would exceed the Aggregate Trade Finance Commitment, (ii) no Letter
of Credit shall be issued by any Bank the Stated Amount of which, when
added to the Letter of Credit Outstandings of Letters of Credit issued by
such Bank, the face amount of Bankers' Acceptances created by such Bank,
any Steamship Indemnity Outstandings with respect to such Bank, and such
Bank's Commitment Percentage of Short Term Loans then outstanding, would
exceed such Bank's Trade Finance Commitment, and (iii) no Standby Letter of
Credit shall be issued the Stated Amount of which, when added to the Letter
of Credit Outstandings at such time of all Standby Letters of Credit, would
exceed $6,000,000. For the purposes of determining the limits under this
Section 1.4(a), as well as preparing the Agent Monthly Reports prepared
pursuant to Section 1.12 of this Agreement, any Letter of Credit
denominated in a currency other than U.S. dollars shall be converted at the
applicable foreign exchange rate reported in THE WALL STREET JOURNAL on the
last business day of the month preceding the date of determination.
(3) (i) No Trade Letter of Credit shall bear an expiry date
later than 180 days from issuance, (ii) no Standby Letter of Credit shall
bear an expiry date later than 365 days from issuance, (iii) if the
Borrowers do not request, or the Banks do not agree, to extend the Trade
Finance Termination Date pursuant to Section 1.1(c) above, no Letter of
Credit issued less than 90 days prior to the Trade Finance Termination Date
shall bear an expiry date later than 90 days from issuance, (iv) if the
Stated Amount of a Letter of Credit to be issued by any Bank after May 15
and before November 30 of any year, when added to the Letter of Credit
Outstandings of Letters of Credit issued by such Bank, the face amount of
Bankers' Acceptances created by such Bank, any Steamship Indemnity
Outstandings with respect to such Bank, and such Bank's Commitment
Percentage of the outstanding principal amount of Short Term Loans at such
time, would exceed such Bank's Trade Finance Commitment (exclusive of the
amount of such Bank's Seasonal Trade Finance Commitment, if any), such
Letter of Credit shall not bear an expiry date later than November 30 of
such year, and (v) the Stated Amount of all Letters of Credit that shall
contain any term or provision that extends the expiry date or otherwise
renews the Letter of Credit without explicit action being taken by the
Issuing Bank shall not exceed $540,000 at any time.
(b) MINIMUM STATED AMOUNT. The Stated Amount of each Letter of
Credit shall not be less than such amount as may be acceptable to the
Issuing Bank.
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(c) LIMIT ON CERTAIN LETTERS OF CREDIT. The aggregate sum of
all Letter of Credit Outstandings and any Steamship Indemnity Outstandings
issued with respect to CCL shall not at any time exceed $5,000,000.
(d) LETTER OF CREDIT REQUESTS.
(1) Whenever a Borrower desires that a Letter of Credit be
issued for its account, it shall give the Issuing Bank (with copies to be
sent to the Agent) at least five Banking Business Days' prior written
request therefor in the case of a Standby Letter of Credit (or such shorter
period of notice as the Issuing Bank may agree upon with the Borrower from
time to time), and, in the case of a Trade Letter of Credit, written
request therefor such number of Banking Business Days prior to issuance as
shall be reasonably required by the Issuing Bank.
(2) The execution and delivery of each request for a Letter of
Credit shall be deemed to be a representation and warranty by the Borrowers
that such Letter of Credit may be issued in accordance with, and will not
violate the requirements of, this Section 1.4. Unless the Issuing Bank has
received notice from the Agent or the Required Banks before it issues the
respective Letter of Credit that one or more of the conditions specified in
Section 3.1 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 1.4, then the Issuing Bank may issue the
requested Letter of Credit for the account of the Borrower in accordance
with the terms of this Agreement and, with respect to any matters not
specifically covered by this Agreement, in accordance with the Issuing
Bank's usual and customary practices and any Letter of Credit Agreement in
effect with such Borrower. In the event that any conflict shall exist
between the terms of this Agreement and the terms of any such Letter of
Credit Agreement, the terms of this Agreement shall prevail.
(e) LETTER OF CREDIT PARTICIPATIONS.
(1) Immediately upon the issuance by the Issuing Bank of any
Letter of Credit (or in the case of the existing Letters of Credit, upon
the effective date of this Agreement), the Issuing Bank shall be deemed to
have sold and transferred to each Bank (other than the Issuing Bank), and
each such Bank shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such Bank's
Commitment Percentage in such Letter of Credit, each substitute letter of
credit, each drawing made thereunder and the obligations of the Borrowers
under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto. Notwithstanding the foregoing, if any Issuing
Bank shall fail to notify the Agent of the issuance of a Letter of Credit
as part of such Bank's Bank Daily Report, as required by Section 1.12
hereof, promptly following such issuance and in any event not later than
five Banking Business Days after receipt by such Bank of the Agent Weekly
Report distributed by the Agent most recently following the issuance of
such Letter of Credit, such sale and transfer of each undivided interest
and participation shall be deemed to be rescinded and of no further force
or effect. Upon any change in the Commitments of the Banks, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment
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to the participations pursuant to this Section 1.4(d) to reflect the new
Commitment Percentages of the assigning and assignee Banks.
(2) In determining whether to pay under any Letter of Credit,
the Issuing Bank shall have no obligation relative to the Banks other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit, or to have
received from the Borrowers authorization in connection with a Steamship
Indemnity to pay under such Letter of Credit notwithstanding the
nonconformance of such documents to the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Letter of Credit if taken or omitted in the
absence of gross negligence or wilful misconduct, shall not create for the
Issuing Bank any resulting liability to any Bank.
(3) In the event that the Issuing Bank makes any payment under
any Letter of Credit and the Borrowers shall not have reimbursed such
amount in full in cash to the Issuing Bank pursuant to and as required by
Section 1.4(e), the Issuing Bank shall promptly notify the Agent, which
shall promptly notify each Bank of such failure, and each Bank shall
promptly and unconditionally pay to the Agent for the account of the
Issuing Bank, the amount of such Bank's Commitment Percentage of such
unreimbursed payment in U.S. dollars and in same day funds. If the Agent
so notifies, prior to 11:00 A.M. (Philadelphia time) on any Banking
Business Day, any Bank required to fund a payment under a Letter of Credit,
such Bank shall make its required payment on the same Banking Business Day.
If and to the extent such Bank shall not have so made its Commitment
Percentage of the amount of such payment available to the Agent for the
account of the Issuing Bank, such Bank agrees to pay to the Agent for the
account of the Issuing Bank, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Agent for the account of the Issuing Bank at the Federal Funds
Rate. The failure of any Bank to make available to the Agent for the
account of the Issuing Bank its Commitment Percentage of any payment under
any Letter of Credit shall not relieve any other Bank of its obligation
hereunder to make available to the Agent for the account of the Issuing
Bank its Commitment Percentage of any payment under any Letter of Credit on
the date required, as specified above; but no Bank shall be responsible for
the failure of any other Bank to make available to the Agent for the
account of the Issuing Bank such other Bank's Commitment Percentage of any
such payment.
(4) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which the Agent has received for the account
of the Issuing Bank any payments from the Banks pursuant to clause (3)
above, the Issuing Bank shall pay to the Agent and the Agent shall promptly
pay to each Bank which has paid its Commitment Percentage thereof, in U.S.
dollars and in same day funds, an amount equal to such Bank's Commitment
Percentage thereof.
(5) Upon the request of any Bank, the Issuing Bank shall furnish
to such Bank copies of any Letter of Credit to which the Issuing Bank is
party and such other documentation relating to such Letter of Credit as may
reasonably be requested by such Bank.
<PAGE>
Page 11
(6) As between the Borrowers on the one hand and the Issuing
Bank and the Banks on the other hand, the Borrowers assume all risks of the
acts and omissions of, or misuse of the Letters of Credit by the respective
beneficiaries of such Letters of Credit. Without limiting the generality
of the foregoing, neither the Issuing Bank nor any other Bank shall be
responsible (except in the case of its gross negligence or willful
misconduct) for the following:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any documents submitted by
any party in connection with the application for and
issuance of or any drawing under such Letters of Credit,
even if it should in fact prove to be in any respects
invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or
assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason;
(iii)failure of the beneficiary of any such Letter of
Credit to comply fully with conditions required in order to
draw upon such Letter of Credit, other than material
conditions or instructions that expressly appear in such
Letter of Credit;
(iv) errors, omissions, interruptions or delays in the
transmission or delivery of any messages by mail, cable,
telegraph, telecopier, telex or otherwise, whether or not
they are encoded;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under
any such Letter of Credit or the proceeds thereof;
(vii)the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing of any such
Letter of Credit; and
(viii)any consequences arising from causes beyond the
control of the Issuing Bank, including without limitation
any acts of governments.
(7) The obligations of the Banks to make payments to the Agent
for the account of the Issuing Bank with respect to Letters of Credit shall
be irrevocable and not subject to any qualification or exception whatsoever
and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of
the following circumstances:
<PAGE>
Page 12
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which any Borrower may have at any time against
a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing Bank, any
Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions;
(iii)any draft, certificate or any other document
presented under the Letter of Credit shall prove to be
forged, fraudulent, invalid or insufficient in any respect
or any statement therein shall prove to be untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(v) the occurrence of any Potential Default or Event
of Default; or
(vi) the termination of this Agreement or any
Commitment (but only with respect to Letters of Credit
issued prior to such termination).
(8) Immediately upon the issuance by CoreStates of any Standby
Letter of Credit, CoreStates will provide to each other Bank a copy of the
Borrower's written request therefor. In addition, promptly upon receipt by
CoreStates of fees payable with respect to each Standby Letter of Credit
(including fees received after the date hereof with respect to the Standby
Letters of Credit listed on Schedule 1.4(a) hereto), CoreStates will pay to
the Agent for distribution to each of the Banks (including CoreStates) such
fees, which shall be distributed to the Banks in proportion to each Bank's
Commitment Percentage. Promptly following the date on which the first Loan
is made hereunder, CoreStates shall pay to the Agent for distribution to
each of the Banks (including CoreStates) an amount equal to that portion of
the fees previously collected by CoreStates with respect to Standby Letters
of Credit listed on Schedule 1.4(a) hereto which is attributable to the
period of time from the date of this Agreement until the expiration of such
Letters of Credit. The Agent shall distribute such amount in proportion to
each Bank's Commitment Percentage.
<PAGE>
Page 13
(f) AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS, COLLATERAL,
ETC.
(1) Each Borrower agrees to reimburse the Issuing Bank, in
immediately available funds, for any payment made by the Issuing Bank under
any Letter of Credit issued at the request of such Borrower (each such
amount so paid until reimbursed, an "UNPAID DRAWING") immediately after,
and in any event on the date of, such payment, with interest on the amount
so paid by the Issuing Bank, to the extent not reimbursed prior to 1:00
p.m. (Philadelphia time) on the date of such payment, from and including
the date paid to but excluding the date reimbursement is made as provided
above, at a rate per annum equal to the Base Rate plus the Applicable
Margin plus 200 basis points, such interest to be payable promptly
following demand.
(2) The obligations of each Borrower under this Section 1.4(f)
to reimburse the Issuing Bank with respect to Unpaid Drawings (including,
in each case, interest thereon) shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which any Borrower may have or have had against any Bank
(including in its capacity as the Issuing Bank or as a participant in any
Letter of Credit), including, without limitation, any defense based upon
any non-application or misapplication by the beneficiary of the proceeds of
any drawing under a Letter of Credit (each, a "DRAWING"); provided,
however, that no Borrower shall be obligated to reimburse the Issuing Bank
for any wrongful payment made by the Issuing Bank under a Letter of Credit
as a result of acts or omissions constituting wilful misconduct or gross
negligence on the part of the Issuing Bank.
(3) On the Trade Finance Termination Date, the Borrowers shall
deliver to the Agent cash or U.S. Treasury Bills with maturities of not
more than ninety (90) days from the date of delivery (discounted in
accordance with customary banking practice to present value to determine
amount) in an amount equal at all times to one hundred five percent (105%)
of the Letter of Credit Outstandings relating to Standby Letters of Credit,
such cash or U.S. Treasury Bills and all interest earned thereon to
constitute cash collateral for the Borrowers' reimbursement obligation with
respect to all Standby Letters of Credit outstanding on the Trade Finance
Termination Date. If such cash collateral or U.S. Treasury Bills has not
been deposited within five (5) days after the date required, one or more of
the Banks shall be entitled to charge any account maintained by any
Borrower with such Bank or Banks to the extent necessary to create such
cash collateral. Any cash collateral deposited under this paragraph, and
all interest earned thereon, shall be held by the Agent and invested and
reinvested at the expense and the written direction of Conair, in U.S.
Treasury Bills with maturities of no more than ninety (90) days from the
date of investment.
(4) Conair unconditionally and irrevocably guarantees to each
Bank the due, prompt and complete payment by CCL of its reimbursement
obligation with respect to any Letter of Credit issued for the benefit of
CCL when and as the same shall become due and payable, together with any
and all other amounts with respect to which CCL is obligated under any Loan
Document. The obligation of Conair under this paragraph (4) is a guaranty
of payment and not of collectibility and is no way conditioned or
contingent upon any attempt to collect from or enforce compliance by CCL or
upon any other event, contingency or circumstance whatsoever.
<PAGE>
Page 14
The obligation of Conair under this paragraph (4) shall be primary, absolute
and unconditional, shall not be subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment,
reduction, or defense based upon any claim Conair or any other Person may
have against CCL or any other Person, and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any
way affected by, any circumstance or condition whatsoever (whether or not
Conair or CCL shall have any knowledge or notice thereof). Conair shall
not be subrogated to the rights of the Banks in respect of any payment or
other obligation with respect to which an amount has been payable by Conair
under this paragraph (4), and shall not seek to exercise any rights of
subrogation, reimbursement or indemnity arising from payments made by it
pursuant to the provisions of this paragraph (4). The liability of Conair
under this paragraph (4) shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the sums due to the Banks is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of CCL, or upon or as a result of the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to the CCL or any substantial part of its property, or
otherwise, all as though such payment had not been made.
1.5 BANKERS' ACCEPTANCES.
(a) GENERAL REQUIREMENTS.
(1) Subject to the terms and conditions of this Agreement, each
Bank agrees, severally and not jointly with the other Banks, to create from
time to time during the period commencing with the date hereof and ending
on the Trade Finance Termination Date, acceptances of drafts denominated in
U.S. Dollars which are drawn on or for the benefit of Conair (each, a
"BANKERS' ACCEPTANCE").
(2) Notwithstanding the foregoing, no Bankers' Acceptance shall
be created the face amount of which , after giving effect to the creation
thereof would cause (i) the face amount of all outstanding Bankers'
Acceptances plus Steamship Indemnity Outstandings and the principal amount
of Short Term Loans at such time, to exceed the STL/BA Sublimit, (ii) the
face amount of all outstanding Bankers' Acceptances plus the principal
amount of Short Term Loans, Letter of Credit Outstandings and Steamship
Indemnity Outstandings, to exceed the Aggregate Trade Finance Commitment
and (iii) the face amount of all outstanding Bankers' Acceptances created
by such Bank plus the Letters of Credit Outstandings of Letters of Credit
issued by such Bank, the Steamship Indemnity Outstandings with respect to
such Bank and such Bank's Commitment Percentage of Short Term Loans then
outstanding to exceed such Bank's Trade Finance Commitment.
(3) Upon receiving a request from Conair to create a Bankers'
Acceptance and subject to the terms and conditions contained in this
Agreement, the Bank receiving such request shall create a Bankers'
Acceptance in the manner set forth in the Bankers' Acceptance Agreement of
such Bank using drafts signed by Conair and provided to such Bank and will
notify the Agent of such event. Each Bankers' Acceptance shall be of a
type, and any request to create a Bankers'
<PAGE>
Page 15
Acceptance shall constitute a representation and warranty by Conair that
upon creation of such Bankers' Acceptance it will be, eligible for discounting
and purchase under 12 U.S.C. <section> 372 and the rules of the Board of
Governors of the Federal Reserve System then in effect. Each Bankers'
Acceptance shall have a maturity of 30, 60, 90 or 120 days from the date
issued, except that (i) if the Borrowers do not request, or the Banks do
not agree, to extend the Trade Finance Termination Date pursuant to
Section 1.1(c) above, no Bankers' Acceptances created less than 90 days
prior to the Trade Finance Termination Date shall have a maturity in excess
of 90 days from the date issued and (ii) if the face amount of a Bankers'
Acceptance to be created after May 15 and before November 30 of any year,
when added to the face amount of all outstanding Bankers' Acceptances
created by such Bank plus the Letters of Credit Outstandings of Letters
of Credit issued by such Bank, the Steamship Indemnity Outstandings with
respect to such Bank and such Bank's Commitment Percentage of Short
Term Loans then outstanding would exceed such Bank's Trade Finance
Commitment (exclusive of the amount of such Bank's Seasonal Trade Finance
Commitment, if any), such Bankers' Acceptance shall not have a maturity
later than November 30 of such year.
(4) Notwithstanding any provisions of this Agreement or the
Acceptance Agreement to the contrary, a Bank shall not be obligated to
create Bankers' Acceptances (i) if such Bank is prohibited from doing so by
any law, regulation of the Board of Governors of the Federal Reserve System
or of any state banking authority, or court order, decree or injunction, or
(ii) to the extent that any Bankers' Acceptance involved is not of a type
eligible for discounting and purchase under 12 U.S.C. <section> 372 and the
rules of the Board of Governors of the Federal Reserve System then in
effect.
(b) PAYMENT.
(1) Conair shall pay to the Acceptance Bank the face amount of
each Bankers' Acceptance not later than the stated maturity date of such
Bankers' Acceptance.
(2) The obligations of Conair under this Section 1.5(b) to pay
the Acceptance Bank shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Borrower may have or have had against any Bank (including
in its capacity as the Acceptance Bank or as a participant in any Bankers'
Acceptance).
(c) BANKERS' ACCEPTANCE REQUESTS.
(1) Whenever Conair desires that a Bankers' Acceptance be
created for its account, it shall give the Acceptance Bank (with copies to
be sent to the Agent) prior written request therefor such number of Banking
Business Days prior to creation as shall be reasonably required by the
Acceptance Bank.
(2) The execution and delivery of each request for a Bankers'
Acceptance shall be deemed to be a representation and warranty by Conair
that such Bankers' Acceptance may be
<PAGE>
Page 16
issued in accordance with, and will not violate the requirements of,
this Section 1.5. Unless the Acceptance Bank has received notice from
the Agent or the Required Banks before it creates the Bankers'
Acceptance that one or more of the conditions specified in Section
3.1 are not then satisfied, or that the creation of such Bankers'
Acceptance would violate Section 1.5, then the Acceptance Bank may
create the Bankers' Acceptance for the account of Conair in
accordance with the terms of this Agreement and, with respect to any
matters not specifically covered by this Agreement, in accordance with the
Acceptance Bank's usual and customary practices and any Bankers' Acceptance
Agreement in effect with Conair. In the event that any conflict shall
exist between the terms of any such Bankers' Acceptance Agreement and this
Agreement, the terms of this Agreement shall prevail.
(d) BANKERS' ACCEPTANCE PARTICIPATIONS.
(1) Immediately upon the creation by the Acceptance Bank of any
Bankers' Acceptance (or in the case of the existing Bankers' Acceptances,
upon the effective date of this Agreement), the Acceptance Bank shall be
deemed to have sold and transferred to each Bank (other than the Acceptance
Bank), and each such Bank shall be deemed irrevocably and unconditionally
to have purchased and received from the Acceptance Bank, without recourse
or warranty, an undivided interest and participation, to the extent of such
Bank's Commitment Percentage in such Bankers' Acceptance and the
obligations of Conair under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Notwithstanding the
foregoing, if any Acceptance Bank shall fail to notify the Agent of the
creation of a Bankers' Acceptance as part of such Bank's Bank Daily Report,
as required by Section 1.12 hereof, promptly following such creation and in
any event not later than five Banking Business Days after receipt by such
Bank of the Agent Weekly Report distributed by the Agent most recently
following the creation of such Bankers' Acceptance, such sale and transfer
of each undivided interest and participation shall be deemed to be
rescinded and of no further force or effect. Upon any change in the
Commitments of the Banks, it is hereby agreed that, with respect to all
outstanding Bankers' Acceptances, there shall be an automatic adjustment to
the participations pursuant to this Section 1.5(d) to reflect the new
Commitment Percentages of the assigning and assignee Banks.
(2) In the event that Conair shall not have paid in cash to the
Acceptance Bank the full face amount of a Bankers' Acceptance on or before
the stated maturity date thereof pursuant to and as required by Section
1.5(b), the Acceptance Bank shall promptly notify the Agent, which shall
promptly notify each Bank of such failure, and each Bank shall promptly and
unconditionally pay to the Agent for the account of the Acceptance Bank the
amount of such Bank's Commitment Percentage of such unpaid face amount in
U.S. dollars and in same day funds. If the Agent so notifies, prior to
11:00 A.M. (Philadelphia time) on any Banking Business Day, any Bank
required to fund a payment due on a Bankers' Acceptance, such Bank shall
make its required payment on the same Banking Business Day. If and to the
extent such Bank shall not have so made its Commitment Percentage of the
amount of such payment available to the Agent for the account of the
Acceptance Bank, such Bank agrees to pay to the Agent for the account of
the Acceptance Bank, forthwith on demand such amount, together with
interest
<PAGE>
Page 17
thereon, for each day from such date until the date such amount is
paid to the Agent for the account of the Acceptance Bank at the Federal
Funds Rate. The failure of any Bank to make available to the Agent for the
account of the Acceptance Bank its Commitment Percentage of any payment due
on a Bankers' Acceptance shall not relieve any other Bank of its obligation
hereunder to make available to the Agent for the account of the Acceptance
Bank its Commitment Percentage of any payment due on a Bankers' Acceptance
on the date required, as specified above; but no Bank shall be responsible
for the failure of any other Bank to make available to the Agent for the
account of the Acceptance Bank such other Bank's Commitment Percentage of
any such payment.
(3) Whenever the Acceptance Bank receives a payment of the face
amount of a Bankers' Acceptance as to which the Agent has received for the
account of the Acceptance Bank any payments from the Banks pursuant to
clause (2) above, the Acceptance Bank shall pay to the Agent and the Agent
shall promptly pay to each Bank which has paid its Commitment Percentage
thereof, in U.S. dollars and in same day funds, an amount equal to such
Bank's Commitment Percentage thereof.
(4) The obligations of the Banks to make payments to the Agent
for the account of the Acceptance Bank with respect to Bankers' Acceptances
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any
of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which any Borrower may have at any time against
any transferee of any Bankers' Acceptance (or any Person for
whom any such transferee may be acting), the Agent, the
Acceptance Bank, any Bank, or any other Person, whether in
connection with this Agreement, any Bankers' Acceptance, the
transactions contemplated herein or any unrelated
transactions;
(iii)the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(iv) the occurrence of any Potential Default or Event
of Default; or
(v) the termination of this Agreement or any
Commitment.
<PAGE>
Page 18
1.6 STEAMSHIP INDEMNITIES; TRADE COLLATERAL.
(a) GENERAL REQUIREMENTS.
(1) Subject to and upon the terms and conditions herein set
forth, Conair, on behalf of itself or on behalf of CCL, may request a Bank
at any time and from time to time prior to the Trade Finance Termination
Date, to issue, and subject to the terms and conditions contained herein
such Bank (the "INDEMNITY BANK") shall issue, for the account of the
Borrower, one or more Steamship Indemnities in such form as is approved by
the Issuing Bank in its sole discretion.
(2) Notwithstanding the foregoing, (i) no Steamship Indemnity
shall be issued the Indemnity Amount of which, when added to the Steamship
Indemnity Outstandings, face amount of Bankers' Acceptances, the Letter of
Credit Outstandings, and outstanding principal amount of Short Term Loans
at such time, would exceed the Aggregate Trade Finance Commitment, and (ii)
no Steamship Indemnity shall be issued by any Bank the Indemnity Amount of
which, when added to the Letter of Credit Outstandings of Letters of Credit
issued by such Bank, the face amount of Bankers' Acceptances created by
such Bank, any Steamship Indemnity Outstandings with respect to such Bank,
and such Bank's Commitment Percentage of Short Term Loans then outstanding,
would exceed such Bank's Trade Finance Commitment.
(b) STEAMSHIP INDEMNITY REQUESTS.
(1) Whenever a Borrower desires that a Steamship Indemnity be
issued for its account, it shall give the Indemnity Bank (with copies to be
sent to the Agent) written request therefor.
(2) The execution and delivery of each request for a Steamship
Indemnity shall be deemed to be a representation and warranty by the
Borrowers that such Steamship Indemnity may be issued in accordance with,
and will not violate the requirements of, this Section 1.6. Unless the
Indemnity Bank has received notice from the Agent or the Required Banks
before it issues the respective Steamship Indemnity that one or more of the
conditions specified in Section 3.1 are not then satisfied, or that the
issuance of such Steamship Indemnity would violate Section 1.6, then the
Indemnity Bank shall issue the requested Steamship Indemnity for the
account of the Borrower in accordance with the terms of this Agreement and,
with respect to any matters not specifically covered by this Agreement, in
accordance with the Indemnity Bank's usual and customary practices and any
Steamship Indemnity Agreement in effect with such Borrower. In the event
that any conflict shall exist between the terms of this Agreement and the
terms of any such Steamship Indemnity Agreement, the terms of this
Agreement shall prevail.
<PAGE>
Page 19
(c) STEAMSHIP INDEMNITY PARTICIPATIONS.
(1) Immediately upon the issuance by the Indemnity Bank of any
Steamship Indemnity, the Indemnity Bank shall be deemed to have sold and
transferred to each Bank (other than the Indemnity Bank), and each such
Bank shall be deemed irrevocably and unconditionally to have purchased and
received from the Indemnity Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Bank's
Commitment Percentage, in such Steamship Indemnity and the obligations of
the Borrowers under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto. Notwithstanding the foregoing, if
any Indemnity Bank shall fail to notify the Agent of the issuance of a
Steamship Indemnity as part of such Bank's Bank Daily Report, as required
by Section 1.12 hereof, promptly following such issuance and in any event
not later than five Banking Business Days after receipt by such Bank of the
Agent Weekly Report distributed by the Agent most recently following the
issuance of such Steamship Indemnity, such sale and transfer of each
undivided interest and participation shall be deemed to be rescinded and of
no further force or effect. Upon any change in the Commitments of the
Banks, it is hereby agreed that, with respect to all outstanding Steamship
Indemnities, there shall be an automatic adjustment to the participations
pursuant to this Section 1.6(c) to reflect the new Commitment Percentages
of the assigning and assignee Banks.
(2) In the event that the Indemnity Bank makes any payment under
any Steamship Indemnity and the Borrowers shall not have reimbursed such
amount in full in cash to the Indemnity Bank pursuant to and as required by
Section 1.6(d), the Indemnity Bank shall promptly notify the Agent, which
shall promptly notify each Bank of such failure, and each Bank shall
promptly and unconditionally pay to the Agent for the account of the
Indemnity Bank, the amount of such Bank's Commitment Percentage of such
unreimbursed payment in U.S. dollars and in same day funds. If the Agent
so notifies, prior to 11:00 A.M. (Philadelphia time) on any Banking
Business Day, any Bank required to fund a payment under a Steamship
Indemnity, such Bank shall make its required payment on the same Banking
Business Day. If and to the extent such Bank shall not have so made its
Commitment Percentage of the amount of such payment available to the Agent
for the account of the Indemnity Bank, such Bank agrees to pay to the Agent
for the account of the Indemnity Bank, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date
such amount is paid to the Agent for the account of the Indemnity Bank at
the Federal Funds Rate. The failure of any Bank to make available to the
Agent for the account of the Indemnity Bank its Commitment Percentage of
any payment under any Steamship Indemnity shall not relieve any other Bank
of its obligation hereunder to make available to the Agent for the account
of the Indemnity Bank its Commitment Percentage of any payment under any
Steamship Indemnity on the date required, as specified above; but no Bank
shall be responsible for the failure of any other Bank to make available to
the Agent for the account of the Indemnity Bank such other Bank's
Commitment Percentage of any such payment.
(3) Whenever the Indemnity Bank receives a payment of a
reimbursement obligation as to which the Agent has received for the account
of the Indemnity Bank any payments from the Banks pursuant to clause (2)
above, the Indemnity Bank shall pay to the
<PAGE>
Page 20
Agent and the Agent shall promptly pay to each Bank which has paid its
Commitment Percentage thereof, in U.S. dollars and in same day funds,
an amount equal to such Bank's Commitment Percentage thereof.
(4) The obligations of the Banks to make payments to the Agent
for the account of the Indemnity Bank with respect to Steamship Indemnities
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any
of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which any Borrower may have at any time against
a beneficiary named in a Steamship Indemnity, any transferee
of any Steamship Indemnity (or any Person for whom any such
transferee may be acting), the Agent, the Indemnity Bank,
any Bank, or any other Person, whether in connection with
this Agreement, any Steamship Indemnity, the transactions
contemplated herein or any unrelated transactions;
(iii)the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(iv) the occurrence of any Potential Default or Event
of Default; or
(v) the termination of this Agreement or any
Commitment (but only with respect to Steamship Indemnities
issued prior to such termination).
(d) AGREEMENT TO REPAY STEAMSHIP INDEMNITY DRAWINGS, COLLATERAL,
ETC.
(1) Each Borrower agrees to reimburse the Indemnity Bank, in
immediately available funds, for any payment made by the Indemnity Bank
under any Steamship Indemnity issued at the request of such Borrower (each
such amount so paid until reimbursed, an "UNPAID INDEMNITY") immediately
after, and in any event on the date of, such payment, with interest on the
amount so paid by the Indemnity Bank, to the extent not reimbursed prior to
1:00 p.m. (Philadelphia time) on the date of such payment, from and
including the date paid to but excluding the date reimbursement is made as
provided above, at a rate per annum equal to the Base Rate plus the
Applicable Margin plus 200 basis points, such interest to be payable
promptly following demand.
<PAGE>
Page 21
(2) The obligations of each Borrower under this Section 1.6(d)
to reimburse the Indemnity Bank with respect to Unpaid Indemnities
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which any Borrower may have or
have had against any Bank (including in its capacity as the Indemnity Bank
or as a participant in any Steamship Indemnity), including, without
limitation, any defense based upon any non-application or misapplication by
the beneficiary of the proceeds of any payment under a Steamship Indemnity
(each, an "INDEMNITY"); provided, however, that no Borrower shall be
obligated to reimburse the Indemnity Bank for any wrongful payment made by
the Indemnity Bank under a Steamship Indemnity as a result of acts or
omissions constituting wilful misconduct or gross negligence on the part of
the Indemnity Bank.
(3) Conair unconditionally and irrevocably guarantees to each
Bank the due, prompt and complete payment by CCL of its reimbursement
obligation with respect to any Steamship Indemnity issued for the benefit
of CCL when and as the same shall become due and payable, together with any
and all other amounts with respect to which CCL is obligated under any Loan
Document. The obligation of Conair under this paragraph (3) is a guaranty
of payment and not of collectibility and is no way conditioned or
contingent upon any attempt to collect from or enforce compliance by CCL or
upon any other event, contingency or circumstance whatsoever. The
obligation of Conair under this paragraph (3) shall be primary, absolute
and unconditional, shall not be subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment,
reduction, or defense based upon any claim Conair or any other Person may
have against CCL or any other Person, and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any
way affected by, any circumstance or condition whatsoever (whether or not
Conair or CCL shall have any knowledge or notice thereof). Conair shall
not be subrogated to the rights of the Banks in respect of any payment or
other obligation with respect to which an amount has been payable by Conair
under this paragraph (3), and shall not seek to exercise any rights of
subrogation, reimbursement or indemnity arising from payments made by it
pursuant to the provisions of this paragraph (3). The liability of Conair
under this paragraph (3) shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the sums due to the Banks is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of CCL, or upon or as a result of the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to the CCL or any substantial part of its property, or
otherwise, all as though such payment had not been made.
(e) TRADE COLLATERAL. Each Borrower hereby grants to the Bank
issuing a Letter of Credit, creating a Bankers' Acceptance or entering into
a Steamship Indemnity an absolute security interest in and unqualified
right to the possession and disposal of all goods, including without
limitation inventory, shipped under or in connection with each Letter of
Credit, Bankers' Acceptance or Steamship Indemnity issued, created or
entered into by such Bank, and in and to all shipping documents, documents
of title, or drafts drawn under a Letter of Credit, together with the
proceeds of each and all of the foregoing, until such time as all the
obligations and liabilities of such Borrower to such issuing, creating or
entering Bank under or with reference
<PAGE>
Page 22
to such Letter of Credit, Bankers' Acceptance or Steamship Indemnity, and
all other Obligations, now or hereafter incurred, have been fully paid
and discharged. Each Bank acknowledges that, to the extent such security
interest secures Obligations other than such specific Letter of Credit,
Bankers' Acceptance or Steamship Indemnity, use of the proceeds of such
collateral shall be subject to the Intercreditor Agreement. Each Borrower
will execute and deliver to each Bank from time to time all such other
agreements, instruments and other documents (including without limitation
all requested financing and continuation statements) and do all such
further acts and things as a Bank may reasonably request in order to further
evidence or carry out the intent of this Section or to perfect the lien and
security interest created hereby or intended so to be.
1.7 COMMITMENT FEES. In addition to the fees set forth in Section
3.2(g) the Borrowers agree to pay to the Agent on behalf of each Bank as
compensation for such Bank's Revolving Loan Commitment and Trade Finance
Commitment a fee (the "COMMITMENT FEE") computed at the rate of (i) one-
quarter of one percent (1/4 of 1%) per annum on the average daily amount of
the unused portion of the Aggregate Revolving Loan Commitment accrued from
and after the date hereof and (ii) one-eighth of one percent (1/8 of 1%)
per annum on the average daily amount of the unused portion of the
Aggregate Trade Finance Commitment accrued from and after the date hereof.
The unused portion of the Aggregate Revolving Loan Commitment shall mean
the Aggregate Revolving Loan Commitment less the aggregate unpaid principal
of outstanding Aggregate Revolving Credit Loans. The unused portion of the
Aggregate Trade Finance Commitment shall mean the Aggregate Trade Finance
Commitment less the aggregate unpaid principal amount of outstanding Short
Term Loans, Letter of Credit Outstandings and the aggregate outstanding
amount of Bankers' Acceptances. The Commitment Fee shall be payable in
arrears on the first day of each January, April, July and October,
commencing January 1, 1993 (for the three month period or portion thereof
ended on the preceding day), and on the Revolver Termination Date. Payment
shall be made to the Agent on behalf of the Banks and the Agent shall
promptly forward to each Bank the amount due such Bank. The Commitment Fee
shall be calculated on the basis of a 365-day year for the actual number of
days elapsed.
1.8 REDUCTION AND TERMINATION OF AGGREGATE REVOLVING LOAN COMMITMENT
AND STL/BA SUBLIMIT.
(a) The Aggregate Revolving Loan Commitment shall be reduced
from time to time by the full amount of the following:
(1) The net cash proceeds of assets sold by Conair or
any Subsidiary on or after the date hereof, other than (i) sales
in the ordinary course of business, (ii) sales in any transaction
or series of related transactions outside of the ordinary course
of business, in each case where the net proceeds are not in
excess of $4,000,000, provided that the maximum cumulative total
net proceeds of such sales (excluding the sale-leaseback
transaction of certain computer equipment owned by Conair, not to
exceed $2,000,000 to be completed on or about January 1, 1993) in
excess of $8,000,000 shall reduce the Aggregate
<PAGE>
Page 23
Revolving Loan Commitment, (iii) the sale of Farouk Systems, Inc.
and (iv) transactions approved by all the Banks;
(2) The net proceeds of Indebtedness for Borrowed
Money incurred on or after the date hereof and owing to or held
by any Person other than Conair, except (i) indebtedness under
this Agreement, (ii) the Senior Notes, (iii) the Subordinated
Notes, (iv) indebtedness secured by the Arizona Properties, and
indebtedness secured by the Rantoul Facility, the principal
amount of which is within the limitations provided in Section
5.2(d); and (v) indebtedness permitted by Section 5.2(f), (g) and
(h).
(3) The net cash proceeds of all equity securities
issued by Conair on or after the date hereof other than the
Preferred Stock.
Reductions in the Aggregate Revolving Loan Commitment under this Section
1.8 shall not affect the amount or date of any scheduled reduction listed
on Exhibit A hereto.
(b) Commencing at such time as the Aggregate Revolving Loan
Commitment is reduced to $0, the STL/BA Sublimit shall be reduced from time
to time by the full amount provided in clauses (1) and (2) (but not (3))
above arising thereafter.
(c) Conair shall give the Agent and the Banks written notice not
less than 30 days prior to any Change of Control Event. The Banks may,
upon any such Change of Control Event, by notice to Conair, reduce each of
the Aggregate Revolving Loan Commitment and the Aggregate Trade Finance
Commitment to $0, and accelerate the Revolver Termination Date and the
Trade Finance Termination Date, whereupon the Revolving Credit Loans and
Short Term Loans and all Obligations, including without limitation accrued
interest, shall be due and payable without presentment, demand, protest or
other notice of any kind. To the extent the Obligations becoming due and
payable relate to Letters of Credit and Steamship Indemnities, the amount
becoming due and payable shall be the aggregate amount of the Letter of
Credit Outstandings and Steamship Indemnity Outstandings, whether or not
any drawings or claims have been presented thereunder.
1.9 PREPAYMENTS.
(a) BASE RATE LOANS AND SHORT TERM LOANS. The Borrowers shall
make mandatory prepayments of the Revolving Credit Loans if at any time the
aggregate outstanding Revolving Credit Loans exceed the then Aggregate
Revolving Credit Commitment. In addition, on one Banking Business Day's
notice to the Banks, the Borrowers may, at their option, prepay the Base
Rate Loans or Short Term Loans in whole at any time or in part from time to
time, provided that each partial prepayment shall be in the principal
amount of $1,000,000 or, if greater, then in such minimum amount plus
$1,000,000 multiples.
<PAGE>
Page 24
(b) LIBO RATE LOANS. The Borrowers may prepay any LIBO Rate
Loan provided that (1) not less than $2 million of the LIBO Rate Loan for a
given interest period is prepaid, and (2) if the Borrowers shall prepay a
LIBO Rate Loan prior to the last day of the applicable Interest Period, or
shall fail to borrow any LIBO Rate Loan on the date such Loan is to be
made, the Borrowers shall pay to each Bank, in addition to the principal
and interest then to be paid in the case of a prepayment, the Additional
Amount incurred or sustained by such Bank as a result of such prepayment or
failure to borrow. The Additional Amount (which each Bank shall take
reasonable measures to minimize) shall be specified in a written notice or
certificate delivered to the Borrowers by the Agent in the form provided by
each Bank incurring or sustaining such costs or losses. Such notice or
certificate shall contain a calculation in reasonable detail of the
Additional Amount to be compensated and shall be conclusive as to the fact
and the amounts stated therein, absent manifest error. For purposes of
this subsection, a prepayment of all the LIBO Rate Loans shall be deemed to
occur whenever the interest rate thereon is converted under the provisions
of Section 1.15.
1.10 PAYMENTS.
(a) LIBO LOANS. Accrued interest on LIBO Loans with Interest
Periods of one, two or three months shall be due and payable on the last
day of such Interest Period. Accrued interest on LIBO Loans with Interest
Periods of six months shall be due and payable at the end of the third
month and on the last day of such Interest Period.
(b) BASE RATE LOANS. Accrued interest on all Base Rate Loans
shall be due and payable on the first Banking Business Day of each calendar
quarter, on the date of a paydown which effectively reduces the base rate
loans under the revolving credit loan to zero outstanding, or upon the
Revolver Termination Date.
(c) SHORT TERM LOANS. Accrued interest on all Short Term Loans
shall be due and payable on the first Banking Business Day of each calendar
quarter, on the date of a paydown which effectively reduces the short term
loans outstanding to zero, and upon the Trade Finance Termination Date.
(d) APPLICATION OF PAYMENTS, PAYMENT ADMINISTRATION, ETC. All
payments and prepayments shall be applied to the Loans in such order and to
such extent as shall be specified by the Borrowers, by written notice to
the Agent at the time of such payment or prepayment. If no such written
notice is received by the Agent, the payment or prepayment shall be applied
to the Loans in such order and to such extent as the Agent shall determine
in accordance with Section 7.7. Except as otherwise provided herein, all
payments of principal, interest, fees, or other amounts payable by the
Borrowers hereunder shall be remitted to the Agent on behalf of the Banks
at the address set forth opposite its name on the signature page hereof in
immediately available funds not later than 12:00 noon (Philadelphia time)
on the day when due in lawful money of the United States of America. The
Agent will promptly distribute to each Bank by wire transfer in immediately
available funds each Bank's pro rata share of such payment based upon such
Bank's Commitment Percentage, or, if such payment relates to a LIBO Rate
<PAGE>
Page 25
Loan, based upon the proportion of such LIBO Rate Loan made by such Bank.
Whenever any payment is stated as due on a day which is not a Banking
Business Day, the maturity of such payment shall, except as otherwise
provided in Section 1.11, be extended to the next succeeding Banking
Business Day and interest shall continue to accrue during such extension.
The Borrowers authorize the Agent to deduct from any account of any
Borrower maintained at the Agent or over which the Agent has control any
amount payable under this Agreement, the Notes or any other Loan Document
which is not paid in a timely manner.
(e) NET PAYMENTS. (i) All payments made to the Banks and the
Agent by the Borrowers hereunder, under any Note or under any other Loan
Document will be made without setoff, counterclaim or other defense. All
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties,
fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or any political subdivision or taxing
authority thereof or therein (but excluding, except as provided below, any
tax imposed on or measured by the gross or net income of a Bank (including
all interest, penalties or similar liabilities related thereto) pursuant to
the laws of the United States of America or any political subdivision
thereof, or taxing authority of the United States or any political
subdivision thereof, in which the principal office or applicable lending
office of such Bank is located), and all interest, penalties or similar
liabilities with respect thereto (collectively, together with any amounts
payable pursuant to the next sentence, "TAXES"). The Borrowers shall also
reimburse each Bank, upon the written request of such Bank, for taxes
imposed on or measured by the gross or net income of such Bank pursuant to
the laws of the United States of America (or any State or political
subdivision thereof), or the jurisdiction (or any political subdivision or
taxing authority thereof) in which the principal office or applicable
lending office of such Bank is located as such Bank shall determine are
payable by such Bank in respect of Taxes paid to or on behalf of such Bank
pursuant to this or the preceding sentence. If any Taxes are so levied or
imposed, the Borrowers agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts
due hereunder, under any Note or under any other Loan Document, after
withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. The Borrowers will
furnish to the Agent upon request certified copies of tax receipts
evidencing such payment by the Borrowers. The Borrowers will indemnify and
hold harmless the Agent and each Bank, and reimburse the Agent or such Bank
upon its written request, for the amount of any Taxes so levied or imposed
and paid or withheld by such Bank.
(ii) Notwithstanding the preceding paragraph (i), the Borrowers
shall be entitled, to the extent required to do so by law, to deduct or
withhold Taxes imposed by the United States of America (or any political
subdivision or taxing authority thereof) from interest, fees or other
amounts payable hereunder for the account of any Person other than a Bank
(x) that is a domestic corporation (as such term is defined in Section 7701
of the Code) for federal income tax purposes (but excluding any foreign
office of any Bank) or (y) that has necessary forms on file with the
Borrowers for the applicable year to the extent deduction or withholding of
such Taxes is not required as a result of the filing of such forms,
provided that if a Borrower shall so deduct or withhold any such Taxes, it
shall provide a statement to the Agent and such Bank, setting forth
<PAGE>
Page 26
the amount of such Taxes so deducted or withheld, the applicable rate and any
other information or documentation which such Bank may reasonably request
for assisting such Bank to obtain any allowable credits or deductions for
the taxes so deducted or withheld in the jurisdiction or jurisdictions in
which such Bank is subject to tax.
1.11 INTEREST.
(a) BASE RATE. Each Base Rate Loan shall bear interest on the
principal amount thereof from the date made until such Loan is paid in full
or converted, at a rate per annum equal to the Base Rate plus the
Applicable Margin set forth in Section 1.11(f).
"BASE RATE" shall mean, for any day, the highest of (i) the
fluctuating rate per annum publicly announced from time to time by the
Agent as its "prime rate" (ii) the Federal Funds Rate plus 1/2 of 1% or
(iii) the CD Rate plus 5/8 of 1%.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Banking Business Day next succeeding such day, provided that (i) if the day
for which such rate is to be determined is not a Banking Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Banking Business Day as so published on the next
succeeding Banking Business Day.
"CD RATE" shall mean the sum of (A) plus (B) where "(A)" is the
quotient of (1) the average, rounded upwards to the next one-hundredth of
one percent (1/100 of 1%), furnished to the Agent on the date of such Loan,
of the rates per annum bid by two New York City certificate of deposit
dealers of recognized standing for the purchase at face value of 90-day
certificates of deposit of the Agent in an amount comparable to the
principal amount of the Loan requested, such rate to be determined by the
Agent on the basis of the quotations obtained by it as of 10:00 A.M.
(Philadelphia time) on the Banking Business Day of the Loan (or as soon
thereafter as is practicable) from at least two such dealers selected by
the Agent, divided by (2) a number equal to one (1.0) minus the CD Reserve
Adjustment Factor and "(B)" is the Assessment Rate.
"CD RESERVE ADJUSTMENT FACTOR" means the daily average of the stated
maximum rate (expressed as a decimal) at which reserves (including any
marginal, supplemental, or emergency reserves) are required to be
maintained during such 90-day period under Regulation D by member banks of
the Federal Reserve System against new nonpersonal U.S. Dollar time
deposits in the amount of $100,000 or more and with a 90-day maturity.
Without limiting the effect of the foregoing, the CD Reserve Adjustment
Factor shall reflect any other reserves required to be maintained by the
Agent against (1) any category of liabilities that includes deposits by
reference to which the CD Rate is to be determined; or (2) any category of
credit or other assets that include Loans the interest rate of which is
determined in accordance with clause (iii) of the definition of "BASE
RATE."
<PAGE>
Page 27
"ASSESSMENT RATE" means the average rate (expressed as a percentage)
determined by the Agent to be the actual (if known) or the estimated (if
the actual rate is not known) assessment rate (rounded up, if necessary, to
the next 1/10 of 1%) at which the Agent pays premiums to the Federal
Deposit Insurance Corporation (or any successor) during the 90-day period
for deposit insurance for U.S. Dollar time deposits. In the event the
assessment rate of any Bank exceeds the assessment rate of the Agent,
"Assessment Rate" shall be deemed to include such Bank's rate on the
portion of the Loan made by that Bank for which the CD Rate is to be
applicable. In such event, the applicable Bank shall directly charge the
Borrowers for such additional amount and the Borrowers agree to pay such
Bank promptly upon receipt of any supplemental invoice therefor.
(b) LIBO RATE. Each LIBO Rate Loan shall bear interest on the
principal amount thereof from the date made until such Loan is paid in full
or converted, at a fixed rate per annum equal to the LIBO Rate plus the
Applicable Margin set forth in Section 1.11(f).
After receipt of a request for a LIBO Rate Loan, the Agent shall
proceed to determine the LIBO Rate to be applicable thereto. "LIBO RATE"
shall mean, for the applicable Interest Period, (1) the rate, rounded
upwards to the next one-sixteenth of one percent, determined by the Agent
two London Banking Business Days prior to the date of the Loan, at which
the Agent is offered deposits in United States Dollars at approximately
11:00 A.M., London time, on the second London Banking Business Day
preceding the date of such Loan by leading banks in the interbank
eurodollar market for delivery on the date of such Loan in an amount and
for a period comparable to the amount and Interest Period of such Loan and
in like funds, divided by (2) a number equal to one (1.0) minus the LIBO
Rate Reserve Percentage.
"LIBO RATE RESERVE PERCENTAGE" means, relative to each Interest
Period, that percentage (expressed as a decimal) specified from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including,
supplemental, marginal and emergency reserves) with respect to eurocurrency
fundings (currently referred to as "Eurocurrency Liabilities") of a member
bank in such System.
The LIBO Rate shall be adjusted automatically with respect to any LIBO
Rate Loan outstanding on the effective date of any change in the LIBO Rate
Reserve Percentage, as of such effective date.
The Agent shall give prompt notice by telephone or facsimile to Conair
and to each Bank of the LIBO Rate thus determined in respect of each LIBO
Rate Loan or any change therein. If the Agent shall not so notify the
Borrowers and each Bank of a rate, or if otherwise the Agent shall
determine (which determination will be made after consultation with any
Bank requesting same and shall be, in the absence of fraud or manifest
error, conclusive and binding upon all parties hereto) that by reason of
abnormal circumstances affecting the interbank eurodollar or applicable
eurocurrency market adequate and reasonable means do not exist for
ascertaining the LIBO Rate to be applicable to the requested LIBO Rate Loan
or that eurodollar funds in amounts sufficient to fund all the LIBO Rate
Loans are not obtainable on reasonable terms, the Agent shall
<PAGE>
Page 28
give notice of such inability or determination by telephone to Conair on
behalf of the Borrowers and to each Bank at least two Banking Business Days
prior to the date of the proposed Loan and thereupon the obligations of the
Banks to make, convert other Loans to, or renew such LIBO Rate Loan shall be
excused, subject, however, to the right of the Borrowers at any time
thereafter to submit another request.
"INTEREST PERIOD" means (1) with respect to any LIBO Rate Loan, each
period commencing on the date any such Loan is made, or the last day of the
next preceding Interest Period with respect to such Loan, and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter as selected by the Borrowers under the procedures
specified in Section 1.3, if the Banks are then offering LIBO Rate Loans
for such period; provided that each LIBO Rate Loan Interest Period which
would otherwise end on a day which is not a Banking Business Day shall end
on the next succeeding Banking Business Day unless such next succeeding
Business Day falls in the next succeeding calendar month, in which case the
Interest Period shall end on the next preceding Banking Business Day.
In the event the Borrowers fail or are not permitted to select an
Interest Period for any LIBO Rate Loan within the time period and otherwise
as provided herein, such Loan shall, at the option of the Borrowers, be
prepaid in the manner provided in Section 1.9(b) or be automatically
converted into a Base Rate Loan on the last day of the Interest Period for
such Loan.
(c) BANKERS' ACCEPTANCE RATE. "Bankers' Acceptance Rate" means,
with respect to, and at the time of, the creation of each Bankers'
Acceptance, the rate per annum in effect at the Acceptance Bank on the date
the Bankers' Acceptance is created for discount by such Bank of commercial
drafts eligible for discount with Federal Reserve Banks approximately in
the same denomination, of equal tenor, and maturing on the same date as the
draft being used to create such Bankers' Acceptance.
(d) CONVERSIONS OF LOANS. The Borrowers shall have the right to
convert Base Rate Loans into LIBO Loans, and vice versa, from time to time,
provided that: (i) Borrowers shall give the Agent notice of each permitted
conversion as provided in Section 1.3 hereof; (ii) LIBO Rate Loans may be
converted only as of the last day of the applicable Interest Period for
such Loans; and (iii) without the consent of the Banks, no Base Rate Loan
may be converted into a LIBO Rate Loan and no Interest Period may be
renewed if on the proposed date of conversion an Event of Default, or an
event ("POTENTIAL DEFAULT") which with the giving of notice or the passing
of time or both would become an Event of Default, exists or would thereby
occur. The Agent shall use its best efforts to notify Conair on behalf of
the Borrowers of the effectiveness of such conversion, and the new interest
rate to which the converted Loan is subject, as soon as practicable after
the conversion; provided, however, that any failure to give such notice
shall not affect the Borrowers' obligations or the Banks' rights and
remedies hereunder in any way whatsoever.
<PAGE>
Page 29
(e) DEFAULT RATE.
(i) If any Event of Default specified in Section
6.1(a) or Section 6.1(e) shall occur; or
(ii) If any other Event of Default occurs and the Banks
declare the Notes to be immediately due and payable;
THEN, the rate of interest applicable to each Loan then outstanding shall
be increased by 200 basis points per annum (the resulting interest rate in
each case is referred to herein as the "DEFAULT RATE"). Unless waived by
the Required Banks, the Default Rate shall apply from the date of the Event
of Default until the date such Event of Default or breach is cured, and
interest accruing at the Default Rate shall be payable upon demand.
(f) APPLICABLE MARGINS. The Base Rate Margin, the LIBO Rate
Margin and the Bankers' Acceptance Rate Margin (in each such case, the
"Applicable Margin") will be determined from time to time based on the
attainment of certain financial ratios. Upon receipt by the Agent of the
quarterly financial statements required to be delivered pursuant to Section
4.1, the Agent shall determine (A) the ratio of Senior Funded Debt to
Tangible Net Worth plus Senior Funded Debt, (B) the ratio of Trailing
Adjusted Net Income to Fixed Charges and (C) the ratio of EBITDA to
interest expenses for the quarterly period covered by such statements. The
Agent shall thereupon determine the Applicable Margins corresponding to (A)
above and the higher of the Applicable Margins corresponding to (B) or (C)
above. The Applicable Margins shall be the lowest of the Applicable
Margins resulting from such determination. Any adjustment to the
Applicable Margins shall become effective on the first day of the third
month following
<PAGE>
Page 30
the end of a quarterly period, and shall remain effective until the first
day of the third month following the end of the next quarter.
<TABLE>
<CAPTION>
Ratio of Senior Ratio of
Funded Debt to Trailing
Tangible Net Adjusted Net
Worth Plus Senior Income to EBITDA to Bankers'
Funded Debt Fixed Charges** Interest Expense Base LIBO Rate Acceptance
(not greater than) (not less than) (not less than) Rate Margin Margin Rate Margin
------------------ --------------- ---------------- ----------- ---------- -----------
<C> <C> <C> <C> <C> <C>
60 1.65 4.5 0 110 110
60 1.70 5.0 (50) 90 90
57* 1.80 5.5 (100) 65 65
50 2.00 6.0 (125) 55 55
</TABLE>
* As applied to the third Quarter of 1994, such ratio criteria shall be 59.
** As of December 31, 1995, such ratio criteria shall reduce by .25.
(g) COMPUTATIONS. Interest on LIBO Rate Loans shall be computed
on the basis of a year of 360 days and the actual days elapsed, and
interest on Base Rate Loans shall be computed on the basis of a year of 365
or 366 days, as the case may be, and the actual days elapsed.
1.12 REPORTS AS TO LOANS, LETTERS OF CREDIT AND BANKERS' ACCEPTANCES
AND STEAMSHIP INDEMNITIES.
(a) The Borrowers shall provide to the Agent on each Banking
Business Day a report (which report shall be in substantially the form of
Exhibit E hereto) (the "BORROWERS DAILY REPORT") setting forth certain
information with respect to Revolving Credit Loans, Short Term Loans,
Letters of Credit and Bankers' Acceptances outstanding as of the close of
business on the immediately preceding Banking Business Day.
(b) Each Bank shall provide to the Agent on each Banking
Business Day a report (which report shall be in substantially the form of
Exhibit F hereto) (the "BANK DAILY REPORT") setting forth certain
information with respect to Letters of Credit issued and Bankers'
<PAGE>
Page 31
Acceptances created by such Bank outstanding as of the close of business on
the immediately preceding Banking Business Day.
(c) The Agent shall provide to each Bank and to Conair on the
first Banking Business Day of each week a report (which report shall be in
substantially the form of Exhibit G hereto) (the "AGENT WEEKLY REPORT")
setting forth certain information with respect to Revolving Credit Loans,
Short Term Loans, Letters of Credit and Bankers' Acceptances outstanding as
of the close of business on the final Banking Business Day of the
immediately preceding week, including, commencing January 1, 1994, the then
applicable Base Rate Margin, LIBO Rate Margin and Bankers' Acceptance Rate
Margin.
(d) The Agent shall provide to each Bank and to Conair not later
than the fifth Banking Business Day of each month a report (which report
shall be in substantially the form of Exhibit H hereto) (the "AGENT MONTHLY
REPORT") setting forth, as to each Bank, the average daily Letter of Credit
Outstandings during the prior month of the Letters of Credit issued by such
Bank and the average daily face amount of Bankers' Acceptances created by
such Bank which were outstanding during the prior month.
(e) Notwithstanding anything else contained in this Agreement,
the failure of any Bank to provide a Bank Daily Report shall not result in
any liability to the other Banks or cause any sale and transfer of any
undivided interest and participation to be deemed to be rescinded unless
such Bank shall have failed to report the issuance of a Letter of Credit or
the creation of a Bankers' Acceptance within five Banking Business Days
following the receipt by such Bank of the Agent Weekly Report distributed
by the Agent most recently following the issuance of such Letter of Credit
or the creation of such Bankers' Acceptance.
1.13 ANNUAL ALLOCATION FEE.
Not later than ten Banking Business Days following each anniversary of
the date hereof and following the Trade Finance Termination Date (each, an
"ANNUAL ALLOCATION DATE"), the Borrowers shall pay to each Bank a fee
(which may be $0) computed in accordance with Schedule 1.13 hereto (the
"ANNUAL ALLOCATION FEE"). Such Annual Allocation Fee shall be based upon
the Agent's Monthly Reports for each month ending during the period from
the immediately preceding Annual Allocation Date through the current Annual
Allocation Date.
1.14 CHANGES IN CIRCUMSTANCES; YIELD PROTECTION.
(a) If any Regulatory Change or compliance by the Banks with any
request made by the Board of Governors of the Federal Reserve System or by
any Federal Reserve Bank or other fiscal, monetary or similar authority (in
each case whether or not having the force of law) shall:
(i) impose, modify or make applicable any reserve,
special deposit or similar requirement or imposition against
assets held by, or
<PAGE>
Page 31
deposits in or for the account of, or loans made by, or any other
acquisition of funds for loans or advances by, the Banks;
(ii) impose on the Banks any other condition regarding
the Notes;
(iii)subject the Banks to, or cause the withdrawal or
termination of any previously granted exemption with respect
to, any tax (including any withholding tax but not including
any income tax not currently causing the Banks to be subject
to withholding) or any other levy, impost, duty, charge, fee
or deduction on or from any payments due from the Borrowers;
or
(iv) change the basis of taxation of payments from the
Borrowers to the Banks (other than by reason of a change in
the method of taxation of a Bank's net income);
and the result of any of the foregoing events is to increase the cost to a
Bank of making or maintaining any LIBO Rate Loan or to reduce the amount of
principal, interest or fees to be received by the Bank hereunder in respect
of any LIBO Rate Loan, the Agent will immediately so notify the Borrowers.
If a Bank determines in good faith that the effects of the change resulting
in such increased cost or reduced amount cannot reasonably be avoided or
the cost thereof mitigated, then upon notice by the Agent to the Borrowers,
the Borrowers shall pay to such Bank on each interest payment date of the
LIBO Rate Loan such additional amount as shall be necessary to compensate
the Bank for such increased cost or reduced amount.
(b) If any Bank shall determine that any law, rule or regulation
regarding capital adequacy or the adoption of any law, rule or regulation
regarding capital adequacy, which law, rule or regulation is applicable to
banks (or their holding companies) generally and not such Bank (or its
holding company) specifically, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank (or its holding company)
with any such request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has the effect of reducing the rate of return on such
Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies with
respect to capital adequacy) by an amount deemed by such Bank to be
material, the Borrowers shall promptly pay to the Agent for the account of
such Bank, upon the demand of such Bank, such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Determination by a Bank for purposes of this Section of the
effect of any Regulatory Change or other change or circumstance referred to
above on its costs of making or maintaining Loans or on amounts receivable
by it in respect of the Loans, and of the additional
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amounts required to compensate such Bank in respect of any additional
costs, shall be made in good faith and shall be evidenced by a certificate,
signed by an officer of such Bank and delivered to the Borrowers, as to the
fact and amount of the increased cost incurred by or the reduced amount
accruing to the Bank owing to such event or events. Such certificate shall
be prepared in reasonable detail and shall be conclusive as to the facts and
amounts stated therein, absent manifest error.
"REGULATORY CHANGE" means any change after the date of this Agreement
in United States, federal, state or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System) or
the adoption or making after such date of any interpretations, directives
or requests of or under any United States federal, state, or foreign laws
or (whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration
thereof applying to a class of banks including any one of the Banks but
excluding any foreign office of any Bank.
1.15 ILLEGALITY. Notwithstanding any other provision in this
Agreement, if the adoption of any applicable law, rule, or regulation, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or compliance by
the Banks with any request or directive (whether or not having the force of
law) of any such authority, central bank, or comparable agency shall make
it unlawful or impossible for the Banks to (1) maintain their Revolving
Loan Commitments or Trade Finance Commitments, then upon notice to the
Borrowers by the Agent, the Revolving Loan Commitments or Trade Finance
Commitments, or both, as the case may be, shall terminate; or (2) maintain
or fund their LIBO Rate Loans, then upon notice to the Borrowers of such
event, the Borrowers' outstanding LIBO Rate Loans shall be converted into
Base Rate Loans.
II. REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Banks that:
2.1 ORGANIZATION, STANDING. Each Borrower and Subsidiary (i) is a
corporation duly organized, validly existing and in good standing (or
equivalent status under the laws of the foreign jurisdiction, if
applicable, in which such company was formed) under the laws of the
jurisdiction of its incorporation, (ii) has the corporate power and
authority necessary to own its assets, carry on its business and enter into
and perform its obligations hereunder, under the Notes, the Letter of
Credit Agreements, the Bankers' Acceptance Agreements, the Steamship
Indemnity Agreements, the Subordination Agreements, the Intercreditor
Agreement, the Pledge Agreement and the Guarantee (individually, a "LOAN
DOCUMENT" and collectively, the "LOAN DOCUMENTS") to which it is a party
and (iii) is qualified to do business and is in good standing in each
jurisdiction where the nature of its business or the ownership of its
properties requires such qualification except where the failure to be so
qualified would not have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Conair or of
Conair and its Subsidiaries taken as a whole.
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2.2 CORPORATE AUTHORITY, ETC. The making and performance of the Loan
Documents to which it is a party are within the power and authority of each
Borrower and have been duly authorized by all necessary corporate action.
The making and performance of the Loan Documents do not and under present
law will not require any consent or approval of any of the Borrowers' or
Subsidiaries' shareholders or any other person, do not and under present
law will not violate any law, rule, regulation order, writ, judgment,
injunction, decree, determination or award, do not violate any provision of
its charter or by-laws, do not and will not result in any breach of any
material agreement, lease or instrument to which it is a party, by which it
is bound or to which any of its assets are or may be subject, and do not
and will not give rise to any Lien upon any of its assets except in favor
of the Banks. Further, no Borrower or Subsidiary is in default under any
such agreement, lease or instrument except to the extent such default
reasonably could not have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of any Borrower or
Guarantor or of Conair and its Subsidiaries taken as a whole. No
authorizations, approvals or consents of, and no filings or registrations
with, any governmental or regulatory authority or agency (other than
authorizations, approvals, consents, filings and registrations heretofore
obtained and in full force and effect) are necessary for the execution,
delivery or performance by any Borrower or Subsidiary of any Loan Document
to which such Borrower or Subsidiary is a party or for the validity or
enforceability thereof.
2.3 VALIDITY OF DOCUMENTS. Each Loan Document, when executed and
delivered, will be the legal, valid and binding obligation of each Borrower
and Subsidiary that is a party thereto, enforceable against it in
accordance with its terms. No authorization, consent, approval, license,
exemption of or filing or registration with any court, governmental agency
or other tribunal is or under present law will be necessary to the validity
or performance of any Loan Document.
2.4 LITIGATION. Except as set forth in Schedule 2.4 hereto as of the
date of this Agreement, there are no actions, suits or proceedings pending
or, to the Borrowers' knowledge, threatened against or affecting any
Borrower or Subsidiary or any of its assets before any court, government
agency, or other tribunal which if adversely determined reasonably could
have a material adverse effect on the financial condition, operations or
assets of any Borrower or Guarantor or of Conair and its Subsidiaries taken
as a whole or upon its ability to perform under the Loan Documents.
Schedule 2.4 includes a detailed description of the status of each
litigation matter listed therein as of the date of this Agreement.
2.5 ERISA. The provisions of each Plan in which any Borrower or
ERISA Affiliate participates or to which any Borrower or ERISA Affiliate
contributes, whether or not they are the sole participant or contributor,
comply, in all material respects, with all applicable requirements of ERISA
and of the Code, and with all applicable rulings and regulations issued
under the provisions of ERISA and the Code setting forth those
requirements. No event has occurred with respect to any Plan in which any
Borrower or ERISA Affiliate participates or to which any of them
contributes (hereinafter referred to as a "COVERED PLAN") which constitutes
a Reportable Event, or, if such event has occurred, the employer and plan
administrator have complied with such Section 4043 and the regulations
thereunder, and have discharged all notification obligations, if any,
imposed on either of them by such Section 4043, to the extent
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that the employer or plan administrator has not been relieved of such
obligations by regulation or otherwise by the Pension Benefit
Guaranty Corporation ("PBGC"); there does not exist with respect
to any Covered Plan any accumulated funding deficiency within the meaning
of Section 412 of the Code nor has there been issued either a variance or
a waiver of the minimum funding standards imposed by the Code with respect
to any Covered Plan, nor are there any excise taxes due or hereafter to
become due under Section 4971 of the Code with respect to the funding of
any covered Plan for any plan year or fiscal period ending prior to the date
hereof; no Covered Plan to which Section 4021 of ERISA applies has been
terminated or, if such termination has occurred, the requirements of
ERISA Sections 4041 and 4044 have been satisfied and the Internal Revenue
Service has issued a letter of determination that the Covered Plan met
the requirements of Code Section 401(a) at the time of such termination;
no Covered Plan has incurred any liability to the PBGC under Sections 4062,
4063 or 4064 of ERISA which has not been satisfied or discharged; and no
Covered Plan has engaged in any Prohibited Transaction. Neither the
Borrowers nor any ERISA Affiliate is now or has been at any time a
contributor or obligated to contribute to any Multiemployer Plan
or if any Borrower or ERISA Affiliate is or has been a contributor
to a Multiemployer Plan, any Borrower or ERISA Affiliate has
not incurred any withdrawal liability within the meaning of Section 4201 of
ERISA which has not been fully satisfied. As of the date of this
Agreement, neither the Borrowers nor any ERISA Affiliate has established or
maintained any Plan or arrangement which provides post-employment welfare
benefits or coverage (other than as required pursuant to Section 4980B of
the Code). As of the date of this Agreement, neither the Borrowers nor any
ERISA Affiliate has ever established, maintained or contributed to, or has
any liability, actual or contingent, with respect to, a Plan subject to
Title IV of ERISA. Each Borrower and each ERISA Affiliate has, as of the
date of this Agreement, made all contributions or payments to or under each
such Plan required by law or the terms of such Plan.
For purposes of this Agreement:
"CODE" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"ERISA AFFILIATE" means any corporation which is a member of the same
controlled group of corporations as Conair within the meaning of Section
414(b) of the Code, or any trade or business which is under common control
with Conair within the meaning of Section 414(c) of the Code.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in ERISA
Section 4001(a)(3).
"PENSION PLAN" means, at any time, any Plan (including a Multiemployer
Plan), the funding requirements of which (under ERISA Section 302 or Code
Section 412) are, or at any
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time within the six years immediately preceding the time in question, were
in whole or in part, the responsibility of any Borrower or any ERISA
Affiliate.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA, other than a Multiemployer Plan.
"PROHIBITED TRANSACTION" means a transaction that is prohibited under
Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.
"REPORTABLE EVENT" means, with respect to a Pension Plan: (a) Any of
the events set forth in ERISA Sections 4043(b) (other than a reportable
event as to which the provision of 30 days' notice to the PBGC is waived
under applicable regulations) or 4063(a) or the regulations thereunder, (b)
an event requiring any Borrower or any ERISA Affiliate to provide security
to a Pension Plan under Code Section 401(a)(29) and (c) any failure by any
Borrower or any ERISA Affiliate to make payments required by Code Section
412(m).
"TERMINATION EVENT" means, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension
Plan amendment as a termination under ERISA Section 4041(c), (c) the
institution of proceedings to terminate a Pension Plan under ERISA Section
4042 or (d) the appointment of a trustee to administer any Pension Plan
under ERISA Section 4042.
"UNFUNDED PENSION LIABILITIES" means, with respect to any Pension Plan
at any time, the amount determined by taking the accumulated benefit
obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, over the fair market value of Pension Plan assets.
"UNRECOGNIZED RETIREE WELFARE LIABILITY" means, with respect to any
Plan that provides post-retirement benefits other than pension benefits,
the amount of the accumulated post-retirement benefit obligation, as
determined in accordance with Statement of Financial Accounting Standards
No. 106, as of the most recent valuation date. Prior to the date such
statement is applicable to any Borrower, such amount of the obligation
shall be based on an estimate made in good faith. For purposes of
determining the aggregate amount of the Unrecognized Retiree Welfare
Liability, Plans maintained by a subsidiary that is not otherwise a ERISA
Affiliate shall be taken into account.
2.6 FINANCIAL STATEMENTS. The consolidated financial statements of
Conair and its Subsidiaries as of and for the fiscal years ending December
31, 1991 and December 31, 1990, consisting in each case of a balance sheet,
a statement of income, a statement of shareholders' equity, a statement of
cash flows and accompanying footnotes, and the interim consolidated
financial statements of Conair and its Subsidiaries as of June 30, 1992 and
June 30, 1991 furnished to the Banks in connection herewith, present
fairly, in all material respects, the financial position, results of
operations and cash flows of Conair and its Subsidiaries as of the date and
for the period referred to, in conformity with generally accepted
accounting principles as in effect from time to time consistently applied
("GENERALLY ACCEPTED ACCOUNTING PRINCIPLES") (subject,
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in the case of interim statements, to changes resulting from audits
and year-end adjustments). Except as set forth on Schedules 2.4 and 2.6,
there are no liabilities, fixed or contingent, which are not reflected in
such financial statements, other than liabilities which are not required to
be reflected in such balance sheets and which, individually or in the
aggregate, would not have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Conair
or of Conair and its Subsidiaries taken as a whole. There has been
no material adverse change in the business, operations or assets or condition
(financial or otherwise) of any of the Borrowers, since June 30, 1992.
2.7 MARGIN REGULATIONS. No proceeds of any Loan will be applied for
the purpose, whether immediate, incidental or ultimate, of buying or
carrying or trading in any securities, including "margin stock" as defined
by The Board of Governors of the Federal Reserve System.
2.8 NOT IN DEFAULT. No Event of Default or Potential Default under
any Loan Document has occurred and is continuing.
2.9 TAXES. Each Borrower and Subsidiary has filed all federal, state
and local tax returns and reports which it is required by law to file and
has paid all taxes, including wage taxes, assessments, withholdings and
other governmental charges which are presently due and payable (other than
those being contested in good faith by appropriate proceedings). The
charges, accruals and reserves on the books of the Borrowers and
Subsidiaries are adequate. Conair is a member of an affiliated group of
corporations filing consolidated returns for United States federal income
tax purposes, and is the "common parent" of such group.
2.10 PERMITS, LICENSES, ETC. Each Borrower and Subsidiary possesses
all permits, licenses, franchises, trademarks, tradenames, copyrights and
patents necessary to the conduct of its business as presently conducted or
as presently proposed to be conducted, except where the failure to possess
the same would not have a material effect on the financial condition,
operations or assets of Conair or of Conair and its Subsidiaries taken as a
whole.
2.11 COMPLIANCE WITH LAWS.
(a) Each Borrower and Subsidiary is in compliance in all
material respects with all Regulations applicable to its business
(including obtaining all authorizations, consents, approvals, orders,
licenses, exemptions from, and making all filings or registrations or
qualifications with, any court or governmental department, public body or
authority, commission, board, bureau, agency, or instrumentality), the
noncompliance with which reasonably could have a material adverse effect on
the business, operations, assets or condition (financial or otherwise) of
Conair or of Conair and its Subsidiaries taken as a whole.
(b) Each Borrower and Subsidiary has obtained all permits,
licenses and other authorizations required under any Regulation relating to
pollution or protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes into
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the environment (including, without limitation, ambient air, surface
water, groundwater, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes except where the
failure to possess the same would not have a material adverse effect on the
business, operations, assets or condition (financial or otherwise) of
Conair or of Conair and its Subsidiaries taken as a whole. Each Borrower
and Subsidiary is in compliance in all material respects with all terms and
conditions of the required permits, licenses and authorizations, and is
also in compliance in all material respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Regulation, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder which has the force of law. Each
Borrower and Subsidiary is not aware of, nor has received written notice
of, any past or present events, conditions, circumstances, activities,
practices, incidents or actions which may interfere with or prevent
compliance or continued compliance with those laws or with any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder which has the force of
law, or which may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release into
the environment, of any pollutant, contaminant, chemical, or industrial,
toxic or hazardous substance or waste, except where such events,
conditions, circumstances, activities, practices, incidents or actions
would not result in a material adverse effect on the business, operations,
assets or condition (financial or otherwise) of Conair or of Conair and its
Subsidiaries taken as a whole.
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or, to any Borrower's or Subsidiary's
knowledge, threatened against any Borrower or Subsidiary relating in any
way to those laws or any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder, except such actions, suits, demands, claims, hearings,
notice or demand letters, notices of violations, or proceedings which would
not have a material adverse effect on the business, operations, assets or
condition (financial or otherwise) of Conair or of Conair and its
Subsidiaries taken as a whole.
2.12 SOLVENCY. Each Borrower and Subsidiary is, and after giving
effect to the transactions contemplated hereby, will be, Solvent.
"SOLVENT" means that the aggregate present fair saleable value of such
Person's assets is in excess of the total amount of its probable liability
on its existing debts as they become absolute and matured, such Person has
not incurred debts beyond its foreseeable ability to pay such debts as they
mature, and such Person has capital adequate to conduct the business it is
presently engaged in or is about to engage in.
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2.13 AMOUNTS OWED TO OR FROM AFFILIATES; INTERCOMPANY AGREEMENTS.
(a) AFFILIATES. Except as disclosed on Schedule 2.13 as of the
date of this Agreement, there is not outstanding and unpaid any debt, loan,
advance, guaranty or investment (i) by any Borrower to or for the benefit
of any Conair Affiliate or (ii) to any Borrower from any Conair Affiliate
(collectively, "INTERCOMPANY DEBT"), and there has not been paid (1) by any
Borrower to or for the benefit of any Conair Affiliate or (2) to any
Borrower from any Conair Affiliate, any amount for management,
administrative, operational, consulting, brokerage or other services. None
of the Borrowers has prepaid to or for the benefit of any Subsidiary or
other Conair Affiliate any Intercompany Debt or amount for management,
administrative, operational, consulting, brokerage or other services.
(b) INTERCOMPANY AGREEMENTS. Except as disclosed on
Schedule 2.13 hereto as of the date of this Agreement, there are no
agreements between any Borrower and any Conair Affiliate relating to the
extension of any funds to a Borrower, the sharing of any costs among the
Borrowers and any Conair Affiliate or the provision of any management,
administrative, operational, consulting, brokerage or other services to a
Borrower ("INTERCOMPANY AGREEMENTS").
(c) DIVIDENDS. Except as disclosed on Schedule 2.13 hereto,
during the period from June 30, 1992 through the date of this Agreement,
neither Conair nor any other Borrower accrued, declared or paid any
dividend on, or purchased, redeemed, retired or otherwise acquired for
value, any of Conair's or such Borrower's capital stock then outstanding,
returned any capital stock to its stockholders, or made any distribution
with respect to its shares, whether in cash, property or obligations,
except to stockholders that are Borrowers.
2.14 TITLE TO ASSETS. Each Borrower and Subsidiary has good and
marketable title to all of its properties and assets, free and clear of all
Liens, other than Permitted Liens and encumbrances which do not materially
impair the use or value thereof.
"LIEN" means any lien, mortgage, security interest, chattel mortgage,
pledge or other encumbrance (statutory or otherwise) of any kind securing
satisfaction of an obligation, including any agreement to give any of the
foregoing, any conditional sales or other title retention agreement, any
lease in the nature thereof, and the filing of or the agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.
"PERMITTED LIENS" means:
(a) any Liens for current taxes, assessments and other
governmental charges not yet due and payable or being contested in good
faith by the Borrowers by appropriate proceedings and for which adequate
reserves have been established by the Borrowers as reflected in the
Borrowers' financial statements;
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(b) any mechanic's, materialman's, carrier's, warehousemen's or
similar Liens for sums not yet due or being contested in good faith by the
Borrowers by appropriate proceedings and for which adequate reserves have
been established by the Borrowers as reflected in the Borrowers' financial
statements;
(c) liens in favor of the Banks and the holders of Senior Notes
under the Loan Documents; and
(d) easements, rights-of-way, restrictions and other similar
encumbrances on the real property or fixtures of the Borrowers and the
Subsidiaries incurred in the ordinary course of business which INDIVIDUALLY
OR in the aggregate are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of either Borrower or
any Subsidiary;
(e) liens (other than Liens imposed in any property of the
Borrowers or any ERISA Affiliate pursuant to ERISA or section 412 of the
Code) incurred or deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
(ii) to secure performance of tenders, statutory
obligations, surety and appeal bonds (in the case of appeal
bonds such lien shall not secure any reimbursement or
indemnity obligation in an amount greater than $1,000,000),
bids, leases that are not capitalized leases, performance
bonds, sales contracts and other similar obligations, in
each case, not incurred in connection with the obtaining of
credit or the payment of a deferred purchase price, and
which do not, in the aggregate, result in a material adverse
effect on the business, operations, assets or condition
(financial or otherwise) of Conair or of Conair and its
Subsidiaries taken as a whole;
(f) liens existing upon the date hereof as set forth in Schedule
2.14 hereto.
2.15 INSURANCE. The Borrowers and the Subsidiaries have at their own
cost and expense obtained in commercially reasonable kind and form and with
financially sound and reputable insurers, all risk of physical loss or
damage insurance covering the assets of the Borrowers and the Subsidiaries
wherever the same may be located, insuring against the risks of fire,
explosion, theft and such other risks as are prudently insured against by
corporations engaged in the same business and similarly situated with the
Borrowers and the Subsidiaries (and specifically including vandalism,
malicious mischief coverage, loss overboard and breakage), in an amount
usually carried by corporations engaged in the same business and similarly
situated with the Borrowers and the Subsidiaries.
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2.16 NO BURDENSOME AGREEMENTS. No Borrower or Subsidiary is a party
to or bound by any agreement or instrument or subject to any corporate or
other restriction, the performance or observance of which now has or, as
far as such Borrower or Subsidiary can reasonably foresee, may have a
materially adverse effect, financial or otherwise, upon the assets or
business of Conair or of Conair and its Subsidiaries taken as a whole.
2.17 SUBSIDIARIES, ETC. Set forth in Schedule 2.17 hereto is a
complete and correct list, as of the date of this Agreement, of all
Subsidiaries (and the respective jurisdiction of incorporation of each such
Subsidiary) and of all Investments held by any of the Borrowers in any
joint venture or other Person. Except as disclosed in Schedule 2.17
hereto, as of the date hereof, Conair owns, directly or through a
Subsidiary, free and clear of Liens, all outstanding shares of such
Subsidiaries and all such shares are validly issued, fully paid and non-
assessable and Conair (or the respective Subsidiary) also owns, free and
clear of Liens, all such Investments. Schedule 2.17 also sets forth as to
each Subsidiary the authorized capital stock, the number of shares of each
class of such capital stock issued and outstanding and held in treasury and
the record and beneficial owners of all such issued and outstanding shares.
Except as set forth on Schedule 2.17, all of the issued and outstanding
shares of capital stock of each Subsidiary have been duly authorized and
validly issued and will be fully paid and nonassessable and free and clear
of all Liens whatsoever (except a lien on the stock of Conair Costa Rica,
S.A. in connection with the OPIC Guaranteed Loan) and there are no
outstanding subscriptions, options, warrants, calls, conversion or exchange
rights, commitments or agreements of any character obligating any
Subsidiary to issue, deliver or sell additional shares of its capital stock
of any class or any securities convertible into or exchangeable for any
such capital stock.
2.18 DISCLOSURE GENERALLY. The representations and statements made by
or on behalf of any Borrower in connection with this credit facility and
each Loan hereunder, including representations and statements in each of
the Loan Documents, do not contain any untrue statement of a material fact
or omit to state a material fact or any fact necessary to make the
representations made not materially misleading. No written information,
exhibit, report or financial statement furnished by any Borrower to the
Banks in connection with this Agreement, the Loans or any Loan Document,
contains any material misstatement of fact or omits to state a material
fact or any fact necessary to make the statements contained therein not
materially misleading.
III. CONDITIONS PRECEDENT.
3.1 ALL LOANS. The obligation of each Bank to make any Loan, issue
any Letter of Credit or Steamship Indemnity or create any Bankers'
Acceptance is conditioned upon the following:
(a) DOCUMENTS. In the case of a Loan, Conair shall have
delivered and the Agent shall have received, a request for a Loan, as
provided in Sections 1.1 and 1.3. In the case of a Letter of Credit,
Steamship Indemnity or Bankers' Acceptance the Issuing Bank or Acceptance
Bank, as the case may be, has received an appropriate request therefor.
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(b) COVENANTS; REPRESENTATIONS. Each Person that is a party
thereto other than the Banks and the Agent shall be in compliance with all
covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true
with the same effect as if such representation or warranty had been made on
the date such Loan, Letter of Credit, Steamship Indemnity or Bankers'
Acceptance is made, issued or created. Also, in the case of each Loan and
Standby Letter of Credit, the Agent shall have received a certificate dated
the date of the Loan or Standby Letter of Credit signed by the chief
executive officer or chief financial officer of Conair, on behalf of the
Borrowers, to the foregoing effect.
(c) LIMITS. In the case of a Loan, the amount of the requested
Loan, when added to the outstanding balances of the Notes would not exceed
any applicable limit set forth or referred to in Section 1.1. In the case
of a Letter of Credit, the Stated Amount of the requested Letter of Credit,
in the case of a Bankers' Acceptance the face amount thereof, or in the
case of a Steamship Indemnity, the Indemnity Amount, would not exceed any
applicable limit set forth in Section 1.4, 1.5 or 1.6, respectively.
(d) DEFAULTS. After giving effect to such transaction, no Event
of Default or Potential Default shall exist.
3.2 CONDITIONS TO FIRST LOAN, LETTER OF CREDIT OR BANKERS'
ACCEPTANCE. No Letter of Credit or Steamship Indemnity shall be issued or
Bankers' Acceptance created hereunder (other than Letters of Credit and
Bankers' Acceptances existing on the date hereof) until the first Loan is
made. The obligation of each Bank to make the first Loan, hereunder, is
conditioned upon the following:
(a) ARTICLES, BYLAWS. The Banks shall have received copies of
the Articles of Incorporation (or in the case of any foreign company, other
equivalent document) and Bylaws (or in the case of any foreign company,
other equivalent document) of each Borrower and Subsidiary, certified by
the secretary or assistant secretary of such Borrower or Subsidiary;
(b) EVIDENCE OF AUTHORIZATION. The Banks shall have received
certified copies of all corporate or other action (i) taken by each Person
other than a Bank who is a party to any Loan Document to authorize its
execution and delivery and performance of the Loan Documents and to
authorize the Revolving Credit Loans, Short Term Loans, Letters of Credit
and Bankers' Acceptances hereunder, together with such other related papers
as the Banks shall reasonably require and (ii) taken by Conair with respect
to issuance of the Senior Notes, the Subordinated Notes, and the Preferred
Stock;
(c) LEGAL OPINIONS. The Banks shall have received a favorable
written opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel for
Conair and Cuisinarts Corp., which shall be addressed to the Banks and be
dated the date of the first Loan, in substantially the form attached as
Exhibit E, together with related opinions of Marguiles & Marguiles, P.C.,
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general counsel for Conair, and opinions of counsel for CCL, Conair Costa
Rica, S.A. and Conair Consumer Products Inc., each in form and substance
satisfactory to the Banks;
(d) INCUMBENCY. The Banks shall have received a certificate
signed by the secretary or assistant secretary of each corporate signatory
to the Loan Documents other than a Bank, together with the true signature
of the officer or officers authorized to execute and deliver the Loan
Documents, upon which the Banks shall be entitled to rely conclusively
until the Agent shall have received a further certificate of the
appropriate secretary or assistant secretary amending the prior certificate
and submitting the signature of the officer or officers named in the new
certificate as being authorized to execute and deliver Loan Documents;
(e) NOTES. Each Bank shall have received executed Notes, each
in the respective amounts provided herein, payable to the order of such
Bank and otherwise in the form of Exhibits B and C hereto. In addition,
the Agent shall have received all certificates, instruments and other
documents then required to be delivered pursuant to any Loan Documents, in
each instance in form and substance reasonably satisfactory to the Agent
and the Banks;
(f) INTERCOMPANY AGREEMENTS. There will not have been any
change in, modification or termination of, the Intercompany Agreements, and
all such agreements shall be in form and substance satisfactory to the
Banks;
(g) FEES. The Borrowers shall have (i) paid to the Agent and
each Co-Agent such fees as are then due them in connection with the
Transaction, (ii) paid to the Agent a facility fee equal to 1% of the
Aggregate Revolving Loan Commitment plus 1/8 of 1% of the Aggregate Trade
Finance Commitment, which shall be distributed to the Banks in the
proportion each Bank's Commitment Percentage, (iii) paid to CoreStates all
private placement advisory fees due in connection with the Transaction, and
(iv) reimbursed the Agent for all out-of-pocket expenses, including
reasonable legal fees of counsel to the Agent, incurred in connection with
the Transaction contemplated hereby and reimbursed the Banks for such
specific expenses as the Borrowers have otherwise agreed to pay;
(h) PROJECTIONS. The Banks shall have received five (5) year
financial projections of the Borrowers on a consolidated basis in form and
substance satisfactory to the Banks;
(i) SENIOR NOTES. Pursuant to the Note Agreement, Conair shall
have issued or, on the date of the first Loan shall issue, the Senior Notes
in the amount of $50,000,000, the terms and conditions of which shall be
satisfactory to the Banks;
(j) CONSENTS. The Borrowers shall have provided to the Banks
evidence satisfactory to the Banks that all governmental, shareholder and
third party consents and approvals necessary in connection with the
transactions contemplated hereby and by the issuance of the Senior Notes
and related refinancing have been obtained and remain in effect;
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(k) CHANGE. No material adverse change shall have occurred in
the financial condition or prospects of any Borrower since June 30, 1992;
(l) PENDING OR THREATENED LITIGATION. There shall not be any
pending litigation, bankruptcy or insolvency, injunction, order or claim
which could reasonably have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Conair or
Conair and its Subsidiaries taken as a whole;
(m) RATING. Conair shall have delivered to the Agent and the
Banks evidence satisfactory to the Banks of a Duff and Phelps rating of BBB
or higher with respect to the Senior Notes;
(n) SUBORDINATED INDEBTEDNESS. The Borrowers shall have
delivered to the Banks evidence satisfactory to the Banks that (i) Conair
has given an irrevocable notice of the redemption with respect to all of
its 14% subordinated indebtedness and the 14 1/2 % subordinated
indebtedness (the "EXISTING SUBORDINATED DEBT"), (ii) Conair has issued
$5,000,000 of Preferred Stock, the terms of which shall be in form and
substance satisfactory to the Agent and the Banks, and (iii) Conair has
exchanged with Leandro P. Rizzuto $10,000,000 in principal amount of its
existing subordinated notes currently held by Mr. Rizzuto for the
Subordinated Notes, which shall be in form and substance satisfactory to
the Banks. The Subordination Agreements shall have been executed and
delivered by each of the parties thereto, and each such agreement shall be
in form and substance satisfactory to the Banks; and
(o) OTHER AGREEMENTS. (i) Conair shall have entered into a
Pledge Agreement with CoreStates Bank, N.A., as collateral agent on behalf
of the Banks and the holders of the Senior Notes (the "Collateral Agent")
in the form of Exhibit J hereto (the "PLEDGE AGREEMENT"), and all stock
certificates required to be delivered thereunder shall have been delivered
to the Agent, along with all necessary stock powers, (ii) the Borrowers
shall have entered into a Letter of Credit Agreement with each Bank in the
form prescribed by such Bank, (iii) the Borrowers shall have entered into a
Bankers' Acceptance Agreement with each Bank in the form prescribed by such
Bank, (iv) the Borrower shall, if requested by any Bank, have entered into
an agreement with such Bank governing the issuance of Steamship
Indemnities, such agreement to be in the form prescribed by such Bank, (v)
Cuisinarts Corp. shall have entered into a Guarantee Agreement with the
Agent and the Banks in the form of Exhibit K hereto and (vi) the Borrowers
shall have entered into an Intercreditor and Collateral Agency Agreement
with the Banks, the holders of the Senior Notes and the Collateral Agent in
the form of Exhibit L hereto.
IV. AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that, without the prior written
consent of the Required Banks, from and after the date hereof and so long
as the Revolving Loan Commitments or Trade Finance Line Commitments are in
effect or any Obligations remain unpaid or outstanding:
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4.1 FINANCIAL STATEMENTS AND REPORTS. The Borrowers will furnish to
the Banks the following financial information:
(a) ANNUAL STATEMENTS. As soon as available but no later than
ninety (90) days after the end of each fiscal year, commencing December 31,
1992, a balance sheet of Conair and its Subsidiaries as of the end of such
year and the prior year in comparative form, and related statements of
operations, shareholders' equity, and cash flows for Conair and its
Subsidiaries for the fiscal year and the prior fiscal year in comparative
form. The financial statements shall be on a consolidated basis, including
each Subsidiary, and shall include consolidating information. The
financial statements shall be in reasonable detail with appropriate notes
and be prepared in accordance with Generally Accepted Accounting
Principles. Annual financial statements (other than the consolidating
information) shall be certified (without any qualification or exception
deemed material by the Required Banks for the purposes of evaluating the
creditworthiness of the Borrowers) by independent public accountants of
nationally recognized standing acceptable to the Banks and such
consolidating information shall be certified by the chief financial officer
or treasurer of Conair and shall be accompanied by a report of such
independent certified public accountants (if other than consolidating
information) or such chief financial officer or treasurer (if consolidating
information) stating that, in the opinion of such accountants or officer,
respectively, such financial statements present fairly, in all material
respects, the financial position, and the results of operations and the
cash flows of Conair and its Subsidiaries for the period then ended in
conformity with Generally Accepted Accounting Principles, except for
inconsistencies resulting from changes in accounting principles and methods
agreed to by such accountants or officers and specified in such report, and
that the examination by such accountants or officers of such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and
assessing the accounting principles used and significant estimates made, as
well as evaluating the overall financial statement presentation. Each
financial statement provided under this subsection (a) (other than the
consolidating financial statements) shall be accompanied by a corresponding
financial statement for the same period in the preceding fiscal year and by
a certificate signed by such accountants either stating that during the
course of their examination nothing came to their attention which would
cause them to believe that any event has occurred and is continuing which
constitutes an Event of Default or Potential Default, or describing each
such event and the remedial steps being taken by the Borrowers. In
addition to the annual financial statements, Conair shall, promptly upon
receipt thereof, furnish to the Banks a copy of each other report submitted
to the board of directors of Conair by its independent accountants in
connection with any annual, interim or special audit made by them of the
financial records of Conair or any of its Subsidiaries.
(b) QUARTERLY STATEMENTS. As soon as available but no later
than sixty (60) calendar days after the end of each fiscal quarter of each
fiscal year, a consolidated balance sheet of Conair and its Subsidiaries
and related consolidated statements of operations, shareholders' equity and
cash flows for such quarterly period and for the period from the beginning
of such fiscal year to the end of such fiscal quarter certified by the
chief financial officer of Conair as having been prepared in accordance
with Generally Accepted Accounting Principles (subject to
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changes resulting from audits and year-end adjustments); provided,
however, that if the quarterly financial statements of any
Borrower are reviewed by independent certified public accountants,
the financial statements required by this subsection (b) shall be
accompanied by a certificate signed by such accountants either
stating that during the course of their examination nothing came
to their attention which would cause them to believe that any
event has occurred and is continuing which constitutes an Event of Default
or Potential Default, or describing each such event and the remedial steps
being taken by the Borrowers. Each financial statement provided hereunder
shall be accompanied by a corresponding financial statement for the same
period in the preceding fiscal year.
(c) NO DEFAULT. Within sixty (60) calendar days after the end
of each of the first three fiscal quarters of each fiscal year and within
one hundred twenty (120) calendar days after the end of each fiscal year, a
certificate signed by the chief financial officer or treasurer of Conair on
behalf of the Borrowers certifying that, to the best of such officer's
knowledge, after due inquiry, (i) the Borrowers have complied with all
covenants, agreements and conditions in each Loan Document and that each
representation and warranty contained in each Loan Document are true and
correct with the same effect as though each such representation and
warranty had been made on the date of such certificate (except to the
extent such representation or warranty related to a specific prior date),
and (ii) no event has occurred and is continuing which constitutes an Event
of Default or Potential Default, or describing each such event and the
remedial steps being taken by the Borrowers.
(d) COMPLIANCE. Within sixty (60) calendar days after the end
of each of the first three fiscal quarters of each fiscal year and within
one hundred twenty (120) calendar days after the end of each fiscal year, a
certificate signed by the chief financial officer or treasurer of Conair
setting forth (on a consolidated basis) Consolidated Net Income, Current
Ratio, Fixed Charge Coverage, Operating Cash Flow, Senior Funded Debt to
Operating Cash Flow, Tangible Net Worth, Trailing Adjusted Net Income and
EBITDA to interest expense for such quarter and compliance with all other
financial covenants and representations contained in this Agreement as of
the end of such period and the Restricted Payments paid by Conair. The
chief financial officer of Conair shall provide any and all reports,
audits, and such other information as may be reasonably requested by the
Agent to substantiate such compliance by the Borrowers or upon which said
officer may have relied in signing such certificate. In addition, Conair
shall, promptly following delivery to the holders of the Senior Notes,
deliver to the Agent a copy of any certificate or report required to be
delivered under the Note Agreement for purposes of demonstrating compliance
with any covenants contained in the Note Agreement.
(e) CASH FLOW PROJECTIONS. No later than April 30 of each year
and at other such times reasonably requested by the Agent, projections for
the next twelve month period of (i) cash flows, (ii) earnings,
(iii) significant sources and uses of cash, (iv) Revolving Credit Loan,
Letter of Credit and Bankers' Acceptance requests, and (v) balance sheets,
each such projection being broken down on a monthly basis and otherwise
satisfactory in form to the Agent and the Banks.
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(f) ERISA. All reports and forms filed with respect to all
Plans, except as filed in the normal course of business and that would not
result in an adverse action to be taken under ERISA, and details of related
information of a Reportable Event.
(g) MATERIAL CHANGES. The Borrowers shall promptly notify the
Agent and the Banks of any litigation, administrative proceeding,
investigation, business development, or change in financial condition which
could reasonably have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of any Borrower or
Guarantor or of Conair and its Subsidiaries taken as a whole.
(h) OTHER INFORMATION. Promptly upon request by the Agent or
the Banks from time to time (which may be on a monthly or other basis),
such other information and reports regarding the operations, business
affairs, prospects and financial condition of any Borrower, Subsidiary or
Conair Affiliate, as the Agent or the Banks may reasonably request,
including shareholder and Securities and Exchange Commission notices,
reports and filings and any material press release; provided, however, that
the Borrowers shall not be obligated to disclose any information with
respect to such Conair Affiliate if such information has no relation to the
Borrowers or a Guarantor and disclosure thereof would violate any
applicable federal or state securities law.
4.2 INSURANCE; TAXES AND OTHER CHARGES.
(a) INSURANCE. The Borrowers and each Subsidiary shall at their
own cost and expense obtain and keep in full force and effect, in
commercially reasonable kind and form and with reputable insurers, all risk
of physical loss or damage insurance covering the Borrower's and
Subsidiary's inventory, plants and equipment wherever the same may be
located, insuring against the risks of fire, explosion, theft and such
other risks as are prudently insured against by corporations engaged in the
same business and similarly situated with the Borrowers or such Subsidiary,
as the case may be (and specifically including vandalism, malicious
mischief coverage, loss overboard and breakage), in an amount usually
carried by corporations engaged in the same business and similarly situated
with the Borrowers or such Subsidiary, as the case may be.
(b) TAXES AND OTHER CHARGES. The Borrowers shall pay or cause
to be paid after notice that the same are due all taxes, assessments and
governmental charges imposed upon the Borrowers and the Subsidiaries or any
of the Borrowers' or Subsidiaries' assets or which the Borrowers and the
Subsidiaries are required to withhold and pay over, except as may be
contested in good faith by the Borrowers or Subsidiaries by appropriate
proceedings and for which adequate reserves have been established by the
Borrowers or Subsidiaries as reflected in the Borrowers' or Subsidiaries'
financial statements.
4.3 CORPORATE EXISTENCE. Each Borrower and Subsidiary shall preserve
its corporate existence and material franchises, licenses, patents,
copyrights, trademarks and tradenames consistent with good business
practice, except as otherwise expressly permitted by Section 5.1.
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4.4 COMPLIANCE WITH ERISA. The Borrowers shall maintain each Covered
Plan in compliance in all material respects with all applicable
requirements of ERISA and the Code, including all applicable rulings and
regulations under ERISA and the Code. As soon as practicable and, in any
event, within 10 business days after any Borrower or any ERISA Affiliate
knows, or has reason to know, that:
(a) any Termination Event with respect to a Pension Plan
has occurred or will occur; or
(b) any Borrower or any ERISA Affiliate has applied for a
waiver of the minimum funding standard under Section 412 of the
Code with respect to a Pension Plan; or
(c) the aggregate amount of the Unfunded Pension
Liabilities under all Pension Plans has increased to an amount in
excess of $250,000; or
(d) the aggregate amount of Unrecognized Retiree Welfare
Liability under all applicable Plans has increased to an amount
in excess of $250,000; or
(e) any Borrower or Subsidiary has engaged in a Prohibited
Transaction with respect to a Plan; or
(f) there is a partial or complete withdrawal (as described
in ERISA Section 4203 or 4205) by any Borrower or any ERISA
Affiliate from a Multiemployer Plan; or
(g) any Borrower or any ERISA Affiliate is in "default" (as
defined in ERISA Section 4219(c)(5)) with respect to payments to
a Multiemployer Plan by reason of its complete or partial
withdrawal from such Multiemployer Plan; or
(h) a Multiemployer Plan is in "reorganization" (as
described in Code Section 418 or Title IV or ERISA); or
(i) the potential withdrawal liability (as determined in
accordance with Title IV or ERISA) of any Borrower or any ERISA
Affiliate with respect to all Multiemployer Plans has, in any
year, increased to an amount in excess of $250,000; or
(j) there is an action brought against any Borrower or any
ERISA Affiliate under ERISA Section 502 with respect to its
failure to comply with ERISA Section 515;
Conair shall, on behalf of the Borrowers and the Subsidiaries, furnish
or cause to be furnished to the Agent a notice of such event.
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Any notice required hereunder shall include a certificate addressed to
the Agent and signed by the chief financial officer or treasurer of Conair
on behalf of the Borrowers, setting forth all pertinent details relating to
the events described in such notice is based and the action which is
proposed to be taken with respect thereto. Conair shall also furnish or
cause to be furnished to the Agent notice within ten (10) calendar days
after any complete or partial withdrawal from a Multiemployer Plan within
the meaning of Sections 4203 and 4205 of ERISA by Conair or any other
Borrower or ERISA Affiliate.
4.5 COMPLIANCE WITH REGULATIONS. Each Borrower and Subsidiary shall
comply in all material respects with all Regulations applicable to its
business, the noncompliance with which reasonably could have a material
adverse effect on the business, operations, assets or condition (financial
or otherwise) of Conair or of Conair and its Subsidiaries taken as a whole.
4.6 NOTICE OF EVENTS. Promptly upon discovery by the Borrowers or
any officer of the Borrowers of any of the events described in subsections
(a) through (f) hereof, Conair shall, on behalf of the Borrowers, deliver
to an officer of the Agent active on the Borrowers' accounts telephone
notice, and within three (3) calendar days of such telephone notice deliver
to the Agent a written notice, which describes the event and all action the
Borrowers propose to take with respect thereto:
(a) an Event of Default under this Agreement;
(b) any Potential Default or event which would entitle the Banks
to terminate or suspend the Revolving Loan Commitments hereunder or to
accelerate the Obligations;
(c) any default or event of default under a contract or
contracts and the default or event of default involves payments in an
aggregate amount equal to or in excess of $1,000,000;
(d) a default or event of default under or as defined in any
evidence of or agreements for Indebtedness for Borrowed Money under which
any Borrower's or Subsidiary's liability is equal to or in excess of
$50,000 singularly or in the aggregate, whether or not an event of default
thereunder has been declared by any party to such agreement or any event
which, upon the lapse of time or the giving of notice or both, would become
an event of default under any one of said agreements or would permit any
party to any of said agreements to terminate or suspend any commitment to
lend to the Borrowers or the Subsidiaries or to declare or to cause any
such indebtedness to be accelerated or payable before it would otherwise be
due;
(e) the institution of, any material adverse determination in,
or the entry of any default judgment or order or stipulated judgment or
order in, any suit, action, arbitration, administrative proceeding,
criminal prosecution or governmental investigation in which the amount in
controversy is at least $500,000 singularly or in the aggregate; or
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(f) any change in any Regulation, including, without limitation,
changes in tax laws and regulations, which could reasonably have a material
adverse impact on the ability of the Borrowers to perform their obligations
under the Loan Documents or a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Conair or of
Conair and its Subsidiaries taken as a whole.
4.7 INSPECTION RIGHTS. At any time during regular business hours and
as often as reasonably requested of the Borrowers by any Bank, the
Borrowers shall (i) permit any Bank or any authorized officer, employee,
agent, or representative of any Bank, to examine and make abstracts from
the records and books of account of the Borrowers, wherever located, and to
visit the properties of the Borrowers and the Subsidiaries; and (ii) permit
any Bank or any authorized officer, employee, agent, or representative of
any Bank to discuss the affairs, finances, and accounts of the Borrowers
and the Subsidiaries with any of the Borrowers' and Subsidiaries' officers,
directors or independent accountants, which activities shall be at the
expense of such Bank. The Banks shall also have the right to have
conducted by the Agent or their other designees, an audit of the Borrowers
and the Subsidiaries and all the Borrowers' and Subsidiaries' books and
records annually, provided that such audits may be conducted more
frequently within the reasonable discretion of the Required Banks. The
Borrowers shall bear the expense of such annual audits, and the Banks shall
bear equally the expense of such audits conducted more frequently than
annually, without regard to their portion of the outstanding Notes or their
percentage of the Commitments.
4.8 SHORT TERM LOANS OUTSTANDING. During each period of 12 calendar
months beginning on the first day of each month after the date hereof, the
Borrowers shall not have outstanding any Short Term Loans for a period of
at least 30 days.
4.9 GAAP. Each Borrower and Subsidiary shall maintain its books and
records at all times in accordance with Generally Accepted Accounting
Principles.
4.10 USE OF PROCEEDS. The Borrowers shall use the proceeds of the
Short Term Loans only to finance the purchase by the Borrowers of inventory
(as defined in the Uniform Commercial Code in effect on the date hereof in
the State of New York) and to finance outstanding accounts (as defined in
the Uniform Commercial Code in effect on the date hereof in the State of
New York) of the Borrowers. Conair shall use the proceeds of the initial
Revolving Credit Loan only to purchase the Existing Subordinated Debt, and
shall use the proceeds of subsequent Revolving Credit Loans to refinance
the initial Revolving Credit Loan and for working capital and other general
corporate purposes.
4.11 DOMESTIC SUBSIDIARIES. Promptly following the formation of any
Domestic Subsidiary, Conair shall cause such Domestic Subsidiary to enter
into a guarantee substantially in the form of the Guarantee Agreement.
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4.12 SUBSIDIARY DIVIDENDS. Conair shall cause its Subsidiaries to
declare and pay to Conair such cash dividends or to make such cash advances
as shall be necessary from time to time to enable the Borrowers to fulfill
the Obligations.
4.13 REGISTRATION. Within 25 days after the date of the execution of
the Subsidiary Subordination Agreement and this Agreement, Conair shall
cause an executed copy of each thereof and the relevant particulars of each
such agreement to be delivered to the Registrar of Companies in Hong Kong
in accordance with section 80 of the Companies Ordinance of Hong Kong.
Conair shall provide the Agent with evidence of such registration within 10
days after such registration is effected. Conair will not directly, or
indirectly through an agent, establish a place of business in Hong Kong,
unless Conair shall have first taken all necessary steps to register the
pledge of CCL stock effected by the Pledge Agreement with the Registrar of
Companies in Hong Kong pursuant to Section 91 of the Companies Ordinance
(Hong Kong) and shall provide the Agent with evidence of such registration
prior to the establishment of such place of business.
V. NEGATIVE COVENANTS.
The Borrowers covenant and agree that, without the prior written
consent of the Required Banks, from and after the date hereof and so long
as the Revolving Loan Commitments or Trade Finance Commitments are in
effect, or any Obligations remain unpaid or outstanding, they will not, and
will not permit any Subsidiary to:
5.1 MERGER, CONSOLIDATION. Merge or consolidate with or into any
corporation except, if no Potential Default or Event of Default shall have
occurred and be continuing either immediately prior to or upon the
consummation of such transaction:
(a) a Subsidiary, may be merged into Conair, if Conair is
the surviving corporation;
(b) a Subsidiary may be merged with or into any
corporation, including a Subsidiary, if the surviving corporation
is a Subsidiary that is a Guarantor (or becomes a party to a
Guarantee Agreement) whose principal place of business is located
within the United States; and
(c) any corporation may merge into Conair if (i) Conair is
the surviving corporation, (ii) the fair market value of all
consideration issued or paid by Conair to effect such merger does
not exceed ten percent of Tangible Net Worth as of the end of the
fiscal year immediately preceding the date such merger becomes
effective and (iii) immediately prior to the merger the
corporation that merges into Conair is Solvent and as of such
date the book value of its assets does not exceed ten percent of
the book value of the assets of Conair.
5.2 INDEBTEDNESS FOR BORROWED MONEY. Incur, create, or permit to
exist any Indebtedness for Borrowed Money except:
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(a) the Obligations, the Senior Notes and the Subordinated
Notes;
(b) the Existing Subordinated Debt, except no portion of
the Existing Subordinated Debt shall be permitted to remain
outstanding after the redemption date specified in the notice
described in Section 3.2(n);
(c) other existing Indebtedness for Borrowed Money set
forth on Schedule 5.2, such indebtedness not to be renewed,
extended, or refinanced except as permitted by paragraphs (d) and
(e) below;
(d) Indebtedness for Borrowed Money secured by (i) the
Arizona Properties to a maximum of the lesser of fair market
value of the Arizona Properties and $10,000,000 and (ii) the
Rantoul Facility to a maximum of the lesser of fair market value
of the Rantoul Facility and $2,500,000;
(e) Indebtedness for Borrowed Money incurred after the date
hereof which is secured by (1) the Arizona Properties in excess
of the amount permitted by paragraph (d), (2) the Rantoul
Facility in excess of the amount permitted by paragraph (d), (3)
the East Windsor Facility and (4) the Costa Rica Facility, in
each case to the extent the net proceeds of such indebtedness are
used to make a mandatory prepayment of any Revolving Loans then
outstanding and to effect a corresponding reduction in the
Aggregate Revolving Loan Commitment;
(f) Indebtedness for Borrowed Money subordinated to the
Obligations on terms and conditions satisfactory to and with the
prior written consent of all the Banks;
(g) Indebtedness for Borrowed Money, not in excess of
$3,000,000 at any time outstanding, financing the purchase of,
and secured by a mortgage on or security interest in, real
property or equipment acquired after the date hereof, the loan-
to-value ratio of each such indebtedness when incurred not to
exceed 100% of the fair market value of such real property or
equipment;
(h) additional Indebtedness for Borrowed Money not in
excess of $3,000,000 at any time outstanding;
(i) the New First Fidelity Loan;
(j) the CoreStates Debt; and
(k) the UJB Debt,
provided that the aggregate Indebtedness for Borrowed Money of Foreign
Subsidiaries shall be limited to $15,000,000 (including the existing
OPIC Guaranteed Loan of Conair
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Costa Rica, S.A. and any refinancings thereof which do not increase the
principal amount outstanding).
5.3 LIENS. Create, assume or permit to exist any Lien on any of the
Borrowers' property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, except:
(a) Permitted Liens, subject to the prohibition upon
renewal, extension or increase of the Liens described on Schedule
2.14 contained in clause (b) below;
(b) existing Liens described on Schedule 2.14, which Liens
shall not be renewed, extended, or increased (except to secure
indebtedness permitted under Section 5.2(d) above);
(c) liens upon real property and fixtures to secure
indebtedness permitted by Section 5.2(e); and
(d) liens securing indebtedness permitted under Section
5.2(g) and Section 5.2(i).
5.4 GUARANTEES. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts, etc.) of any other person, contingently
or otherwise, except:
(a) guarantees issued in the Banks' favor;
(b) the endorsement of negotiable instruments of deposit in
the normal course of business;
(c) existing guarantees further described on Schedule 5.4
hereto, such guarantees not to be renewed except in the ordinary
course of business and which guarantees, together with such
renewals, shall not at any time exceed $1,000,000 in the
aggregate;
(d) guarantees issued in connection with the OPIC
Guaranteed Loan, which guarantees shall not exceed $10,500,000;
(e) guarantees issued in connection with the Transactions;
(f) guarantees by a Borrower issued to secure the
indebtedness or obligation of Conair or any Subsidiary, which
underlying indebtedness or obligation is permitted hereunder; and
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(g) guarantees that are covered by Standby Letters of
Credit issued hereunder;
(h) additional guarantees made in the ordinary course of
business which shall not at any time exceed $1,000,000 in the
aggregate; and
(i) guarantees by a Subsidiary permitted under Section
5.5(c) hereof.
5.5 SALE OF STOCK AND INDEBTEDNESS OF SUBSIDIARIES.
(a) sell, assign, pledge or otherwise dispose of any Debt
of any Subsidiary or any shares of stock or other equity
interests in (or warrants, rights or options to acquire stock of
or equity interests in) any Subsidiary except to the Agent and
the Banks pursuant to the Pledge Agreement or to Conair, PROVIDED
that all of the equity securities and Debt of a Subsidiary may be
sold as an entirety if all the assets of such Subsidiary could be
sold pursuant to Section 5.12;
(b) in the case of a Subsidiary, issue or sell any shares
of its stock or other equity interests in itself (or warrants,
rights or options to acquire, or securities convertible into,
such stock or other equity interests) to any Person other than
Conair; or
(c) in the case of a Subsidiary, issue, sell, create,
incur, assume or suffer to exist Indebtedness for Borrowed Money
owing to or held by any Person other than Conair, except (subject
to compliance with Section 5.17 through 5.21) (i) guarantees of
the Senior Notes, (ii) guarantees of the Obligations and (iii)
other Indebtedness for Borrowed Money not to exceed in aggregate
principal amount for all Subsidiaries at any time outstanding of
$15,000,000.
5.6 RESTRICTIONS ON SUBSIDIARY DIVIDENDS. Enter into any contract or
agreement (including any provision in its charter) that imposes
restrictions on the ability of any Subsidiary to pay dividends other than
restrictions existing on the date hereof imposed by the documents relating
to the OPIC Guaranteed Loan.
5.7 SALE OF RECEIVABLES. Discount, pledge, sell with recourse, or
otherwise sell or transfer any of its notes receivable or accounts
receivable except receivables pledged or sold pursuant to Bankers'
Acceptances created under this Agreement.
5.8 JUDGMENT, ATTACHMENT. Permit any of its assets to be subject to
any judgment, attachment or levy the aggregate amount of which exceed
$1,000,000 and which judgments, attachments or levies have not been stayed
by appeal, satisfied, bonded or discharged within thirty (30) calendar days
after service of notice thereof to such Borrower.
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5.9 RESTRICTED PAYMENTS. Accrue, order, declare, pay or set apart
any sum or property, or permit CCL or any other Subsidiary to accrue,
order, declare, pay or set apart any sum or property, for any Restricted
Payment during any period of 12 consecutive calendar months unless to the
extent the aggregate amount involved in all such Restricted Payments would
not exceed 18% of Earnings Available for Restricted Payments for such
period of 12 consecutive calendar months, such Restricted Payment is
permissible under applicable state law and both immediately before and
immediately after giving effect to the payment of such Restricted Payment,
there exists no Event of Default or Potential Default.
5.10 MARGIN STOCK. Use or permit any proceeds of the Loans to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying margin stock within the
meaning of Regulation U of The Board of Governors of the Federal Reserve
System, as amended from time to time.
5.11 LOANS, ADVANCES AND INVESTMENTS. Purchase or otherwise acquire
or hold any Investments, except that:
(a) Conair may make and own Investments in Cuisinarts Corp. and
in other Domestic Subsidiaries that are Guarantors provided that the
aggregate amount of all such Investments made after September 30, 1992
shall not exceed $5,000,000 (measured at cost on the date each such
Investment is made);
(b) any Subsidiary may make and own Investments in Conair or CCL
consisting of intercompany debt that is subordinated to the
Obligations;
(c) Conair or Cuisinarts Corp. may make and own Investments in
any Foreign Subsidiary or any entity which immediately after such
Investment will be a Foreign Subsidiary so long as (i) the aggregate
amount of all such Investments made after September 30, 1992 and
outstanding at any one time does not exceed $15,000,000, (ii) the
aggregate amount of such Investments in Conair Costa Rica, S.A. made
after September 30, 1992 does not exceed $5,000,000 (measured at cost
on the date each such Investment is made) and (iii) the capital stock
of each such Foreign Subsidiary (other than capital stock representing
more than 65% (by voting power) of the voting stock of such Foreign
Subsidiary) shall be duly and validly pledged to the Collateral Agent
under the Pledge Agreement and, PROVIDED, FURTHER, that (1) no capital
stock of Conair Costa Rica, S.A. shall be required to be pledged by
this clause (c) for so long as such pledge would constitute a default
in connection with the guaranty by Overseas Private Investment
Corporation of indebtedness of Conair Costa Rica, S.A. existing on the
date hereof, (2) each such pledge of any capital stock of any Foreign
Subsidiary shall in any event create in favor of the pledgee under the
Pledge Agreement a valid, perfected, first priority lien on such
capital stock under the laws of the jurisdiction of incorporation of
such Foreign Subsidiary, and each Significant Holder shall have
received an opinion of local counsel, reasonably satisfactory to such
holder, to such effect; provided, however, that upon the repayment of
the OPIC Guaranteed Loan and incurrence of the New First Fidelity
Loan,
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the lien of the pledgee under the Pledge Agreement in the
capital stock of Conair Costa Rica, S.A. required by this clause (c)
to be pledged may be second in priority to the lenders under the New
First Fidelity Loan for so long as such capital stock is pledged to
secure the New First Fidelity Loan, and (3) any property subjected to
the Lien of the Pledge Agreement pursuant to this clause (c) may be
released from such Lien without requirement of any action by the
holders of the Notes if such property is being sold or otherwise
disposed of to a Person other than a Subsidiary in a transaction
permitted by Sections 5.5 and 5.12.
(d) Conair or any Subsidiary may make and own stock, obligations
or securities received in settlement of debts (created in the ordinary
course of business) owing to Conair or such Subsidiary;
(e) Conair or any Subsidiary may make and own:
(i) Investments in certificates of deposit or time
deposits having maturities in each case not exceeding one
year from the date of issuance thereof and issued by a Bank,
or any FDIC-insured commercial bank incorporated in the
United States or any state thereof having a combined capital
and surplus of not less than $500,000,000;
(ii) Investments in marketable direct obligations
issued or unconditionally guaranteed by the United States of
America or issued by any agency thereof and backed by the
full faith and credit of the United States of America, in
each case maturing within one year from the date of issuance
or acquisition thereof; and
(iii)Investments in commercial paper issued by a
corporation incorporated in the United States or any State
thereof maturing no more than one year from the date of
issuance thereof and, at the time of acquisition, having a
rating of A-1 (or better) by Standard & Poor's Corporation
or P-1 (or better) by Moody's Investors Service, Inc.; and
(iv) Investments in money market mutual funds all of
the assets of which are invested in cash or investments
described in clauses (i), (ii) and (iii) of this paragraph
(e);
(f) Conair or any Subsidiary may make and have outstanding
travel and other like advances to officers and employees incurred in
the ordinary course of business, provided that the aggregate amount of
such advances at any one time outstanding to Leandro P. Rizzuto shall
not exceed $750,000, and to all others shall not exceed at any time
$250,000 and further provided that as of the end of each fiscal year
all such advances under this clause (f) shall not exceed $500,000; and
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(g) Conair may make and own Investments in addition to those set
forth in clauses (a) through (f), provided that the amount of such
additional Investments shall not at any time exceed in the aggregate
$7,000,000 (valued in the case of each such Investment at original
cost);
provided that all Investments made by Conair in Subsidiaries in the
form of loans or advances shall be evidenced by negotiable instruments
(as defined in the Uniform Commercial Code of the State of New York)
delivered to the Agent and pledged under the Pledge Agreement.
5.12 TRANSFER OF ASSETS. Sell, transfer, pledge, assign or otherwise
dispose of any assets or any interests therein, other than (i) sales or
dispositions in the ordinary course of Conair's or such Subsidiary's
business; (ii) the sale of Farouk Systems, Inc., and (iii) the sale and
lease-back of computer equipment described in Section 1.8(a), provided that
in the case of each of clause (i), (ii) and (iii) no Event of Default or
Potential Default shall have occurred or will thereby occur.
5.13 TRANSACTIONS WITH CONAIR AFFILIATES. Directly or indirectly
engage in any transaction (including, without limitation, the purchase,
sale or exchange of assets or the rendering of any service) with any Conair
Affiliate except (i) those transactions described in Schedule 5.13 hereto
and (ii) transactions entered into in the ordinary course of and pursuant
to the reasonable requirements of Conair's or such Subsidiary's business
and upon fair and reasonable terms that are no less favorable to Conair or
such Subsidiary than those which would have been obtainable in an arm's
length transaction at the time from Persons which are not Conair
Affiliates, provided that if Conair or any Subsidiary leases real or
personal property from a Conair Affiliate, then the payment of rentals
under such lease, other than amounts payable to the lessor to discharge
impositions upon and other costs and expenses incurred with respect to the
leased property (including transaction costs) and similar payments, shall
be junior and subordinate to the Obligations at least to the extent
provided in the Lease Subordination Agreement, for so long as the lessor
under such lease is a Conair Affiliate.
5.14 MODIFICATION OF LOAN AGREEMENTS OR POLICIES. (i) Consent to or
permit any amendment, modification or waiver of any material provision or
term contained in any agreement or indenture, governing any Indebtedness
subordinated to the Obligations that might accelerate any obligations of,
or delay any payments to Conair, (ii) prepay, redeem, purchase or otherwise
acquire, or make any payment on account of any Indebtedness subordinated to
the Obligations, other than in accordance with its terms, (iii) amend,
modify or waive any provision of the Note Agreement other than as
contemplated by the Intercreditor Agreement, (iv) amend, modify or waive
any provision of (A) the Loan Agreement, dated as of November 1, 1993,
between First Fidelity Bank, National Association, New Jersey and Conair
evidencing the New First Fidelity Loan (the "First Fidelity Loan
Agreement"), (B) the Term Loan Agreement, dated as of November 24, 1993,
between CoreStates Bank, N.A. and Conair evidencing the CoreStates Debt
(the "CoreStates Loan Agreement") or (C) the Loan Agreement, dated as of
March __, 1994, between United Jersey Bank/Central, N.A. and Conair
evidencing the UJB Debt (the "UJB Loan
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Agreement") or (v) amend, modify or waive any provision of the Preferred
Stock in any manner adverse to the interests of the Banks.
5.15 DISCONTINUANCE OR CHANGE OF BUSINESS. Discontinue any
substantial part of their existing business taken as a whole or change the
nature of their existing business or enter into a new line of business or
otherwise change the legal form of their business.
5.16 CAPITAL EXPENDITURES. Make capital expenditures in any fiscal
year in excess of $8,000,000 plus, commencing in the 1993 fiscal year, an
amount, not in excess of $2,000,000, equal to the amount of the capital
expenditures limit not used in the immediately preceding fiscal year; the
foregoing restriction shall not apply to capital expenditures for the
Arizona Properties and Rantoul Facility which are to be financed through a
mortgage as provided in Section 5.2 above.
5.17 CURRENT RATIO. Permit, at the end of any fiscal quarter, (i) the
Current Ratio to be less than 2.0 to 1.0, (ii) the current assets of CCL
divided by the current liabilities of CCL to be less than 2.0 to 1.0, and
(iii) the current assets of Conair Costa Rica, S.A. divided by the current
liabilities of Conair Costa Rica, S.A. to be less than 1.5 to 1.0.
5.18 TANGIBLE NET WORTH. Permit, at the end of any fiscal quarter,
Tangible Net Worth to be less than the sum of (i) $69,000,000, plus (ii)
the greater of (x) 50% of Consolidated Net Income for the period from
July 1, 1992, to and including the most recently ended fiscal year
(excluding any fiscal year, or in the case of the fiscal year ending
December 31, 1992, the second half thereof, in which Consolidated Net
Income was negative) or (y) the product of $2,000,000 multiplied by the
number of fiscal years ended on or after December 31, 1992 plus (iii) 70%
the net proceeds of any equity securities issued by Conair after the date
hereof.
5.19 SENIOR FUNDED DEBT. Permit the ratio of Senior Funded Debt to
Tangible Net Worth plus Senior Funded Debt on a consolidated basis to be at
any time greater than:
0.60:1.0 from January 1, 1994 through December 30, 1994;
0.55:1.0 from December 31, 1994 through December 30, 1995;
0.50:1.0 on December 31, 1995;
0.52:1.0 from January 1, 1996 through December 30, 1996;
0.40:1.0 on December 31, 1996
0.44:1.0 from January 1, 1997 through December 30, 1997
0.40:1.0 after December 30, 1997
5.20 FIXED-CHARGE COVERAGE RATIO. Permit the ratio of Trailing
Adjusted Net Income to Fixed Charges as of the end of each fiscal quarter
to be less than:
1.65:1.00 from January 1, 1994 through December 31, 1994;
1.30:1.00 from January 1, 1995 through December 31, 1996;
1.35:1.00 after December 31, 1996.
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5.21 MAINTENANCE OF CASH COVERAGE RATIO. Permit the ratio of Trailing
Adjusted Cash to Adjusted Fixed Charges to be on the last day of each
fiscal quarter less than 1.00 to 1.00.
VI. DEFAULT.
6.1 EVENTS OF DEFAULT. The Borrowers shall be in default if any one
or more of the following events ("EVENT OF DEFAULT") occurs:
(a) PRINCIPAL, INTEREST OR OTHER AMOUNTS. Any Borrower fails
(i) to pay any principal of any Note when due and payable (whether at
maturity, by notice of intention to prepay, or otherwise) or fails to pay
when it is due and payable any other amount (other than interest) payable
under any Loan Document or (ii) to pay any interest on any Note for more
than two (2) days after it is due and payable;
(b) COVENANTS.
(i) Any Borrower fails to observe or perform as and when
required any of the terms, conditions or covenants contained in
any Loan Document or the Pledge Agreement, dated as of November
1, 1993, among Conair, First Fidelity Bank, National Association,
New Jersey and CoreStates Bank, N.A., as Collateral Agent (the
"First Fidelity Pledge Agreement") or Leandro P. Rizzuto fails to
observe or perform as and when required any of the terms,
conditions or covenants contained in Sections 10 or 16 of the
Third Subordination and Pledge Agreement dated as of November 24,
1993 among Conair, Leandro P. Rizzuto, the Agent and The
Prudential Insurance Company of America (the "Third Subordination
Agreement") (in each case, other than those terms, conditions or
covenants referred to in clause (ii) below); or
(ii) Any Borrower fails to observe or perform as and when
required any of the terms, conditions or covenants contained in
Sections 4.2, 4.3 (other than as to the corporate existence of
any Borrower or Guarantor), 4.4, 4.5, 4.6(c), 4.6(d), 4.6(e) or
4.6(f) of this Agreement, any section of the Pledge Agreement
(other than Sections 1 and 5 thereof), the Intercreditor
Agreement or the First Fidelity Pledge Agreement (other than
Sections 3, 4 and 5 thereof) or Leandro P. Rizzuto fails to
observe or perform as and when required any of the terms,
conditions or covenants contained in the Third Subordination
Agreement (other than Sections 10 and 16 thereof) or the Lease
Subordination Agreement (as hereinafter defined) and such failure
shall continue for thirty (30) days after written notice to
Conair by the Agent.
(c) REPRESENTATIONS, WARRANTIES, ETC. Any representation or
warranty made by any Borrower herein or in any Loan Document or in any
exhibit, schedule, report or certificate delivered pursuant hereto or
thereto shall prove to have been false, misleading or incorrect in any
material respect when made or deemed to have been made;
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(d) CROSS DEFAULT. If there shall occur an Event of Default as
defined in any of (i) the Note Agreement, (ii) the Loan Agreement dated as
of November 1, 1993, between Conair, First Fidelity Bank, National
Association, New Jersey, evidencing the New First Fidelity Loan (the "First
Fidelity Loan Agreement") and (iii) the Term Loan Agreement, dated November
24, 1993, evidencing the CoreStates Debt;
(e) BANKRUPTCY, ETC. Any Borrower is dissolved or liquidated,
makes an assignment for the benefit of creditors, files a petition in
bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to
any tribunal for any receiver or trustee, commences any proceeding relating
to itself under any bankruptcy, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, has
commenced against it any such proceeding which remains undismissed for a
period of thirty (30) days, indicated its consent to, approval of or
acquiescence in any such proceeding, or any receiver of or trustee for such
Borrower or any substantial part of the property of such Borrower is
appointed, or any Borrower suffers any such receivership or trusteeship to
continue undischarged for a period of thirty (30) days;
(f) CERTAIN OTHER DEFAULTS. If any Borrower shall fail to pay
when due any Indebtedness for Borrowed Money which singularly or in the
aggregate exceeds $250,000, and such failure shall continue beyond any
applicable cure period, or any Borrower shall suffer to exist any default
or event of default in the performance or observance, subject to any
applicable grace period, of any agreement, term, condition or covenant with
respect to any agreement or document, if the effect of such default is to
permit, with the giving of notice or passage of time or both, the holders
thereof, or any trustee or agent for said holders, to terminate or suspend
any commitment (which is equal to or in excess of $500,000) to lend money
or to cause or declare any portion of any borrowings thereunder to become
due and payable prior to the date on which it would otherwise be due and
payable, provided that during any applicable cure period the Banks'
obligations hereunder to make further Loans, issue Letters of Credit or
create Bankers' Acceptances shall be suspended;
(g) JUDGMENTS. Any judgments against any Borrower or any
attachments against its assets or property for amounts in excess of
$1,000,000 in the aggregate remain unpaid, unstayed on appeal,
undischarged, unbonded and undismissed for a period of thirty (30) days;
(h) ERISA. (i) Any Termination Event shall occur; (ii) any
accumulated funding deficiency, whether or not waived, shall exist with
respect to any Pension Plan; (iii) any Borrower or any ERISA Affiliate is
in "default" (as defined in ERISA Section 4219(c)(5)) with respect to
payments to a Multiemployer Plan resulting from any Borrower's or any ERISA
Affiliate's complete or partial withdrawal from such Multiemployer Plan;
(iv) any Borrower or any ERISA Affiliate shall fail to pay when due an
amount which is payable to the PBGC or to a Pension Plan under Title IV of
ERISA; (v) any Borrower or Subsidiary shall engage in any Prohibited
Transaction involving any Plan; (vi) a proceeding shall be instituted by a
fiduciary of any Multiemployer Plan against any Borrower or any ERISA
Affiliate to enforce ERISA Section 515 and such proceedings shall not have
been dismissed within 30 days thereafter; (vii) any other
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event or condition shall occur or exist with respect to a Plan, except that
no event or condition referred to in clauses (i) through (vii) shall
constitute an Event of Default if it, together with all other such events
or conditions at the time existing, would not subject any Borrower or any
Subsidiary to any tax, penalty, debt, or liability that, alone or in
aggregate, would have a material adverse effect on the assets, business,
operations or conditions (financial or otherwise) of any Borrower or
Guarantor or of Conair and its Subsidiaries taken as a whole.
(i) ENVIRONMENTAL MATTERS. Any Borrower shall receive any
notice from any governmental agency or unit, shall be served with any
complaint, or otherwise shall become aware of any claim against it for any
matter involving the laws, rules or regulations, federal or state, which
pertain to environmental matters the effect of which, or any resulting
proceedings, will have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Conair or of
Conair and its Subsidiaries taken as a whole.
THEN and in every such event other than that specified in clause (e), the
Required Banks may terminate the Revolving Loan Commitments and the Trade
Finance Commitments and may declare the Revolving Loans and the Short Term
Loans and all other Obligations, including without limitation accrued
interest, to be, and the Revolving Loans and Short Term Loans and all other
Obligations shall thereupon become, due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrowers. Upon the occurrence of any event specified in clause (e)
above, the Revolving Loan Commitments and the Trade Finance Commitments
shall automatically terminate and the Revolving Loans and Short Term Loans
and all other Obligations, including without limitation accrued interest,
shall immediately be due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrowers. To the extent that the Obligations accelerated hereunder relate
to Letters of Credit and Steamship Indemnities, the amount becoming due and
payable shall be the aggregate amount of the Letter of Credit Outstandings
and Steamship Indemnity Outstandings, whether or not any drawings or claims
have been presented thereunder. Any date on which the Loans and such other
obligations are declared due and payable pursuant to this Section 6.1,
shall be a Revolver Termination Date and a Trade Finance Termination Date
for purposes of this Agreement.
VII. AGENT.
7.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action on its behalf and to
exercise such powers under this Agreement and the Loan Documents as are
specifically delegated to the Agent by the terms hereof or thereof,
together with such other powers as are reasonably incidental thereto. The
relationship between the Agent and each Bank has no fiduciary aspects, and
the Agent's duties (as Agent) hereunder are acknowledged to be only
ministerial and not involving the exercise of discretion on its part.
Nothing in this Agreement or any Loan Document shall be construed to impose
on the Agent any duties or responsibilities other than those for which
express provision is made herein or therein. In performing its duties and
functions hereunder, the Agent does not assume and shall not be deemed to
have assumed, and hereby expressly disclaims, any obligation
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with or for the Borrowers. As to matters not expressly provided for in this
Agreement or any Loan Document, the Agent shall not be required to exercise
any discretion or to take any action or communicate any notice, but shall be
fully protected in so acting or refraining from acting upon the
instructions of the Required Banks and their respective successors and
assigns; provided, however, that in no event shall the Agent be required to
take any action which exposes it to personal liability or which is contrary
to this Agreement, any Loan Document or applicable law, and the Agent shall
be fully justified in failing or refusing to take any action hereunder
unless it shall first be specifically indemnified to its satisfaction by
the Banks against any and all liability and expense which may be incurred
by it by reason of taking or omitting to take any such action. If an
indemnity furnished to the Agent for any purpose shall, in the reasonable
opinion of the Agent, be insufficient or become impaired, the Agent may
call for additional indemnity from the Banks and not commence or cease to
do the acts for which such indemnity is requested until such additional
indemnity is furnished.
7.2 DUTIES AND OBLIGATIONS. In performing its functions and duties
hereunder on behalf of the Banks, the Agent shall exercise the same care
and skill as it would exercise in dealing with loans for its own account.
Neither the Agent nor any of its directors, officers, employees or other
agents shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or any Loan Document except
for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Agent (a) may consult with
legal counsel and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith and in
accordance with the advice of such experts; (b) makes no representation or
warranty to any Bank as to, and shall not be responsible to any Bank for,
any recital, statement, representation or warranty made in or in connection
with this Agreement, any Loan Document or in any written or oral statement
(including a financial or other such statement), instrument or other
document delivered in connection herewith or therewith or furnished to any
Bank by or on behalf of the Borrowers; (c) shall have no duty to ascertain
or inquire into the Borrowers' performance or observance of any of the
covenants or conditions contained herein or to inspect any of the property
(including the books and records) of the Borrowers or inquire into the use
of the proceeds of the Revolving Credit Loans, Short Term Loans or Bankers
Acceptances or (unless the officers of the Agent active in their capacity
as officers of the Agent on the Borrowers' account have actual knowledge
thereof or have been notified in writing thereof) to inquire into the
existence or possible existence of any Event of Default or Potential
Default; (d) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, effectiveness, genuineness,
sufficiency, collectability or value of this Agreement or any other Loan
Document or any instrument or document executed or issued pursuant hereto
or in connection herewith, except to the extent that such may be dependent
on the due authorization and execution by the Agent itself; (e) except as
expressly provided herein in respect of information and data furnished to
the Agent for distribution to the Banks, shall have no duty or
responsibility, either initially or on a continuing basis, to provide to
any Bank any credit or other information with respect to the Borrowers,
whether coming into its possession before the making of the Loans or at any
time or times thereafter; and (f) shall incur no liability under or in
respect of this Agreement or any other Loan Document for, and shall be
entitled to rely and act upon, any notice, consent, certificate or other
instrument or
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writing (which may be by facsimile (telecopier), telegram, cable, or other
electronic means) believed by it to be genuine and correct and to have been
signed or sent by the proper party or parties.
7.3 THE AGENT AS A BANK. With respect to its Commitment and the
Loans and Bankers' Acceptances made and to be made by it, CoreStates shall
have the same rights and powers under this Agreement and all other Loan
Documents as the other Banks and may exercise the same as if it were not
the Agent. The terms "Bank" and "Banks" as used herein shall, unless
otherwise expressly indicated, include the Agent in its individual
capacity. CoreStates and any successor Agent which is a commercial bank,
and their respective affiliates, may accept deposits from, lend money to,
act as trustee under indentures of and generally engage in any kind of
business with, the Borrowers and their affiliates from time to time, all as
if such entity were not the Agent hereunder and without any duty to account
therefor to any Bank.
7.4 INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges to the
Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based upon such documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will,
independently or through other advisers and representatives but without
reliance upon the Agent or any other Bank, and based upon such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or refraining from taking any action
under this Agreement or any Loan Document.
7.5 INDEMNIFICATION. The Banks agree to indemnify the Agent (to the
extent not reimbursed by the Borrowers), ratably in the proportion each
Bank's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in such capacity in
any way relating to or arising out of this Agreement or any Loan Document
or any action taken or omitted to be taken by the Agent in such capacity
hereunder or under any Loan Document; provided that none of the Banks shall
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Bank
agrees to reimburse the Agent, promptly on demand, for such Bank's ratable
share (based upon the aforesaid apportionment) of any out-of-pocket
expenses (including counsel fees and disbursements) incurred by the Agent
in connection with the preparation, execution, administration or
enforcement of, or the preservation of any rights under, this Agreement an
the Loan Documents to the extent that the Agent is not reimbursed for such
expenses by the Borrowers.
7.6 SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice of such resignation to the Banks and the Borrowers, such
resignation to be effective only upon the appointment of a successor Agent
as hereinafter provided. Upon any such notice of resignation, the Banks
shall jointly appoint a successor Agent upon written notice to the
Borrowers and the
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retiring Agent. If no successor Agent shall have been jointly
appointed by such Banks and shall have accepted such appointment
within thirty (30) days after the retiring Agent shall have given notice of
resignation, the retiring Agent may, upon notice to the Borrowers and the
Banks, appoint a successor Agent. Upon its acceptance of any appointment
as Agent hereunder, the successor Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
as Agent under this Agreement and the Loan Documents. After any retiring
Agent's resignation hereunder, the provisions hereof shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
the Agent under this Agreement and the Loan Documents.
7.7 ALLOCATIONS MADE BY AGENT. As between the Agent and the Banks,
unless a Bank objecting to a determination or allocation made by the Agent
pursuant to this Agreement delivers to the Agent written notice of such
objection within one hundred twenty (120) days after the date any
distribution was made by the Agent, such determination or allocation shall
be conclusive on such one hundred twentieth day and only those items
expressly objected to in such notice shall be deemed disputed by such Bank.
The Agent shall not have any duty to inquire as to the application by the
Banks of any amounts distributed to them.
VIII. CERTAIN DEFINITIONS.
8.1 DEFINITIONS. As used in this Agreement, the following terms
shall have these meanings:
"ACCEPTANCE BANK" shall mean the Bank which creates a commercial
acceptance of a draft on which a Borrower is the obligor.
"ADJUSTED FIXED CHARGES," as determined on the last day of any
calendar quarter, shall mean the sum of (i) scheduled principal payments on
Funded Debt of Conair and its Subsidiaries (which shall not include
payments on Bankers' Acceptances, financial guarantees, or any Letters of
Credit or repayments of Short Term Loans) due within the period of four
consecutive calendar quarters commencing with the next following calendar
quarter, excluding any principal payments required to be made under
Section 1.9 as a result of mandatory reductions under Section 1.8 and (ii)
the gross interest expense of the Company and its Subsidiaries during the
four consecutive calendar quarters ending on the date of determination on
Funded Debt.
"AGGREGATE TRADE FINANCE COMMITMENT" shall mean the aggregate Trade
Finance Commitments of all Banks plus the aggregate Seasonal Trade Finance
Commitments of all Banks.
"ARIZONA PROPERTIES" shall mean the facilities owned by Conair and
located in Phoenix, Arizona.
"BANKERS' ACCEPTANCE AGREEMENT" shall mean an agreement between Conair
and a Bank governing the creation of acceptances for the benefit of Conair.
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"BANKERS' ACCEPTANCE OUTSTANDINGS" shall mean, at any time, the
aggregate face amount of all outstanding Bankers' Acceptances.
"CHANGE OF CONTROL EVENT" shall mean any event or condition that
results in Leandro P. Rizzuto together with his lineal descendants and any
trust the beneficiaries of which are his lineal descendants owning legally
and beneficially less than such number of shares of such class or classes
of voting stock of Conair as shall be necessary to enable the holder
thereof to elect a controlling majority of the board of directors of
Conair.
"COMMITMENT" shall mean a Revolving Credit Commitment or a Trade
Finance Commitment.
"COMMITMENT PERCENTAGE" shall mean with respect to each Bank the
percentage set forth opposite its name on Exhibit A hereto.
"CONAIR AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control
with, Conair. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"CONNECTICUT FACILITY LEASE" shall mean the lease by Conair from
Leandro P. Rizzuto of the facility located in Stamford, Connecticut.
"CONSOLIDATED CURRENT ASSETS" shall mean all current assets of Conair
and its Subsidiaries determined on a consolidated basis.
"CONSOLIDATED CURRENT LIABILITIES" shall mean all current liabilities
of Conair and its Subsidiaries determined on a consolidated basis.
"CONSOLIDATED NET INCOME" shall mean any net earnings (or net loss) of
Conair and its Subsidiaries determined in accordance with Generally
Accepted Accounting Principles, on a consolidated basis, excluding:
(a) extraordinary gains (net of any extraordinary losses (other
than those described in (b)) up to the amount of any extraordinary
gains);
(b) any extraordinary losses (up to $4,000,000) arising in 1992
from the repurchase of the existing 14% and 14 1/2 % subordinated
indebtedness of Conair;
(c) net income or net loss of any Person (other than a
Domestic Subsidiary and other than Farouk Systems, Inc.,
Cuisinarts-Sanyei Co., Ltd., Continental Products, S.A. and, if
Conair purchases an interest therein, Rusk, Inc.)
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in which Conair or a subsidiary has an ownership interest unless those net
earnings have actually been received in the form of cash for
distributions;
(d) any portion of the net income of any Subsidiary which
for any reason is unavailable to pay dividends to Conair or any
other Subsidiary;
(e) any aggregate net gain (in excess of any net losses)
arising from the sale, exchange or other disposition of capital
assets (such term to include all fixed assets, whether tangible
or intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all securities);
(f) any write-up of any asset;
(g) any gain arising from the acquisition of any securities
of Conair or its Subsidiaries;
(h) net income or gain (but not any loss) resulting from a
change in accounting, discontinuing or disposing of operations,
an extraordinary event or prior period adjustments; and
(i) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary.
"CORESTATES DEBT" shall mean the Indebtedness for Borrowed Money in
the principal amount of $4,000,000 payable by Conair to the order of
CoreStates Bank, N.A., which Indebtedness for Borrowed Money shall be
unsecured and shall have the following additional terms: (i) principal to
be payable in 60 equal monthly installments commencing December 1, 1993
with a final payment on November 1, 1998 and (ii) interest payable at the
rate of 5.8% per annum, payable monthly in arrears.
"COSTA RICA FACILITY" shall mean the manufacturing facility owned by
Conair Costa Rica, S.A. and located in Zona Industrial de Cartago, Costa
Rica.
"CURRENT RATIO" shall mean Consolidated Current Assets divided by
Consolidated Current Liabilities.
"DEBT" shall mean, with respect to any Person, without duplication,
(i) all items (excluding reserves for deferred income taxes) which in
accordance with Generally Accepted Accounting Principles would be included
in determining total liabilities as shown on the liability side of a
balance sheet of such Person as of the date on which Debt is to be
determined, (ii) all indebtedness secured by any Lien on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed, (iii) all
indebtedness of others with respect to which such Person has become liable
by way of a guarantee, and (iv) all outstanding letters of credit with
respect, to which, if drawn upon, such
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Person would have any repayment or reimbursement obligations other than Trade
Letters of Credit.
"DOMESTIC CONSOLIDATED NET INCOME" shall mean any net earnings (or net
losses) of the Company and its Domestic Subsidiaries determined in
accordance with generally accepted accounting principles, on a consolidated
basis, excluding earnings (or losses) of all Foreign Subsidiaries but
including all cash dividends from Foreign Subsidiaries actually received by
the Company or a Domestic Subsidiary, and excluding non-cash extraordinary
gains and losses (such as those resulting from a change in accounting,
discontinuing or disposing of operations, extraordinary events or prior
period adjustments).
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary which is incorporated
under the laws of the United States or any political subdivision thereof.
"EARNINGS AVAILABLE FOR RESTRICTED PAYMENTS" shall mean for any period
of 12 consecutive months, an amount equal to the sum of:
(i) Domestic Consolidated Net Income for such period;
(ii) all taxes substracted in determining Domestic
Consolidated Net Income for such period;
(iii)all payments for such period constituting "Fixed Rent"
as defined in the lease of the Stamford Facility, and all other
rental payments for such period required by Section 5.13 to be
subject to subordination provisions;
(iv) the consolidated gross interest expense of Conair and
its Subsidiaries for such period, excluding all inter-company
transactions; and
(v) amortization of good will and other intangible assets
for Conair and its Domestic Subsidiaries for such period,
determined on a consolidated basis and excluding all inter-
company transactions.
"EAST WINDSOR FACILITY" shall mean the facility owned by Conair and
located in East Windsor, New Jersey.
"EBITDA" shall mean, for any period on a consolidated basis, earnings
before interest and taxes plus depreciation and amortization.
"EXISTING SUBORDINATED DEBT" shall have the meaning set forth in
Section 3.2(n).
"FIXED CHARGES" shall mean, without duplication, for any period on a
consolidated basis, (a) the amounts for such period of interest expense,
plus (b) the amounts of scheduled principal payments (which shall not
include payments on Bankers' Acceptances, financial guarantees, or
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any Letters of Credit or repayments of Short Term Loans) made by the Borrowers
on Funded Debt of the Borrowers less balloon payments which are refinanced,
plus (c) payments made by the Borrowers on capitalized leases.
"FIXED CHARGE COVERAGE" shall mean Trailing Adjusted Net Income
divided by the Fixed Charges.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean Indebtedness for Borrowed Money, capitalized
lease obligations, financial guarantees, and reimbursement, indemnity or
other liability with respect to standby/financial letters of credit and
bankers acceptances, including without limitation the Senior Notes.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally
accepted accounting principles as in effect from time to time, consistently
applied.
"GUARANTOR" shall mean Cuisinarts Corp., a Delaware corporation, and
any other Person that is a guarantor under a Guarantee Agreement.
"INDEBTEDNESS FOR BORROWED MONEY" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising for money
borrowed by Conair or its Subsidiaries, whether or not evidenced by any
note, indenture, or agreement (including, without limitation, the Notes and
any indebtedness for money borrowed from a Conair Affiliate) (ii) Letter of
Credit Outstandings with respect to Standby Letters of Credit, and (iii)
all indebtedness of others (including a Conair Affiliate) with respect to
which Conair or a Subsidiary has become liable by way of a guarantee or
indemnity.
"INDEMNITY AMOUNT" of each Steamship Indemnity shall mean, at any
time, the maximum liability of the Indemnity Bank under such Steamship
Indemnity reasonably determined by the Indemnity Bank based on the value of
the transaction with respect to which such Steamship Indemnity was issued.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor and Collateral
Agency Agreement dated as of the date hereof, among the parties hereto and
The Prudential Insurance Company of America.
"INVESTMENT" in any Person shall mean:
(a) the acquisition (whether for cash, property, services or
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of such
Person; and
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(b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than any such advance, loan or extension of
credit having a term not exceeding 120 days in the case of unaffiliated
Persons and one year in the case of Conair Affiliates representing the
purchase price of inventory or supplies purchased in the ordinary course of
business) or guarantee of, or other contingent obligation with respect to,
Indebtedness for Borrowed Money or other liability of such Person and
(without duplication) any amount committed to be advanced, lent or extended
to such Person.
"IRB DEBT" shall mean the Economic Development Bonds (Conair
Corporation - 1985 Project) issued by New Jersey Economic Development
Authority under the Bond Agreement, dated as of December 1, 1986 with
Conair, and secured by the Premises and the Assignment of Leases (such
terms defined in the Bond Agreement), Conair's promissory note issued to
the New Jersey Economic Authority and other collateral described in Section
4.04 of the aforesaid Bond Agreement.
"LETTER OF CREDIT" shall mean a Trade Letter of Credit or a Standby
Letter of Credit, and shall include all existing Letters of Credit
described in Schedule 1.4(a) hereto which were issued by a Bank and remain
outstanding immediately prior to the date of this Agreement.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the aggregate
Stated Amount of all outstanding Letters of Credit plus the aggregate
amount of Unpaid Drawings.
"LIEN" shall have the meaning set forth in Section 2.14.
"NEW FIRST FIDELITY LOAN" shall mean the Indebtedness for Borrowed
Money in the principal amount of $10,500,000 payable by Conair, the
proceeds of which Indebtedness for Borrowed Money shall, simultaneously
with its incurrence, be used by Conair to pay certain accounts payable
currently due and owing by Conair to Conair Costa Rica, S.A. The New First
Fidelity Loan shall be secured by the pledge of not more than 2/3 of the
capital stock of Conair Costa Rica, S.A. held by Conair and shall have the
following additional terms: (i) principal to be payable in 16 equal
consecutive semiannual installments commencing May 15, 1994 and (ii)
interest payable at the rate of 6.25% per annum, payable quarterly in
arrears.
"NOTE AGREEMENT" shall mean the Note Agreement between Conair and The
Prudential Insurance Company of America dated October 20, 1992 relating to
the Senior Notes.
"NOTES" shall mean the Revolving Credit Notes and the Short Term
Notes.
"OBLIGATIONS" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every kind,
matured or unmatured, direct or contingent, owing, arising, due, or payable
to the Banks or the Agent by or from the Borrowers arising out of this
Agreement or any other Loan Document, including, without limitation, all
obligations to repay the Revolving Credit Loans and Short Term Loans, to
make reimbursements or payments with respect to Letters of Credit, Bankers'
Acceptances or Steamship Indemnities,
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and to pay interest, fees, costs, charges, expenses, professional fees,
and all sums chargeable to the Borrowers under the Loan Documents, whether
or not evidenced by any note or other instrument.
"OPERATING CASH FLOW" shall mean the sum of net income after taxes of
the Borrower, plus each of the following, to the extent actually deducted
in arriving at such net income; depreciation, amortization, other non-cash
items, interest expense and taxes, before adjustment for extraordinary
items.
"OPIC GUARANTEED LOAN" shall mean a certain loan extended to Conair
Costa Rica, S.A. which is the subject of a guarantee by the Overseas
Private Investment Corporation.
"PERMITTED LIEN" shall have the meaning set forth in Section 2.14.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, company or entity.
"PREFERRED STOCK" shall mean certain convertible preferred stock of
Conair issued or to be issued by Conair in connection with the Transaction.
"RANTOUL FACILITY" shall mean the manufacturing facility owned by
Conair and located in Rantoul, Illinois.
"REGULATION" means any statute, law, ordinance, regulation, order or
rule of any foreign, federal, state, local or other government or
governmental body, including, without limitation, those covering or related
to banking, financial transactions, securities, public utilities,
environmental control, energy, safety, health, transportation, bribery,
record keeping, zoning, antidiscrimination, antitrust, wages and hours,
employee benefits, and price and wage control matters.
"REQUIRED BANKS" at any time shall mean Banks whose outstanding
Revolving Credit Commitments and Trade Finance Line Commitments exceed 75%
of the total of such Commitments.
"RESTRICTED PAYMENTS" shall mean (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Conair or any Subsidiary now or hereafter outstanding, except (A)
a dividend payable solely in shares of stock of Conair or such Subsidiary
and (B) a dividend payable on any class of common stock of Conair so long
as Conair is registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934 and such class of stock is listed on the New York
Stock Exchange, the American Stock Exchange (other than the emerging
compaines system) or the NASDAQ National Market Systems, (ii) any
redemption, retirement, purchase or other acquisition, direct or indirect,
of any shares of any class of stock of Conair or any Subsidiary now or
hereafter outstanding, or of any warrants, rights or options to acquire any
such shares, except to the extent that the consideration therefor consists
solely of
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shares of stock of Conair or such Subsidiary; (iii) any payment,
direct or indirect, of or on account of any principal of or interest or
premium on the Subordinated Notes, the IRB Debt or other Indebtedness for
Borrowed Money subordinated to the Obligations now or hereafter outstanding
or any redemption, retirement, purchase or other acquisition, direct or
indirect, of the Subordinated Notes, the IRB Debt or other Indebtedness for
a Borrowed Money subordinated to the Obligations.
"SEASONAL TRADE FINANCE COMMITMENT" shall mean the amount set forth
opposite the name of each Bank on Exhibit A hereto under the caption
"Seasonal Trade Finance Commitment," which Seasonal Trade Finance
Commitment shall commence June 1, 1994 and expire November 30, 1994,
subject to renewal for the period commencing May 15, 1995 and expiring
November 30, 1995 as provided in Section 1.1(d).
"SENIOR FUNDED DEBT" shall mean the aggregate amount, determined on a
consolidated basis for Conair and its Subsidiaries in accordance with
Generally Accepted Accounting Principles, of Indebtedness for Borrowed
Money that is not subordinated to the Obligations, capitalized lease
obligations, financial guarantees, and reimbursement obligations with
respect to standby/financial letters of credit and bankers' acceptances,
including without limitation the Senior Notes, but excluding the debt to
the Conair Profit Sharing Plan, provided it is not in excess of $5,000,000,
arising as a result of the transfer of ownership of preferred stock of
Conair from the existing profit sharing plan to a newly created employee
stock ownership trust. Senior Funded Debt shall include the aggregate
outstanding amount of the New First Fidelity Loan, the CoreStates Debt and
the UJB Debt.
"SENIOR FUNDED DEBT TO OPERATING CASH FLOW" shall mean Senior Funded
Debt divided by Operating Cash Flow.
"SENIOR NOTES" shall mean the Series A and Series B notes of Conair in
the aggregate principal amount of $50,000,000, due December 28, 2002,
issued or to be issued under the Note Agreement.
"STAMFORD FACILITY" shall mean the facility located in Stamford,
Connecticut, a portion of which is leased by Conair and which facility is
anticipated to be acquired by Conair on or about March 10, 1994.
"STANDBY LETTER OF CREDIT" shall mean a letter of credit issued for
the account of a Borrower, other than a Trade Letter of Credit.
"STATED AMOUNT" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder, determined without regard
to whether any conditions to drawing could then be met.
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"STEAMSHIP INDEMNITY" shall mean an undertaking by an Indemnity Bank
to indemnify or otherwise reimburse a carrier or steamship agent against
liability or loss for releasing goods in the absence of the delivery of
bills of lading or other documents of title.
"STEAMSHIP INDEMNITY OUTSTANDINGS" shall mean the aggregate of all
Indemnity Amounts under all outstanding Steamship Indemnities.
"SUBORDINATED NOTES" shall mean the 10% subordinated notes due April
27, 2003, in the initial aggregate principal amount of $10,000,000, issued
or to be issued by Conair payable to Leandro P. Rizzuto in connection with
the Transaction.
"SUBORDINATION AGREEMENTS" shall mean (i) the Lease Subordination
Agreement dated October 20, 1992 among Conair, Leandro P. Rizzuto, the
Agent and The Prudential Insurance Company of America, as modified by the
Subordination Agreement, dated as of March 10, 1993, among Leandro P.
Rizzuto, the Agent, The Prudential Insurance Company of America, certain
holders of Senior Notes and United Jersey Bank/Central N.A. (the "Lease
Subordination Agreement"), (ii) the Subsidiary Subordination Agreement
dated October 20, 1992 among Conair, certain Subsidiaries party thereto,
the Agent and The Prudential Insurance Company of America and (iii) the
Third Subordination Agreement.
"SUBSIDIARY" shall mean any Person at least 95% of the voting stock of
which is held, directly or indirectly, by Conair.
"TANGIBLE NET WORTH" shall mean the aggregate amount, determined on a
consolidated basis for Conair and its Subsidiaries in accordance with
Generally Accepted Accounting Principles, of (a) capital stock, less any
treasury stock, capital stock subscribed and unissued and contra-equity
accounts to the extent the aggregate of all such contra-equity accounts
exceed $5,000,000, (b) surplus, (c) retained earnings and (d) the
Subordinated Notes, excluding (i) any intercompany transaction, (ii) the
excess of cost over net assets of acquired companies, (iii) any Investment
not permitted by Section 5.11 and (iv) the cumulative amount of any net
write-up of asset values after the date of the audit immediately preceding
the closing date of the first Loan hereunder.
"TOTAL ASSETS" shall mean the total assets of Conair and its
Subsidiaries computed on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
"TOTAL LIABILITIES" shall mean the total liabilities of Conair and its
Subsidiaries, including, without limitation, deferred taxes, computed on a
consolidated basis in accordance with Generally Accepted Accounting
Principles.
"TRADE FINANCE COMMITMENT" shall mean the amount set forth opposite
the name of each Bank on Exhibit A hereto under the caption "Trade Finance
Commitment."
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"TRADE FINANCE TERMINATION DATE" shall mean June 29, 1995, or such
earlier date as may be provided in Section 6.1.
"TRADE LETTER OF CREDIT" shall mean a letter of credit issued for the
account of a Borrower in the ordinary course of business of the Borrower to
secure the deferred purchase price of goods.
"TRAILING ADJUSTED CASH" shall mean, with respect to any consecutive
12-month period, Domestic Consolidated Net Income for such period, plus all
taxes subtracted from gross earnings of the Company and its Domestic
Subsidiaries in determining Domestic Consolidated Net Income for such
period, plus the consolidated gross interest expense of the Company and its
Subsidiaries for such period excluding all inter-company transactions, plus
amortization of goodwill and other intangible assets for the Company and
its Domestic Subsidiaries for such period, determined on a consolidated
basis and excluding all inter-company transactions, plus for any such
period in which the redemption of the Existing Subordinated Notes occurs,
an amount equal to the lesser of (a) extraordinary charges related to such
redemption to the extent deducted in determining Domestic Consolidated Net
Income for such period and (b) $4,000,000, and less all taxes actually paid
by the Company and its Domestic Subsidiaries during such period to any
taxing authority having jurisdiction.
"TRAILING ADJUSTED NET INCOME" shall mean, with reference to any
consecutive twelve-month period, Consolidated Net Income plus gross
interest accrued for such period, plus amortization of goodwill and other
intangible assets.
"TRANSACTION" shall mean the repurchase and/or redemption of Conair's
Existing Subordinated Debt and the establishment of working capital
facilities through: (i) the issuance of at least $5,000,000 of Preferred
Stock, (ii) the issuance of the Subordinated Notes, (iii) the receipt from
institutional lender(s) of $50,000,000 in Senior Notes and (iv) the receipt
from the Banks of commitments totalling $70,000,000.
"UJB DEBT" shall mean Indebtedness for Borrowed Money, not in excess
of $20,000,000, payable by Conair to United Jersey Bank/Central, N.A.,
incurred to finance the purchase price of the Stamford Facility. The UJB
Debt shall accrue interest at a rate of 7% through August 31, 2000 and a
rate equal to the "Treasury Rate" (as defined in the agreement evidencing
such debt) plus 1.25% thereafter, shall mature on February 28, 2004, and
shall be unsecured.
IX. MISCELLANEOUS.
9.1 WAIVER. No failure or delay on the part of the Agent or any Bank
or any holder of any Note in exercising any right, power or remedy under
any Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy under any Loan Document. The remedies provided under the Loan
Documents are cumulative and not exclusive of any remedies provided by law.
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9.2 AMENDMENTS. This Agreement, together with the Schedules and
Exhibits hereto, the Loan Documents, and a certain letter dated the date
hereof among Conair, the Banks and the holder of the Senior Notes, set
forth the entire understanding among the parties with respect to the
subject matter hereof. No amendment, modification, termination or waiver
of any Loan Document or any provision thereof nor any consent to any
departure by any Borrower therefrom shall be effective unless the same
shall have been approved by the Required Banks, be in writing and be signed
by the Agent and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No
notice to or demand on any Borrower shall entitle any Borrower to any other
or further notice or demand in similar or other circumstances.
Notwithstanding any other provision contained in any Loan Document, no
amendment, modification, termination or waiver shall affect the payment of
principal (including without limit the date when due), interest or any fee
provided herein, increase any Revolving Loan Commitment or Trade Finance
Commitment or affect any voting rights of the Banks herein without the
written consent of all the Banks.
9.3 GOVERNING LAW. The Loan Documents and all rights and obligations
of the parties thereunder shall be governed by and be construed and
enforced in accordance with the laws of New York without regard to New York
or federal principles of conflict of laws.
9.4 ASSIGNMENT. Each Loan Document shall bind and inure to the
benefit of the Borrowers and each Bank and their respective successors and
assigns, except that no Borrower shall have the right to assign any of its
rights or interests under any Loan Document without the prior written
consent of all the Banks and no Bank shall have the right to assign any of
its rights or interest under any Loan Document (except in the form of a
participation in such Bank's Loans as to which the Agent has consented,
provided that the transferor Bank's remaining interest shall be not less
than 50% of its original Commitment) without the prior written consent of
the Agent and the Borrowers and payment by the assignee of an
administrative fee to the Agent in the amount of $3,000. No participant
shall have any right to vote on any matter herein or governed hereby except
such matter as may involve a change to any interest rate option, to the
principal amounts or the maturity dates of the Loans. No person not a
party to any Loan Document is intended to be benefitted thereby.
The merger or consolidation of any Bank with and into a bank,
regardless of whether the surviving bank is or is not a Bank hereunder, or
the sale of all or substantially all the assets of one Bank to another bank
shall not constitute a transfer of such Bank's interest under this Section.
The surviving or successor bank of any such transaction shall be obligated
hereunder and shall be entitled to all the rights and benefits of the
merged, consolidated or selling Bank(s) based on the aggregate of the
Commitment Percentages of each of such Banks.
9.5 CAPTIONS. Captions in the Loan Documents are included for
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
9.6 NOTICES. All notices, requests, demands, directions,
declarations and other communications between the Banks and the Borrowers
provided for in any Loan Document shall,
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except as otherwise expressly provided, be mailed by registered or
certified mail, return receipt requested, or telegraphed, or telefaxed,
or delivered in hand to the applicable party at its address indicated
opposite its name on the signature pages hereto. The foregoing shall
be effective and deemed received three days after being deposited in the
mails, postage prepaid, addressed as aforesaid and shall whenever sent
by telegram, telegraph or telefax or delivered in hand be effective when
received. Any party may change its address by a communication in accordance
herewith.
9.7 SHARING OF COLLECTIONS, PROCEEDS AND SET-OFFS; APPLICATION OF
PAYMENTS.
(a) If any Bank, by exercising any right of set-off or
counterclaim or otherwise, receives payment of principal or interest or
other amount due on any Loan, Letter of Credit, Steamship Indemnity or
Bankers' Acceptance which is greater than the percentage share of such Bank
(determined as set forth below), the Bank receiving such proportionately
greater payment shall purchase such participations in the Loans, Letter of
Credit, Steamship Indemnity and Bankers' Acceptance obligations held by the
other Banks, and such other adjustments shall be made as may be required,
so that all such payments shall be shared by the Banks shall be shared by
the Banks on the basis of their percentage shares; provided that if all or
any portion of such proportionately greater payment of such indebtedness is
thereafter recovered from, or must otherwise be restored by, such
purchasing Bank, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest being paid by
such purchasing Bank. The percentage share of each Bank shall be based on
the portion of the outstanding Loans and other Obligations due such Bank
(prior to receiving any payment for which an adjustment must be made under
this Section 9.7(a)) in relation to the aggregate outstanding Loans and
other Obligations due all the Banks (prior to receiving any payment of
which an adjustment must be made under this Section 9.7(a)). The Borrowers
agree, to the fullest extent each may effectively do so under applicable
law, that any holder of a participation in a Loan or other Obligation,
whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a
direct creditor of the Borrowers in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Bank
receives a secured claim in lieu of a set-off to which this Section would
apply, such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Banks entitled under this Section to share in the benefits of any recovery
on such secured claim.
(b) Subject to the provisions of Section 1.10, the Agent and
each Bank agree that all payments on account of the Loans, Letters of
Credit, Steamship Indemnities and Bankers' Acceptances shall be applied by
the Agent and the Banks as follows:
(1) First, to the Agent for any Agent fees then due and
payable under this Agreement until such fees are paid in full;
<PAGE>
Page 76
(2) Second, to the Agent for any fees, costs or expenses
(including expenses described in Section 9.8) incurred by the
Agent under any of the Loan Documents or this Agreement, then due
and payable and not reimbursed by the Borrowers or the Banks
until such fees, costs and expenses are paid in full;
(3) Third, to the Banks for their percentage shares of the
Commitment Fee then due and payable under this Agreement until
such fee is paid in full;
(4) Fourth, to the Banks for their respective shares of all
costs, expenses and fees then due and payable from the Borrowers
until such costs, expenses and fees are paid in full;
(5) Fifth, to the Banks for their percentage shares of all
interest then due and payable from the Borrowers until such
interest is paid in full, which percentage shares shall be
calculated by determining each Bank's percentage share
(determined as set forth in Section 9.7(a)) of the amounts
allocated in (a) above; and
(6) Sixth, to the Banks for their percentage shares of the
principal amount of the Loans and all amounts due with respect to
Letters of Credit, Steamship Indemnities and Bankers' Acceptances
then due and payable from the Borrowers until such principal is
paid in full, which percentage shares shall be calculated by
determining each Bank's percentage share (determined as set forth
in Section 9.7(a)) of the amounts allocated in (a) above.
9.8 EXPENSES OF THE AGENT; INDEMNIFICATION OF THE AGENT AND THE
BANKS.
(a) The Borrowers will from time to time reimburse the Agent
promptly following demand for all out-of-pocket expenses (including the
reasonable fees and expenses of legal counsel) in connection with (i) the
preparation of the Loan Documents, (ii) the making of any Loans, (iii) the
administration of the Loan Documents, and (iv) the enforcement of the Loan
Documents; provided, however, that the Borrowers will not be responsible
for the fees and expenses of legal counsel separately retained by any Bank.
(b) In addition to the payment of the foregoing expenses, the
Borrowers hereby agree to indemnify, protect and hold the Agent, each Bank
and any holder of the Notes and the officers, directors, employees, agents,
affiliates and attorneys of the Agent, each Bank and such holder
(collectively, the "INDEMNITEES") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature, including
reasonable fees and expenses of legal counsel, which may be imposed on,
incurred by, or asserted against such Indemnitee by any Borrowers or other
third parties and arise out of or relate to this Agreement or the other
Loan Documents or any other matter whatsoever related to the transactions
contemplated by or referred to in this Agreement or the other Loan
Documents (other than those fees and expenses relating to disputes
<PAGE>
Page 77
among parties to the Intercreditor Agreement other than the Borrowers);
provided, however, that the Borrowers shall have no obligation to an
Indemnitee hereunder to the extent that the liability incurred by such
Indemnitee has been determined by a court of competent jurisdiction to
be the result of gross negligence or willful misconduct of such Indemnitee.
9.9 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements,
representations and warranties made or deemed made herein shall survive the
execution and delivery of this Agreement, the making of the Loans hereunder
and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of the
Borrowers set forth in Sections 1.1, 1.10, 1.12 and 9.8, and the agreements
of the Banks set forth in Sections 7.1, 7.5 and 9.7 shall survive the
payment of the Loans and the termination of this Agreement. This Agreement
shall remain in full force and effect until the latest to occur of the
termination of the Aggregate Revolving Loan Commitment, the termination of
the Aggregate Trade Finance Commitment or the repayment in full of all
amounts owed by the Borrowers under any Loan Document.
9.10 SEVERABILITY. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement,
the Notes or other Loan Documents shall not affect or impair the validity,
legality or enforceability of the remaining provisions or obligations under
this Agreement, the Notes or other Loan Documents or of such provision or
obligation in any other jurisdiction.
9.11 BANKS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF BANKS' RIGHTS.
The obligation of each Bank hereunder is several and not joint and no Bank
shall be the agent of any other (except to the extent the Agent is
authorized to act as such hereunder). No Bank shall be responsible for the
obligation or commitment of any other Bank hereunder. In the event that
any Bank at any time should fail to make a Loan as herein provided, the
other Banks, or any of them as may then be agreed upon, at their sole
option, may make the Loan that was to have been made by the Bank so failing
to make such Loan. Nothing contained in any Loan Document and no action
taken by Agent or any Bank pursuant hereto or thereto shall be deemed to
constitute Banks to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to
each Bank shall be a separate and independent debt, and, subject to the
terms of this Agreement, each Bank shall be entitled to protect and enforce
its rights arising out of this Agreement and it shall not be necessary for
any other Bank to be joined as an additional party in any proceeding for
such purpose.
9.12 NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in
any of the other Loan Documents and no course of dealing between the
parties shall be deemed to create any fiduciary duty by Agent or any Bank
to the Borrowers.
9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE
BORROWERS HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF NEW YORK OR THE COMMONWEALTH OF PENNSYLVANIA
AND IRREVOCABLY AGREES THAT, SUBJECT
<PAGE>
Page 78
TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
TO THE NOTES, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. EACH OF THE BORROWERS ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
SUCH NOTE, OR SUCH OTHER LOAN DOCUMENT. EACH OF THE BORROWERS DESIGNATES
AND APPOINTS CT CORPORATION SYSTEM (OR SUCH OTHER PERSON AS SHALL ACT
AS REGISTERED AGENT OF A BORROWER IN PENNSYLVANIA AND NEW YORK AND AS TO
WHOM EACH BORROWER SHALL PROVIDE NOTICE IN WRITING TO EACH BANK AND THE
AGENT) AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY SUCH
PERSON WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO
RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN
ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWERS
TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY
SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO BORROWERS,
AS APPLICABLE, AT ITS ADDRESS PROVIDED IN SECTION 9.6, EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED
BY BORROWERS REFUSES TO ACCEPT SERVICE, EACH OF THE BORROWERS
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT
NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY BANK TO
BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY
OTHER JURISDICTION.
9.14 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, AGENT AND EACH BANK
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH OF THE BORROWERS, AGENT AND EACH BANK ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF
THE BORROWERS, AGENT AND EACH BANK
<PAGE>
Page 79
FURTHER WARRANTS AND REPRESENTS THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.15 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement and any
amendments hereto or waivers hereof shall become effective when the Agent
shall have received signed counterparts or notice by telecopy of the
signature page that the counterpart has been signed and is being delivered
to the Agent or facsimile that such counterparts have been signed by all
the parties hereto or thereto.
9.16 USE OF DEFINED TERMS. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where
the context or construction so requires. Any defined term used in the
singular preceded by "any" shall be taken to indicate any number of the
members of the relevant class.
9.17 ACCOUNTING TERMS. All accounting terms used herein shall be
construed in accordance with Generally Accepted Accounting Principles.
9.18 CONFIDENTIALITY. Each Bank (and any transferee of any interest
in any Loan) agrees to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by or on behalf of the
Borrowers pursuant to this Agreement which is identified by the Borrowers
as being confidential at the time the same is delivered to the Banks,
provided that nothing herein shall limit the disclosure of any such
information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the Agent, (iii)
to bank examiners, auditors or accountants, (iv) to the Agent, any holder
of the Senior Notes, (v) in connection with any litigation to which any one
or more of the Banks or the Agent is a party after providing to Conair
notice of such proposed disclosure and providing the Borrowers with
reasonable opportunity to seek legal protection from such disclosure, and
(vi) to any subsidiary or affiliate of such Bank; provided, that the
obligation of each Bank to keep any information confidential pursuant to this
<PAGE>
Section 9.18 shall cease with respect to any information upon such
information becoming public (other than by reason of a breach by such Bank
of the provisions of this Section 9.18).
IN WITNESS WHEREOF, the Borrowers and the Banks have caused this
Agreement to be executed by their proper corporate officers thereunto duly
authorized as of the day and year first above written.
150 Milford Avenue CONAIR CORPORATION
East Windsor, NJ 08520
Attention: Treasurer
By:___________________________
Title:
c/o Conair Corporation CONTINENTAL CONAIR LIMITED
1 Cummings Point Road
Stamford, CT 06904
Attention: Vice President-Legal By:___________________________
Title:
International Trade Banking CORESTATES BANK, N.A., as Agent
FC 1-8-8-2
Box 7618
Philadelphia, PA 19101-7618 By:___________________________
Title:
International Trade Banking CORESTATES BANK, N.A.
FC 1-8-8-2
Box 7618
Philadelphia, PA 19101-7618 By:___________________________
Title:
8 Peach Tree Hill Road CHEMICAL BANK NEW JERSEY,
Livingston, NJ 07039 NATIONAL ASSOCIATION
By:___________________________
Title:
<PAGE>
550 Broad Street, 15th Fl. FIRST FIDELITY BANK, NATIONAL
Newark, NJ 07102 ASSOCIATION, NEW JERSEY
By:___________________________
Title:
160 Water Street STANDARD CHARTERED BANK
New York, NY 10038
By:___________________________
Title:
<PAGE>
Exhibit A
BANKS AND COMMITMENTS
<TABLE>
<CAPTION>
Seasonal
Revolving Trade Trade
Loan Finance Finance Commitment
Commitment Commitment Commitment Percentage
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CoreStates Bank, N.A. $ 8,571,000 $17,142,000 $ 7,142,500 28.57%
Chemical Bank New $ 8,571,000 $17,142,000 $ 7,142,500 28.57%
Jersey, National
Association
First Fidelity, $ 8,571,000 $17,142,000 $ 7,142,500 28.57%
National Bank, New
Jersey
Standard Chartered Bank $ 4,287,000 $ 8,574,000 $ 3,572,500 14.29%
----------- ----------- -----------
$30,000,000 $60,000,000 $25,000,000
</TABLE>
The Aggregate Revolving Loan Commitment shall reduce in accordance with
the following schedule:
<TABLE>
<CAPTION>
DATE OF REDUCTION REDUCTION
<S> <C>
December 15, 1993 $3,000,000
December 15, 1994 6,000,000
December 15, 1995 6,000,000
December 15, 1996 7,500,000
December 15, 1997 7,500,000
</TABLE>
On the date of each such reduction, the Revolving Loan Commitment
of each Bank shall reduce to an amount equal to such Banks' Commitment
Percentage, set forth above, of the then Aggregate Revolving Loan Commitment.
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FIRST AMENDMENT, dated as of February 17, 1995 (the "AMENDMENT"),
is entered into by and among Conair Corporation ("CONAIR"), a Delaware
corporation, Continental Conair Limited ("CCL"), a Hong Kong corporation,
the banking institutions signatories hereto (collectively, the "BANKS" and
individually, a "BANK") and CoreStates Bank, N.A., as agent for the Banks
under the Credit Agreement referred to below (in such capacity, the
"AGENT"). Conair and CCL are sometimes referred to herein collectively as
the "BORROWERS" and individually as a "BORROWER."
PRELIMINARY STATEMENT
WHEREAS, Conair, CCL, the Banks, the Agent and Chemical Bank New
Jersey, National Association and First Fidelity Bank, National Association,
New Jersey, as Co-Agents for the Banks are parties to an Amended and
Restated Credit Agreement, dated as of October 1, 1994 (the "CREDIT
AGREEMENT"), whereby the Banks are providing to Conair a revolving credit
facility and are providing to Conair and to CCL a trade finance facility,
upon the terms and conditions set forth in the Credit Agreement; and
WHEREAS, Conair desires to purchase certain of the issued and
outstanding capital stock of Babyliss S.A. ("BABYLISS") and all of the
issued and outstanding capital stock of Cristal Gesellschaft F<u">r
Beteiligungen und Finanzierungen S.A. ("Cristal") resulting in Conair
holding, directly or indirectly, all of the issued and outstanding stock of
each of Babyliss and Cristal for an aggregate purchase price of
approximately 198 million French francs plus the retention by Babyliss of
certain existing indebtedness and to increase the Aggregate Revolving Loan
Commitment currently established under the Credit Agreement by the lesser
of (i) the U.S. dollar equivalent of 200 million French francs at the time
of the Acquisition or (ii) $37,500,000, which increased Aggregate Revolving
Loan Commitment will be used by Conair to finance a portion of such
purchase price; and
WHEREAS, Conair and CCL have requested, and the Banks have agreed, to
consent to the foregoing transaction and to amend the Credit Agreement
hereby, but only to the extent and on the terms and conditions specifically
set forth herein. All capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed to them in the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, intending to be legally bound hereby, and
subject to the satisfaction of the conditions hereinafter set forth, the
parties hereto agree as follows:
<PAGE>
Page 2
1. CONSENT AND WAIVER OF THE BANKS.
(a) The undersigned Banks hereby consent to the acquisition by Conair
of all of the issued and outstanding capital stock of Babyliss and Cristal
notwithstanding the limitation of $15,000,000 on such Investments in
Foreign Subsidiaries contained in Section 5.11(c)(i) and agree that the
amount of such Investment in Babyliss and Cristal shall not be included in
determining the Borrowers' compliance with the dollar limitation of such
Section.
(b) The undersigned Banks hereby consent to the waivers and consents
granted under, and the modification of, the Note Agreement, the First
Fidelity Loan Agreement, the CoreStates Loan Agreement and the UJB Loan
Agreement, as contemplated by Section 3 below, notwithstanding the
prohibition contained in Section 5.14(iii) of the Credit Agreement.
2. AMENDMENT TO THE CREDIT AGREEMENT.
The Credit Agreement is hereby amended as follows:
(a) The date "June 30, 1997" contained in the definition of "Revolver
Termination Date" in Section 1.1(a) of the Credit Agreement is hereby
replaced with the date "March 15, 2000."
(b) Section 1.1(a) of the Credit Agreement is further amended by the
insertion immediately following the first sentence of subsection (1) of
such Section of the following sentences:
The Revolving Loan Commitment of each Bank consists of the
commitment existing as of February 17, 1995 (the "ORIGINAL
COMMITMENT") and the additional commitment of such Bank as of
such date (the "ADDITIONAL COMMITMENT"), as set forth on Exhibit
A hereto. The Banks' aggregate Original Commitment is referred
to herein as the "AGGREGATE ORIGINAL COMMITMENT" and the Banks'
aggregate Additional Commitment is referred to herein as the
"AGGREGATE ADDITIONAL COMMITMENT."
(c) Section 1.8 of the Credit Agreement is hereby amended by the
deletion of the final sentence of subsection (a) thereof and by the
addition at the end of such Section of the following additional
subsections:
(d) The Borrowers may, upon not less that three Banking
Business Days' notice to the Banks, reduce the Aggregate
Revolving Loan Commitment, provided that any such reduction shall
be in the amount of $1,000,000 or, if greater, then in such
minimum amount plus $1,000,000 multiples.
(e) Reductions in the Aggregate Revolving Loan Commitment
under this Section 1.8 shall be applied pro rata to the then
remaining portions of the Aggregate Original Commitment and the
Aggregate Additional Commitment, and
<PAGE>
Page 3
shall reduce the scheduled reductions of such Aggregate Original
Commitment and the Aggregate Additional Commitment required pursuant
to Section 1.1(a) and Exhibit A hereto in the inverse order of such
required reductions.
(d) The first paragraph of Section 1.11(f) of the Credit Agreement is
hereby amended in its entirety so that such paragraph, as so amended, shall
read as follows:
(f) APPLICABLE MARGINS. The Base Rate Margin, the LIBO
Rate Margin and the Bankers' Acceptance Rate Margin (in each such
case, the "Applicable Margin") will be determined from time to
time based on the attainment of certain financial ratios. Upon
receipt by the Agent of the quarterly financial statements
required to be delivered pursuant to Section 4.1, the Agent shall
determine (A) the ratio of Senior Funded Debt to Tangible Net
Worth plus Senior Funded Debt, (B) the ratio of Trailing Adjusted
Net Income to Fixed Charges and (C) the ratio of EBITDA to
interest expenses for the quarterly period covered by such
statements. The Agent shall thereupon determine the margins
corresponding to (A) above and the lower of the margins
corresponding to (B) or (C) above, in each case pursuant to the
schedule set forth below in this Section 1.11(f). The Applicable
Margins shall be the higher of the Applicable Margins resulting
from such determination PLUS, as such Applicable Margins apply to
Revolving Credit Loans (i) from January 1, 1995 through December
31, 1995, 25.64 basis points, (ii) from January 1, 1996 through
December 31, 1996, 28.60 basis points, (iii) from January 1, 1997
through December 31, 1997, 32.52 basis points and (iv)
thereafter, 40 basis points. Any adjustment to the Applicable
Margins shall become effective upon receipt by the Agent of the
financial statements required pursuant to Section 4.1(b) hereof
or financial statements as of any month-end in form satisfactory
to the Agent (provided, however, that the determination of the
Applicable Margins in effect as of February 17, 1995 shall be
based upon the pro forma consolidated financial statements dated
January 13, 1995 reflecting the acquisition by Conair of the
capital stock of Babyliss), and shall remain in effect until such
time as the Agent shall receive more current financial
statements. Any adjustment in such Applicable Margins shall
affect the Base Rate Margin of Base Rate Loans then in effect or
thereafter made, and shall apply to the LIBO Rate Margin and
Bankers' Acceptance Rate Margin of LIBO Rate Loans and Bankers'
Acceptances thereafter made or created.
(e) The second sentence of Section 4.10 of the Credit Agreement is
hereby modified in its entirety so that such sentence, as so modified,
shall read as follows:
Conair shall use the proceeds of the initial Revolving Credit
Loan only to purchase the Existing Subordinated Debt, shall use
the proceeds of the initial Revolving Credit Loans made upon the
establishment of the Additional Commitments only to purchase all
of the issued and outstanding capital stock of each of Babyliss
and Cristal and shall use the proceeds of subsequent Revolving
Credit Loans to
<PAGE>
Page 4
refinance the initial Revolving Credit Loan and
for working capital and other general corporate purposes.
(f) Section 5.2 of the Credit Agreement is hereby amended by the
deletion at the end of subsection (j) thereof of the word "and," by the
addition at the end of subsection (k) thereof of the phrase "; and," by the
deletion of the phrase immediately following subsection (k) thereof and by
the addition thereto of the following text immediately following such
subsection (k):
(l) Indebtedness for Borrowed Money of Babyliss set forth
on Schedule 5.2(l) hereto, such Indebtedness not to be renewed,
extended, or refinanced without the prior written approval of the
Required Banks;
provided that the aggregate Indebtedness for Borrowed Money of Foreign
Subsidiaries (other than the Indebtedness for Borrowed Money of
Babyliss permitted pursuant to clause (l) above) shall be limited to
$15,000,000 (including the existing OPIC Guaranteed Loan of Conair
Costa Rica, S.A. and any refinancings thereof which do not increase
the principal amount outstanding).
(g) Section 5.3 of the Credit Agreement is hereby amended by the
deletion of the word "and" at the end of subsection (c) thereof, by the
addition of the phrase "; and" at the end of subsection (d) thereof and by
the addition at the end thereof of the following subsection:
(e) liens upon real property subject to that certain lease
and purchase agreement dated January 1, 1990 and such additional
liens securing Indebtedness permitted under Section 5.2(l), so
long as such additional liens are removed not later than May 15,
1995.
(h) Section 5.11 of the Credit Agreement is hereby amended by the
deletion of the word "and" at the end of subsection (f) thereof, and the
addition of the following clauses:
(h) Babyliss S.A. may own Investments existing as of
February 17, 1995 consisting of the capital stock of those
entities listed on Schedule 5.11(h) hereto and may make
additional Investments to acquire any capital stock of those
entities listed on Schedule 5.11(h) not owned by Babyliss S.A. so
long as the aggregate amount of all such additional Investments
made after February 17, 1995 does not exceed $3,000,000; and
(i) Cristal may own Investments existing as of February 17,
1995 consisting of 13,003 shares of the capital stock of Babyliss
and 50 shares of the capital stock of Blitog.
(i) Section 5.18 of the Credit Agreement is hereby amended by the
addition at the end of such Section of the following phrase:
<PAGE>
Page 5
less (iv) the amount of the Babyliss Goodwill as of the end of
such fiscal quarter to the extent such Babyliss Goodwill does not
exceed $26,000,000.
(j) Section 5.19 is hereby amended in its entirety so that such
Section, as so amended, shall read as follows:
5.19 SENIOR FUNDED DEBT. Permit the ratio of Senior Funded
Debt to Tangible Net Worth plus Senior Funded Debt on a
consolidated basis to be at any time greater than:
0.68:1.0 from January 1, 1995 through December 30, 1995;
0.63:1.0 on December 31, 1995;
0.65:1.0 from January 1, 1996 through December 30, 1996;
0.53:1.0 on December 31, 1996;
0.57:1.0 from January 1, 1997 through December 30, 1997;
0.50:1.0 after December 30, 1997.
(k) Section 8.1 is hereby amended by the addition of the following
definition in the appropriate alphabetical order:
"BABYLISS GOODWILL" shall mean the excess of the purchase
price paid by Conair for the capital stock of Babyliss over the
net assets of Babyliss at the time of acquisition, less the
amount of any write-up of value of the assets of Babyliss on or
after the date of such acquisition.
(l) The definition of "TANGIBLE NET WORTH" contained in Section 8.1
of the Credit Agreement is hereby amended by substituting a "," for the
word "and" immediately before clause (iv) thereof and inserting at the end
of such definition the following additional clause:
and (v) the cumulative amount of any net write-up of asset values
of Babyliss at any time on or after the date of acquisition by
Conair of the capital stock of Babyliss.
(m) Exhibit A to the Credit Agreement is hereby amended in its
entirety so that such Exhibit, as so amended, shall be in the form attached
hereto as Exhibit A.
(n) Schedule 2.17 to the Credit Agreement is hereby amended in its
entirety so that such Schedule, as so amended, shall be in the form
attached hereto.
3. CONDITIONS PRECEDENT
The provisions of Sections 1 and 2 above shall be effective upon the
satisfaction of the following conditions:
<PAGE>
Page 6
(a) REQUIRED CONSENTS. The Banks shall have received evidence
reasonably acceptable to the Agent that all consents under and waivers
to each of (i) the Note Agreement, (ii) the First Fidelity Loan
Agreement, (iii) the CoreStates Loan Agreement and (iv) the UJB Loan
Agreement, necessary to allow the purchase by Conair of Babyliss and
Cristal and this amendment of the Credit Agreement, have been
received. In addition, the Borrowers shall have provided to the Banks
evidence satisfactory to the Banks that all governmental, shareholder
and third party consents and approvals necessary in connection with
the acquisition by Conair of Babyliss and Cristal and the transactions
contemplated by this Amendment have been obtained and remain in
effect.
(b) AMENDMENTS TO FINANCIAL AGREEMENTS. The Banks shall have
received evidence reasonably acceptable to the Agent that the
financial covenants contained in each of (i) the Note Agreement, (ii)
the First Fidelity Loan Agreement, (iii) the CoreStates Loan Agreement
and (iv) the UJB Loan Agreement have been amended in a manner
substantially similar to the amendments to the Credit Agreement
contained herein.
(c) ARTICLES, BYLAWS. The Banks shall have received copies of
the Articles of Incorporation and Bylaws (or other equivalent
document) of each of Babyliss and Cristal, certified by the secretary
or assistant secretary of Babyliss and Cristal, respectively.
(d) EVIDENCE OF AUTHORIZATION. The Banks shall have received
certified copies of all corporate or other action (i) taken by each
Person other than a Bank who is a party to this Amendment or any other
document executed in connection herewith to authorize its execution
and delivery and performance of this Amendment and such other
documents, as amended hereby, and to authorize obtaining the Aggregate
Additional Commitment provided hereby, together with such other
related papers as the Banks shall reasonably require and (ii) taken by
Conair with respect to acquisition of the capital stock of Babyliss
and Cristal.
(e) LEGAL OPINIONS. The Banks shall have received a favorable
written opinion of Margulies & Margulies, P.C., general counsel for
Conair, which shall be addressed to the Banks and be dated the date of
this Amendment, in substantially the form attached as Exhibit E,
together with opinions of counsel for Babyliss and Cristal, each in
form and substance satisfactory to the Banks.
(f) INCUMBENCY. The Banks shall have received a certificate
signed by the secretary or assistant secretary of each corporate
signatory to this Amendment and each other document executed in
connection herewith other than a Bank, together with the true
signature of the officer or officers authorized to execute and deliver
this Amendment and such documents, upon which the Banks shall be
entitled to rely conclusively until the Agent shall have received a
further certificate of the appropriate secretary or assistant
secretary amending the prior certificate and submitting the signature
of the officer or officers named in the new certificate as being
authorized to execute and deliver Loan Documents.
<PAGE>
Page 7
(g) REVOLVING CREDIT NOTES. Each Bank shall have received an
executed Revolving Credit Note in the respective amounts provided
herein, payable to the order of such Bank and otherwise in the form of
Exhibit B to the Credit Agreement, in substitution for the Revolving
Credit Note currently held by each such Bank. Upon receipt by a Bank
of such replacement Revolving Credit Note, such Bank shall surrender
to the Borrowers the Revolving Credit Note currently held by such Bank
marked "cancelled." In addition, the Agent shall have received all
certificates, instruments and other documents then required to be
delivered pursuant to this Amendment, in each instance in form and
substance reasonably satisfactory to the Agent and the Banks.
(h) FEES. In addition to the $100,000 portion of the
underwriting fee previously paid, the Borrowers shall have (i) paid to
the Agent an underwriting fee equal to $150,000, which shall be
distributed to the Banks in the proportion of each Bank's Commitment
Percentage and (ii) reimbursed the Agent for all out-of-pocket
expenses, including reasonable legal fees of counsel to the Banks,
incurred in connection with the transaction contemplated hereby.
(i) CHANGE. No material adverse change shall have occurred (or
shall occur upon the acquisition of Babyliss and Cristal) in the
financial condition or prospects of any Borrower or of Conair and its
Subsidiaries, taken as a whole, since June 30, 1992.
(j) ACQUISITION DOCUMENTS. The Banks shall have received true
and correct copies of the executed stock purchase agreement and all
related documents effecting the acquisition by Conair of the capital
stock of Babyliss and Cristal, which agreement and other documents
shall reflect that the aggregate purchase price for such stock equals
approximately 198 million French francs and the debt retained by
Babyliss is not in excess of $13,000,000. In addition, the Borrowers
shall have provided to the Banks all due diligence reports and
memoranda relating to the acquisition prepared by or supplied to
Conair or its counsel or accountants and such other materials relating
to Babyliss and/or Cristal as the Agent or any of the Banks may
reasonably request.
(k) CONSUMMATION OF ACQUISITION. All conditions precedent to
the acquisition by Conair of all issued and outstanding capital stock
of Babyliss and Cristal other than the payment of the purchase price
of approximately 198 million French francs shall have been satisfied,
and the Borrowers shall have requested pursuant to Section 1.3 of the
Credit Agreement that the Banks make a Revolving Credit Loan in the
amount not greater than the lesser of the U.S. Dollar equivalent of
200 million French Francs at the time of the Acquisition or
$37,500,000 and payable in the manner required by the stock purchase
agreement.
(l) PLEDGE OF BABYLISS SHARES. The Collateral Agent shall have
received a certificate or certificates representing 65% of the
outstanding shares of capital stock of Babyliss acquired directly by
Conair and a certificate or certificates representing 65% of all
outstanding shares of capital stock of Cristal, in each case, together
with duly executed stock powers, in pledge of such shares pursuant to
the terms of the Pledge Agreement.
<PAGE>
Page 8
Notwithstanding the foregoing provisions of this Section 3, the
provisions of Sections 1 and 2 above shall be effective on February 17,
1995 solely for purposes of advancing the Revolving Credit Loan
contemplated by Section 3(k) above into escrow, to be released upon the
satisfaction of the conditions set forth in subsections 3(a) through (l)
above. If such conditions are not satisfied on or prior to February 24,
1995, such escrowed funds will be returned to the Banks as a prepayment in
accordance with Section 1.9 of the Credit Agreement.
4. EXPENSES.
In compliance with Section 9.8(a) of the Credit Agreement, the
Borrowers will reimburse the Agent promptly following demand for all out-
of-pocket expenses (including reasonable fees and expenses of legal
counsel) incurred in connection with the preparation of this Amendment.
5. REPRESENTATIONS AND WARRANTIES.
(a) Each of the Borrowers confirms the accuracy of the
representations and warranties contained in each Loan Document as of the
date originally given and restates to the Banks such representations and
warranties, as amended, on and as of the date hereof and on and as of the
Acquisition as if originally given on such date.
(b) The making and performance of this Amendment and the performance
of the Credit Agreement, as amended hereby, are within the power and
authority of each Borrower and have been duly authorized by all necessary
corporate action. The acquisition by Conair of the capital stock of
Babyliss and Cristal, the making and performance of this Amendment and the
performance of the Credit Agreement, as amended hereby, does not and under
present law will not require any consent or approval of any of the
Borrowers' or Subsidiaries' shareholders or any other person (other than
consents and approvals heretofore obtained and in full force and effect),
does not and under present law will not violate any law, rule, regulation
order, writ, judgment, injunction, decree, determination or award, does not
violate any provision of its charter or by-laws, does not and will not
result in any breach of any material agreement, lease or instrument to
which it is a party, by which it is bound or to which any of its assets are
or may be subject, and does not and will not give rise to any Lien upon any
of its assets except in favor of the Banks. No authorizations, approvals
or consents of, and no filings or registrations with, any governmental or
regulatory authority or agency (other than authorizations, approvals,
consents, filings and registrations heretofore obtained and in full force
and effect) are necessary for the acquisition by Conair of the capital
stock of Babyliss and Cristal, the execution, delivery or performance by
any Borrower or Subsidiary of this Amendment or for the performance of the
Credit Agreement, as amended hereby, or for the validity or enforceability
of this Amendment or the Credit Agreement as amended hereby.
(c) When executed and delivered, this Amendment, and the Credit
Agreement as amended hereby, will be the legal, valid and binding
obligations of each Borrower, enforceable against it in accordance with its
terms.
<PAGE>
Page 9
6. COVENANTS.
(a) Each of the Borrowers, jointly and severally, warrant to the
Banks that the Borrowers are in compliance and have complied with all
covenants, agreements and conditions in each Loan Document on and as of the
date hereof, that no Potential Default or Event of Default has occurred and
is continuing on the date hereof and that, upon the acquisition by Conair
of the capital stock of Babyliss and the effectiveness of this Amendment,
no Potential Default or Event of Default shall have occurred and be
continuing.
(b) The proceeds of the Revolving Credit Loans advanced in connection
with the increase in the Aggregate Revolving Loan Commitment shall be used
by Conair solely as a portion of the purchase price paid by Conair to
acquire, directly or indirectly, all of the issued and outstanding shares
of Babyliss and Cristal.
7. EFFECT OF AMENDMENT.
This Amendment amends the Loan Documents only to the extent and in the
manner herein set forth, and in all other respects the Loan Documents are
ratified and confirmed.
8. COUNTERPARTS; EFFECTIVENESS.
This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures
hereto were upon the same instrument. This Amendment shall become
effective when the Agent shall have received notice by telecopy or telex or
satisfactory telephonic advice that such counterparts have been signed by
all the parties hereto and are being transmitted to the Agent.
9. GOVERNING LAW.
This Amendment and all rights and obligations of the parties hereunder
shall be governed by and be construed and enforced in accordance with the
laws of New York without regard to New York or federal principles of
conflict of law.
PH02/65725.8 2/14/95
<PAGE>
Page 10
IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent have caused
this Amendment to be executed by their proper corporate officers thereunto
duly authorized as of the day and year first above written.
150 Milford Avenue CONAIR CORPORATION
East Windsor, NJ 08520
Attention: Treasurer
By:___________________________
Title:
c/o Conair Corporation CONTINENTAL CONAIR LIMITED
1 Cummings Point Road
Stamford, CT 06904
Attention: Vice President-LegalBy:___________________________
Title:
Eastern Corporate Banking CORESTATES BANK, N.A., as Agent
FC 1-8-3-16
Box 7618
Philadelphia, PA 19101-7618 By:___________________________
Title:
Eastern Corporate Banking CORESTATES BANK, N.A.
FC 1-8-3-16
Box 7618
Philadelphia, PA 19101-7618 By:___________________________
Title:
East 36 Midland Avenue CHEMICAL BANK NEW JERSEY,
Paramus, NJ 07652 NATIONAL ASSOCIATION
By:___________________________
Title:
550 Broad Street, 15th Fl. FIRST FIDELITY BANK, NATIONAL
Newark, NJ 07102 ASSOCIATION, NEW JERSEY
By:___________________________
Title:
<PAGE>
Page 11
160 Water Street STANDARD CHARTERED BANK
New York, NY 10038
By:___________________________
Title:
PH02/65725.8 2/14/95
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
BANKS AND COMMITMENTS
Original Additional Revolving Trade Seasonal Commitment
COMMITMENT COMMITMENT Loan Finance Trade PERCENTAGE
COMMITMENT COMMITMENT Finance
COMMITMENT
<S> <C> <C> <C> <C> <C> <C>
CoreStates Bank, N.A. $ 5,999,700 $10,713,750 $16,713,450 $17,142,000 $ 7,142,500 28.57%
Chemical Bank New Jersey, $ 5,999,700 $10,713,750 $16,713,450 $17,142,000 $ 7,142,500 28.57%
National Association
First Fidelity, National $ 5,999,700 $10,713,750 $16,713,450 $17,142,000 $ 7,142,500 28.57%
Bank, New Jersey
Standard Chartered Bank $ 3,000,900 $ 5,358,750 $ 8,359,650 $ 8,574,000 $ 3,572,500 14.29%
----------- ----------- ----------- ----------- -----------
$21,000,000 $37,500,000 $58,500,000 $60,000,000 $25,000,000
</TABLE>
The Aggregate Revolving Loan Commitment shall reduce in accordance with
the following schedule:
<TABLE>
<CAPTION>
DATE OF REDUCTION Reduction Reduction
to Original to Additional
COMMITMENT COMMITMENT
<S> <C> <C>
December 15, 1995 $6,000,000
December 15, 1996 7,500,000 5,000,000
December 15, 1997 7,500,000 7,500,000
December 15, 1998 10,000,000
December 15, 1999 10,000,000
March 15, 2000 5,000,000
</TABLE>
On the date of each such reduction, the Original Commitment and
Additional Commitment of each Bank shall reduce to an amount equal to such
Banks' Commitment Percentage, set forth above, of the then Aggregate Original
Commitment or Aggregate Additional Commitment.
PH02/65725.8 2/14/95
