<PAGE>
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: April 1, 2000
RALSTON PURINA COMPANY
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
MISSOURI 1-4582 No.43-0470580
- --------------------------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
CHECKERBOARD SQUARE, ST. LOUIS, MISSOURI 63164
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(314) 982-1000
-------------------
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On April 1, 2000, Ralston Purina Company ("Ralston") distributed all of
The issued and outstanding shares of $.01 par value common stock
("Energizer Stock") of its subsidiary, Energizer Holdings, Inc. ("Energi-
("Energizer"), to share-holders of its $.10 par value Ralston Purina Common
Stock ("Ralston Stock") on the basis of one share of Energizer Stock for every
Three shares of Ralston Stock held as of the close of business on
March 31, 2000, as more specifically described in the Agreement and Plan of
Reorganization dated as of April 1, 2000, between Ralston and Energizer.
On March 30, 2000, Ralston borrowed $478 Million pursuant to a 64-Day Credit
Agreement, a 5-Year Revolving Credit Agreement and two Letter Agreements
(collectively referred to as the "Credit Agreements") with various lenders and
agents. On April 1, 2000, Ralston assigned the repayment obligation
under these Credit Agreements to Energizer under these Credit Agreements without
recourse to Ralston pursuant to two Debt Assignment, Assumption and Release
Agreements.
In addition, due to the spin-off, J. Patrick Mulcahy, Chief Executive Officer of
Energizer and a member Ralston's Board of Directors resigned from the Ralston
Board effective March 17, 2000 in order to focus exclusively on the Energizer
business. As a result, Ralston's Board now stands at 12 directors.
Item 5. Other Events.
On March 30, 2000, Ralston amended its Shareholder Agreement with Interstate
Bakeries Corporation ("IBC") dated July 22, 1995. The amended agreement provides
that if Ralston has not sold the IBC Equity (as defined in the Shareholder
Agreement) owned by Ralston and its Affiliates prior to August 15, 2000, Ralston
will cause the principal amount of each 7% Stock Appreciation Income Linked
Securities ("SAILS") to be mandatorily exchanged with shares of IBC's common
stock. The amended agreement also provides that Ralston will reduce its
ownership in IBC's common stock to no more than 20% by September 30, 2000, 15%
by August 1, 2004, and 10% by August 1, 2005.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following financial information reflects the Company's Battery Products
business as a discontinued operation and reflects pro forma adjustments
associated with the distribution of this business to Ralston Purina
Company shareholders.
The pro forma consolidated statements of earnings for the year ended September
30, 1999 and the quarters ended December 31, 1999 and 1998 present Ralston
Purina Company results as if the distribution had occurred as of the beginning
of the period presented. These statements of earnings have been prepared by
adjusting the historical statements of earnings to reflect the Company's Battery
Products business as a discontinued operation and include the effect of
estimated costs and expenses as a result of the distribution.
The pro forma consolidated balance sheet at December 31, 1999 presents the
consolidated financial position of Ralston Purina Company assuming the
distribution had occurred at that date. Such balance sheet has been prepared by
adjusting the historical balance sheet for the effect of changes in assets,
liabilities and capital associated with the distribution.
Pro forma financial statements may not necessarily reflect the consolidated
results of operations or financial position that would have existed had the
distribution been effected on the dates specified nor are they indicative of
future results.
Also presented are consolidated statements of earnings for the years ended
September 30, 1998 and 1997 that reflect the Battery Products business as a
discontinued operation.
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
QUARTER ENDED DECEMBER 31, 1999
(Dollars in millions except per share data)
ADJUSTMENTS FOR
DISCONTINUED
OPERATIONS
---------------
Pro
Forma
As Battery Sub- Adjust- Pro
Reported Products total ments Forma
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . $1,414.5 $686.2 $728.3 $ - $728.3
Costs and Expenses
Cost of products sold. . . . . . . . . 627.5 334.9 292.6 - 292.6
Selling, general and administrative. . 225.5 110.4 115.1 - 115.1
Advertising and promotion. . . . . . . 230.3 67.6 162.7 - 162.7
Interest . . . . . . . . . . . . . . . 48.2 1.6 46.6 (7.0)(a) 39.6
Unrealized gain on SAILS debt. . . . . (75.6) - (75.6) - (75.6)
Restructuring reversals. . . . . . . . (5.8) (5.8) - - -
Other (income)/expense, net. . . . . . (6.0) 0.5 (6.5) - (6.5)
--------- ------- ------- ------ -------
1,044.1 509.2 534.9 (7.0) 527.9
Earnings from Continuing Operations before
Income Taxes and Equity Earnings . . . . 370.4 177.0 193.4 7.0 200.4
Income Taxes . . . . . . . . . . . . . . . (135.4) (69.3) (66.1) (4.7)(b) (70.8)(d)
Equity Earnings, Net of Taxes. . . . . . . 7.8 - 7.8 - 7.8
-------- ------- ----- -------- -------
Earnings from Continuing Operations . . $ 242.8 (c) $107.7 $135.1 $ 2.3 $137.4 (c)
======== ====== ======= ======= =======
Earnings Per Share from Continuing
Operations
Basic $ 0.83 $ 0.46 $ 0.47
Diluted $ 0.82 $ 0.46 $ 0.47
Average Shares Outstanding Used for
Earnings Per Share Computation
Basic 292.2 292.2 292.2
Diluted 295.1 295.1 295.1
(a) To reflect reduction of interest expense based on Battery Products' net
debt of approximately $585 at an average annual short-term
rate of 5.9%. Assumes proceeds from Battery Products' issuance of debt are
used to pay-down Ralston's short-term debt.
(b) To reflect the tax effect of the above pro forma adjustment and Ralston's
tax rate post spin-off.
(c) Earnings from continuing operations (As Reported and Pro Forma) includes an
unrealized after-tax gain related to the Company's SAILS debt of
$48.4, or $.16 per basic and diluted share. In addition, As Reported
earnings includes an after-tax Battery Products' restructuring
reversal of $4.5, or $.02 per basic and diluted share.
(d) The effective tax rate for the quarter, excluding taxes on the unrealized
SAILS gain, is 34.9%.
</TABLE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
QUARTER ENDED DECEMBER 31, 1998
(Dollars in millions except per share data)
ADJUSTMENTS FOR
DISCONTINUED
OPERATIONS
---------------
Pro
Forma
As Battery Sub- Adjust- Pro
Reported Products total ments Forma
-------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . $1,291.8 $612.7 $679.1 $ - $679.1
Costs and Expenses
Cost of products sold. . . . . . . . . 628.4 327.7 300.7 - 300.7
Selling, general and administrative. . 239.2 120.2 119.0 - 119.0
Advertising and promotion. . . . . . . 193.9 59.2 134.7 - 134.7
Interest . . . . . . . . . . . . . . . 49.4 1.7 47.7 (6.2) (a) 41.5
Unrealized gain on SAILS debt. . . . . (70.2) - (70.2) - (70.2)
Other (income)/expense, net. . . . . . (11.0) 2.1 (13.1) - (13.1)
--------- ------- ------- ------ -------
1,029.7 510.9 518.8 (6.2) 512.6
Earnings from Continuing Operations before
Income Taxes and Equity Earnings . . . . 262.1 101.8 160.3 6.2 166.5
Income Taxes . . . . . . . . . . . . . . . (94.3) (40.4) (53.9) (3.7) (b) (57.6)(d)
Equity Earnings, Net of Taxes. . . . . . . 9.0 - 9.0 - 9.0
--------- ------- ------- ------ -------
Earnings from Continuing Operations. . . . $ 176.8 (c)$ 61.4 $115.4 $ 2.5 $117.9 (c)
========= ======= ======= ====== =======
Earnings Per Share from Continuing Operations
Basic $ 0.58 $ 0.38 $ 0.39
Diluted $ 0.55 $ 0.36 $ 0.37
Average Shares Outstanding Used for Earnings Per Share Computation
Basic 299.1 299.1 299.1
Diluted 319.4 319.4 319.4
(a) To reflect reduction of interest expense based on Battery Products' net
debt of approximately $585 at an average annual short-term
rate of 5.7%. Assumes proceeds from Battery Products' issuance of debt are
used to pay-down Ralston's short-term debt.
(b) To reflect the tax effect of the above pro forma adjustment and Ralston's
tax rate post spin-off.
(c) Earnings from continuing operations (As Reported and Pro Forma) includes an
unrealized after-tax gain related to the Company's SAILS debt of
$44.9, or $.15 and $.14 per basic and diluted share, respectively.
(d) The effective tax rate for the quarter, excluding taxes on the unrealized
SAILS gain, is 33.5%.
</TABLE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED SEPTEMBER 30, 1999
(Dollars in millions except per share data)
ADJUSTMENTS FOR
DISCONTINUED
OPERATIONS
---------------
Pro
Forma
As Battery Sub- Adjust- Pro
Reported Products total ments Forma
-------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . $4,720.5 $2,000.0 $2,720.5 $ - $2,720.5
Costs and Expenses
Cost of products sold. . . . . . . . . 2,269.8 1,111.1 1,158.7 - 1,158.7
Selling, general and administrative. . 947.3 463.4 483.9 - 483.9
Advertising and promotion. . . . . . . 740.8 164.9 575.9 - 575.9
Interest . . . . . . . . . . . . . . . 183.4 3.8 179.6 (24.9) (a) 154.7
Provisions/(reversals) for restructuring 95.2 98.4 (3.2) - (3.2)
Unrealized gain on SAILS debt. . . . . (123.5) - (123.5) - (123.5)
Gain on sale and conversion of stock . (86.0) - (86.0) - (86.0)
Other (income)/expense, net. . . . . . (22.3) 8.6 (30.9) - (30.9)
--------- --------- --------- ------- ---------
4,004.7 1,850.2 2,154.5 (24.9) 2,129.6
Earnings from Continuing Operations before
Income Taxes and Equity Earnings . . . . 715.8 149.8 566.0 24.9 590.9
Income Taxes . . . . . . . . . . . . . . . (246.6) (64.6) (182.0) (10.1)(b) (192.1)(d)
Equity Earnings, Net of Taxes. . . . . . . 35.9 - 35.9 - 35.9
--------- --------- --------- ------- ---------
Earnings from Continuing Operations. . . . $ 505.1(c) $ 85.2 $ 419.9 $ 14.8 $ 434.7 (c)
========= ========= ========= ======= =========
Earnings Per Share from Continuing Operations
Basic $ 1.63 $ 1.35 $ 1.40
Diluted $ 1.60 $ 1.33 $ 1.38
Average Shares Outstanding Used for Earnings Per Share Computation
Basic 307.8 307.8 307.8
Diluted 314.9 314.9 314.9
(a) To reflect reduction of interest expense based on Battery Products' net
debt of approximately $585 at an average annual short-term
rate of 5.3%. Assumes proceeds from Battery Products' issuance of debt are
used to pay-down Ralston's short-term debt.
(b) To reflect the tax effect of the above pro forma adjustment and Ralston's
tax rate post spin-off.
(c) Earnings from continuing operations (As Reported and Pro Forma) includes
several unusual items: an after-tax restructuring reversal of $3.2,
or $.01per basic and diluted share; an unrealized after-tax gain
related to the Company's SAILS debt of $79.0, or $.26 and $.25 per
basic and diluted share, respectively; an after-tax gain on the sale
and conversion of the Company's investments in common stock of
$55.0, or $.18 and $.17 per basic and diluted share; and capital loss
tax benefits of $10.0, or $.03 per basic and diluted share. In
addition, As Reported earnings includes after-tax restructuring charges
for Battery Products of $64.6, or $.21 and $.20 per basic and
diluted share.
(d) The effective tax rate for the year, excluding unusual items, is 33.5%.
</TABLE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(Dollars in millions)
ADJUSTMENTS FOR
DISCONTINUED
OPERATIONS
---------------
Pro
Forma
As Battery Sub- Adjust- Pro
Reported Products total ments Forma
-------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents. . . . . . $ 110.4 $ 19.9 $ 90.5 - $ 90.5
Receivables, less allowance
for doubtful accounts . . . . . 870.2 644.9 225.3 - 225.3
Inventories. . . . . . . . . . . . . 471.9 345.6 126.3 - 126.3
Other current assets . . . . . . . . 66.9 68.7 (1.8) - (1.8)
-------- ---------- --------- -------- --------
Total Current Assets . . . . . . 1,519.4 1,079.1 440.3 - 440.3
Investments and Other Assets . . . . . 2,922.2 412.3 2,509.9 - 2,509.9
Investment in Discontinued Operations. - (1,322.7) 1,322.7 (1,322.7)(a) -
Property at Cost . . . . . . . . . . . 2,202.7 1,016.9 1,185.8 - 1,185.8
Accumulated depreciation . . . . . . 1,133.4 547.7 585.7 - 585.7
-------- ---------- --------- ------- ---------
Net Property . . . . . . . . . . . 1,069.3 469.2 600.1 - 600.1
-------- ---------- --------- ------- ---------
Total. . . . . . . . . . . . . . $5,510.9 $ 637.9 $4,873.0 $(1,322.7) $3,550.3
======== ========== ========= ========== =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Current maturities of long-term debt $ 295.7 $ 0.3 $ 295.4 - $ 295.4
Notes payable. . . . . . . . . . . . 809.6 130.9 678.7 (474.1)(b) 204.6
Accounts payable . . . . . . . . . . 265.3 121.3 144.0 - 144.0
Other current liabilities. . . . . . 566.0 242.7 323.3 - 323.3
-------- ---------- --------- --------- ---------
Total Current Liabilities. . . . 1,936.6 495.2 1,441.4 (474.1) 967.3
Long-term Debt . . . . . . . . . . . . 1,251.2 1.4 1,249.8 - 1,249.8
Deferred Income Taxes. . . . . . . . . 461.0 7.3 453.7 - 453.7
Other Liabilities. . . . . . . . . . . 551.9 134.0 417.9 - 417.9
Shareholders Equity. . . . . . . . . . 1,310.2 - 1,310.2 (848.6) 461.6
-------- -------- --------- ---------- ---------
Total. . . . . . . . . . . . . . $5,510.9 $ 637.9 $4,873.0 $(1,322.7) $3,550.3
======== ========== ========= ========== =========
(a) To eliminate the Company's investment in the Battery Products segment.
(b) To reflect assumption of debt by Energizer.
</TABLE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
CONSOLIDATED STATEMENT OF EARNINGS REFLECTING DISCONTINUED OPERATIONS
YEAR ENDED SEPTEMBER 30, 1998
(Dollars in millions except per share data)
As Battery Continuing
Reported Products Operations
-------- -------- ----------
<S> <C> <C> <C>
Net Sales $ 4,653.3 $ 2,071.2 $ 2,582.1
Costs and Expenses
Cost of products sold 2,295.1 1,122.3 1,172.8
Selling, general and
administrative 946.6 457.3 489.3
Advertising and promotion 696.2 184.4 511.8
Interest 190.1 8.5 181.6
Provisions for restructuring 96.4 92.3 4.1
Gain on sale of IBC stock (20.1) - (20.1)
Other (income)/expense, net (20.4) 7.3 (27.7)
----------- --------- -----------
4,183.9 1,872.1 2,311.8
Earnings from Continuing
Operations before Income Taxes
And Equity Earnings 469.4 199.1 270.3
Income Taxes (117.5) (78.8) (38.7)
Equity Earnings, Net of Taxes 38.7 - 38.7
----------- -------- ----------
Earnings from Continuing Operations $ 390.6 (a) $ 120.3 $ 270.3 (a)
=========== =========== ===========
Earnings Per Share from Continuing Operations
Basic $ 1.24 $ 0.85
Diluted $ 1.19 $ 0.82
Average Shares Outstanding Used for Earnings Per Share Computation
Basic 304.9 304.9
Diluted 326.8 326.8
(a) Earnings from continuing operations (As Reported and as adjusted for the discontinued
Battery Products business) includes several unusual items: an after-tax
restructuring charge of $3.8, or $.01 per basic and diluted share; an after-tax
gain on the sale of Interstate Bakeries Corporation (IBC) common stock of $13.0, or $.04
per basic and diluted share; and capital loss tax benefits of $44.8, or $.15 and $.14 per
basic and diluted share, respectively. In addition, As Reported earnings includes after-tax
restructuring charges for Battery Products of $57.5, or $.19 and $.18 per basic and
diluted share.
</TABLE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY
CONSOLIDATED STATEMENT OF EARNINGS REFLECTING DISCONTINUED OPERATIONS
YEAR ENDED SEPTEMBER 30, 1997
(Dollars in millions except per share data)
As Battery Continuing
Reported Products Operations
-------- -------- -----------
<S> <C> <C> <C>
Net Sales $ 4,486.8 $ 2,177.9 $ 2,308.9
Costs and Expenses
Cost of products sold 2,276.4 1,218.0 1,058.4
Selling, general and
and administrative925.8 925.8 463.0 462.8
Advertising and promotion 646.2 185.9 460.3
Interest 173.0 15.0 158.0
Provisions for restructuring 111.4 95.9 15.5
Gain on sale of IBC stock (23.2) - (23.2)
Other (income)/expense, net (7.7) 2.5 (10.2)
---------- --------- -----------
4,101.9 1,980.3 2,121.6
Earnings from Continuing
Operations before Income
Taxes and Equity Earnings 384.9 197.6 187.3
Income Tax (Provision)/Benefit (70.0) (101.4) 31.4
Equity Earnings, Net of Taxes 34.0 - 34.0
---------- -------- ---------
Earnings from Continuing
Operations $ 348.9 (a) $ 96.2 $ 252.7
============ ========== =============
Earnings Per Share from Continuing Operations
Basic $ 1.10 $ 0.78
Diluted $ 1.05 $ 0.75
Average Shares Outstanding Used for Earnings Per Share Computation
Basic 306.2 306.2
Diluted 330.7 330.7
(a) Earnings from continuing operations (As Reported and as adjusted for the
discontinued Battery Products business) includes several unusual items:
an after-tax restructuring charge of $15.5, or $.05 per basic and diluted
share; an after-tax gain on the sale of IBC common stock of $15.1, or $.05
per basic and diluted share; capital loss tax benefits of $61.7, or $.20 and
$.19 per basic and diluted share, respectively; and foreign tax credit refunds
of $34.7, or $.11 and $.10 per basic and diluted share. In addition, As
Reported earnings includes after-tax restructuring charges for Battery Products
of $82.5, or $.27 and $.25 per basic and diluted share.
</TABLE>
(c) Exhibits.
2.1 Agreement and Plan of Reorganization dated as of April 1, 2000,
between Ralston Purina Company and Energizer Holdings, Inc.
10.1 364-Day Credit Agreement dated March 30, 2000
10.2 5-Year Revolving Credit Agreement dated March 30, 2000
10.3 Bank One Letter Agreement dated March 30, 2000
10.4 Bank of America Letter Agreement dated March 30, 2000
10.5 Debt Assignment, Assumption and Release Agreement with Bank One dated
April 1, 2000
10.6 Debt Assignment, Assumption and Release Agreement with Bank of America
dated April 1, 2000
10.7 Amendment to Shareholder Agreement between Ralston Purina Company and
Interstate Bakeries Corporation dated March 30, 2000
10.8 Letter Agreement between Ralston Purina Company and Interstate Bakeries
Corporation dated July 3, 1997
*Registrant agrees to furnish a copy of any omitted schedules with respect to
the above agreements upon request by the Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RALSTON PURINA COMPANY
- -----------------------------------
Registrant
By: /s/ James R. Elsesser
James R. Elsesser
Vice President, Chief Financial Officer and
Treasurer
Dated: April 14, 2000
<PAGE>
EXHIBIT INDEX
- --------------
Exhibits
- --------
EX-2 Agreement and Plan of Reorganization dated as of April 1, 2000,
between Ralston Purina Company and Energizer Holdings, Inc.
EX-10 Material Contracts
10.1 364-Day Credit Agreement dated March 30, 2000
10.2 5-Year Revolving Credit Agreement dated March 30, 2000
10.3 Bank One Letter Agreement dated March 30, 2000
10.4 Bank of America Letter Agreement dated March 30, 2000
10.5 Debt Assignment, Assumption and Release Agreement with Bank
One dated April 1, 2000
10.6 Debt Assignment, Assumption and Release Agreement with Bank
of America dated April 1, 2000
10.7 Amendment to Shareholder Agreement between Ralston Purina
Company and Interstate Bakeries Corporation dated March
30, 2000
10.8 Letter Agreement between Ralston Purina Company and
Interstate Bakeries Corporation dated July 3, 1997
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
April 1, 2000, by and among Ralston Purina Company, a Missouri corporation
("Ralston") and Energizer Holdings, Inc. ("Energizer"), a Missouri corporation
and wholly owned Subsidiary of Ralston.
WITNESSETH:
WHEREAS, Ralston's businesses principally consist of the manufacture,
distribution and sale of pet products and battery and lighting products both
domestically and internationally; and
WHEREAS, the Board of Directors of Ralston (the "Ralston Board") has
determined that it is in the best interests of the Ralston shareholders to
separate Ralston's battery and lighting products business from its pet products
business by creating a new independent publicly held battery and lighting
products company, and to distribute the $.01 par value Energizer Stock
("Energizer Stock") to shareholders of its $.10 par value Ralston Purina Common
Stock ("Ralston Stock"); and
WHEREAS, in order to effect such separation, the Ralston Board has
determined that it is necessary and advisable to restructure the worldwide
battery and lighting products business and to transfer to Energizer the direct
stock ownership of those Subsidiaries that are engaged in the operation of the
battery and lighting products business, as well as other assets of Ralston used
in the battery and lighting products businesses, as more fully set forth below;
and
WHEREAS, in connection with such consolidation, Ralston caused Eveready
Battery Company, Inc. ("Eveready"), a Delaware corporation and indirectly wholly
owned Subsidiary of Ralston, to form Energizer effective September 23, 1999; and
effected the reincorporation of Eveready Battery International, Inc. ("EBII"), a
wholly owned Subsidiary of Eveready, from Delaware to Missouri by causing EBII
to be merged into Energizer, in connection with which Eveready, the sole
shareholder of EBII, surrendered all shares of capital stock in EBII in a
constructive exchange for all of the issued and outstanding shares of capital
stock of Energizer; and
WHEREAS, in order to effect such distribution of the ownership of Energizer
to the holders of Ralston Stock, the Ralston Board has determined that it is
necessary and desirable to distribute all outstanding shares of Energizer Stock
on a pro rata basis to the holders of Ralston Stock, such distribution being
hereinafter referred to as the "Distribution"; and
WHEREAS, the mergers and liquidations of certain affected subsidiaries are
intended to qualify as nontaxable under Sections 368(a)(1)(A) and 332 of the
Internal Revenue Code of 1986, as amended (the "Code"), the transfer of assets
is intended to qualify as nontaxable under Code Section 368(a)(1)(D) and 351,
and the distribution of Energizer Stock is intended to qualify as nontaxable
under Code Section 355; and
WHEREAS, the parties hereto have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution and to set forth other agreements that will govern certain
other matters prior to and following the Distribution;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound thereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.01 General. As used in this Agreement, the following terms shall
-------
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, claim, suit, arbitration, inquiry, proceeding or
------
investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any arbitration or other tribunal.
Affiliate: with respect to any specified Person, an "affiliate" as defined
---------
in Rule 405 promulgated pursuant to the Securities Act; provided, however, that
for purposes of this Agreement (i) Affiliates of Energizer shall not be deemed
to include Ralston or any corporation which will be a Subsidiary or affiliate of
Ralston following the Distribution; and (ii) Affiliates of Ralston shall not be
deemed to include Affiliates of Energizer.
Aircraft Agreement: as defined in Section 5.03 of this Agreement.
-------------------
Ancillary Agreements: the Tax Sharing Agreement, the Bridging Services
---------------------
Agreement, the Intellectual Property Agreement and the Aircraft Agreement.
Asset: any and all assets, rights and properties, tangible or intangible,
-----
including, but not limited to, the following: (i) cash, notes and trade
receivable accounts (whether current or non-current and including all rights
with respect thereto); (ii) certificates of deposit, bankers' acceptances,
stock, debentures, evidences of indebtedness, certificates of interest or
participation in profit-sharing agreements, collateral-trust certificates,
preorganization certificates, investment contracts, voting-trust certificates;
(iii) trade secrets and confidential information; statutory, common law and
registered trademarks, trade styles, service marks, service names, trade names,
trade dress, copyrights, moral rights, rights of privacy and publicity, Internet
or other electronic communication addresses (e.g., "energizer.com" and
1-800-982-ENRS), business addresses of a proprietary nature (e.g., "Ever Ready
House"), designs, inventions, know-how, issued and unissued patents, and other
property commonly considered intellectual property, all rights to recover for
past infringements of each of the foregoing, and the goodwill of the business to
the extent associated with any and all of the foregoing; (iv) rights under
leases, contracts, licenses, permits, and sales and purchase agreements; (v)
real estate and buildings and other improvements thereon and timber and mineral
rights of every kind; (vi) leasehold improvements, fixtures, trade fixtures,
machinery, equipment (including transportation and office equipment), tools,
dies and furniture; (vii) office supplies, production supplies, spare parts,
other miscellaneous supplies and other tangible property of any kind; (viii) raw
materials, work-in-process, finished goods, consigned goods and other
inventories; (ix) prepayments or prepaid expenses; (x) claims, causes of action,
choses in action, rights of recovery and rights of set-off of any kind; (xi) the
right to receive mail and other communications; (xii) lists of advertisers,
records pertaining to advertisers and accounts, lists and records pertaining to
suppliers, customers and agents, and books, ledgers, files and business records
of every kind; (xiii) advertising materials and other recorded, printed or
written materials; (xiv) goodwill as a going concern and other intangible
properties; (xv) personnel records and employee contracts, including any rights
thereunder to restrict an employee from competing in certain respects; and (xvi)
licenses and authorizations issued by any governmental authority.
Battery Business: Ralston's direct or indirect ownership of (i) the
-----------------
worldwide business of the manufacture, distribution and sale of primary
alkaline, carbon zinc, miniature, rechargeable and other types of batteries; and
flashlights and other lighting products; and (ii) all joint ventures involving
or associated with the businesses described in (i) next above.
Bridging Services Agreement: as defined in Section 5.03 of this Agreement.
---------------------------
Business: the Battery Business or the Ralston Business.
--------
Business Day: any day other than a Saturday, a Sunday or a day on which
-------------
banking institutions located in the State of Missouri are obligated by law or
executive order to close.
Cash: cash, checks deposited in lockboxes, marketable securities,
----
compensating balances used to secure debt financing, amounts held in margin
accounts, and such other items as have been or would be classified as cash
consistent with accounting policies of Ralston.
Code: the Internal Revenue Code of 1986, as amended, or any successor
----
legislation.
Current Plan Year: the plan year or fiscal year, to the extent applicable
------------------
with respect to any Plan, during which the Distribution Date occurs.
Distribution: as defined in the recitals to this Agreement.
------------
Distribution Date: April 1, 2000.
------------------
DuPont Agreement: an Agreement and Plan of Merger and Exchange dated as of
----------------
December 2, 1997, by and among E. I. du Pont de Nemours and Company, Ralston and
certain of their affiliates.
Energizer: as defined in the recitals to this Agreement.
---------
Energizer Assets: except to the extent provided in, and subject to the
-----------------
provisions of, any of the Ancillary Agreements, (i) all of the Assets used or
held by or on behalf of any member of the Energizer Group or the Ralston Group
immediately prior to the Distribution which are used or held for use
exclusively in the Battery Business, and which are not used or held for use in
the Ralston Business; including, but not limited to, the Assets set forth on
Schedule 1.01(a) but excluding the Assets set forth on Schedule 1.01(b); and
(ii) any office equipment and furniture used immediately prior to the
Distribution exclusively by Energizer Employees.
Energizer Board: the Board of Directors of Energizer Holdings, Inc. and
----------------
their duly elected or appointed successors.
Energizer Deferred Compensation Plan: as defined in Section 7.09 of this
--------------------------------------
Agreement.
Energizer Employee: any individual who (i) is on the Distribution Date, or
------------------
immediately following the Distribution will be, an employee of any member of the
Energizer Group, (ii) is on the Distribution Date employed by a member of the
Ralston Group but who, pending transfer of employment to a member of the
Energizer Group, performs duties primarily for the Energizer Group other than
pursuant to the Bridging Services Agreement; or (iii) is on leave (including,
but not limited to, leave for sickness or disability) or layoff from active
employment on the Distribution Date but who, immediately prior to commencement
of such leave or layoff, was employed in, or performed duties primarily for, the
Battery Business. Notwithstanding the foregoing, an Energizer Employee shall
not include any individual who, as of the Distribution Date, is employed by a
member of the Energizer Group but performs duties primarily for the Ralston
Group, pending subsequent transfer of employment to a member of the Ralston
Group or termination of employment.
Energizer Group: Energizer and its Affiliates after the Distribution.
----------------
Energizer Individual: any individual who is an Energizer Employee, a
---------------------
Former Energizer Employee, or a beneficiary or alternate payee of an Energizer
Employee or of a Former Energizer Employee.
Energizer Obligations: as defined in Article X of this Agreement.
----------------------
Energizer Retirement Plan: the Energizer Holdings, Inc. Retirement Plan, a
-------------------------
defined benefit pension plan.
Energizer Stock: Energizer common stock, par value $.01 per share.
----------------
ERISA: the Employee Retirement Income Security Act of 1974, as amended, or
-----
any successor legislation.
Exchange Act: the Securities Exchange Act of 1934, as amended, together
--------------
with the rules and regulations promulgated thereunder.
Executive Life Plan: the Ralston Purina Executive Life Plan.
---------------------
Executive SIP: the Ralston Purina Executive Savings Investment Plan.
--------------
Form 10: as defined in Section 2.06 of this Agreement.
--------
Former Battery Businesses: all of the following businesses which, as of
---------------------------
the Distribution Date, were no longer owned and/or conducted, directly or
indirectly, by Ralston, Energizer or their Subsidiaries, Affiliates or any
predecessors to the foregoing:
(i) former businesses and operations relating to the manufacture, sale and
distribution of battery, safety and lighting products conducted by Ralston
and/or its Subsidiaries after June 30, 1986, including, but not limited to, the
worldwide rechargeable Original Equipment Manufacturers' battery business and
the Eversafe line of products;
(ii) former businesses and operations relating to the manufacture, sale and
distribution of battery and lighting products conducted by Union Carbide
Corporation and/or its Subsidiaries and Affiliates through June 30, 1986, to the
extent assets and liabilities related to such businesses and operations were
acquired and assumed by Ralston and its Subsidiaries and Affiliates effective
June 30, 1986 pursuant to, or arising out of the transactions contemplated by,
the Omnibus Purchase and Sale Agreement by and between Union Carbide Corporation
and Ralston Purina Company, made April 7, 1986; and
(iii) all former joint ventures involving or associated with the businesses
described in (i) or (ii) above or the Battery Business.
Former Businesses: The Former Ralston Businesses and the Former Battery
------------------
Businesses.
Former Energizer Employee: an individual who was employed in, or performed
-------------------------
duties primarily for, the Battery Business or a Former Battery Business at the
time of his or her termination or retirement on or prior to the Distribution
Date and who was not subsequently, prior to the Distribution Date, employed in
the Ralston Business or in a Former Ralston Business.
Former Ralston Businesses: all of the businesses and operations directly
---------------------------
or indirectly owned and conducted by Ralston prior to, but not as of, the
Distribution Date, other than a Former Battery Business; and all former joint
ventures involving or associated with such businesses and operations.
Former Ralston Employee: an individual who was employed in, or performed
-------------------------
duties primarily for, the Ralston Business or a Former Ralston Business at the
time of his or her termination or retirement and who was not subsequently, prior
to the Distribution Date, employed in the Battery Business or a Former Battery
Business.
Group: the Ralston Group or the Energizer Group.
-----
Indebtedness of the Energizer Group: external obligations of a member or
-------------------------------------
members of the Energizer Group in the form of money that is borrowed from third
party banks and/or financial institutions, to the extent that such indebtedness
(i) is incurred in connection with, or arising out of the operations of, the
Battery Business or is assigned to Energizer or a member of its Group as set
forth in Section 2.01(j)(iii); and (ii) is or should be reflected and booked on
the balance sheet statements of the Battery Business in accordance with
accounting policies of Ralston; and in no event shall intercompany or
intracompany accounts between the Battery Business and the Ralston Business be
deemed to be Indebtedness of the Energizer Group.
Indemnifiable Loss: with respect to any claim by an Indemnitee for
-------------------
indemnification hereunder, any and all losses, liabilities, claims, damages,
obligations, payments, costs and expenses (including, without limitation, the
costs and expenses of any and all Actions, demands, claims and assessments, and
any and all judgments, settlements and compromises related thereto and
reasonable attorney's fees and expenses in connection therewith) incurred or
suffered by such Indemnitee with respect to such claim except as may arise in
connection with the performance of any of the Ancillary Agreements, which shall,
in each such case, be governed by the terms of such Ancillary Agreement.
Indemnitee: as defined in Section 4.02 of this Agreement.
----------
Indemnitor: as defined in Section 4.02 of this Agreement.
----------
Information: as defined in Section 6.02 of this Agreement.
-----------
Information Statement: the information statement sent to holders of
----------------------
Ralston Stock in connection with the Distribution, which sets forth appropriate
disclosures concerning the Battery Business, Energizer, the Distribution and
other related matters.
IP Agreement: as defined in Section 5.03 of this Agreement.
-------------
IRS: the Internal Revenue Service.
---
ISP: the Ralston Purina 1988, 1996 and 1999 Incentive Stock Plans.
---
Liabilities: all claims, debts, liabilities, royalties, license fees,
-----------
losses, costs, expenses, deficiencies, litigation proceedings, taxes, levies,
imposts, duties, deficiencies, assessments, attorneys' fees, charges,
allegations, demands, damages, judgments, guaranties, indemnities, or
obligations, whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown and whether or not the same
would properly be reflected on a balance sheet, including all costs and expenses
relating thereto.
Notice of Claim: as defined in Section 4.02 of this Agreement.
-----------------
NYSE: the New York Stock Exchange.
----
Operating Agreement: an agreement as described in Section 2.04(f) in
--------------------
effect during a period of beneficial ownership of the Energizer Assets or the
Ralston Assets.
Person: an individual, a partnership, a joint venture, a corporation, a
------
trust or other entity, an unincorporated organization or a government or any
department or agency thereof.
Plan: any plan, policy, arrangement, contract or agreement providing
----
benefits (including salary, bonuses, deferred compensation, incentive
compensation, savings, stock purchases, pensions, profit sharing, welfare
benefits or retirement or other retiree benefits, including retiree medical
benefits) for any group of employees or former employees or individual employee
or former employee, or the beneficiary or beneficiaries of any such employee or
former employee, whether formal or informal or written or unwritten and whether
or not legally binding, and including any means, whether or not legally
required, pursuant to which any benefit is provided by an employer to any
employee or former employee or the beneficiary or beneficiaries of any such
employee or former employee.
Qualified Plan: a Plan which is an employee pension benefit plan (within
---------------
the meaning of Section 3(2) of ERISA) and which constitutes or is intended in
good faith to constitute a Qualified Plan under Section 401(a) of the Code.
Ralston: as defined in the recitals to this Agreement.
-------
Ralston Assets: except to the extent provided in, and subject to the
---------------
provisions of, any of the Ancillary Agreements, all of the Assets, other than
the Energizer Assets, used or held immediately prior to the Distribution Date by
or on behalf of any member of either Group, including, but not limited to, the
Assets set forth on Schedule 1.01(c).
Ralston Board: the Board of Directors of Ralston Purina Company and their
--------------
duly elected or appointed successors.
Ralston Business: all of the businesses owned, directly or indirectly, by
-----------------
Ralston immediately prior to the Distribution Date, other than the Battery
Business.
Ralston Chilean Asset Purchase Price: Cash paid, after the Distribution,
---------------------------------------
to Energizer or its Affiliates by Ralston or its Affiliates to effect the
purchase, as set forth in Section 2.01(e), of the Assets and Liabilities of the
Ralston Business conducted by Eveready de Chile S.A.
Ralston Deferred Compensation Plan: the Ralston Purina Deferred
-------------------------------------
Compensation Plan for Key Employees.
Ralston Employee: any individual who, as of the day prior to the
-----------------
Distribution Date, is an employee of any member of either Group, other than an
Energizer Employee.
Ralston Group: Ralston and its Affiliates after the Distribution.
--------------
Ralston Individual: any individual who is a Ralston Employee, a Former
-------------------
Ralston Employee, or a beneficiary or alternate payee of a Ralston Employee or
of a Former Ralston Employee.
Ralston Option: the option defined in Section 7.08(b) of this Agreement.
---------------
Ralston Retirement Plan: the Ralston Purina Retirement Plan, a defined
-------------------------
benefit pension plan.
Ralston Stock: Ralston Purina Company common stock, $.10 par value.
--------------
Record Date: March 31, 2000, determined by the Board of Directors of
------------
Ralston as the record date for determining shareholders of Ralston Stock
entitled to receive the Distribution.
Rights: the rights to be issued by Energizer pursuant to the Rights
------
Agreement between Energizer and Continental Stock Transfer and Trust Company.
SEC: the Securities and Exchange Commission.
---
Securities Act: the Securities Act of 1933, as amended, together with the
---------------
rules and regulations promulgated thereunder.
Shared Liability: a Liability arising out of, or associated with, the
-----------------
ownership of both the Energizer Assets and the Ralston Assets; or the operation
of the Battery Business or a Former Battery Business, on the one hand, and the
Ralston Business or a Former Ralston Business, on the other hand, prior to the
Distribution.
SIP: a Savings Investment Plan.
---
Subsidiary: with respect to any specified Person, any corporation or other
----------
legal entity of which such Person or any of its Subsidiaries controls or owns,
directly or indirectly, 50% or more of the stock or other equity interest
entitled to vote on the election of members to the board of directors or similar
governing body of such corporation or other legal entity.
Survivor Life Insurance Plan: the 1996 Split Dollar Second-To-Die Plan.
-------------------------------
Tax Sharing Agreement: as defined in Section 5.03 of this Agreement.
-----------------------
Third-Party Claim: any Action or claim by a third party against or
------------------
otherwise involving an Indemnitee for which indemnification may be sought
pursuant to Article IV hereof.
Welfare Plan: any Plan which is not a Qualified Plan and which provides
-------------
medical, health, disability, accident, life insurance, death, dental or other
welfare benefits, including any post-employment benefits or retiree medical
benefits.
1.02 References to Time. All references to times of the day in this
--------------------
Agreement shall refer to St. Louis, Missouri time unless otherwise specifically
indicated.
ARTICLE II
CERTAIN RESTRUCTURING TRANSACTIONS
2.01 Restructuring Transactions. Prior to the Distribution Date or, as
--------------------------
indicated, as soon as practicable thereafter, the following shall have been or
shall be effected:
(a) Reincorporation Merger. Eveready, the sole shareholder of
-----------------------
Energizer and EBII, shall surrender all of the issued and outstanding shares of
capital stock of EBII in a constructive exchange for all of the issued and
outstanding shares of capital stock of Energizer, pursuant to the General and
Business Corporation Law of Missouri and Delaware General Corporation Law, in
connection with EBII's reincorporation from Delaware to Missouri and merger into
Energizer.
(b) United Kingdom Restructuring. Energizer UK Company ("Energizer
------------------------------
UK"), a United Kingdom unlimited company, shall wholly redeem EII's partnership
interest in Energizer UK (the "Partnership Interest") by distributing to EII (i)
---
all of the stock of Energizer Holdings UK Company ("Energizer Holdings UK"), a
United Kingdom unlimited company, which owns all of the stock of the following
subsidiaries: (a) Energizer Limited, (b) Ever Ready Ltd; (c) Ralston Energy
Systems U.K. Ltd.; (d) BCL (MVL) Limited; (e) Berec Overseas Investments Ltd.,
(f) Energizer Ireland Ltd., (g) WER (MVL) (1998) Ltd., and (h) Ralston Trust
Limited, and; (ii) cash proceeds resulting from (a) a loan to Energizer UK by
Tower Holding Company, Inc. ("Tower Holding"), a Delaware corporation, and (b) a
contribution of capital by Ralston, such that the fair market value of (i) and
(ii) will equal the fair market value of the Partnership Interest. The value of
the Partnership Interest and the value of Energizer Holdings UK shall be
determined by an independent appraisal.
(c) Mexican Restructuring. Ralston Purina Holdings Mexico S.A. de C.V.
---------------------
("RP Holdings Mexico"), a Mexican corporation, shall capitalize a portion of the
intercompany debt owed to it by its wholly owned Subsidiary, Eveready de Mexico
S.A. de C.V. ("Eveready Mexico"), such that the resulting value of Eveready de
Mexico will equal EII's interest in RPHM. Eveready de Mexico shall borrow from
outside parties an amount necessary to pay off its remaining intercompany debt
to RPHM prior to the Distribution. Prior to the Distribution Date, or as soon
as practicable thereafter, RP Holdings Mexico shall distribute all of the
capital stock of Eveready Mexico to EII in complete redemption of EII's entire
stock interest in RP Holdings Mexico.
(d) Brazilian Restructuring. EII shall form a new, wholly owned
------------------------
Subsidiary, Energizer do Brasil, Ltda.("Energizer do Brasil"), a Brazilian
corporation. Ralston Purina do Brasil Ltda.("RP do Brasil"), a Brazilian
corporation, shall sell to Energizer do Brasil all of the Assets and Liabilities
associated with its ownership and operation of the Battery Business in Brazil,
other than external debt, all of which RP do Brasil shall retain. The
purchase price shall be equal to the statutory net book value of such Business
as of March 31, 2000, excluding such external debt. Prior to the Distribution
Date, EII shall distribute to Ralston in the form of a dividend all of its stock
interest in RP do Brasil. Prior to the Distribution, EII will also assign to
Checkerboard Holding Company ("Checkerboard Holding"), a Delaware corporation,
an intercompany note evidencing debt owed from RP do Brasil to EII.
(e) Argentinean/Chilean Restructuring. Prior to the Distribution Date
----------------------------------
or as soon as practicable thereafter, Checkerboard Holding shall form a new
wholly owned Subsidiary, Ralston Purina Chile, S.A. ("RP Chile"), a Chilean
corporation. Eveready de Chile S.A. ("Eveready Chile"), a Chilean corporation,
will sell the Assets and Liabilities of the Ralston Business conducted by it to
RP Chile. The purchase price shall be determined by an independent appraisal
less debt. Prior to the Distribution Date, EII will transfer to Checkerboard
Holding, and Eveready Battery Company will transfer to Tower Holding, that
portion of the stock of Ralston Purina Argentina S.A. ("RP Argentina"), an
Argentinean corporation, held by each transferor company reflecting the relative
value of their respective interests in the Ralston Business conducted by RP
Argentina. Prior to the Distribution Date or as soon as practicable thereafter,
in accordance with Argentinean law, RP Argentina will divide into two
Argentinean corporations, one conducting the Battery Business and the other
conducting the Ralston Business, as follows: (i) RP Argentina will transfer all
of its stock interest in Eveready Chile, and the Assets and Liabilities of the
Battery Business conducted by RP Argentina to Energizer Argentina, a newly
created Argentinean corporation resulting from the division of RP Argentina,
having the same shareholders, with identical share ownership proportions, as RP
Argentina; and (ii) Checkerboard Holding and Tower Holding will then each
exchange their shares of Energizer Argentina for the shares of RP Argentina
held, respectively, by EII and Eveready. EII and Eveready will then be sole
shareholders of Energizer Argentina, which will conduct the Battery Business in
Argentina and will be the parent company of Eveready Chile; and Checkerboard
Holding and Tower Holding will then be sole shareholders of RP Argentina, which
will conduct the Ralston Business in Argentina.
(f) Spanish Restructuring. Ralston Energy Systems Iberica S.A.
----------------------
("RESIB"), a Spanish corporation, which indirectly conducts the Battery Business
in Spain through its 91% owned Subsidiary Energizer Iberia S.A., also a Spanish
corporation, will sell all of the issued and outstanding stock of its wholly
owned Subsidiary Ralston Purina Europe S.A ("RPE"), which directly conducts the
Ralston Business, to Checkerboard Holding for an amount determined by an
independent appraisal.
(g) Distribution of Energizer Stock to VCS Holding. Following (i) the
------------------------------------------------
transaction described in paragraph 2.01(a), and (ii) those of the transactions
described in paragraphs 2.01(b) through (f) which have been completed prior to
the Distribution Date, Eveready will distribute by dividend all the stock of
Energizer to VCS Holding Company ("VCS"), a Delaware corporation and wholly
owned Subsidiary of Ralston.
(h) Merger of VCS Holding into Ralston. Ralston and VCS shall enter
--------------------------------------
into an Agreement and Plan of Merger and Complete Liquidation pursuant to which
VCS shall be merged with and into Ralston pursuant to the General and Business
Corporation Law of Missouri and Delaware General Corporation Law, and in
accordance with the terms and conditions of such merger agreement. Prior to
such merger, VCS shall transfer to Tower Holding, as a contribution to capital,
all shares of capital stock of Interstate Bakeries Corporation held by VCS as
well as all receivables reflecting intercompany loans by VCS to Ralston.
Following the merger, VCS will cease to exist, and Ralston shall become the
direct owner of Energizer and all other stock interests and Assets owned by VCS
at the time of the merger, including, but not limited to, notes reflecting
intercompany loans by VCS to Eveready ("the Eveready Notes"). The intercompany
account owed by Ralston to VCS shall be extinguished incident to the merger of
VCS into Ralston.
(i) Canadian Restructuring. Ralston shall contribute a portion of its
-----------------------
capital stock in Ralston Purina Canada Inc. ("RP Canada") to Energizer so that
the number of shares of RP Canada stock owned by Energizer, when combined with
the number of shares of RP Canada stock owned by EII, will reflect, on a
combined stock ownership basis, an interest in RP Canada equal to the appraised
value of the Battery Business conducted by RP Canada. EII and Energizer will
form a new Canadian corporation, Energizer Canada Inc., and will each transfer
all of their stock in RP Canada to Energizer Canada Inc. in exchange for
Energizer Canada Inc. common stock of proportionate value. RP Canada will
transfer the Assets and Liabilities of the Battery Business conducted by it to
Energizer Canada Inc. in exchange for all of the issued and outstanding
preferred stock in Energizer Canada Inc. RP Canada will then issue a note to
Energizer Canada Inc. in complete redemption of the RP Canada common stock held
by Energizer Canada Inc., and Energizer Canada Inc. will issue to RP Canada a
note of equal value in redemption of the Energizer Canada Inc. preferred stock
held by RP Canada. The two notes will then be offset against one another and
each cancelled. Ralston will thereupon own all of the stock of RP Canada, which
will conduct only the Ralston Business, and EII and Energizer will in the
aggregate own all of the stock of Energizer Canada Inc., which will conduct only
the Battery Business.
(j) Other Post-Merger Transfers/Debt Assumption. Following the merger
--------------------------------------------
described in Section 2.01(h) and the restructuring described in Section 2.01(i),
the following transactions will take place prior to the Distribution Date:
(i) Ralston will transfer the Eveready Notes to MKTE, Inc., a newly
formed Delaware corporation and first tier Subsidiary of Ralston.
(ii) Ralston will transfer to Energizer all of the stock of Eveready;
will cause the transfer to Eveready of all of the stock of EII and MKTE; and
will cause the transfer to EII of all of the stock of Energizer Japan,
Inc., a Delaware corporation.
(iii) Ralston will enter into certain credit facility agreements to
borrow funds from third party banks and/or financial institutions and will
assign to Energizer all obligations, including, but not limited to, the
obligation to make payments of principal and interest to the lenders
arising out of or in connection with such credit facility agreements, other
than for certain fees set forth in Section 12.04. The sum of such debt
assumed by Energizer, plus other Indebtedness of the Energizer Group, is
intended to equal total Indebtedness of the Energizer Group, net of Cash, of
US$586.8 million as of the close of business on March 31, 2000.
2.02 Issuance of Stock. Prior to the Distribution Date, the parties
-------------------
hereto shall take all steps necessary so that immediately prior to the
Distribution Date, the number of shares of Energizer Stock outstanding and held
by Ralston shall equal the number of shares necessary to effect the
Distribution. The Distribution shall be effected by distributing, on a pro rata
basis to every holder of Ralston Stock, one share of Energizer Stock for every
three shares of Ralston Stock held as of the Record Date.
2.03 Share Purchase Rights Agreement; Articles of Incorporation;
-----------------------------------------------------------------
Bylaws. Prior to the Distribution Date, Energizer shall adopt an Energizer
Rights Agreement in substantially the form filed with the SEC as an exhibit to
the Form 10, and the Board of Directors of Energizer shall authorize a
distribution of one Right to every share of outstanding Energizer Stock, such
distribution to occur prior to the Distribution. Ralston and Energizer shall
take all action necessary so that, at the Distribution Date, the Articles of
Incorporation and Bylaws of Energizer shall be substantially in the forms filed
with the SEC as exhibits to the Form 10.
2.04 Transfer of Assets; Assumption of Liabilities.
--------------------------------------------------
(a) Prior to the Distribution Date, the parties hereto shall cooperate in
taking all action necessary to convey, assign and transfer to Energizer or its
Affiliates, effective no later than the Distribution Date, all of the right,
title and interest in the Energizer Assets held by any member of the Ralston
Group, and to convey, assign and transfer to Ralston or its Affiliates all of
the right, title and interest in the Ralston Assets held by any member of the
Energizer Group. Effective as of the Distribution Date, Energizer and its
Affiliates shall become the beneficial owners of all of the Energizer Assets,
and Ralston and its Affiliates shall remain the beneficial owners of all of the
Ralston Assets. The parties acknowledge that formal actions to effect fully the
legal transfers of such Assets may not be completed by the Distribution Date,
but that the entire beneficial title and interest in and to each Asset shall
pass to Energizer or remain with Ralston, as the case may be, as of the
Distribution Date. The parties shall take such action as is necessary in their
reasonable discretion, whether before or after the Distribution Date, to
complete the transfer of the Energizer Assets to the Energizer Group and the
Ralston Assets to the Ralston Group, as the case may be, and each party shall
cooperate fully with the other in such regard.
Ralston and Energizer shall cooperate in estimating the appropriate amount of
Cash to be transferred to or from members of the Energizer Group on or before
March 31, 2000 to cause the Energizer Group to hold, as of the close of business
on March 31, 2000, Cash in such an amount that would cause the Indebtedness of
the Energizer Group, at the close of business on such date, to equal US$586.8
million, net of such Cash. The parties shall use reasonable efforts to cause
the transfer of Cash to or from Energizer to effect this provision.
(b) As of the Distribution Date, Energizer and Ralston and, as
appropriate, other members of their respective Groups, shall assume or retain
all of the Liabilities, with respect to Energizer, of the Battery Business and
Former Battery Businesses and, with respect to Ralston, of the Ralston Business
and Former Ralston Businesses, of whatsoever type or nature, arising exclusively
out of or associated exclusively with the ownership of the Assets of such
Businesses or Former Businesses or the operation of such Businesses or Former
Businesses prior to the Distribution, whether such Liabilities become known
prior to or after, or are asserted prior to or after, the Distribution. Unless
otherwise provided in this Agreement or any Schedule hereto, Energizer and its
Affiliates and Ralston and its Affiliates shall assume (or retain, as the case
may be) a share of any Shared Liability in proportion, as applicable, to their
respective ownership of the relevant Assets, control of affected operations or
employment of affected individuals. Shared Liabilities shall include, but not
be limited to, those set forth on Schedule 2.04(b)(1). Notwithstanding the
foregoing, effective as of the Distribution Date, Energizer or another member of
the Energizer Group shall assume or retain Liabilities specifically described in
any other provision of this Agreement or any Ancillary Agreement, and
Liabilities described on Schedule 2.04(b)(2) to this Agreement. Ralston and
members of the Ralston Group shall, except as qualified hereinabove, assume or
retain the Liabilities specifically described in this Agreement or any Ancillary
Agreement, and the Liabilities specifically described on Schedule 2.04(b)(3) to
this Agreement.
(c) The parties agree and acknowledge that the assumption or retention by
Energizer or other members of the Energizer Group or Ralston or other members of
the Ralston Group, as the case may be, of all such Liabilities described herein
is part of a single plan to transfer the Battery Business and the Energizer
Assets to Energizer as of the Distribution Date. With regard to that plan, the
parties further agree that (i) the entire beneficial title and interest in and
to each and all of the Energizer Assets shall, regardless of when legal title to
any such asset is in fact transferred to Energizer or its Subsidiaries, remain
in Ralston until the Distribution Date at which time all beneficial title and
interest in all of the Energizer Assets will pass to Energizer, and all title
and interest in and to each and all of the Ralston Assets which is owned by a
member of the Energizer Group prior to the Distribution Date shall, regardless
of when legal title to any such asset is in fact transferred to Ralston or its
Subsidiaries after the Distribution Date, be beneficially owned by Ralston; (ii)
the economic burden of the assumption or retention by the members of the
Energizer Group or the Ralston Group, as the case may be, of each and all of the
Liabilities described herein shall pass to the Energizer Group or the Ralston
Group, as the case may be, as of the Distribution Date, regardless of when
Energizer or any other member of the Energizer Group or Ralston or any other
member of the Ralston Group, as the case may be, in fact assumes or becomes
legally obligated to the obligee of any one or more of such Liabilities; and
(iii) all operations of the Battery Business shall be for the account of Ralston
through 12:01 a.m. on the Distribution Date and shall be for the account of
Energizer thereafter.
(d) Ralston and Energizer shall, and shall cause their Affiliates to,
execute prior to, or as soon as practicable following, the Distribution Date,
such additional agreements and arrangements as may be necessary or appropriate
(i) to effect the restructuring transactions set forth in Section 2.01; (ii) to
transfer to the appropriate member of the Energizer Group or Ralston Group such
local product registrations, franchises, licenses, and any other governmental
authorizations or other rights owned or held by Ralston, Energizer or their
respective Groups that are necessary to the conduct of their Businesses in such
jurisdiction; (iii) to make all such further assignments and do all such other
acts as are necessary or desirable to carry out the intent of the parties that
each of the Businesses, as a going concern, be fully vested in the appropriate
party as of the Distribution Date and operated for its benefit and burden as of
12:01 a.m. on the Distribution Date; and (iv) to provide for, and negotiate in
good faith, such other agreements and arrangements relating to the foregoing as
the parties deem appropriate, including, but not limited to, any such agreements
or arrangements relating to the treatment of employees, benefit plans,
intellectual property and taxes.
(e) If any Energizer Asset or Ralston Asset is not owned, respectively,
by a member of the Energizer Group or Ralston Group or leased from a third party
or governmental entity by a member of the appropriate Group, as of the
Distribution Date, Ralston and Energizer shall use their reasonable best efforts
to transfer, assign and deliver such assets or leases to the appropriate member
of the other Group as soon as practicable thereafter.
Prior to such transfer or assignment, Ralston or Energizer, as the case may be,
shall use its reasonable best efforts to give the benefits of ownership of such
Assets to the appropriate member of the other Group. The entire economic
beneficial interest in and to, and the risk of loss with respect to, such Assets
shall, regardless of when legal title thereto shall be transferred to the
appropriate member of the Energizer or Ralston Group, pass to those entities as
of the Distribution. Ralston and Energizer shall, or shall cause their
Affiliates to, hold such Assets for the benefit and risk of the other and shall
cooperate with the other in any lawful and reasonable arrangements designed to
provide the benefits of ownership of the Assets to it, including, but not
limited to, properly recording evidence of such beneficial ownership and risk of
loss with appropriate governmental entities as required by applicable law.
In the event that the legal interest in such Assets or any claim, right or
benefit arising thereunder or resulting therefrom, is not capable of being sold,
assigned, transferred or conveyed hereunder as a result of the failure to
receive any consents or approvals required for such transfer, then the legal
interest in such Assets shall not be sold, assigned, transferred or conveyed
unless and until approval, consent or waiver thereof is obtained. Ralston and
Energizer shall, or shall cause their Affiliates, at their expense, to use
reasonable best efforts to cooperate in obtaining such consents or approvals as
may be necessary to complete such transfers and to obtain satisfaction of
conditions to transfer as soon as practicable.
Nothing in this Agreement shall be construed as an attempt to assign to a member
of the Energizer Group or the Ralston Group any legal interest in such Assets
which, as a matter of law or by the terms of any legally binding contract,
engagement or commitment to which the legal owner is subject, is not assignable
without the consent of any other Person, unless such consent shall have been
given.
(f) After the Distribution Date, Ralston and Energizer shall cause such
Assets (including the capital stock of any Affiliates) which are beneficially
owned by the other party to be managed at the direction of the beneficial owner
pursuant to one or more Operating Agreements until such Assets are actually
legally transferred and conveyed. Without limiting the foregoing, all revenues,
earnings and cash flows associated with the Assets following the Distribution
Date shall be for the account of the beneficial owner but shall be retained by
the respective legal owner until the transfers are legally effected. Following
the Distribution Date, neither Ralston nor Energizer shall be required to lend,
advance, contribute or use any of its own funds in connection with the
operations of such Assets except to the extent contemplated by the Operating
Agreements.
(g) Ralston and Energizer shall cooperate after the Distribution Date
in determining the actual Indebtedness of the Energizer Group and Cash held by
members of the Energizer Group as of the close of business on March 31, 2000 in
order to determine if a further transfer of Cash is required between the
parties. A preliminary determination of the actual Cash and Indebtedness of the
Energizer Group shall be made no later than 60 days after the Distribution Date
in order to make a preliminary adjustment of Cash from Ralston to Energizer or
vice versa, as the findings warrant.
In addition, the parties shall determine the value of checks and other forms of
electronic payments, written or authorized by Energizer or its Affiliates on
their U.S. bank accounts, which are outstanding and have not cleared as of March
31, 2000. If the aggregate value of such outstanding checks and payments was
less than $10 million, then the target Indebtedness of Energizer, net of Cash,
shall remain $586.8 million. If the aggregate value of such checks and payments
was greater than $10 million, then the target Indebtedness of Energizer, net of
Cash, shall be reduced dollar for dollar by an amount equal to the value of such
outstanding checks in excess of $10 million. For purposes of this Section
2.04(g), checks outstanding shall not be deemed to include checks issued in
connection with obligations under any Plans with respect to Energizer
Individuals.
If it is determined that actual Indebtedness of the Energizer Group, net of
Cash, exceeded US$586.8 million (adjusted, if applicable, pursuant to the
preceding paragraph) as of the close of business on March 31, 2000, Ralston
shall pay an amount equal to such excess to Energizer in US dollars.
Conversely, if it is determined that actual Indebtedness of the Energizer Group,
net of Cash, fell short of US$586.8 million (adjusted, if applicable, pursuant
to the preceding paragraph) as of the close of business on March 31, 2000,
Energizer shall pay an amount equal to such shortfall to Ralston in US dollars.
Alternatively, the parties may, by mutual consent, cause such amounts to be paid
by any member of one Group to any member of the other Group in local currency.
Any Cash paid to Ralston by Energizer pursuant to this Section 2.04(g) shall be
used to repay third party indebtedness of Ralston.
Ralston shall have the opportunity to review, to its satisfaction, the books and
records of Energizer and its Affiliates, bank records, loan documentation and
other relevant materials in order to enable Ralston to verify any amounts to be
transferred, and Energizer shall cooperate in Ralston's review. Payment of such
preliminary adjustment shall be made within fifteen (15) Business Days of such
determination. In addition, such amounts shall be increased by an amount equal
to simple interest accrued on such unpaid excess (or shortfall, as applicable)
at the rate of 7% per annum for the period from the Distribution Date until the
date such preliminary adjustment is paid to the party to which it is owed.
As soon as practicable after the end of its third fiscal quarter, but no later
than August 10, 2000, Energizer will present to Ralston a draft of its Quarterly
Report on Form 10Q for such quarter, indicating an opening shareholders' equity
balance for Energizer as of April 1, 2000, which balance shall reflect all asset
and liability transfers pursuant to the terms of this Agreement, including, but
not limited to, any Cash to be transferred between the parties under the
provisions of this Section 2.04(g), other than Cash which may be required to be
transferred pursuant to the following paragraph. Ralston shall have the
opportunity to review the books and records of Energizer and its Affiliates in
order to enable it to verify said shareholders' equity balance, and Energizer
shall cooperate in Ralston's review. As part of such review, Ralston shall
verify the calculations of the Indebtedness of the Energizer Group and Cash held
by Energizer and its Affiliates as of March 31, 2000, and shall make, if
necessary, a final adjustment to the amounts to be transferred as described
above. Such final adjustments shall be increased by an amount equal to simple
interest accrued on such adjustments at 7% per annum for the period from the
date of any preliminary adjustment as described above, until the date such final
adjustment is paid to the party to which it is owed. If such final adjustments
are made, the opening shareholders' equity balance for Energizer as of April 1,
2000, as described above, shall be revised to reflect such adjustments.
In the event that the opening shareholders' equity balance of Energizer as
of April 1, 2000, revised in the manner described above, is less than US$625
million, then Ralston shall pay to Energizer, no later than August 14, 2000, an
amount of Cash so as to cause the opening shareholders' equity balance to equal
US$625 million following such payment. If such additional payment is required,
the amount paid shall be increased by an amount equal to simple interest accrued
on such amount at the rate of 7% per annum for the period from the Distribution
Date until the date of payment. Energizer shall revise its Quarterly Report on
Form 10Q to reflect such revised opening shareholders' equity balance.
(h) Ralston shall pay to Energizer in US dollars, at the time of
payment of the Ralston Chilean Asset Purchase Price to a member of the Energizer
Group, an additional lump sum equal to interest on such purchase price,
denominated in US dollars at the time of payment to Energizer, accrued at the
simple interest rate of 7% per annum, for the period beginning on the
Distribution Date to the date such purchase price is paid to the Energizer
Affiliate.
(i) Calculations of equivalent values of US and foreign currencies
shall, for purposes of this Agreement, be based on foreign exchange rates for
the relevant date or dates as reflected in accordance with accounting practices
historically employed by Ralston.
2.05 Conduct of Business Pending the Distribution Date. Prior to the
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Distribution Date, the Battery Business shall be operated for the sole benefit
of Ralston.
2.06 Registration and Listing. Prior to the Distribution Date:
--------------------------
(a) Ralston and Energizer shall prepare, and Energizer shall file with the
SEC, a Registration Statement on Form 10 pursuant to Section 12(b) of the
Exchange Act with respect to the Energizer Stock and associated Rights. Ralston
and Energizer shall use reasonable efforts to cause the Form 10 to become
effective under the Exchange Act, and, following such effectiveness, Ralston
shall mail the Information Statement to the holders of record of Ralston Stock
as of the close of business on the Record Date.
(b) The parties hereto shall take all such actions as may be necessary or
appropriate under state securities and Blue Sky laws in connection with the
Distribution.
(c) Ralston and Energizer shall prepare, and Energizer shall file and seek
to make effective, an application for the listing of the Energizer Stock and
associated Rights on the NYSE.
2.07 Ralston Purina Charitable Fund.
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(a) Energizer shall take, or cause to be taken, all necessary and
appropriate actions to establish, effective as of (or as soon as practicable
following) the Distribution Date, a charitable trust or a nonprofit corporation
which is exempt from Federal income taxation under Code Section 501(c)(3) (the
"Energizer Charitable Foundation"). Ralston shall, as soon as practicable
following the Distribution Date, in accordance with subparagraph (b) below,
cause the Trustee of the Ralston Purina Charitable Fund, a trust fund exempt
under Code Section 501(c)(3), to transfer to the Energizer Charitable
Foundation, an amount in cash and other liquid investment assets held in the
Ralston Purina Charitable Fund with an aggregate value equal to one-third (1/3)
of the fair market value of the assets of the Ralston Purina Charitable Fund as
of the Distribution Date, as determined by the Trustee of the Ralston Purina
Charitable Fund (the "Charitable Transfer Amount"). The date of such transfer
shall be the "Charitable Transfer Date." The Charitable Transfer Amount shall
include earnings (taking into account any appreciation or depreciation of the
assets) for the period from the Distribution Date to the Charitable Transfer
Date (the "Earnings Period"), net of a proportionate share of related investment
fees, expenses and any taxes incurred by the Ralston Purina Charitable Fund for
the Earnings Period. The earnings rate (which may be positive or negative)
shall be the investment rate of return on the assets of the Ralston Purina
Charitable Fund during the Earnings Period, as determined by the Ralston
Trustee.
Energizer shall cause the Energizer Charitable Foundation to assume, as of the
Distribution Date, the obligation to pay certain pledge commitments of the
Ralston Purina Charitable Fund as set forth in Schedule 2.07; provided however,
that the present value as of the Distribution Date, as determined by the Ralston
Trustee, of such pledge commitments assumed by the Energizer Charitable
Foundation shall be no greater than the Charitable Transfer Amount. Energizer
shall timely notify, or shall cause the Energizer Charitable Foundation to
timely notify, in writing the recipients of such pledge commitments of its
assumption of such obligations from the Ralston Purina Charitable Fund. Any
pledge commitments entered into by the Energizer Charitable Foundation
subsequent to the Distribution Date shall be the sole obligation of the
Energizer Charitable Foundation and shall not be satisfied prior to the
Charitable Transfer Date with any assets held by the Ralston Purina Charitable
Fund on behalf of the Energizer Charitable Foundation. The Energizer Charitable
Foundation shall have no obligation to assume or satisfy any pledge commitment
of the Ralston Purina Charitable Fund that arises subsequent to the Distribution
Date other than those set forth in Schedule 2.07.
(b) If any of the pledge commitments assumed by the Energizer
Charitable Foundation as set forth on Schedule 2.07 become due and payable prior
to the Charitable Transfer Date, the Ralston Purina Charitable Fund shall
satisfy such pledge commitments on behalf of the Energizer Charitable Foundation
and the Charitable Transfer Amount shall be reduced by the amount of such pledge
commitments paid by the Ralston Purina Charitable Fund. As used herein, a
"pledge commitment" shall mean any commitment of the Ralston Purina Charitable
Fund to make a contribution of cash or other property or services for a purpose
described in Code Section 170(c)(2)(B). Contributions received by the Ralston
Purina Charitable Fund subsequent to the Distribution Date shall be the sole
property of the Ralston Purina Charitable Fund and shall not be considered
assets subject to transfer under this Agreement. Contributions received by the
Energizer Charitable Foundation subsequent to the Distribution Date shall be the
sole property of the Energizer Charitable Foundation.
Notwithstanding the foregoing, the transfer of assets and the assumption of
pledge commitments described in subparagraph (a) (the "Charitable Transfer")
shall be conditioned upon the following: (i) the consummation of the
Distribution as contemplated under this Agreement; (ii) the receipt of a
determination letter from the Internal Revenue Service that the Energizer
Charitable Foundation, and any successor to the Ralston Purina Charitable Fund
if its formation is necessary to consummate the Charitable Transfer (the
"Ralston Successor Fund"), is exempt under Code Section 501(c)(3); (iii) the
receipt by Ralston of a private letter ruling from the Internal Revenue Service
(A) determining whether the Charitable Transfer imposes any "expenditure
responsibility" on Ralston or the Ralston Charitable Fund pursuant to Code
Section 4945; and (B) holding that the Charitable Transfer does not violate the
Code Section 501(c)(3) exemption of the Ralston Purina Charitable Fund or the
Ralston Successor Fund, nor result in any taxes under Code Section 507 or
Chapter 42 of the Code; and (iv) the execution by the Ralston Charitable Fund
and the Energizer Charitable Foundation of a grant agreement satisfactory to
Ralston, to the extent required under Code Section 4945. Ralston and Energizer
shall cooperate fully and use their best efforts to satisfy the conditions of
the Charitable Transfer. Ralston and Energizer shall, and shall cause each
member of the Ralston Group and Energizer Group, respectively, to refrain from
taking any action which would adversely impact the receipt of any favorable
ruling or determination letter obtained from the IRS or the continued validity
of such ruling or letter as contemplated in this subparagraph (b).
(c) Energizer shall cause the Energizer Charitable Foundation to
cooperate fully and take all steps necessary as requested by the Ralston
Charitable Fund to satisfy any "expenditure responsibility" Ralston or the
Ralston Charitable Fund may retain with respect to the Energizer Charitable
Foundation, in accordance with Code Section 4945. Ralston and Energizer shall
if feasible structure the Charitable Transfer in a manner that will minimize any
and all costs related to the Charitable Transfer, including any taxes imposed by
Code Section 507(c) and Chapter 42 of the Code.
ARTICLE III
THE DISTRIBUTION
3.01 Record Date and Distribution Date. Subject to the satisfaction of
---------------------------------
the conditions set forth in Section 12.01, the Ralston Board shall establish the
Record Date and the Distribution Date and any appropriate procedures in
connection with the Distribution. The determination of record holders of
Ralston Stock on the Record Date shall be as of the close of business on March
31, 2000, and the Distribution shall be effective as of 12:01 a.m. on the
Distribution Date.
3.02 Distribution. Ralston shall distribute all of the outstanding
------------
shares of Energizer Stock to holders of record of Ralston Stock on the Record
Date on the basis of one share of Energizer Stock for each three shares of
Ralston Stock outstanding as of 12:01 a.m. on the Distribution Date, subject to
the treatment of fractional shares set forth in Section 3.03. All shares of
Energizer Stock issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
3.03 Payment in Lieu of Fractional Shares. No fractional shares of
----------------------------------------
Energizer Stock shall be issued in the Distribution. In lieu thereof, a
distribution agent will aggregate fractional shares into whole shares and sell
them in the open market at then prevailing prices on behalf of holders who
otherwise would be entitled to receive fractional share interests, and such
distribution agent shall remit to each holder of Ralston Stock who would
otherwise be entitled to receive such fractional shares a cash payment equal to
such holder's pro rata share of the total gross sale proceeds (after making
appropriate deductions of the amount required to satisfy legal requirements).
Ralston shall bear the cost of commissions incurred in connection with such
sales.
ARTICLE IV
INDEMNIFICATION
4.01 Indemnification.
---------------
(a) From and after the Distribution Date, Ralston agrees to indemnify and
hold harmless Energizer against and in respect of any and all Liabilities
assumed or retained by Ralston pursuant to Section 2.04(b) of this Agreement
and/or related to, arising from, or associated with:
(i) any breach or violation of any covenant made in this Agreement or
any Ancillary Agreement by Ralston or any of its Affiliates;
(ii) any Third-Party Claim relating to the actions of the Ralston Board
in authorizing the Distribution;
(iii) the ownership, use or possession of the Ralston Assets or the
operation of the Ralston Business or Former Ralston Businesses, whether relating
to or arising out of occurrences prior to or after the Distribution, except to
the extent liability therefor is specifically assumed or retained by Energizer
or another member of the Energizer Group pursuant to Section 2.04(b) of this
Agreement; and all operations conducted by Ralston, its successors and their
Affiliates following the Distribution.
(iv) with respect to the operation or administration of Plans by
Ralston Employees, Former Ralston Employees or agents of Ralston or the Ralston
Business, Ralston's failure to comply with the provisions of a Plan or
applicable laws and regulations prior to or after the Distribution;
(v) any violations of the Code, or of federal or state securities laws,
in connection with the Distribution, the Information Statement and Form 10 or
any filings made with governmental agencies with respect thereto, except to the
extent that such violations, or allegations of violations, result from or are
related to the disclosure to Ralston's corporate staff of information, or
failure to disclose information, by officers, directors, employees, agents,
consultants or representatives of the Battery Business; and
(vi) any activity (other than the Charitable Transfer as
described in Section 2.07), operation, expenditure, distribution, act or
failure to act by the Ralston Purina Charitable Fund prior to the Charitable
Transfer, including any transferee or similar liability. Such indemnification
for any and all costs and expenses shall include any tax, penalty, interest or
litigation expense that may be incurred by or imposed on Energizer or
the Energizer Charitable Foundation.
Any indemnification provided for under this Section shall, to the extent legally
permissible, also be deemed to extend to other members of the Energizer Group,
Affiliates, Energizer Charitable Foundation, Energizer Employees, directors,
Plan fiduciaries, shareholders, agents, consultants, representatives,
successors, transferees and assigns of Energizer or members of the Energizer
Group.
(b) From and after the Distribution Date, Energizer agrees to indemnify
and hold harmless Ralston against and in respect of all Liabilities assumed or
retained by Energizer or another member of the Energizer Group pursuant to
Section 2.04(b) of this Agreement and/or related to, arising from, or associated
with:
(i) any breach or violation of any covenant made in this Agreement or
any Ancillary Agreement by Energizer or any of its Affiliates;
(ii) the ownership, use or possession of the Energizer Assets or the
operation of the Battery Business or Former Battery Businesses, whether relating
to or arising out of occurrences prior to or after the Distribution, except to
the extent liability therefor is specifically assumed or retained by Ralston or
another member of the Ralston Group pursuant to Section 2.04(b) of this
Agreement; and all operations conducted by Energizer, its successors and their
Affiliates following the Distribution;
(iii) with respect to the operation or administration of Plans by
Energizer Employees, Former Energizer Employees or agents of Energizer or the
Battery Business, Energizer's failure to comply with the provisions of a Plan or
applicable laws and regulations prior to or after the Distribution;
(iv) any violation or allegations of violations of federal or state
securities laws in connection with the Distribution, the Information Statement
and Form 10 or any filings made with governmental agencies with respect thereto,
to the extent that such violations, or allegations of violations, result from or
are related to, the disclosure to Ralston's corporate staff of information, or
failure to disclose information, by officers, directors, employees, agents,
consultants or representatives of the Battery Business;
(v) any and all obligations and Liabilities of Ralston (other than
certain fees set forth in Section 12.04) related to, or arising in connection
with, Energizer's establishment of a $175 million private placement of unsecured
notes, Ralston's and Energizer's establishment of a $450 million bank
syndication credit facility and Energizer's establishment of a $200 million
credit facility for the purpose of selling, on a revolving basis, undivided
ownership interest in accounts receivable of the Battery Business;
(vi) the Charitable Transfer, as described in Section 2.07 hereunder,
including any taxes imposed by Code Sections 170, 507(c), or Chapter 42 of the
Code, any penalty, interest or litigation expense that may be incurred by or
imposed on Ralston, the Ralston Purina Charitable Fund or Successor Fund,
including, without limitation, costs arising as a result of (i) the Ralston
Purina Charitable Fund's retaining expenditure responsibility with respect to
such assets; (ii) Ralston's status as a "substantial contributor" with respect
to the Energizer Charitable Foundation in accordance with Code Section 507;
(iii) the Charitable Transfer's being treated as a "significant disposition of
assets" under Code Section 507, and (iv) any failure of the Energizer Charitable
Foundation to satisfy the pledge commitments assumed from the Ralston Purina
Charitable Fund;
(vii) any occurrence, conduct or action of or involving Energizer,
any member of the Energizer Group, Energizer Affiliates, Energizer Indivi-
duals, directors, Plan fiduciaries, shareholders, agents, consultants, represen-
tatives, successors, transferees or assigns of Energizer or members of the
Energizer Group, which is alleged to constitute a breach or violation of
either Section 6.01 of the DuPont Agreement, or Section 5.01 of the Agree-
ment and Plan of Reorganization dated as of April 1, 1998 by and between Ral-
ston and Agribrands International, Inc; and
(viii) any Liabilities of Ralston arising out of any amendments which
may be adopted by Energizer or its Affiliates, as permitted under Section 7.18
of this Agreement, with respect to Plans affecting Energizer Individuals.
Any indemnification provided for under this Section shall, to the extent
legally permissible, also be deemed to extend to other members of the Ralston
Group, Affiliates, Ralston Employees, directors, Plan fiduciaries, the Ralston
Charitable Fund, shareholders, agents, consultants, representatives, successors,
transferees and assigns of Ralston or members of the Ralston Group.
(c) For purposes of this Section 4.01, an Energizer Employee or Former
Energizer Employee shall be considered an agent of Ralston or the Ralston
Business only if such individual acted pursuant to direction from a person who,
at the time of the direction, was an employee of the Ralston Business (including
employees of the corporate division of Ralston). A Ralston Employee or Former
Ralston Employee shall be considered an agent of Energizer or the Battery
Business only if such individual acted pursuant to direction from a person who,
at the time of the direction, was an employee of the Battery Business.
(d) Except with respect to Liabilities subject to Section 4.01(b)(vii), a
party shall have no right to indemnification under this Article IV until the
cumulative aggregate dollar amount of all Liabilities to which this Article
applies equals or exceeds US$250,000 with respect to such party. Liabilities of
any amount shall be included in the computation of the cumulative aggregate
dollar amount of Liabilities, but, except with respect to Liabilities subject to
Section 4.01(b)(vii), neither party shall be entitled to indemnification for any
single Liability of less than US$25,000. Energizer shall indemnify and hold
harmless Ralston against and in respect of all Liabilities subject to Section
4.01(b)(vii), regardless of the amount or nature thereof.
4.02 Actions and Claims Other Than Third-Party Claims; Notice and
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Payment. Upon obtaining knowledge of any Action, Liability or claim, other than
Third-Party Claims, which any Person entitled to indemnification (the
"Indemnitee") believes may give rise to any Indemnifiable Loss, the Indemnitee
shall promptly notify the party liable for such indemnification (the
"Indemnitor") in writing of such Action or claim (such written notice being
hereinafter referred to as a "Notice of Claim"); provided, however, that failure
of an Indemnitee timely to give a Notice of Claim to the Indemnitor shall not
release the Indemnitor from its indemnity obligations set forth in this Article
IV except to the extent that such failure increases the amount of
indemnification which the Indemnitor is obligated to pay hereunder, in which
event the amount of indemnification which the Indemnitee shall be entitled to
receive shall be reduced to an amount which the Indemnitee would have been
entitled to receive had such Notice of Claim been timely given. A Notice of
Claim shall specify in reasonable detail the nature and estimated amount of any
such Action, Liability or claim giving rise to a right of indemnification. The
Indemnitor shall have ninety (90) Business Days after receipt of a Notice of
Claim to notify the Indemnitee whether or not it disputes its liability to the
Indemnitee with respect to such Action, Liability or claim or the amount
thereof, and setting forth the basis for such objection. If the Indemnitor
fails to respond to the Indemnitee within such ninety (90) Business Day period,
the Indemnitor shall be deemed to have acknowledged its responsibility for such
Indemnifiable Loss. If such Indemnifiable Loss is not contested, the Indemnitor
shall pay and discharge any such Indemnifiable Loss within one hundred twenty
(120) Business Days after its receipt of a Notice of Claim.
4.03 Insurance and Third-Party Obligations.
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(a) Any indemnification otherwise payable pursuant to Section 4.01 shall
be reduced by the amount of any insurance or other amounts (net of deductibles
and allocated paid loss retro-premiums) that would be payable by any third party
to the Indemnitee or on the Indemnitee's behalf in the absence of this
Agreement. It is expressly agreed that no insurer or any other third party
shall be (i) entitled to a benefit it would not be entitled to receive in the
absence of the foregoing indemnification provisions, (ii) relieved of the
responsibility to pay any claims for which it is obligated, or (iii) entitled to
any subrogation rights with respect to any obligation hereunder.
(b) Ralston hereby assigns to Energizer any amounts payable to Ralston or
a member of the Ralston Group under any property or casualty insurance policy to
the extent that such amounts relate to claims associated solely with the Battery
Business or the Energizer Assets. To the extent any further documentation or
instruments are reasonably requested by Energizer to effect such assignment,
Ralston agrees to promptly execute the same. Ralston agrees to take all other
actions reasonably requested by Energizer to timely pursue Energizer's rights
and remedies under such policies, and Energizer shall bear any costs associated
with such actions.
4.04 Third-Party Claims; Notice, Defense and Payment. Promptly
----------------------------------------------------
following the earlier of (i) receipt of notice of the commencement of a
Third-Party Claim or (ii) receipt of information from a third party alleging the
existence of a Third-Party Claim, any Indemnitee who believes that it is or may
be entitled to indemnification by any Indemnitor under Section 4.01 with respect
to such Third-Party Claim shall deliver a Notice of Claim to the Indemnitor.
Failure of an Indemnitee timely to give a Notice of Claim to the Indemnitor
shall not release the Indemnitor from its indemnity obligations set forth in
this Section 4.04 except to the extent that such failure adversely affects the
ability of the Indemnitor to defend such Action, Liabilities or claim or
increases the amount of indemnification which the Indemnitor is obligated to pay
hereunder, in which event the amount of indemnification which the Indemnitee
shall be entitled to receive shall be reduced to an amount which the Indemnitee
would have been entitled to receive had such Notice of Claim been timely given.
Indemnitee shall not settle or compromise any Third-Party Claim in an amount in
excess of US$25,000 prior to giving a Notice of Claim to Indemnitor at least
twenty (20) Business Days in advance of such settlement. In addition, if an
Indemnitee settles or compromises any Third-Party Claims prior to giving such
Notice of Claim to an Indemnitor, the Indemnitor shall be released from its
indemnity obligations to the extent that the Indemnitor can sustain the burden
of proving that such settlement or compromise was not made in good faith and was
not commercially reasonable. Within ninety (90) days after receipt of such
Notice of Claim (or sooner if the nature of such Third-Party Claim so requires),
the Indemnitor may (A) by giving written notice thereof to the Indemnitee,
acknowledge liability for, and at its option elect to assume, the defense of
such Third-Party Claim at its sole cost and expense or (B) object to the claim
of indemnification set forth in the Notice of Claim delivered by the Indemnitee;
provided that if the Indemnitor does not within the same ninety (90) day period
give the Indemnitee written notice either objecting to such claim and setting
forth the grounds therefor or electing to assume the defense, the Indemnitor
shall be deemed to have acknowledged its responsibility to accept the defense
and its ultimate liability, if any, for such Third-Party Claim.
Any contest of a Third-Party Claim as to which the Indemnitor has elected to
assume the defense shall be conducted by attorneys employed by the Indemnitor
and reasonably satisfactory to the Indemnitee; provided that the Indemnitee
shall have the right to participate in such proceedings and to be represented by
attorneys of its own choosing at the Indemnitee's sole cost and expense. If the
Indemnitor assumes the defense of a Third-Party Claim, the Indemnitor may settle
or compromise the Third-Party Claim without the prior written consent of
Indemnitee only if such settlement or compromise involves the payment of
monetary damages for which the Indemnitor alone shall be responsible. If such
settlement or compromise involves any legal or equitable remedy or relief to be
applied against the Indemnitee, or any change or compromise to any contractual
or other rights of the Indemnitee, then such settlement or compromise shall only
be effected with the prior written consent of the Indemnitee, which consent
shall not be unreasonably withheld.
If the Indemnitor does not assume the defense of a Third-Party Claim for which
it has acknowledged liability for indemnification under Section 4.01, the
Indemnitee may require the Indemnitor to reimburse it on a current basis for its
reasonable expenses of investigation, reasonable attorney's fees and reasonable
out-of-pocket expenses incurred in defending against such Third-Party Claim and
the Indemnitor shall be bound by the result obtained with respect thereto by the
Indemnitee, provided that the Indemnitor shall not be liable for any settlement
effected without its consent, which consent shall not be unreasonably withheld.
The Indemnitor shall pay to the Indemnitee in cash the amount for which the
Indemnitee is entitled to be indemnified (if any) within thirty (30) days after
the final resolution of such Third-Party Claim (whether by settlement, a final
nonappealable judgment of a court of competent jurisdiction or otherwise) or, in
the case of any Third-Party Claim as to which the Indemnitor has not
acknowledged liability, within thirty (30) days after such Indemnitor's
objection has been resolved by settlement, compromise or arbitration pursuant to
the provisions of Article XI of this Agreement.
4.05 Remedies Cumulative; Survival of Indemnities. The remedies
------------------------------------------------
provided in this Article IV shall be cumulative and shall not preclude assertion
by any Indemnitee of any other rights or the seeking of any and all other
remedies against any Indemnitor. The obligations of each of the Ralston Group
and the Energizer Group under this Article IV shall survive the sale or other
transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any claim of the other for any Indemnifiable Losses
related to such assets, businesses or Liabilities.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
5.01 Further Assurances. Each party hereto shall cooperate with the
-------------------
other parties, and execute and deliver, or use its best efforts to cause to be
executed and delivered, all instruments, including instruments of conveyance,
assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any governmental or regulatory
authority or any other Person under any permit, license, agreement, indenture or
other instrument, and take all such other actions as such party may reasonably
be requested to take by any other party hereto from time to time, consistent
with the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement and the transfers of Assets and Liabilities and the
other transactions contemplated hereby or in any of the Ancillary Agreements.
If any such transfer of Assets or Liabilities is not consummated prior to or on
the Distribution Date, then the party hereto retaining such Asset or Liability
shall thereafter hold such Asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto), or shall retain
such Liability for the account of the party by whom such Liability is to be
assumed pursuant hereto, as the case may be, and shall take such other action as
may be reasonably requested by the party to whom such Asset is to be
transferred, or by whom such Liability is to be assumed, as the case may be, in
order to place such party, insofar as reasonably possible, in the same position
as if such Asset or Liability had been transferred as contemplated hereby. If
and when any such Asset or Liability becomes transferable, such transfer shall
be effected forthwith. The parties hereto agree that, as of the Distribution
Date, each party hereto shall be deemed to have acquired complete and sole
beneficial ownership of all of the Energizer Assets, or Ralston Assets, as the
case may be, together with all rights, powers and privileges incident thereto,
and shall be deemed to have assumed in accordance with the terms of this
Agreement all of the Liabilities, and all duties, obligations and
responsibilities incident thereto, that such party is entitled to acquire or
required to assume pursuant to the terms of this Agreement.
5.02 Energizer Board. Prior to the Distribution Date, Energizer shall
----------------
take such actions as are necessary so that its Board of Directors is comprised
of those individuals named as directors in the Form 10.
5.03 Contractual Arrangements.
-------------------------
(a) Effective as of the Distribution Date, Ralston and Energizer shall
enter into a tax sharing agreement, substantially in the form attached to this
Agreement as Exhibit A ("Tax Sharing Agreement").
(b) Effective as of the Distribution Date, Ralston and Energizer shall
enter into a bridging services agreement, substantially in the form attached to
this Agreement as Exhibit B ("Bridging Services Agreement").
(c) Effective as of the Distribution Date, Ralston and Energizer shall
enter into an intellectual property agreement, substantially in the form
attached to this Agreement as Exhibit C ("IP Agreement").
(d) Effective as of the Distribution Date, Ralston and Energizer shall
enter into an Aircraft Agreement, substantially in the form attached to this
Agreement as Exhibit D.
5.04 Cash Management and Intercompany Accounts.
----------------------------------------------
(a) Through and including 12:01 a.m. local time on the Distribution
Date, Ralston and Energizer shall continue to employ cash management and other
business practices with respect to the Battery Business that are consistent with
those practices historically employed.
(b) Except as otherwise provided on Schedule 5.04(b)(1), all bank
accounts used exclusively in the Battery Business, and the balances therein
existing as of 12:01 a.m. local time on the Distribution Date, shall be
transferred to, or retained by, members of the Energizer Group effective as of
the Distribution Date. All bank accounts used exclusively in the Ralston
Business, and the balances therein existing as of 12:01 a.m. local time on the
Distribution Date, shall be transferred to, or retained by, members of the
Ralston Group effective as of the Distribution Date. Each party shall promptly
pay to the other any amounts collected by it following the Distribution through
any of its accounts, to the extent any of such amounts collected relate
exclusively to the Business of the other party.
(c) All intercompany services provided by the Ralston Business to the
Battery Business , and vice versa, shall terminate as of the Distribution Date
unless otherwise provided in the Bridging Services Agreement or any other
Ancillary Agreement. Effective as of the close of business on March 31, 2000,
all intercompany receivables or payables and loans then existing between any
member of one Group and any member of the other Group shall be forgiven, except
that trade receivables or payables arising out of intercompany sales of
inventories or other tangible goods, and claims between any member of the
Energizer Group and Checkerboard Insurance Company, shall be settled in the
normal course of business.
ARTICLE VI
ACCESS TO INFORMATION
6.01 Provision of Corporate Records. Subject to the terms of the
---------------------------------
Ancillary Agreements, prior to, or as promptly as practicable after, the
Distribution Date, Ralston shall deliver to Energizer, and Energizer shall
deliver to Ralston, all corporate books and records pertaining to the other
party's Business that each has in its possession. The parties shall also make
available for copying or, to the extent not detrimental, in the reasonable
opinion of the party in possession of the materials, to such party's interests,
originals of all books, records and data reasonably related to the Assets, the
Battery Business, and the Liabilities assumed or retained by the party
requesting such materials, including, but not limited to, all books, records and
data relating to the purchase of materials, supplies and services, financial
results, sale of products, records of the applicable Energizer or Ralston
Individuals, commercial data, catalogues, brochures, training and other manuals,
sales literature, advertising and other sales and promotional materials,
maintenance records and drawings, all active agreements, active litigation files
and government filings. To the extent that originals of such books, records and
data are provided to Energizer by Ralston or vice versa, the party to which the
originals are given shall provide to the other party copies thereof as
reasonably requested in writing.
Each party shall provide such copies of all books, records and data only to the
extent that such action is not prohibited by the terms of any agreements
pertaining to such information or is not prohibited by law. From and after the
Distribution Date, all books, records and copies so delivered shall be the
property of the party to which they were given. Notwithstanding the above,
neither party shall be required to make copies, other than pursuant to Section
6.02 of this Agreement, of any books, records and data which are more than seven
years old or which relate to events occurring more than seven (7) years prior to
the Distribution Date.
6.02 Access to Information. From and after the Distribution Date,
-----------------------
Ralston and Energizer shall afford, to the other and to the other's agents,
employees, accountants, counsel and other designated representatives, reasonable
access and duplicating rights during normal business hours to all records,
books, contracts, instruments, computer data and other data and information
("Information") within such party's possession relating to such other party's
businesses, assets or liabilities, insofar as such access is reasonably required
by such other party. Without limiting the foregoing, such Information may be
requested under this Section 6.02 for audit, accounting, claims, litigation and
tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations.
6.03 Retention of Records. Except as otherwise required by law or
----------------------
agreed in writing, or as otherwise provided in the Tax Sharing Agreement,
Ralston and Energizer shall retain, for a period of at least seven (7) years
following the Distribution Date, all significant Information in such party's
possession or under its control relating to the Business, Assets or Liabilities
of the other party and, after the expiration of such seven-year period, prior to
destroying or disposing of any of such Information, (i) the party proposing to
dispose of or destroy any such Information shall provide no less than 30 days'
prior written notice to the other party, specifying the Information proposed to
be destroyed or disposed of, and (ii) if, prior to the scheduled date for such
destruction or disposal, the other party requests in writing that any of the
Information proposed to be destroyed or disposed of be delivered to such other
party, the party proposing to dispose of or destroy such Information promptly
shall arrange for the delivery of the requested Information to a location
specified by, and at the expense of, the requesting party.
6.04 Confidentiality. From and after the Distribution Date, each Group
---------------
shall hold, in strict confidence, all Information obtained from the other Group
prior to the Distribution Date or furnished to it pursuant to this Agreement or
any other agreement referred to herein which relates to or concerns the business
conducted by such other Group, and such Information shall not be used by it to
the detriment of the other Group, or disclosed by it or its agents, officers,
employees or directors without the prior written consent of such other Group
unless and to the extent that:
(a) disclosure is compelled by judicial or administrative process or, in
the opinion of such Group's counsel, by other requirements of law; or
(b) such Group can show that such Information was:
(i) available to such Group on a nonconfidential basis prior to its dis-
closure by the other Group,
(ii) in the public domain through no fault of such Group,
(iii) lawfully acquired by such Group from other sources after the time
that it was furnished to such Group pursuant to this Agreement or any other
agreement referred to herein, or
(iv) independently developed by such Group.
Notwithstanding the foregoing, each Group shall be deemed to have satisfied its
obligations of confidentiality under this Section 6.04 with respect to any
Information concerning or supplied by the other Group if it exercises
substantially the same care with regard to such Information as it takes to
preserve confidentiality for its own similar Information.
6.05 Reimbursement. Each member of any Group providing Information
-------------
pursuant to Sections 6.02 or 6.03 to any member of the other Group shall be
entitled to receive from the recipient, upon presentation of an invoice
therefor, payment in U. S. dollars of all out-of-pocket costs and expenses as
may reasonably be incurred in providing such Information.
ARTICLE VII
EMPLOYEE MATTERS
7.01 Employee Liabilities; Continuation of Employment.
-----------------------------------------------------
After the Distribution, except as otherwise specifically provided for in
this Agreement and Plan of Reorganization, the Energizer Group shall be
responsible for all employment and benefit liabilities related to the Energizer
Individuals, and the Ralston Group shall be responsible for all employment and
benefit liabilities related to the Ralston Individuals, whether arising before,
coincident with or after the Distribution. Ralston and Energizer shall cause
each member of their respective Groups to cooperate with the members of the
other's Group to effect, as soon as practicable in a cost-effective manner, the
transfer of employment, where applicable, of Energizer Employees and Ralston
Employees to the appropriate Affiliate of either Group.
7.02 Ralston Purina Retirement Plan.
---------------------------------
(a) Effective as of the Distribution Date, Energizer shall take, or
cause to be taken, all actions necessary and appropriate to establish, effective
as of the Distribution Date, an Energizer Retirement Plan and trust intended to
qualify under Sections 401(a) and 501(a) of the Code, respectively, and to
provide benefits thereunder for all Energizer Individuals who, on the
Distribution Date, were participants in the Ralston Retirement Plan. All
liabilities for benefits accrued for Energizer Individuals under the Ralston
Retirement Plan shall be transferred to the Energizer Retirement Plan, the terms
of which will be substantially the same as those of the Ralston Retirement Plan
in respect of the Energizer Individuals. Such transfer and assumption of
liabilities shall be consistent with the spin-off of the Ralston Retirement
Plan, in accordance with Code Section 414(l) and the regulations thereunder.
The Energizer Retirement Plan shall give the Energizer Employees credit, for
purposes of eligibility, vesting and benefit accrual, for service on or prior to
the Distribution Date, to the extent such service was recognized under the
Ralston Retirement Plan. As soon as practicable after the Distribution Date,
Ralston shall cause the trustee of the Ralston Retirement Plan to transfer, in
one or more installments, to the trustee of the Energizer Retirement Plan, in
accordance with Sections 7.02(c) and (e) below, an amount in cash and other
liquid assets held in the trust equal to the following, adjusted as applicable
pursuant to Section 7.02(d) below (the "Transfer Amount"):
(i) the Projected Benefit Obligation ("PBO"), as defined in Financial
Accounting Standards 87, attributable to pension benefits (other than
PensionPlus Match Accounts) developed as of the Distribution Date with re-
spect to the Energizer Individuals under the Ralston Retirement Plan; plus
(ii) amounts credited to the PensionPlus Match Accounts as
developed for Energizer Individuals as of the Distribution Date; plus
(iii) a pro rata share of the assets, with a market value determined as of
March 31, 2000, of the Ralston Retirement Plan in excess of the assets
required to fund the PBO and PensionPlus Match Accounts developed for all
participants and beneficiaries in the Ralston Retirement Plan (the "Surplus
Assets"), such share of the Surplus Assets to be apportioned and
transferred to the Energizer Retirement Plan in the same proportion as the
PBO liabilities and the amounts credited to the PensionPlus Match Accounts,
developed for Energizer Individuals as of March 31, 2000, bear to the PBO
liabilities and the amounts credited to the PensionPlus Match Accounts
developed for all participants in the Ralston Retirement Plan as of
March 31, 2000; plus
(iv) interest with respect to each installment of the Transfer Amount
based on the investment rate of return of the assets of the Ralston Retirement
Plan from the Distribution Date to the actual transfer date, net of invest-
ment fees and expenses for that period; less
(v) the amount of benefits paid by the Ralston Retirement Plan to
Energizer Individuals between the Distribution Date and the date Plan
assets are transferred.
Calculations of PBO shall be made in accordance with terms of the Ralston
Retirement Plan, established administrative procedures and the economic
assumptions used by Ralston as of September 30, 1999 under FAS 87 (including a
discount rate of 7.00%) and the non-economic assumptions (including rates of
mortality, retirement, termination and disability) as set forth in Schedule B to
the 1999 Form 5500 for the Ralston Retirement Plan. For purposes of determining
the Transfer Amount, the PBO liability and the PensionPlus Match Accounts shall
be developed as of March 31, 2000 by calculating and measuring those amounts as
of October 1, 1999 on the basis described above - reflecting participant
information gathered as of October 1, 1999 as adjusted to reflect the transfer
of participants between the Energizer Business and the Ralston Business during
the period October 1, 1999 through March 31, 2000 - and projecting those amounts
forward to March 31, 2000. The projecting of the PBO liability shall take into
consideration (a) the additional liability attributable to benefits earned by
active participants in the Ralston Retirement Plan during the period October 1,
1999 through March 31, 2000 (as represented by 50% of the annual Service Cost -
as defined under FAS 87 - developed as of October 1, 1999); (b) the interest
accumulated on the liability during that six month period (as represented by 50%
of the annual Interest Cost - as defined under FAS 87 - developed using the PBO
calculated as of October 1, 1999 and reflecting the 7.00% discount rate
indicated above); and (c) the aggregate benefit payments anticipated to be
received during the six month period by all retirees reported as of October 1,
1999. The PensionPlus Match Accounts shall be projected to March 31, 2000 for
all participants by increasing the PensionPlus Match Account balances - measured
as of October 1, 1999 - by (a) six months of interest credited at a rate of
6.00% per annum; and (b) six months of anticipated contributions to the accounts
developed by assuming that the participants' after-tax supplemental
contributions to the Ralston SIP - measured as of October 1, 1999 - will remain
constant over the projection period and reflecting 50% of the participants' last
full calendar year of pensionable compensation collected as of October 1, 1999.
In no event will the Transfer Amount, as calculated pursuant to this Section
7.02(a) and, if applicable, adjusted pursuant to Section 7.02(d), be less than
the present value, determined in accordance with Section 417 of the Code, of
benefits of the Energizer Individuals accrued as of the Distribution Date, as
determined based on the actuarial assumptions of the Ralston Retirement Plan and
in compliance with Section 414(l) of the Code.
(b) No changes in the status of any Energizer Individual between the
Distribution Date and the date or dates funds are actually transferred pursuant
to this Section 7.02 shall affect the Transfer Amount to be calculated
hereunder.
(c) An initial portion of the Transfer Amount (the "Initial Transfer
Amount") shall be transferred to the trustee of the Energizer Retirement Plan as
soon as practicable after the expiration of the thirty-day waiting period
required by section 6058(b) of the Code. The transfer shall be conditioned upon
completion of the following items:
(i) Ralston's receipt of an opinion of counsel retained by Energi-
zer and reasonably satisfactory in form and substance to Ralston to the
effect that the Energizer Retirement Plan is a Qualified Plan and that the
trust established under such Plan is intended to be exempt from taxation under
Section 501(a) of the Code;
(ii) Ralston's filing with the Internal Revenue Service the notice
required by Section 6058(b) of the Code.
(d) Notwithstanding the foregoing Section 7.02(a), if an apportionment
of pension assets, including pension surplus, is not made with respect to the
Ralston Canadian Pension Plan and/or the Energizer/Ralston UK Pension Plan, as
defined below, in a manner similar to that described with respect to the Ralston
Retirement Plan, then the Transfer Amount shall be increased or decreased, as
applicable, in an amount equal to the value of such excess or shortfall in
allocation of surplus assets in those Plans effective as of the date the parties
mutually agree on the amount of such excess or shortfall. The equivalent value
of US and applicable Canadian or United Kingdom currencies shall be determined
in accordance with Section 2.04(i).
(e) The parties shall cooperate in transferring the final installment
or installments of the Transfer Amount as soon as practicable. The final
installment of the Transfer Amount shall be made when it has been determined to
the reasonable satisfaction of both parties.
(f) Upon completion of the transfers of such assets and liabilities,
the Ralston Retirement Plan and the Ralston Group shall have no further
liability therefor with respect to the Energizer Individuals.
7.03 Certain International Pension Plans.
--------------------------------------
(a) Canadian Pension Plans. Effective as of the Distribution Date,
subject to the transfer of assets referred to below, the Energizer Employees
participating in the registered pension plan sponsored by Ralston Purina Canada
Inc. (the "Ralston Canadian Pension Plan") shall cease to accrue benefits under
such Plan, and all liabilities for benefits accrued by Energizer Individuals as
of such Distribution Date shall be transferred to a new pension plan (the
"Energizer Canadian Pension Plan") established by Energizer Canada Inc., an
Affiliate of Energizer, the terms of which will be substantially the same as
those of the Ralston Canadian Pension Plan in respect of the Energizer
Individuals. The Energizer Canadian Pension Plan shall give the Energizer
Employees credit, for purposes of eligibility, vesting and benefit accrual, for
service on or prior to the Distribution Date, to the extent such service was
recognized under the Ralston Canadian Pension Plan.
Ralston shall, as soon as practicable after the receipt of all requisite
governmental and other approvals and consents referred to below, cause Ralston
Purina Canada Inc. to transfer from the Ralston Canadian Pension Plan to the
Energizer Canadian Pension Plan an amount of assets (the "Canadian Transfer
Amount") determined in accordance with the following formula:
(i) the fair market value of the assets attributable to the defined
benefit portion of the Ralston Canadian Pension Plan, determined as at March
31, 2000, shall be multiplied by a fraction, the numerator of which
shall be:
(A) the present value of defined benefits accrued by the Energizer Indivi-
duals under the Ralston Canadian Pension Plan as of March 31, 2000 determined
as the greater of the going concern or solvency liabilities in accordance with
Ralston Canadian Pension Plan documents and actuarial assumptions and methods
used in the last filed actuarial report, adjusted as necessary to com-
ply with legislation and the requirements of regulatory authorities ("Canadian
Energizer Defined Benefit Liabilities");
and the denominator of which shall be:
(B) the present value of defined benefits accrued by all members and
former members (including without limitation the Energizer Individuals)
under the Ralston Canadian Pension Plan as of March 31, 2000 determined on the
same basis as the Canadian Energizer Defined Benefit Liabilities;
(ii) investment gains and losses on the amount determined in clause
7.03(a)(i) above shall accrue based on the investment rate of return of the
assets of the Ralston Canadian Pension Plan from the Distribution Date to the
actual transfer date, net of investment fees and expenses for such period;
and
(iii) the amount of benefits paid by the Ralston Canadian Pension Plan
to Energizer Individuals between the Distribution Date and the date the Cana-
dian Transfer Amount is transferred shall be deducted from the aggregate
amount determined in accordance with clauses 7.03(a)(i) and 7.03(a)(ii)
above.
Such transfer shall be conditioned upon receipt of, and subject to, all
requisite governmental and other approvals and consents and if a different
Canadian Transfer Amount is required by applicable regulatory authorities, an
adjustment to the Canadian Transfer Amount will be made. Upon completion of the
transfer of such assets and liabilities, the Ralston Canadian Pension Plan and
the Ralston Group shall have no further liability for pension benefits for the
Energizer Individuals.
(b) United Kingdom Pension Plans. Effective as of the date of transfer
of the UK Transfer Amount as described below, the Ralston Individuals
participating in the pension plan offered by Ralston Trust Limited (the
"Energizer/Ralston UK Pension Plan") shall cease to accrue benefits under such
Plan, and all liabilities for benefits accrued by such Individuals as of such
date shall be transferred to a new pension plan (the "New Ralston UK Pension
Plan") established by Purina Pension Trust Limited, an Affiliate of Ralston, the
terms of which are substantially the same as those currently enjoyed by such
Individuals under the Energizer/Ralston UK Pension Plan. The transfer date and
the contributions to be paid to the Energizer/Ralston UK Pension Plan in respect
of the Ralston Individuals between March 31, 2000 and the transfer date is to be
agreed upon by the parties to this Agreement. The New Ralston UK Pension Plan
shall give the Ralston Employees credit, for purposes of eligibility, vesting
and benefit accrual, for service on or prior to the transfer date, to the extent
such service was recognized under the Energizer/Ralston UK Pension Plan.
Ralston shall cause the Purina Pension Trust Limited to, as soon as practicable
after the receipt of all requisite governmental and other approvals and consents
referred to below, seek a transfer from the Energizer/Ralston UK Pension Plan to
the New Ralston UK Pension Plan of an amount of assets (the "UK Transfer
Amount") determined in accordance with the following formula:
(i) The fair market value of the assets of the Energizer/Ralston UK
Pension Plan, determined as at March 31, 2000, shall be multiplied by a frac-
tion ("the Transfer Fraction"), the numerator of which shall be:
(A) the present value of benefits accrued by the Ralston Individuals under
the Energizer/Ralston UK Pension Plan as of March 31, 2000 determined as the
greater of the going concern or solvency liabilities in accordance with
Energizer/Ralston UK Pension Plan documents and actuarial assumptions and
methods used in the last filed actuarial report, adjusted as necessary to comply
with legislation and the requirements of regulatory authorities ("Ralston
Individuals Liabilities");
and the denominator of which shall be:
(B) the present value of benefits accrued by all members and former
members (including without limitation the Ralston Individuals) under the
Energizer/Ralston UK Pension Plan as of March 31, 2000 determined on the same
basis as the Ralston Individuals Liabilities.
(ii) Assets transferred to the Energizer/Ralston UK Pension Plan af-
ter the Distribution Date, in connection with the pension arrangements ari-
sing out of the acquisition by Ralston of the Edward Baker Pet Foods business,
shall be valued at fair market value as of the date such assets are
received by the Energizer/Ralston UK Pension Plan, and multiplied by the
Transfer Fraction.
(iii) Investment gains and losses on the amounts determined in
clauses 7.03(b)(i) and 7.03(b)(ii) above shall accrue based on the investment
rate of return of the assets of the Energizer/Ralston UK Pension Plan from
(A) with respect to clause 7.03(b)(i), the Distribution Date to the actual
transfer date; and (B) with respect to clause 7.03(b)(ii), the date such assets
are received by the Energizer/Ralston UK Pension Plan to the transfer date,
and the return on both amounts is to be net of investment fees and expenses
for the applicable period.
(iv) The amount of benefits paid by the Energizer/Ralston UK Pension
Plan to Ralston Individuals between the Distribution Date and the date the UK
Transfer Amount is transferred shall be deducted from the aggregate amount de-
termined in accordance with clauses 7.03(b)(i) and 7.03(b)(ii) above.
The sum of amounts calculated pursuant to 7.03(b)(i) and 7.03(b)(ii), adjusted
as provided under 7.03(b)(iii) and 7.03(b)(iv), shall constitute the UK Transfer
Amount. Transfer of the UK Transfer Amount shall be conditioned upon receipt of,
and subject to, all requisite trustee, governmental and other approvals and
consents and, if a different UK Transfer Amount is required by applicable
regulatory and fiduciary authorities, an adjustment to the UK Transfer Amount
will be made. Upon completion of the transfer of such assets and liabilities,
the Energizer/Ralston UK Pension Plan and the Energizer Group shall have no
further liability for pension benefits for the Ralston Individuals. The parties
may by mutual agreement, subject to approval of applicable regulatory and
fiduciary authorities, effect such transfer in one or more installments, taking
into consideration the effect of an initial transfer of assets on the
continuation of benefit accruals by the Ralston Individuals in the
Energizer/Ralston UK Pension Plan.
(c) Other Foreign Funded Retirement Plans. With respect to other
foreign funded retirement Plans in which the sole participants are either
Energizer Individuals or Ralston Individuals, Energizer and Ralston shall
cooperate in taking such actions as are necessary or desirable to ensure that
each such Plan in which assets funding pension benefits for such Energizer or
Ralston Individuals are held is transferred to, or retained by, a member of the
Energizer Group or Ralston Group, as appropriate, and that the members of the
other Group shall have no liability related to such pension Plan thereafter.
7.04 Savings Investment Plan.
-------------------------
(a) Effective as of the Distribution Date, Energizer and its Affiliates
shall cease to be co-sponsors of the Ralston Purina Company Savings Investment
Plan ("Ralston SIP"). Energizer shall take, or cause to be taken, all necessary
and appropriate actions to establish, effective as of the Distribution Date, and
administer a defined contribution Plan which will be a Qualified Plan and which
will also be subject to Section 401(k) of the Code ("Energizer SIP"), and to
provide benefits thereunder for all Energizer Individuals who, immediately prior
to the Distribution Date, were participants in the Ralston SIP. Energizer
agrees that each such Energizer Individual shall be, to the extent applicable,
entitled, for all purposes under the Energizer SIP, to be credited with the term
of service and any account balance credited to such Energizer Individual as of
the Distribution Date under the terms of the Ralston SIP as if such service had
been rendered to the Energizer Group and as if such account balance had
originally been credited to such Energizer Individual under the Energizer SIP.
Ralston agrees to provide Energizer, as soon as practicable after the
Distribution Date (with the cooperation of Energizer to the extent that relevant
information is in the possession of the Energizer Group), with a list of the
Energizer Individuals who were, to the best knowledge of Ralston, participants
in the Ralston SIP immediately prior to the Distribution Date, together with a
listing, if requested by Energizer, of each such Energizer Individual's term of
service for eligibility and vesting purposes under such Plan and a listing of
each such Energizer Individual's account balance thereunder. Ralston shall, as
soon as practicable after the Distribution Date, provide Energizer with such
additional information (in the possession of the Ralston Group and not already
in the possession of the Energizer Group) as may be reasonably requested by
Energizer and necessary in order for Energizer to establish and administer
effectively the Energizer SIP.
The Energizer SIP receiving transfers of accounts from the Ralston SIP shall
contain an "Energizer Stock Fund", and Energizer Individuals for whom a portion
of the account balances are to be transferred to the Energizer SIP from the
Ralston SIP in the form of Energizer Stock, as described below, shall be
permitted to elect to retain their investment of that portion of their account
in the Energizer Stock Fund.
(b) Ralston shall, as soon as practicable following the Distribution
Date, direct the trustee of the Ralston Purina Company Savings Investment Trust
to transfer to the trustee of the Energizer SIP an amount equal to the account
balances credited to the Energizer Individuals as of the date of transfer. Such
transfer amount shall include cash, notes evidencing participant loans, shares
of Ralston Stock, and shares of Energizer Stock distributed with respect to
shares of Ralston Stock held in the Ralston SIP as of the Distribution, to the
extent allocated to accounts of Energizer Individuals. Such transfer shall be
consistent with and adjusted, if and to the extent necessary, to comply with
Section 414(l) of the Code and the regulations promulgated thereunder.
(c) In connection with the transfers described in Section 7.04(b),
Ralston and Energizer shall cooperate in making any and all appropriate filings
required under the Code or ERISA, and the regulations thereunder, and any
applicable securities laws and take all such action as may be necessary and
appropriate to cause such transfers to take place as soon as practicable after
the Distribution Date; provided, however, that each such transfer shall not take
place until as soon as practicable after the earlier of (i) the receipt of a
favorable IRS determination letter with respect to the qualification of the
Energizer SIP under Section 401(a) of the Code or (ii) the receipt by Ralston of
an opinion of counsel retained by Energizer and reasonably satisfactory in form
and substance to Ralston to the effect that the Plan is a Qualified Plan and
that the trust established thereunder is intended to be exempt from federal
income tax under Section 501(a) of the Code. Ralston and Energizer agree to
provide to such counsel such information in the possession of the Ralston Group
and the Energizer Group, respectively, as may be reasonably requested by such
counsel in connection with the issuance of such opinion.
(d) Except as specifically set forth in this Section 7.04, upon
completion of the transfers of assets and liabilities from the Ralston SIP to
the Energizer SIP, the Ralston SIP and the Ralston Group shall have no further
liability therefor with respect to the Energizer Individuals.
7.05 U.S. Welfare Plans
--------------------
(a) Except as otherwise specifically provided herein, Energizer shall
take, or cause to be taken, all actions necessary and appropriate on behalf of
itself and the Energizer Group to adopt such Welfare Plans ("Energizer Welfare
Plans") as necessary to provide, effective as of the Distribution Date, welfare
benefits to the Energizer Individuals substantially similar to those offered to
them prior to the Distribution Date. In connection with the foregoing, Ralston
agrees to provide Energizer or its designated representative with such
information (in the possession of the Ralston Group and not already in the
possession of the Energizer Group) as may be reasonably requested by Energizer
and necessary for the Energizer Group to establish any such Welfare Plan.
Energizer agrees to retain or, if Energizer or one of its Affiliates is not a
policyholder as of the Distribution Date, assume all rights and obligations,
including any Liabilities of Ralston, relating to life insurance benefits under
a Metropolitan Life insurance policy for Energizer Individuals who became
disabled between July 1, 1986 and December 31, 1987 while covered under such
policy.
(b) Except as otherwise noted in this Section 7.05, Energizer shall
cause the Energizer Welfare Plans to assume, or cause one or more members of the
Energizer Group to assume, and be solely responsible for, all welfare benefit
claims paid to Energizer Individuals on or after 12:01 a.m. on the Distribution
Date. The Ralston Welfare Plans shall retain liability for welfare benefit
claims paid to Energizer Individuals under the Ralston Welfare Plans before
12:01 a.m. on the Distribution Date.
With respect to Plans providing health benefits:
(i) all checks outstanding as of the Distribution in connection with
benefits paid through First Health for Energizer Individuals shall remain the
obligation of the Purina Health Plan;
(ii) all checks outstanding as of the Distribution in connection with
benefits paid through United Health Care for Energizer Individuals shall
be the obligation of the Energizer Plan offering health benefits; and
(iii) invoices received before the Distribution Date for dental
benefits received by Energizer Individuals shall remain the obligation of
the Purina Health Plan, and invoices received on or after the Distribution Date
for dental benefits received by Energizer Individuals shall be the
obligation of the Energizer Plan offering dental benefits.
(c) As of 12:01 a.m. on the Distribution Date, Energizer shall cease to
be a sponsoring employer of the Welfare Plans sponsored by Ralston. Energizer
Individuals will cease participating in Welfare Plans maintained by any member
of the Ralston Group, except for:
(i) any Energizer Individual who has timely elected or will timely
elect continued coverage under Ralston's health benefit Plans pursuant
to the Consolidated Omnibus Budget Reconciliation Act with respect to a
"qualifying event", as defined under such Act, that occurs on or prior to the
Distribution Date;
(ii) any Energizer Individual who elects to continue coverage under
the Partnership Life Plan as a terminated employee;
(iii) an Energizer Individual who is receiving installment disability
benefits as of the Distribution Date under the Group Life Plan;
(iv) an Energizer Individual who, under the Production Disability Plan
insured by Aetna, is receiving disability benefits as of the Distribution Date
or who after the Distribution Date is determined to be eligible to receive
benefits under the Plan because of a finding of disability that commenced
prior to the Distribution Date; and
(v) an Energizer Individual who is receiving benefits under the Long
Term Disability Plan insured by UNUM.
The parties shall cooperate in seeking and effecting the assignment to Energizer
or one of its Affiliates of all rights and obligations of Ralston under the UNUM
insurance policy described in Section 7.05(c)(v) above. In addition, the
parties agree that Energizer shall bear the cost of any Liabilities of Ralston
related to or arising out of the participation, on or after the Distribution
Date, by Energizer Individuals in the insured Welfare Plans of Ralston described
in this Section 7.05(b)(iii) and (iv); and, until such time as the insurance
contract is assigned to Energizer or one of its Affiliates, Section 7.05(b)(v).
(d) Subject to paragraph (b) above, Energizer and the Energizer Group
shall retain all liabilities for retiree medical and retiree life insurance
benefits with respect to Energizer Individuals, and no Energizer Individuals
shall be entitled to retiree medical and life insurance benefits from Welfare
Plans sponsored by Ralston and the Ralston Group after the Distribution Date.
For purposes of this Section 7.05, the distribution of ownership of the
Energizer Group to shareholders of Ralston Stock shall not be deemed a
termination of employment of Energizer Employees. As of the Distribution Date,
Energizer shall adopt an Energizer Executive Health Plan and an Energizer
Executive Life Plan, and Ralston shall transfer to Energizer, and Energizer
shall assume, all liabilities for retiree benefits for Energizer Individuals who
are eligible for retiree health and life coverage under such Plans. Claims for
retiree health and life benefits paid prior to the Distribution Date with
respect to Energizer Individuals shall be treated in the manner set forth in
paragraph (b) above.
(e) Ralston and Energizer shall cooperate in causing the transfer, as
soon as practicable after the Distribution Date, of certain plan assets from the
Ralston Group Life Plan and the Purina Long Term Disability Plan (collectively
the "Ralston Group Life/LTD Plans") to a Voluntary Employee Benefit Association
Trust, as defined in Code Section 501(c)(9) established by Energizer (the
"Energizer VEBA"), which assets shall be used to provide life insurance benefits
and long term disability benefits to Energizer Individuals participating in the
Energizer Group Life Plan and the Energizer Long Term Disability Plan, which
shall benefit the same class or classes of Energizer Individuals that formerly
participated in the Ralston Group Life/LTD Plans. Subject to the provisions set
forth herein, Ralston shall cause the Ralston Group Life/LTD Plans, or the
Trustee of the Purina Benefit Association (the "Ralston VEBA"), as applicable,
to transfer to the Energizer VEBA a pro rata share of the respective assets of
the Ralston Group Life/LTD Plans with a market value determined as of March 31,
2000, such share of assets to be calculated in the same proportion as the
present value of liabilities relating to Energizer Individuals under each such
Ralston Plan (excluding liabilities retained by the Ralston Group Life Plan
relating to Energizer Individuals receiving installment disability benefits)
bears to the present value of liabilities relating to all Energizer and Ralston
Individuals under each such Plan.
Notwithstanding the foregoing, the transfer of assets contemplated in this
subparagraph shall be conditioned upon (i) the receipt of either, in the sole
discretion of Ralston, (A) an opinion of counsel retained by Energizer and
reasonably satisfactory in form and substance to Ralston to the effect that the
Energizer VEBA is intended to qualify under Section 501(c)(9) of the Code and
that the VEBA is intended to be exempt from taxation under Code Section 501(a);
or (B) a favorable determination letter from the IRS of the tax exempt status of
the Energizer VEBA under Code Sections 501(a) and 501(c)(9); and (ii) an
opinion of counsel retained by Energizer and reasonably satisfactory in form and
substance to Ralston to the effect that the transfer of such plan assets from
the Ralston Group Life/LTD Plans to the Energizer VEBA and the stated purpose
for the utilization of such assets is in compliance with ERISA, including but
not limited to, ERISA Section 403, and any applicable state law or regulations
relating to insurance.
(f) As of the Distribution Date, Energizer will establish a Health Care
and Dependent Care Reimbursement Plan (the "Energizer Reimbursement Plan"),
complying with Code Sections 105, 125 and 129, with terms substantially similar
to the terms of the Ralston Purina Reimbursement Accounts Plan (the "Ralston
Reimbursement Plan"). As of the Distribution Date, Energizer Individuals shall
cease participating in the Ralston Reimbursement Plan, and all liabilities for
benefits with respect to such Energizer Individuals under the Ralston
Reimbursement Plan shall be provided under the Energizer Reimbursement Plan as
of the Distribution Date.
7.06 International Welfare Plans
-----------------------------
Ralston and Energizer shall each retain all liabilities related to
international welfare plans in which only Ralston Individuals or Energizer
Individuals, respectively, are enrolled. With respect to welfare plans in which
both Ralston Individuals and Energizer Individuals are participants, Ralston and
Energizer shall cause each member of their respective Groups to cooperate with
members of the other Group to establish additional separate welfare plans as
soon as practicable after the Distribution Date in order to enroll the Energizer
Individuals and Ralston Individuals in separate plans. During the period after
the Distribution that an Energizer Individual continues to participate in a
welfare plan sponsored by a member of the Ralston Group, or vice versa, the
sponsor (or sponsor's plan, as appropriate) shall be reimbursed for the costs of
providing such coverage in excess of premiums paid by the covered Energizer or
Ralston Individual. Ralston and Energizer, or their respective Welfare Plans as
applicable, shall share proportionately in any refunds of contributions or
stabilization reserves payable on account of experience prior to the
Distribution.
7.07 Internationalist Retirement Plan.
----------------------------------
As of the Distribution Date, Energizer shall assume, and be solely
responsible for, all benefits accrued with respect to Energizer Individuals
based on participation by Energizer Employees and Former Energizer Employees in
the unfunded Internationalist Retirement Plan. No Ralston Individuals are
participants in such Plan as of the Distribution Date, and Ralston shall have no
liability for payment of benefits under such Plan after the Distribution.
Energizer agrees to cause benefits accrued with respect to the Energizer
Individuals to be paid in a manner and amount consistent with the terms of the
Internationalist Retirement Plan.
7.08 Stock Options and Restricted Stock; Stock Purchase Plan.
--------------------------------------------------------------
(a) The stock options and phantom stock options held by Energizer
Individuals as of the Distribution Date shall be administered in accordance with
the terms of such agreements and the ISP under which they were granted. For
purposes of restricted stock awards and stock options, including phantom stock
options, granted under the ISPs, the Distribution shall be deemed to constitute
an involuntary termination, other than for cause, of employment of Energizer
Employees.
(b) Effective immediately after the Distribution Date, the number of
shares of Ralston Stock subject to, and the exercise price of, each
non-qualified option to acquire Ralston Stock granted pursuant to the terms of
an ISP ("Ralston Option") which immediately prior to the Record Date is
outstanding and not exercised shall be adjusted in order to reflect the
difference in the fair market value of the Ralston Stock attributable to the
Distribution, in accordance with the requirements of Section 424 of the Code and
the regulations promulgated thereunder, based upon (i) the average of the
closing prices on the NYSE Composite Index for the Ralston Stock, trading
regular way with due bills for the Energizer Stock, for such period prior to the
Distribution Date as the Ralston Board determines, and (ii) the average of the
closing prices on the NYSE Composite Index for the Ralston Stock, trading
regular way, for such period following the Distribution Date as the Ralston
Board determines. Outstanding phantom stock options held by certain Energizer
Individuals shall also be adjusted in a similar manner.
(c) Energizer agrees that, upon notice of the exercise of a phantom
stock option by an Energizer Individual, it shall promptly reimburse Ralston in
an amount equal to one half of the gross proceeds of the exercise payable to
such Energizer Individual.
(d) Ralston and Energizer agree that Ralston, as sole shareholder of
the outstanding capital stock of Energizer, will approve the adoption by the
Board of Energizer, prior to the Distribution, of a Plan to be administered by
the Nominating and Executive Compensation Committee of the Energizer Board,
under which the Committee shall have authority to grant stock options,
restricted stock awards and other awards payable in Energizer Stock, to
directors of Energizer and eligible Energizer Employees, including executive
officers.
(e) Effective as of the Distribution Date, Energizer Employees shall
cease to be eligible to participate in the Ralston Purina Company Stock Purchase
Plan. All benefit obligations arising under the Plan prior to such date with
respect to Energizer Individuals shall be paid in accordance with the terms of
the Plan.
7.09 Unfunded Executive Deferred Compensation and Retirement Plans.
-----------------------------------------------------------------
(a) Ralston shall retain liability for all unpaid benefits, obligations
and liabilities with respect to benefits for Energizer Individuals arising from
deferrals of compensation by Energizer Employees and Former Energizer Employees
under the Fixed Benefit Option of the Ralston Purina Company Deferred
Compensation Plan for Key Employees ("Ralston Deferred Compensation Plan").
(b) As of the Distribution Date, Energizer will establish a Deferred
Compensation Plan, which shall be a non-qualified unfunded deferred compensation
plan ("Energizer Deferred Compensation Plan"). Effective as of the
Distribution, Ralston shall amend the Ralston Deferred Compensation Plan to
permit the transfer to the Energizer Deferred Compensation Plan of that portion
of the Ralston Deferred Compensation Plan liabilities accrued as of March 31,
2000 with respect to Energizer Individuals under all investment Options of such
Plan other than the Fixed Benefit Option (including the company matching
accruals based on deferrals under the Equity Option), and Energizer shall cause
the Energizer Deferred Compensation Plan to accept such liabilities. In
connection therewith, Ralston shall assign to Energizer all its right, title and
obligations under the deferred compensation agreements associated with such
accrued benefits.
(c) As of the Distribution Date, Energizer will establish an Executive
Savings Investment Plan, which shall be a non-qualified unfunded deferred
compensation plan ("Energizer Executive SIP"). Ralston shall amend the Ralston
Purina Executive SIP ("Ralston Executive SIP") to cause the transfer to the
Energizer Executive SIP of that portion of the liabilities of the Ralston
Executive SIP relating to the benefits accrued as of March 31, 2000 by the
Energizer Individuals, and Energizer shall cause the Energizer Executive SIP to
accept such liabilities.
(d) As of the Distribution Date, Energizer will establish a Supple-
mental Retirement Plan, which shall be a non-qualified unfunded supplemental
retirement plan ("Energizer SERP"). Ralston shall amend the Ralston Purina
Supplemental Retirement Plan ("Ralston SERP") to cause the transfer to the
Energizer SERP of that portion of the liabilities of the Ralston SERP
relating to the benefits accrued as of March 31, 2000 by the Energizer
Individuals, and Energizer shall cause the Energizer SERP to accept such
liabilities. Accrued liabilities under the Ralston SERP shall be deemed to
include, but not be limited to, liabilities arising out of Supplemental
Retirement Awards given to Energizer Employees and Former Energizer Employees.
(e) After the Distribution Date, Energizer shall be solely responsible
for the payment of all liabilities and obligations for benefits with respect to
Energizer Individuals under the Energizer Deferred Compensation Plan, the
Energizer Executive SIP and the Energizer SERP, which shall include all
liabilities and obligations transferred pursuant to 7.09(b), (c) and (d) above,
and Ralston shall have no liability with respect thereto.
7.10 Partnership Life Insurance Plan. Energizer Employees or Former
-------------------------------
Energizer Employees who, immediately prior to the Distribution Date, were
participants in or otherwise entitled to benefits under the Partnership Life
Insurance Plan, will, as of the Distribution Date, be treated as terminated
employees for purposes of such Partnership Life Insurance Plan, and will be
afforded all rights and benefits to which all terminated employees are entitled
under the terms of such Plan. Ralston will retain ownership of any individual
life insurance contracts then insuring the life of any Energizer Employee or
Former Energizer Employee in accordance with the terms of the Partnership Life
Insurance Plan.
7.11 Survivor Life Insurance Plan. Effective as of the Distribution
-------------------------------
Date, all of Ralston's obligations under the Survivor Life Insurance Plan
including, but not limited to, the obligation to pay any premiums on life
insurance policies subject to such Plan (the "Policies"), shall cease with
respect to the Energizer Employees who participated in the Plan immediately
prior to the Distribution Date ("Survivor Life Participants"). Promptly
following the Distribution Date, but conditioned upon its reimbursement by
Energizer of all premiums paid by Ralston with respect to such Policies, Ralston
shall assign to Energizer all of its rights, interests and obligations under
each of the 1996 Split Dollar Agreements between Ralston and either a Survivor
Life Participant or, if applicable, the trustee of a trust created by a Survivor
Life Participant for the purpose of holding such Policies (the "Trustees"). In
accepting such assignment, Energizer shall agree to be bound by the terms and
provisions of such 1996 Split Dollar Agreements.
Upon reimbursement of such premiums, Ralston shall release all of its rights
under the 1996 Collateral Assignments between Ralston and the Survivor Life
Participants, or the Trustees, in accordance with their terms, vesting full
ownership rights in the Policies to the Survivor Life Participants or the
Trustees, as appropriate, subject to the 1996 Split Dollar Agreements. Energizer
shall, or shall cause the appropriate Energizer Affiliate to, adopt a
substantially identical Survivor Life Insurance Plan with respect to all
Survivor Life Participants, and shall enter into substantially identical
Collateral Assignments with the Survivor Life Participants, or the Trustees, in
accordance with such Split Dollar Agreements and such Plan effective immediately
after the Distribution Date.
7.12 Vacation Pay/Paid Time Off. Energizer and the Energizer Group
-----------------------------
will assume (or, as applicable, retain) all liability for unpaid vacation pay
and other paid time off accrued by Energizer Employees and Former Energizer
Employees prior to the Distribution Date. On and after the Distribution Date,
Ralston and the Ralston Group will have no liability for vacation pay or other
paid time off for Energizer Employees and Former Energizer Employees. Ralston
and the Ralston Group will retain (or, as applicable, assume) all liability for
unpaid vacation pay and other paid time off accrued by Ralston Employees and
Former Ralston Employees prior to the Distribution Date. After the Distribution
Date, Energizer and the Energizer Group will have no liability for vacation pay
or other paid time off for Ralston Employees and Former Ralston Employees.
7.13 U. S. Severance Pay.
----------------------
(a) Ralston and Energizer agree that, with respect to individuals who,
in connection with the Distribution, cease to be employees of the Ralston Group
and become employees of the Energizer Group, such cessation shall not be deemed
a severance of employment from either Group for purposes of any Plan that
provides for the payment of severance, salary continuation or similar benefits
and shall, in connection with the Distribution, if and to the extent
appropriate, obtain waivers from individuals against any such assertion.
(b) The Ralston Group shall assume and be solely responsible for all
liabilities and obligations whatsoever in connection with claims made by or on
behalf of Ralston Individuals and the Energizer Group shall assume and be solely
responsible for all liabilities and obligations whatsoever in connection with
claims made by or on behalf of Energizer Individuals in respect of severance
pay, salary continuation and similar obligations relating to the termination or
alleged termination of any such person's employment either before, to the extent
unpaid, or on or after the Distribution Date. On or prior to the Distribution
Date, Energizer shall amend its Plans relating to severance and other
termination benefits to incorporate the terms of the special severance payment
schedule in effect in Ralston's Severance Pay Plan with respect to employees of
the Corporate Division of Ralston who transfer to Energizer and who are
involuntarily terminated without cause by Energizer on or prior to September 30,
2000.
7.14 International Severance Pay.
-----------------------------
(a) Ralston and Energizer agree that, with respect to individuals who,
in connection with the Distribution, cease to be employees of the Ralston Group
and become employees of the Energizer Group or vice versa, such cessation shall
not be deemed a severance of employment from either Group except to the extent
so required by the terms of any benefit plan, labor agreement, applicable law or
governmental regulation that provides for the payment of severance pay, salary
continuation, termination indemnity or similar benefits. The parties agree, if
and to the extent appropriate, to obtain waivers from individuals against any
such assertion.
(b) To the extent severance pay, salary continuation or termination
indemnity is payable with respect to an Energizer Individual or Ralston
Individual, the respective Group shall assume and be solely responsible for all
liabilities and obligations whatsoever in connection with claims for such
benefits made by or on behalf of such Individuals relating to the termination or
alleged termination of any such person's employment either before, to the extent
unpaid, or on or after the Distribution Date.
7.15 Bonus Plans. Energizer and its Affiliates shall be responsible
------------
for all liabilities with respect to Energizer Employees arising under bonus
plans, programs or policies applicable to such Employees, including liabilities
related to service prior to the Distribution Date. Notwithstanding the
foregoing, Ralston shall retain liability for amounts payable to Energizer
Employees who are participants in the 1998 Leveraged Incentive Plan.
7.16 Financial Planning Program. Except for benefits that have been
----------------------------
paid by Ralston prior to the Distribution, Energizer shall be responsible for
all liabilities with respect to Energizer Individuals arising under the
Financial Planning program for executives.
7.17 Other Balance Sheet Adjustments. To the extent not otherwise
----------------------------------
provided in this Agreement, Ralston and Energizer shall take such action as is
necessary to effect an adjustment to the books of the members of the Ralston
Group and the Energizer Group so that, as of the Distribution Date, the prepaid
expense balances and accrued employee liabilities with respect to any employee
liability or obligation assumed or retained as of the Distribution Date by the
Ralston Group or the Energizer Group are appropriately reflected on the
consolidated balance sheets as of the Distribution Date of Ralston and
Energizer, respectively.
7.18 Preservation of Rights to Amend or Terminate Plans. Subject to
-----------------------------------------------------
the provisions of this Article VII, no provision of this Agreement, including
the agreement of Ralston or Energizer that it, or any member of the Ralston
Group or the Energizer Group, will make a contribution or payment to or under
any Plan herein referred to for any period, shall be construed as a limitation
on the right of Ralston or Energizer or any member of the Ralston Group or the
Energizer Group to amend such Plan or terminate its participation therein which
Ralston or Energizer or any member of the Ralston Group or the Energizer Group
would otherwise have under the terms of such Plan or otherwise, and no provision
of this Agreement shall be construed to create a right in any Ralston Individual
or Energizer Individual under a Plan which such Individual would not otherwise
have under the terms of the Plan itself.
7.19 Reimbursement. Each of the parties hereto acknowledges that the
-------------
Ralston Group, on the one hand, and the Energizer Group, on the other hand, may
incur costs and expenses (including contributions to Plans and the payment of
insurance premiums) arising from or related to any of the Plans which are, as
set forth in this Agreement, the responsibility of the other party hereto.
Ralston and Energizer agree that they, or the appropriate members of their
respective Groups, shall reimburse the appropriate members of the other's Group,
as soon as practicable but in any event within 30 days of receipt from the other
party of appropriate verification, for all such costs and expenses.
7.20 Further Transfers. For a period of six months following the
------------------
Distribution Date, no member of either Group shall, directly or indirectly,
without the prior written consent of a corporate officer of the other Group,
solicit or attempt to solicit any employee or officer of such other Group for
the purpose of obtaining his or her services for hire, or otherwise causing such
employee to leave employment with such other Group, and no member of either
Group, without the prior written consent of a corporate officer of the other
Group, will, for such period of six months, hire such employee or officer;
provided, however, if the employment of any officer or employee of one Group is
terminated by that Group at any time following the Distribution, a member of the
other Group may employ such person without the consent of the other Group.
Subject to the preceding paragraph in this Section 7.20, Ralston and Energizer
recognize that there may be Energizer Employees who will, after the Distribution
Date, become employed by Ralston or a Ralston Affiliate and vice versa with
respect to Ralston Employees. With respect to such employees who transfer
employment within six months of the Distribution Date directly from one Group to
the other, the assets and liabilities of either the Ralston Retirement Plan or
the Energizer Retirement Plan, as applicable, associated with benefits accrued,
with respect to such employee, through the date that the employee transfers to
the other Group will be transferred to the corresponding Plan for the other
Group, and the employee will be given the same service credit, for purposes of
eligibility, vesting and benefit accrual, for service that the employee had
under the transferring Group's Plan. In addition, the transferring Group shall
also, as soon as practicable, transfer such employee's account balance held in
either the Ralston SIP or the Energizer SIP, as applicable, to the corresponding
SIP for the other Group, and the employee will be given the same service credit,
for purposes of eligibility and vesting, that the employee had under the
transferring Group's SIP.
7.21 Other Liabilities. Subject to the provisions of Article Four, as
------------------
of the Distribution Date, Energizer and Ralston shall each assume and be solely
responsible for all Liabilities whatsoever with respect to claims made by, in
the case of Energizer, Energizer Individuals and, in the case of Ralston,
Ralston Individuals, relating to any Liability not otherwise expressly provided
for in this Agreement, including, but not limited to, earned salaries, wages,
severance payments, bonus accruals or other compensation, regardless of whether
such Liability was incurred before or after the Distribution Date.
7.22 Compliance. Notwithstanding anything to the contrary in this
----------
Article VII, to the extent any actions of the parties contemplated in this
Article are determined prior to the Distribution to violate law or result in
unintended tax liability for Ralston Individuals or Energizer Individuals, such
action may be modified by mutual consent of the parties hereto to avoid such
violation of law or unintended tax liability.
7.23 Agreement of Parties. Notwithstanding anything herein to the
----------------------
contrary, the agreements contained in this Article VII shall be binding only as
between the parties to this Agreement, no Ralston Individual or Energizer
Individual or other Person shall have any right with respect to any such
agreement, and no Person other than the parties to this Agreement shall have any
rights to enforce any provision hereof.
ARTICLE VIII
POST-DISTRIBUTION OBLIGATIONS
8.01 Energizer's Post-Distribution Obligations.
-------------------------------------------
(a) Energizer shall, and shall cause each member of the Energizer Group
to, comply with each representation and statement made, or to be made, to the
IRS in connection with any ruling obtained, or to be obtained, by Ralston from
the IRS with respect to any transaction contemplated by this Agreement. Neither
Energizer nor any member of the Energizer Group shall, for a period, following
the Distribution Date, of thirty months with respect to transactions described
in subparagraphs (b)(i), (iii), (iv), (v) and (vi) below; and of twenty-four
months with respect to the transaction described in subparagraph (b)(ii) below,
engage in any of the following transactions, unless, in the sole discretion of
Ralston, either
(i) an opinion in form and substance satisfactory to Ralston is obtained
from counsel to Energizer, the selection of which counsel is agreed to by Ral-
ston; or
(ii) a supplemental ruling is obtained from the IRS;
in either case to the effect that such transactions would not adversely affect
the tax consequences of the transactions described in Articles II and III of
this Agreement to Ralston or any member of the Ralston Group; Energizer or any
member of the Energizer Group; or the Ralston shareholders.
(b) The transactions subject to this provision are:
(i) making a material disposition (including transfers from one member
of the Energizer Group to another member of the Energizer Group), by means of a
sale or exchange of assets or capital stock, a distribution to share-
holders, or otherwise, of any of its assets (other than the transactions
contemplated by this Agreement) except in the ordinary course of
business;
(ii) repurchasing any Energizer Stock, unless such repurchase satis-
fies the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30 or any
successor Revenue Procedure;
(iii) issuing capital stock of Energizer (or a successor to Energizer), whe-
ther incident to a stock offering, an acquisition transaction or otherwise, or
participating in a transaction in which shareholders of Energizer (or a
successor to Energizer) exchange or otherwise dispose of their stock in
Energizer (or a successor to Energizer), if the aggregate amount of shares
issued or disposed of in any such transactions represents a "fifty percent (50%)
or greater interest" in the total issued and outstanding stock of Energizer (or
a successor to Energizer) within the meaning of Section 355(d)(4) of the Code;
provided that Energizer further agrees to notify Ralston in advance of any such
transactions that would result in the issuance or disposition of an aggregate
amount of shares representing a ten percent (10%) or greater interest in the
total issued and outstanding stock of Energizer;
(iv) liquidating or merging with any other corporation (including a mem-
ber of the Energizer Group);
(v) ceasing to engage in the active conduct of a trade or business within
the meaning of Section 355(b)(2) of the Code; or
(vi) any other transaction, action or event which is, in any material re-
spect, inconsistent with any of the representations or statements set forth on
Schedule 8.01(b)(vi).
Energizer hereby represents that neither Energizer nor any member of the
Energizer Group has any present intention to undertake any of the transactions
set forth above, except as set forth in the ruling request submitted to the IRS
with respect to the Distribution.
8.02 Ralston's Post-Distribution Obligations. Ralston shall, and shall
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cause each member of the Ralston Group to, refrain from taking any action which
would adversely impact any ruling obtained, or to be obtained, by Ralston from
the IRS with respect to any transaction contemplated by this Agreement.
8.03 Indemnification of Shareholders. In the event that Ralston or
---------------------------------
Energizer breaches or violates any covenant made in this Article VIII, the
breaching party shall indemnify and hold harmless:
(i) all shareholders of Ralston as of the Record Date, and
(ii) if the breaching party is Energizer, Ralston,
against and in respect of any and all costs, expenses, deficiencies, litigation,
proceedings, taxes, levies, assessments, attorneys' fees, damages or judgments
of any kind or nature whatsoever, related to, arising from, or associated with
such breach or violation.
ARTICLE IX
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
Energizer understands and agrees that, except as set forth in Article VIII,
no member of the Ralston Group is, in this Agreement or in any Ancillary
Agreement or other agreement or document, implicitly or explicitly representing
or warranting to Energizer in any way as to the Energizer Assets, the Battery
Business or the Liabilities of the Energizer Group or as to any consents or
approvals required in connection with the consummation of the transactions
contemplated by this Agreement, it being agreed and understood that the
Energizer Group shall take all of the Energizer Assets "as is, where is" and
that, except as provided in Section 2.04, the Energizer Group shall bear the
economic and legal risk that conveyances of the Energizer Assets shall prove to
be insufficient or that the title of any member of the Energizer Group to any
Energizer Assets shall be other than good and marketable and free from
encumbrances.
ARTICLE X
GUARANTEES AND SURETY BONDS OF RALSTON
Energizer agrees that, as soon as practicable following the Distribution
Date, it will substitute surety bonds obtained by it for each of the surety
bonds of any member of the Ralston Group, if any, relating to any Energizer
Asset, the Battery Business or any Liability assumed by Energizer or its
Subsidiaries or Affiliates hereunder. Energizer agrees that it shall enter
indemnification agreements in its name with each provider of a surety bond
obtained with respect to the Energizer Assets, the Battery Business or any
Liability assumed by Energizer. Energizer shall use its best efforts to obtain
the complete release and discharge of any member of the Ralston Group from all
obligations (including any obligations upon any renewal or extension) related to
the Energizer Assets, the Battery Business or any Liability assumed by Energizer
on which any member of the Ralston Group is directly or contingently obligated
as a guarantor or assignor or otherwise contingently liable (including, without
limitation, any letter of credit) (the " Energizer Obligations").
In the event that Energizer is unable to obtain any such release, Energizer
agrees that
(a) it shall not extend the term or otherwise modify any such Energizer
Obligation in a manner which would expand Ralston's financial exposure under
such Energizer Obligation,
(b) it shall use its best efforts to substitute itself or another
member of the Energizer Group as primary guarantor of such Energizer Obli-
gations, and
(c) Energizer or any member of the Energizer Group shall not assign any
such Energizer Obligation or directly or indirectly transfer, sell or
assign any assets securing such Energizer Obligation or comprising all or any
substantial portion of a project, the financing of which gave rise to
such Energizer Obligation, including, but not limited to, the transfer, sale
or assignment of the capital stock of any Affiliate holding title to such
assets, unless Ralston or the appropriate member of the Ralston Group, as the
case may be, is released and discharged of all liabilities with respect to
such Energizer Obligation.
Without limiting any other obligation of indemnification under this Agreement or
any agreement described herein, Energizer shall defend, indemnify and hold
harmless each member of the Ralston Group and their respective Affiliates,
Subsidiaries, directors, officers and employees against any and all Liabilities
whatsoever incurred or suffered by any of them as a result of any Energizer
Obligation.
ARTICLE XI
NEGOTIATION
If any question shall arise in regard to (i) the interpretation of any
provision of this Agreement or, except to the extent provided otherwise therein,
any Ancillary Agreement, or (ii) the rights or obligations of either Group
hereunder or thereunder, each Group shall designate a senior executive within
its organization who shall, within thirty days after such question arises, meet
with the designated executive of the other Group to negotiate and attempt to
resolve such question in good faith. Such senior executives may, if they so
desire, consult outside advisors for assistance in arriving at such a
resolution. In the event that a resolution is not achieved within sixty days
following such initial meeting, then the parties may seek other legal means of
resolving such question, including but not limited to mediation or binding or
non-binding arbitration.
ARTICLE XII
MISCELLANEOUS
12.01 Conditions to the Distribution.
---------------------------------
(a) The obligation of Ralston to make the Distribution is subject to
the satisfaction of each of the following conditions:
(i) The transactions contemplated by Article II shall have been
consummated in all material respects;
(ii) Ralston shall have received rulings from the IRS, in form and
substance satisfactory to Ralston's tax counsel and independent auditors, that
the contributions, transfers, assumptions, mergers and Distribution described in
Articles II and III of this Agreement will not be subject to federal income
taxation at the corporate or shareholder level;
(iii) The Energizer Stock and associated Rights shall have been approved
for listing on the NYSE, subject to official notice of issuance;
(iv) The Form 10 shall have been filed with the SEC and shall have become
effective, and no stop order with respect thereto shall be in effect;
(v) All authorizations, consents, approvals and clearances of all federal,
state, local and foreign governmental agencies required to permit the valid
consummation by the parties hereto of the transactions contemplated by this
Agreement shall have been obtained; and no such authorization, consent, approval
or clearance shall contain any conditions which would have a material adverse
effect on (A) the Ralston Business or the Battery Business, (B) the Assets,
results of operations or financial condition of the Ralston Group or the
Energizer Group, in each case taken as a whole, or (C) the ability of Ralston or
Energizer to perform its obligations under this Agreement; and all statutory
requirements for such valid consummation shall have been fulfilled;
(vi) Ralston shall have provided the NYSE with the prior written notice of
the Record Date required by Rule 10b-17 of the Exchange Act and the rules and
regulations of the NYSE;
(vii) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the payment of the Distribution;
(viii) The Distribution shall be payable in accordance with applicable
law;
(ix) All necessary consents, waivers or amendments to each bank credit
agreement, debt security or other financing facility to which any member of the
Ralston Group or the Energizer Group is a party or by which any such member is
bound shall have been obtained, or each such agreement, security or facility
shall have been refinanced, in each case on terms satisfactory to Ralston and
Energizer and to the extent necessary to permit the Distribution to be
consummated without any material breach of the terms of such agreement, security
or facility; and
(x) One or more members of the Energizer Group shall have been
substituted, as of the Distribution Date in respect of all Ralston Group debt
obligations assumed by Energizer or another member of the Energizer Group
pursuant to this Agreement.
(b) Any determination made by the Ralston Board in good faith
concerning the satisfaction or waiver of any or all of the conditions set forth
in Section 12.01(a) shall be conclusive.
12.02 Survival of Agreements. All covenants and agreements of the
------------------------
parties hereto contained in this Agreement shall survive the Distribution Date.
12.03 Entire Agreement. This Agreement, the Exhibits and Schedules
-----------------
hereto and the Ancillary Agreements shall constitute the entire agreement
between the parties hereto with respect to the subject matter hereof superseding
all previous negotiations, commitments and writings with respect to such subject
matter. To the extent that the provisions of this Agreement are inconsistent
with the provisions of any Ancillary Agreement, the provisions of such Ancillary
Agreement shall prevail.
12.04 Expenses of the Distribution. Except as otherwise provided in
-------------------------------
this Agreement and the Ancillary Agreements, after the Distribution, Ralston
shall remain obligated to pay the following costs and expenses:
(a) costs and expenses (including attorneys' and accountants' fees, legal
costs and expenses) associated with the registration of shares of Energizer's
common stock in connection with the Distribution;
(b) costs of paying shareholders cash in lieu of fractional shares, as
set forth in Section 3.03;
(c) costs and expenses (including attorneys' and accountants' fees, legal
costs and expenses) associated with effecting the restructuring transactions,
as set forth in Section 2.01;
(d) costs and expenses (including attorneys' and accountants' fees, legal
costs and expenses) related to the transfer of Energizer Assets, as set
forth in Section 2.04(a);
(e) costs and expenses incurred in connection with the establishment
of the Energizer SIP and the registration of Energizer Stock to be offered
under the Energizer SIP;
(f) reasonable fees and expenses (including attorneys' and accountants'
fees, legal costs, underwriting fees and expenses) related to Energizer's
establishment of a $175 million private placement of unsecured notes; Ralston's
and Energizer's establishment of a $450 million bank syndication credit
facility; and Energizer's establishment of a $200 million credit facility for
the purpose of selling, on a revolving basis, undivided ownership interest in
accounts receivable of the Energizer Group. In no event, however, shall Ralston
be responsible for any fees, including underwriting fees, costs and expenses,
related to the drawdown of funds under any of the foregoing except the initial
drawdown of funds by Ralston under the $450 million credit facility.
12.05 GOVERNING LAW; JURISDICTION AND VENUE. THIS AGREEMENT IS MADE
----------------------------------------
AND ENTERED INTO IN, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF, THE STATE OF MISSOURI, UNITED STATES OF AMERICA,
WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES, AS TO ALL MATTERS, INCLUDING
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES UNDER THIS
AGREEMENT. ALL MATTERS RELATING TO THIS AGREEMENT SHALL, SUBJECT TO THE
PROVISIONS OF ARTICLE XI OF THIS AGREEMENT, BE ADJUDICATED EXCLUSIVELY IN THE
COURTS OF THE STATE OF MISSOURI LOCATED IN ST. LOUIS, MISSOURI, OR WITHIN THE
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI; AND EACH
PARTY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS FOR
ALL SUCH MATTERS.
12.06 Notices. All notices, requests, claims, demands and other
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communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, telex, facsimile or other standard form of
telecommunications, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to a member of the Ralston Group:
Ralston Purina Company
Checkerboard Square
St. Louis, Missouri 63164
Attention: General Counsel
If to a member of the Energizer Group:
Energizer Holdings, Inc.
800 Chouteau Avenue
St. Louis, Missouri 63102
Attention: General Counsel
or to such other address as either Group may have furnished to the other Group
by a notice in writing in accordance with this Section 12.06.
12.07 Amendment and Modification; Non-Waiver. This Agreement may be
-----------------------------------------
amended, modified or supplemented, or rights, powers or options hereunder waived
or impaired, only by a written agreement signed by a corporate officer of
Ralston and Energizer and attested by their respective corporate secretaries.
Neither party shall be deemed to have waived or impaired any right, power or
option created or reserved by this Agreement (including without limitation, each
party's right to demand compliance with every term herein, or to declare any
breach a default and exercise its rights in accordance with the terms hereof) by
virtue of:
(a) any custom or practice of the parties at variance with the terms
hereof;
(b) any failure, refusal or neglect to exercise any right hereunder, or
to insist upon compliance with any term;
(c) any waiver, forbearance, delay, failure or omission to exercise any
right or option, whether of the same, similar or different natures, under this
Agreement or in any other circumstances; or
(d) the acceptance by either party of any payment or other
consideration from the other following any breach of this Agreement.
The rights and remedies set forth in this Agreement are in addition to any other
rights or remedies which may be granted by law.
12.08 Successors and Assigns; No Third-Party Beneficiaries. This
---------------------------------------------------------
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of each Group and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by either Group without the prior written consent of
the other Group (which consent shall not be unreasonably withheld). Except for
the provisions of Sections 4.02 and 4.03 relating to Indemnities, which are also
for the benefit of the Indemnitees, this Agreement is solely for the benefit of
each Group and is not intended to confer upon any other Person any rights or
remedies hereunder.
12.09 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.10 Interpretation.
--------------
(a) The Article and Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties hereto and shall not in any way affect the meaning or interpretation of
this Agreement.
(b) The parties hereto intend that, for federal income tax purposes,
the contributions, transfers, assumptions, Distribution and Merger contemplated
hereby shall qualify for non-recognition treatment under Sections 332, 336, 337,
355, 357(a), 361, 368(a)(1)(D) and 1032 of the Code.
12.11 Legal Enforceability. Any provision of this Agreement or any of
---------------------
the Ancillary Agreements which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. Each party acknowledges that money damages would be an inadequate
remedy for any breach of the provisions of this Agreement or any of the
Ancillary Agreements and agrees that the obligations of the parties hereunder
and thereunder shall be specifically enforceable.
12.12 References; Construction. References to any "Article",
-------------------------
"Exhibit", "Schedule" or "Section", without more, are to Articles, Exhibits,
Schedules and Sections to or of this Agreement. Unless otherwise expressly
stated, clauses beginning with the term "including" set forth examples only and
in no way limit the generality of the matters thus exemplified.
12.13 Termination. Notwithstanding any provision hereof, this
-----------
Agreement may be terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of the Ralston Board without
the approval of any other party hereto or of Ralston's shareholders. In the
event of such termination, no party hereto shall have any Liability to any
Person by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ENERGIZER HOLDINGS, INC. RALSTON PURINA COMPANY
By: /s/ Harry L. Strachan By: /s/ James R. Elsesser
Harry L. Strachan James R. Elsesser
Vice President and General Vice President and Chief
Counsel Financial Officer
Index of Schedules and Exhibits to Agreement and Plan of Reorganization.
Exhibit A Tax Sharing Agreement
Exhibit B Bridging Services Agreement
Exhibit C Intellectual Property Agreement
Schedule 1.01 (a) Included in Energizer Assets
Schedule 1.01 (b) Excluded from Energizer Assets
Schedule 1.01 (c) Ralston Assets
Schedule 2.04(b)(1) Shared Liabilities - Energizer and Ralston
Schedule 2.04(b)(2) Energizer Assumed Liabilities
Schedule 2.04(b)(3) Ralston Assumed Liabilities
Schedule 2.07 Charitable Trust Fund Pledge Commitments
Schedule 5.04(b)(1) Exclusion from Energizer Bank Accounts
Schedule 8.01(b)(vi) Post Spin-off Obligations of Energizer
EXHIBIT A
TAX SHARING AGREEMENT
-----------------------
BETWEEN
-------
RALSTON PURINA COMPANY
----------------------
AND
---
ENERGIZER HOLDINGS, INC.
------------------------
THIS AGREEMENT (the "Agreement") dated as of April 1, 2000 is made by and
between RALSTON PURINA COMPANY ("Ralston"), a corporation organized under the
laws of the State of Missouri, and ENERGIZER HOLDINGS, INC. ("Energizer"), a
corporation organized under the laws of the State of Missouri.
WHEREAS, Ralston is the common parent of an affiliated group of domestic
corporations within the meaning of Section 1504(a) of the U. S. Internal Revenue
Code of 1986, as amended (the "Code"), which group includes Energizer (such
corporations hereinafter referred to collectively as the "Ralston Domestic
Subsidiaries" and individually as a "Ralston Domestic Subsidiary", and such
affiliated group shall be referred to as the "Ralston Group");
WHEREAS, Ralston is also the parent of certain directly or indirectly owned
foreign corporations (such corporations hereinafter referred to collectively as
the "Ralston Foreign Affiliates", and individually as a "Ralston Foreign
Affiliate"), as more specifically defined below.
WHEREAS, on or before April 1, 2000, Energizer will become the common
parent of an affiliated group of domestic corporations within the meaning of
Code Section 1504(a) (such corporations hereinafter referred to collectively as
the "Energizer Domestic Subsidiaries" and individually as a "Energizer Domestic
Subsidiary", and such affiliated group shall be referred to as the "Energizer
Group");
WHEREAS, on or before April 1, 2000, Energizer will also become the parent
of certain directly or indirectly owned foreign corporations (such corporations
hereinafter referred to collectively as the "Energizer Foreign Affiliates" and
individually as the "Energizer Foreign Affiliate"), as more specifically defined
below.
WHEREAS, Ralston intends to distribute to its shareholders all of its stock
in Energizer (the "Distribution") in accordance with the terms and conditions of
the Agreement and Plan of Reorganization between Ralston and Energizer dated as
of April 1, 2000 (the "Plan of Reorganization") on April 1, 2000 (the
"Distribution Date") in accordance with a favorable ruling from the Internal
Revenue Service ("IRS") dated February 4, 2000 that the Distribution qualifies
as a nontaxable distribution of stock of a controlled corporation under Code
Section 355; and that certain ancillary transactions also qualify as nontaxable
under Code Section 355, 368(a)(1)(D), 332, 351 and 367; and,
WHEREAS, Ralston and Energizer believe that it is in their mutual best
interests to set forth in this Agreement the rights, obligations and duties of
each party with respect to various tax matters relating to the Energizer Group,
the Ralston Group, the Ralston Foreign Affiliates and the Energizer Foreign
Affiliates which may arise as a result of the Distribution.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein set forth, Ralston, (on its own behalf and on behalf of the Ralston
Domestic Subsidiaries and the Ralston Foreign Affiliates) and Energizer (on its
own behalf and on behalf of the Energizer Domestic Subsidiaries and the
Energizer Foreign Affiliates), hereby agree as follows:
ARTICLE I. DEFINITIONS
For purposes of the provisions set forth in this Agreement,
(a) The term "Audit(s)" shall mean any audit or examination undertaken
by a Tax authority with respect to Taxes.
(b) The term "Battery Business" shall have the same meaning as the term
is given in the Plan of Reorganization.
(c) The term "Controversy(ies)" shall mean any action involving a Tax
authority before any administrative or judicial body which results from a
disagreed Tax adjustment proposed during the course of an Audit.
(d) The term "Domestic" as used herein to modify the terms "Tax",
"Taxes" or "Return", shall mean with respect to any U.S. federal, territorial,
state or local government.
(e) The terms "Energizer Employee" or "Former Energizer Employee" shall
have the same meaning as such term is given in the Plan of Reorganization.
(f) The term "Energizer Foreign Affiliate" shall mean any entity which
on or after the Distribution Date is owned directly or indirectly (or, pur-
suant to the Agreement and Plan of Reorganization, is owned beneficially)
by Energizer, and is formed under the laws of a government other than the
United States, its states or territories.
(g) The term "Foreign" as used herein to modify the terms "Tax",
"Taxes" or "Return", shall mean with respect to any government which is
not an U.S. federal, territorial, state or local government.
(h) The term "Former Battery Business" shall have the same meaning as
the term is given in the Plan of Reorganization.
(i) The term "Former Ralston Business" shall have the same meaning as
the term is given in the Plan of Reorganization.
(j) The term "Joint Foreign Affiliate" shall mean any Foreign entity
that currently or formerly conducted a Ralston Business or a Former Ralston
Business and a Battery Business or a Former Battery Business, provided, however,
that, for purposes of this Agreement, after the Distribution Date any such Joint
Foreign Affiliate shall thereinafter be treated as a Ralston Foreign Affiliate
or Energizer Foreign Affiliate, as the case may be.
(k) The term "Ralston Business" shall have the same meaning as the term
is given in the Plan of Reorganization.
(l) The term "Ralston Employee" shall have the same meaning as the term
is given in the Plan of Reorganization.
(m) The term "Ralston Foreign Affiliate" shall mean any entity which on
or after the Distribution Date is owned directly or indirectly (or, pursuant to
the Agreement and Plan of Reorganization, is owned beneficially) by Ralston, is
formed under the laws of a government other than the United States, its states
or territories, and is not an Energizer Foreign Affiliate.
(n) Tax or Taxes. As used herein, "Tax" or "Taxes" shall mean any and
-------------
all taxes, charges, fees, levies or other assessments, however denominated,
including any interest, penalties, fines, or other additions that may become
payable in respect thereof, that are imposed, by any governmental entity,
whether foreign or domestic, federal, territorial, state or local, or any agency
or political subdivision of any such governmental entity; including, but not
limited to, all income, profits, gross receipts, earnings, net worth, payroll,
withholding, unemployment insurance, Social Security, Medicare Hi, sales, use,
ad valorem, excise, franchise, license, occupation, real or personal property,
stamp, transfer, value-added, recording, registration, other governmental
charges, and other government obligations of the same or of a similar nature to
any of the foregoing, which any member of the Ralston Group or Energizer Group,
or any Ralston Foreign Affiliate or Energizer Foreign Affiliate, is required to
pay, withhold or collect. With respect to Foreign Taxes allocated between or
among the Ralston Business, the Battery Business, any Former Ralston Business,
or any Former Battery Business currently or formerly conducted by a Joint
Foreign Affiliate, Taxes shall mean the Taxes that would have been imposed had
the Battery Business or Former Battery Business been the sole business of a
single Foreign Affiliate, in accordance with Article III 1(b)(i) and (ii)
hereof.
(o) The term "Tax Return" or "Return" shall mean any return, filing,
questionnaire, information report or other document required to be filed,
including without limitation any amended returns, any documents with respect to
or accompanying payments of estimated Taxes, that may be filed, for any Tax
period with any Tax authority (domestic or foreign) in connection with any Tax
or Taxes (whether or not payment is required to be made with respect to such
filing). As used herein, "Consolidated Tax Return" shall mean a U.S. federal
income Tax Return described in Code Section 1501.
Any other capitalized terms not defined herein shall have the same meaning as in
the Agreement and Plan of Reorganization.
ARTICLE II. DOMESTIC TAXES
1. Domestic taxes - Preparation and Filing of Tax Returns, Payment of Taxes,
-------------------------------------------------------------------------
Adjustments, Audits and Controversies.
- ----------------------------------------
(a) Preparation and Filing of Domestic Returns.
-----------------------------------------------
(i) The preparation and filing of any Domestic Tax Return for Energi-
zer or the Energizer Domestic Subsidiaries for any Tax period ending prior
to the Distribution Date shall be the responsibility of Ralston. Ralston
shall consistently prepare and file such Domestic Tax Returns in accordance
with its historical practices. To the extent practicable, Ralston shall permit
Energizer to review and comment on, prior to filing, any such Domestic
Tax Return.
(ii) Energizer hereby designates and Energizer agrees to cause each
of the Energizer Domestic Subsidiaries to designate Ralston irrevocably as its
agent for the purpose of taking any and all action necessary or incidental
to the filing of any Consolidated Return or any other Domestic Tax Return, as
necessary for any Tax period ending prior to the Distribution Date.
(iii) The preparation and filing of any Domestic Tax Return for
Energizer or the Energizer Domestic Subsidiaries for any Tax period
beginning on or after the Distribution Date shall be the responsibility
of Energizer. In addition, Energizer shall be responsible for the preparation
and filing of any Energizer Domestic Subsidiary Domestic Tax Return for Tax
periods beginning before and ending after the Distribution Date. For purposes
of the preceding sentence, and to the extent practicable, Energizer shall
permit Ralston to review and comment on, prior to filing, any such
Domestic Tax Return.
(b) Liability for Domestic Taxes.
-------------------------------
(i) Pre-Distribution Date. Ralston shall be liable for, shall indemnify and
---------------------
hold the Energizer Group harmless against, and shall make payment of any
Domestic Tax which is attributable to the Energizer Group, for any and all Tax
periods (or portions of periods) ending prior to the Distribution Date and that
portion of any Tax period straddling the Distribution Date that ends on the day
before the Distribution Date, including any such liabilities resulting from the
Audit or other adjustment to previously filed Domestic Tax Returns with respect
to any such Tax period (or portion thereof). Subject to subparagraph (iii)
hereof, Ralston shall be entitled to any and all refunds of such Domestic Taxes
for any such Tax period, including but not limited to refunds described in
subparagraph (v) hereof. For purposes of this subparagraph (b), Ralston will be
credited for any estimated Domestic Tax payments made for such Tax periods.
(ii) Post-Distribution Date. Energizer shall be liable for, shall indemnify
----------------------
and hold the Ralston Group harmless against, and make payment of any
Domestic Tax due which is attributable to the Energizer Group for all Tax
periods beginning on or after the Distribution Date and that portion of any Tax
period straddling the Distribution Date that begins on the Distribution Date and
shall be entitled to any and all refunds of such Domestic Taxes for that portion
of any such Tax period.
(iii) Proration of Taxes. To the extent permitted by law or administrative
-------------------
practice, the Tax periods of the Energizer Group and each Energizer Domestic
Subsidiary shall end on the day immediately preceding the Distribution Date.
For purposes of determining the liability for Domestic Taxes of an Energizer
Subsidiary for a portion of a taxable year or period that begins before and ends
after the Distribution Date, as necessary under applicable law, the
determination of the Domestic Taxes for the portion of the year or period ending
immediately prior to, and the portion of the year or period beginning on or
after, the Distribution Date shall be determined by assuming that the taxable
year or period ended on the day immediately preceding the Distribution Date,
except that exemptions, allowances or deductions that are calculated on an
annual basis and annual property Taxes shall be prorated on the basis of the
number of days in the applicable annual period elapsed through the day
immediately preceding the Distribution Date.
(iv) Energizer's Carryback of Post-Distribution Deductions, Losses or
----------------------------------------------------------------------
Credits. If (A) Energizer or any Energizer Domestic Subsidiary, shall be
- ------- entitled to carry back any net operating loss, capital loss, or other
similar losses, deductions or credits derived with respect to any period begin-
ning on or after the Distribution Date to any Tax period commencing prior
to the Distribution Date, and (B) any such carry back results in a decrease in
Domestic Taxes paid by Ralston or any Ralston Domestic Subsidiary (as com-
Pared to the Taxes Ralston or such member of the Ralston Group would
otherwise have paid solely without giving effect to such carry back), an
amount equal to any such Tax refunds (plus interest) received by Ralston
or the Ralston Domestic Subsidiaries as a result of such carrybacks
shall be promptly remitted to Energizer. Ralston and Energizer agree to,
and shall cause the appropriate member(s) of their respective Groups to,
cooperate with each other in order to obtain such refunds. Energizer agrees
to reimburse the members of the Ralston Group for any reasonable out-of-
pocket expenses related thereto.
(v) Energizer's Claiming, Receiving or Using Refunds and Overpayments. If
-------------------------------------------------------------------
on or after the Distribution Date, a member of the Energizer Group receives any
refund or utilizes the benefit of any overpayment of Domestic Taxes which, in
either case, relates to Domestic Taxes paid by a member of the Ralston Group
with respect to a taxable period or portion thereof ending on or prior to the
Distribution Date, then Energizer shall promptly transfer, or cause to be
transferred to Ralston an amount equal to the entire amount of the refund or
overpayment (including interest) received or utilized by the Energizer Group.
Energizer agrees to notify Ralston within thirty (30) days after the discovery
of a right to claim any such refund or overpayment and the receipt of any such
refund or utilization of any such overpayment. Energizer agrees to, or to cause
the appropriate member of the Energizer Group to, claim any such refund or
to utilize any such overpayment as soon as possible and to furnish to Ralston
all information, records and assistance necessary to verify the amount of the
refund or overpayment. Ralston and Energizer agree to, and shall cause the
appropriate member(s) of their respective Groups to, cooperate with each other
in order to obtain such refunds or overpayments and Ralston agrees to reimburse
Energizer for any reasonable out-of-pocket expenses related thereto.
(vi) Tax Liabilities/Benefits Resulting from Post Distribution Stock Option
-----------------------------------------------------------------------
Exercises by Energizer Employees, Former Energizer Employees and Post
- -----------------------------------------------------------------------------
Distribution Energizer Employees. Energizer shall be liable for any and all
- ----------------------------------
Taxes, including but not limited to, payroll, Social Security, and Medicare Hi
Taxes, imposed on an employer (the "Employer Taxes") with respect to
compensation resulting from the exercise of Ralston stock options on or after
the Distribution Date by any Energizer Employee, Former Energizer Employee or
other individual who becomes employed by a member of the Energizer Group after
the Distribution Date, if at the time of the grant of such stock option, the
recipient was an employee of the Battery Business or identified on payroll
records as an employee of the Battery Business. In the event that Ralston,
acting on behalf of Energizer, pays and deposits such Employer Taxes with
respect to such compensation, then Ralston shall be entitled to reimbursement
from Energizer for such Employer Taxes, net of the tax benefit derived from any
income tax deduction to Ralston attributable to such Employer Taxes. If as a
result of such exercise of a Ralston stock option, Energizer shall be entitled
to claim on the appropriate Tax Return a corresponding income tax deduction for
the compensation expense, resulting in an actual diminution of any Domestic
Taxes, then Energizer shall pay Ralston the amount of such actual diminution of
Domestic Taxes as well as any reimbursement for Employer Taxes provided herein
within thirty (30) days after written notification of Energizer by Ralston of
such option exercise.
(vii) Tax Liabilities Resulting from Post Distribution Stock Option
--------------------------------------------------------------------
Exercises by all Other Employees. Ralston shall be liable for all Employer
- ------------------------------------
Taxes with respect to compensation resulting from the exercise of Ralston stock
options on or after the Distribution Date by any Energizer Employee or Former
Energizer Employee, if at the time of the award of the grant of the stock
option, the recipient was an employee of Ralston Purina Company or otherwise
employed by a Ralston Business. Ralston shall be entitled to claim on the
appropriate Tax Return a corresponding income tax deduction for the compensation
expense and related Employer Taxes paid. To the extent that Ralston is
entitled to such income tax deduction but Energizer is determined by a Tax
authority to be liable for such Employer Taxes, Ralston shall pay Energizer an
amount equal to such Employer Taxes, net of the tax benefit derived from any
income tax deduction to Energizer attributable to such Employer Taxes, within
thirty (30) days after a final determination by a court or administrative
authority that Energizer is so liable.
(viii) Tax Liabilities/Benefits Resulting from Other Deferred Compensation
---------------------------------------------------------------------
Payable Post Distribution. Energizer shall be liable with respect to any
- ---------------------------
Employer Taxes with respect to payments by Ralston under the Fixed Benefit
Option of the Ralston Purina Company Deferred Compensation Plan for Key
Employees ("Ralston Deferred Compensation Plan") to any Energizer Employee,
Former Energizer Employee or individual who becomes employed by a member of the
Energizer Group after the Distribution Date, if at the time of the award of a
benefit under the Ralston Deferred Compensation Plan, the recipient was an
employee of the Battery Business or identified on payroll records as an employee
of the Battery Business. In the event that Ralston, acting on behalf of
Energizer, pays and deposits such Employer Taxes for which Energizer is liable
under this provision with respect to such compensation, then Ralston shall be
entitled to reimbursement from Energizer for such Employer Taxes for which it is
liable under this provision, net of the tax benefit derived from any income tax
deduction to Ralston attributable to such Employer Taxes. If as a result of
such payment of compensation by Ralston, Energizer shall be entitled to claim on
the appropriate Tax Return a corresponding income tax deduction for the
compensation expense, resulting in an actual diminution of any Domestic Taxes,
then Energizer shall pay Ralston the amount of such actual diminution of
Domestic Taxes as well as any reimbursement for Employer Taxes provided herein
within thirty (30) days after written notification of Energizer of such payment.
Ralston shall be liable for all Employer Taxes with respect to payments
under the Ralston Deferred Compensation Plan on or after the Distribution Date
to any Energizer Employee or Former Energizer Employee, if at the time of the
award of a benefit under the Ralston Deferred Compensation Plan the recipient
was an employee of Ralston Purina Company or otherwise employed by a Ralston
Business. Ralston shall be entitled to claim on the appropriate Tax Return a
corresponding income tax deduction for the compensation expense and related
Employer Taxes paid. To the extent that Ralston is entitled to such income tax
deduction but Energizer is determined by a Tax authority to be liable for such
Employer Taxes, Ralston shall pay Energizer an amount equal to such Employer
Taxes, net of the tax benefit derived from any income tax deduction to Energizer
attributable to such Employer Taxes, within thirty (30) days after a final
determination by a court or administrative authority that Energizer is so
liable.
(ix) Reimbursement of Other Tax Benefits. Energizer shall reimburse Ralston
-----------------------------------
to the extent of Domestic Tax benefits derived by any member of the
Energizer Group, for payments made by Ralston to third parties on or after the
Distribution Date, which result in a tax deduction to Energizer or an Energizer
Domestic Subsidiary ("Ralston Payments"), provided such Ralston Payments (a) are
not claimed as a deduction by Ralston for Domestic Tax purposes, (b) are
deductible on a Domestic Tax Return of the Energizer Group, and (c) result in a
reduction of Domestic Taxes of Energizer, the Energizer Group, or any Energizer
Domestic Subsidiary. The amount of the payment required hereunder for any
taxable period of Energizer shall be equal to the actual diminution of any
Domestic Taxes by reason of any Ralston Payments. Provided, however, if for any
taxable period, (X) Energizer or Ralston files an amended Domestic Tax Return
(or files a carryback or carryforward claim relating to a net operating loss),
or (Y) the IRS adjusts any item on any Energizer or Ralston Domestic Tax Return,
the amount of the payment required under this paragraph shall be recomputed
(either at the time of the filing of the amended return, or carryover or
carryback claim, or at the time of the final determination of the IRS
adjustment) to reflect such amended return, claim, or IRS adjustment, and, at
such time, either (I) Ralston shall repay any overpayment by Energizer under
this paragraph of this Article II.1(b)(ix) to Energizer, or (II) Energizer shall
pay any underpayment under this paragraph of this Article II.1(b)(ix) to
Ralston.
Ralston shall reimburse Energizer to the extent of Domestic Tax benefits
derived by any member of the Ralston Group for payments made by Energizer to
third parties on or after the Distribution Date, which result in a tax deduction
to Ralston or a Ralston Domestic Subsidiary ("Energizer Payments") for any
period beginning after the Distribution Date, provided such Energizer Payments
(a) are not claimed as a deduction by Energizer for Domestic Tax purposes, (b)
are deductible on a Domestic Tax Return of the Ralston Group for any period
beginning after the Distribution Date, and (c) result in a reduction of Domestic
Taxes of Ralston, the Ralston Group, or any Ralston Domestic Subsidiary. The
amount of the payment required hereunder for any taxable period of Ralston shall
be equal to the actual diminution of any Domestic Taxes by reason of any
Energizer Payments. Provided, however, if for any taxable period, (X) Ralston
or Energizer files an amended Domestic Tax Return (or files a carryback or
carryforward claim relating to a net operating loss), or (Y) the IRS adjusts any
item on any Ralston or Energizer Domestic Tax Return, the amount of the payment
required under this paragraph shall be recomputed (either at the time of the
filing of the amended return, or carryover or carryback claim, or at the time of
the final determination of the IRS adjustment) to reflect such amended return,
claim, or IRS adjustment, and, at such time, either (I) Energizer shall repay
any overpayment by Ralston under this paragraph of this Article II.1(b)(ix) to
Ralston, or (ii) Ralston shall pay any underpayment under this paragraph of this
Article II.1(b)(ix) to Energizer.
Ralston or Energizer, as the case may be, will provide, in a timely manner
(but in no event more than thirty (30) days after written request therefor),
such information as is reasonably necessary to substantiate the deduction for a
Ralston Payment or an Energizer Payment, as the case may be, so as to permit
inclusion of such deduction on the appropriate Domestic Tax Return of Energizer,
the Energizer Group, or any Energizer Domestic Subsidiary or Ralston, the
Ralston Group, or any Ralston Domestic Subsidiary, as the case may be. At
Ralston's or Energizer's written request, as the case may be, to the extent that
"substantial authority" (as defined in Section 6662 of the Code) exists
therefor, Energizer or Ralston, as the case may be, (a) shall claim the
deduction for (and shall not report income with respect to) a Ralston Payment or
an Energizer Payment, as the case may be, on the appropriate federal, state or
local income tax return, and (b) shall contest any claim by a taxing authority
relating to the Ralston Payment or the Energizer Payment, as the case may be,
provided Ralston or Energizer, as the case may be has agreed to indemnify the
other in a manner reasonably satisfactory to Energizer or Ralston, as the case
may be, for any liability or loss (including (i) interest and penalties on
Taxes, and (ii) any reasonable out-of-pocket expenses) incurred by Energizer or
Ralston, as the case may be, as a result of taking such return position or
pursuing such contest.
(c) Domestic Audits and Controversies.
------------------------------------
(i) Ralston shall, at its own expense, exclusively control and
direct any Tax Audit or Controversy with respect to any Domestic Taxes for any
Tax period ending prior to the Distribution Date. Energizer, however, shall
have the right, at its own expense, to participate in any such Audit or
Controversy to the extent such Audit or Controversy would impact the Domestic
Taxes for which Energizer is liable in accordance with this Agreement, as
determined by Energizer, and Ralston shall not consent to any resolution,
compromise or conclusion of such Audit or Controversy without the written
approval of Energizer, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, in the event Ralston shall compromise or settle
any such deficiency of Domestic Tax without the prior consent of Energizer,
Ralston shall hold Energizer and any Energizer Domestic Subsidiary harmless
against any losses, costs, or damages, including Taxes resulting from such
compromise or settlement.
(ii) Energizer shall, at its own expense, exclusively control and
direct any Audit or Controversy with respect to any Domestic Taxes attributable
to the Energizer Group for a Tax period which begins on or after the
Distribution Date and for any Tax period straddling the Distribution Date.
Ralston, however, shall have the right, at its own expense, to participate in
any such Audit or Controversy to the extent such Audit or Controversy would
impact the Domestic Taxes for which Ralston is liable in accordance with this
Agreement, as determined by Ralston, and Energizer shall not consent to any
resolution, compromise or conclusion of such Audit or Controversy without the
written approval of Ralston, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, in the event Energizer shall compromise or settle
any such deficiency of Domestic Tax without the prior consent of Ralston,
Energizer shall hold Ralston and any Ralston Domestic Subsidiary harmless
against any losses, costs, or damages, including Taxes resulting from such
compromise or settlement.
(d) Domestic Tax Adjustments.
--------------------------
(i) If the IRS, or any state or local taxing authority, shall make
an adjustment to any Domestic Tax Return of (A) the Ralston Group, (B) any
Ralston Domestic Subsidiary, (C) Energizer, or (D) any Energizer Domestic
Subsidiary for any Tax period ending prior to the Distribution Date, and such
adjustment (including but not limited to adjustments to tax basis determination,
a tax accounting method with respect to its property and accounts included in
and carried forward from Ralston or the Ralston Domestic Subsidiaries prior to
the Distribution Date), consistently applied would require Energizer or the
Energizer Domestic Subsidiaries to make a corresponding adjustment to their
Domestic Tax Returns for periods beginning on or after the Distribution Date,
then,
(A) if such corresponding adjustment in a Domestic Tax Return
of Energizer or any Energizer Domestic Subsidiary results in an actual
diminution of any Domestic Taxes for any such period beginning on or after the
Distribution Date, whether or not an actual amended return is filed, Energizer
shall pay Ralston the amount of such Domestic Tax either (I) when such refund
and related interest are received and required to be remitted within the period
provided in Article VI 3 hereof, or (II) within thirty (30) days of written
notice by Ralston to Energizer of such corresponding adjustment, if an amended
return is not filed.
(B) if such corresponding adjustment in a Domestic Tax
Return of Energizeror any Energizer Domestic Subsidiary results in an increase
of any Domestic Tax for Energizer for such period beginning on or after the
Distribution Date, and an actual diminution of any Domestic Tax for
Ralston, Ralston shall pay Energizer the amount of such Domestic Tax, either
due (I) when such refund and related interest are received and required to
be remitted within the period provided in Article VI.3 hereof, or (II)
within thirty (30) days of written notice by Energizer to Ralston of such
corresponding adjustment, if an amended return is not filed.
No payment shall be due under this Article II.1(d) to the extent that any
payment is made, or would be required to be made for the same adjustment, under
Article II.1(b)(ix) hereof.
(e) Domestic Transfer Taxes. Ralston shall pay any and all Domestic
-------------------------
Taxes required upon, or by virtue of, any transfer of property contemplated
under the Plan of Reorganization including the transfer of shares of stock of
Energizer Domestic Subsidiaries in connection with the Distribution.
(f) Domestic Tax Attributes.
-------------------------
(i) Any Domestic Tax attribute generated by Ralston or Energizer
shall, to the extent permitted by the applicable law of the Tax jurisdiction in
question, remain with Ralston or Energizer, respectively, or the appropriate
entity. In any case where the applicable law of the Tax jurisdiction in
question requires such Tax attribute to be allocated between Ralston and
Energizer, such allocation shall be made as provided by the law of such
jurisdiction.
Notwithstanding the foregoing, any state or local net operating
losses or Tax credits generated by a member of the Energizer Group for any Tax
period beginning prior to the Distribution Date shall be for the benefit of
Ralston. As permitted by the applicable law of the appropriate Tax
jurisdiction, such net operating losses or Tax credits shall be first carried
back to prior Tax periods. In the event that (i) the applicable law of the Tax
jurisdiction does not permit the carryback of such losses or Tax credits, or
(ii) such losses or Tax credits cannot be fully utilized in an allowable
carryback, then Energizer shall pay Ralston the amount of the actual diminution
of any state or local Taxes of Energizer resulting from the utilization by any
member of the Energizer Group of such losses or credits within thirty (30) days
of the filing of the Tax Return reflecting the utilization of such loss or Tax
credit, in accordance with Article VI, 3 hereof.
(ii) Any excess Foreign Tax credits of the Ralston Group, as of
the Distribution Date, as finally determined by Ralston in accordance with Code
Section 904, shall be allocated between the Ralston Group and the Energizer
Group, in accordance with Reg. 1.1502-79(d).
(iii) Any earnings and profits of the Ralston Group as of the
Distribution Date, as finally determined by Ralston, shall be allocated between
the Ralston Group and the Energizer Group in accordance with Reg. 1.312-10(a).
(iv) Any Capital Loss Carryovers of the Ralston Group, as of the
end of the fiscal year that includes the Distribution Date, as finally
determined by Ralston, shall be allocated between the Ralston Group and the
Energizer Group in accordance with
Reg. 1.1502-22T.
(g) Dual Resident Corporations. Energizer shall timely enter into any
---------------------------
closing agreement with Ralston and the IRS in accordance with Regs Section
1503-2(g)(2)(iv)(B)(2), to the extent necessary to avoid recapture of any "dual
consolidated loss", within the meaning of Regs. Section 1.1503-2(c)(5) generated
by any Energizer Domestic Subsidiary, which constitutes a "dual resident
corporation" within the meaning of Regs. Section 1.1503-2(c)(2). To the extent
Energizer causes the recapture of any "dual consolidated loss" created prior to
the Distribution Date, Energizer shall pay or reimburse Ralston for any taxes
and interest due as a result of the recapture.
(h) Gain Recognition Agreements. Energizer shall timely file any
-----------------------------
annual certifications required by any Agreements to Recognize Gain pursuant
to Reg. 1.367(a)-3T(g) entered into by Ralston to defer gain on a transaction
including an Energizer Foreign Affiliate. To the extent Energizer causes the
recognition of any such deferred gain after the Distribution Date, Energizer
shall pay or reimburse Ralston for any Domestic Taxes and interest due as a
result of the recognition of such gain.
ARTICLE III. FOREIGN TAXES
1. Preparation and Filing of Ttax Returns, Payment of Taxes, Adjustments,
-------------------------------------------------------------------------
Audits and Controversies.
- --------------------------
(a) Preparation and Filing of Foreign Returns.
----------------------------------------------
(i) Energizer shall be responsible for the preparation and filing
of any Foreign Tax Return of any Energizer Foreign Affiliate for all Tax
Periods.
(ii) Ralston shall be responsible for the preparation and filing
of any Foreign Tax Return of any Ralston Foreign Affiliate for all Tax Periods.
(iii) In the case of any Joint Foreign Affiliate, which, after the
Distribution Date, shall become a Ralston Foreign Affiliate or an Energizer
Foreign Affiliate, as the case may be, consistent with the definition herein of
"Joint Foreign Affiliate," with the cooperation and assistance of Ralston and
Energizer, shall prepare and file any Foreign Tax Return of such entity for any
Tax period ending prior to, or straddling, the Distribution Date.
(b) Liability for Foreign Taxes.
------------------------------
(i) Except in respect of (A) the Foreign Transfer Taxes described
in subparagraph (c) below, and (B) any Foreign Taxes with respect to the (I)
U.K. Restructuring, (II) Brazilian Restructuring, (III) Mexican Restructuring,
(IV) Argentinean/Chilean Restructuring, or (V) Canadian Restructuring, as
described in Article II of the Plan of Reorganization, or (VI) the
pre-Distribution Date transactions listed on the attached Schedule A. Energizer
shall be liable for, shall indemnify and hold the Ralston Group and the Ralston
Foreign Affiliates harmless against, and shall make payment of all Foreign Taxes
attributable to the Battery Business and any Former Battery Business, for any
and all Tax periods commencing before, on, or after the Distribution Date,
including any Foreign Taxes attributable to the Battery Business and the Former
Battery Business conducted by any Joint Foreign Affiliate and including any such
liabilities resulting from an Audit or other adjustment to previously filed Tax
Returns. Other than refunds of the Foreign Transfer Taxes and Foreign Taxes
with respect to the Restructurings, described in (A) and (B) above, Energizer
shall be entitled to any refund of Foreign Taxes attributable to the Battery
Business and any Former Battery Business for any such Tax periods, including any
Foreign Taxes attributable to the Battery Business and any Former Battery
Business conducted by any Joint Foreign Affiliate. The allocation of any such
Foreign Taxes between or among the Ralston Business, the Battery Business, the
Former Ralston Business or any Former Battery Business of a Joint Foreign
Affiliate shall be determined in accordance with the books and records of
Ralston, any Ralston Foreign Affiliate and any Joint Foreign Affiliate, as
though the Battery Business or Former Battery Business were deemed to have been
conducted as the sole business of such Joint Foreign Affiliate.
(ii) Ralston shall be liable for, shall indemnify and hold the
Energizer Group and the Energizer Foreign Affiliates harmless against, and shall
make payments of, all (A) Foreign Taxes owed by any Ralston Businesses and
Former Ralston Businesses, for any and all Tax periods commencing before, on, or
after the Distribution Date, including any such Foreign Taxes attributable to
the Ralston Businesses or the Former Ralston Businesses conducted by any Joint
Foreign Affiliate prior to the Distribution Date, and including any such
liabilities resulting from an Audit or other adjustment to previously filed Tax
Returns and (B) any Foreign Taxes with respect to the Restructurings. Ralston
shall be entitled to any refund of such Foreign Taxes for any Tax period. The
allocation of any such Foreign Taxes between or among the Ralston Businesses,
the Battery Business, any Former Ralston Businesses or any Former Battery
Businesses of a Joint Foreign Affiliate shall be determined in accordance with
the books and records of Ralston, any Ralston Foreign Affiliate and any Joint
Foreign Affiliate, as may be appropriate, as though the Battery Business or
Former Battery Business were deemed to have been conducted as the sole business
of such Joint Foreign Affiliate.
(iii) If, in accordance with this Article III 1(b), either Ralston
or Energizer is liable for any portion of the Foreign Taxes payable in
connection with any Foreign Tax Return to be filed by the other, the party
responsible for filing such Return (the "Preparer") shall prepare and deliver to
the other party (the "Payor") a copy of such return and any schedules, work
papers and other documentation then available that are relevant to the
preparation of the portion of such return for which the Payor is or may be
liable hereunder not later than the earlier of (A) twenty (20) days prior to the
due date for such Tax Return (including applicable extensions) (the "Due Date"),
or (B) the date the information is available in the normal course of business.
The Preparer shall not file such return until the earlier of either the receipt
of written notice from the Payor indicating the Payor's consent thereto, or five
(5) days prior to the Due Date to ensure timely receipt of the return by the
taxing jurisdiction.
The Payor shall have the option of providing to the Preparer, at
any time at least ten (10) days prior to the Due Date, written instructions as
to how the Payor wants any, or all, of the items for which it may be liable in
full reflected on such Tax Return. Failure by the Payor to give written
instructions at least ten (10) days prior to the Due Date shall constitute a
waiver by the Payor of its right to provide instructions, to the extent such
failure is prejudicial to the Preparer.
The Preparer shall, in preparing such Return, cause the items for
which the Payor is liable hereunder to be reflected in accordance with the
Payor's instructions unless the Preparer determines that such manner of
reporting is in contravention of applicable law. In the absence of having
received instructions from Payor, such items shall be reported in the manner
determined by the Preparer, which is not in contravention of applicable law, and
consistent with historic business practices, as applicable. The Payor shall
timely pay the Preparer an amount equal to the Foreign Taxes for which it is
liable consistent with the Return, and in accordance with Article VI 3 hereof.
(c) Foreign Transfer Taxes. Ralston shall pay or shall reimburse
------------------------
Energizer or an Energizer Foreign Affiliate as appropriate, for payment of any
and all Foreign Taxes upon, or by virtue of, any transfer of property
contemplated under the Plan of Reorganization, including the transfer of shares
of stock of Energizer Foreign Affiliates to Energizer in connection with the
Distribution. Foreign Tax Returns required to be prepared and filed by
Energizer relating to the transfer of shares of stock of Energizer Foreign
Affiliates to Energizer, must be provided to Ralston by Energizer at least ten
(10) days prior to the due date for such Tax Returns so that Ralston may timely
make any payment of Foreign Transfer Taxes due with respect to such Foreign Tax
Return. Ralston shall reimburse Energizer, or an Energizer Foreign Affiliate,
as appropriate, for any such Foreign Transfer Taxes paid, within thirty (30)
days of presentation of a receipt evidencing payment of such Taxes by the
Foreign Affiliate.
(d) Foreign Audits and Controversies.
-----------------------------------
(i) Energizer, at its expense, shall exclusively control and
direct any Audit or Controversy with respect to any Energizer Foreign Affiliate.
Ralston, however, shall have the right to participate in any such Audit or
Controversy to the extent such Audit or Controversy would impact the Foreign
Taxes or Domestic Taxes for which Ralston is liable in accordance with this
Agreement. Energizer shall not consent to any resolution, compromise or
conclusion of such Audit or Controversy without the written approval of Ralston,
which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, in the event Energizer shall compromise or settle any such deficiency
of Foreign Tax without the prior consent of Ralston, Energizer shall indemnify
and hold Ralston and any Ralston Foreign Affiliate harmless against any losses,
costs, or damages, including Taxes resulting from such compromise or settlement.
(ii) Ralston, at its expense, shall exclusively control and direct
any Tax Audit or Controversy as to any Foreign Tax with respect to any Ralston
Foreign Affiliate. Energizer, however, shall have the right to participate in
any such Audit or Controversy to the extent such Audit or Controversy would
impact the Foreign Taxes for which Energizer is liable in accordance with this
Agreement. Ralston shall not consent to any resolution, compromise or
conclusion of such Audit or Controversy without the written approval of
Energizer, which approval shall not be unreasonably withheld. Notwithstanding
the foregoing, in the event Ralston shall compromise or settle any such
deficiency of Foreign Tax without the prior consent of Energizer, Ralston shall
indemnify and hold Energizer and any Energizer Foreign Affiliate harmless
against any losses, costs, or damages, including Taxes resulting from such
compromise or settlement.
(e) Foreign Tax Attributes.
------------------------
Subject to subparagraph (c) above regarding Foreign Transfer Taxes,
any Foreign Tax attribute generated by Ralston or Energizer shall, to the extent
permitted by the applicable law of the Tax jurisdiction in question, remain with
Ralston or Energizer, respectively, or the appropriate entity. In any case
where the applicable law of the Tax jurisdiction in question requires such Tax
attribute to be allocated between Ralston and Energizer, such allocation shall
be made as provided by the law of such jurisdiction. In the event the
applicable law of the Tax jurisdiction requires that such Tax Attribute be
allocated between the parties based on a method of allocation agreed to by the
parties, Ralston and Energizer shall apply an allocation method reasonably
agreed to by both parties.
(f) Competent Authority.
--------------------
If, as a result of a Tax Audit for any Tax Period ending prior to the
Distribution Date (a) the IRS proposes a deficiency with respect to Ralston or
any Ralston Domestic Subsidiary or Energizer or any Energizer Domestic
Subsidiary or (b) any foreign Tax authority proposes a deficiency with respect
to any Ralston Foreign Affiliate or Energizer Foreign Affiliate, in either case
attributable to a proposed adjustment in transfer prices with respect to any of
the foregoing entities, and such adjustment, if sustained, would result in
liability for double Domestic or Foreign Taxes to Ralston or Energizer, to the
extent available under applicable tax treaties and the procedures applied by the
IRS and/or the foreign tax authority, Ralston or Energizer, depending on which
party would be subject to such double taxation, decides to request "competent
authority" (within the meaning of Rev. Proc. 96-13, 1996-1 C.B. 616) assistance
of the appropriate Tax authority or its equivalent ("Competent Authority"), then
the following provisions shall apply: The party initiating the Competent
Authority process, at its expense, shall diligently pursue such Competent
Authority assistance, including without limitation, filing any required amended
Tax Return, in connection with any such Tax Audit and complying with the
applicable procedures of such Competent Authority process. To the extent that
Ralston, as a result of such Competent Authority process, receives a refund of
double Foreign Taxes relating to a Tax Audit of Domestic Taxes of Energizer for
which Ralston is or was liable under this Agreement or utilizes the benefit of
any overpayment of such Foreign Taxes, Ralston shall retain such refund or
utilize the benefit of any such overpayment of Foreign Taxes and to the extent
that Energizer, as a result of such Competent Authority process, receives a
refund of double Foreign Taxes relating to a Tax Audit of Domestic Taxes of
Energizer for which Ralston is or was liable under this Agreement or utilizes
the benefit of such overpayment, Energizer shall pay an amount equal to such
refund or overpayment to Ralston . To the extent that Ralston, as a result of
such Competent Authority process, receives a refund of double Domestic Taxes
relating to a Tax Audit of Foreign Taxes of Energizer for which Energizer is or
was liable under this Agreement or utilizes the benefit of any overpayment of
such Domestic Taxes, Ralston shall pay an amount equal to such refund or
overpayment to Energizer, and, to the extent that Energizer, as a result of such
Competent Authority process, receives a refund of such double Domestic Taxes
relating to a Tax Audit of Foreign Taxes of Energizer for which Energizer is or
was liable under this Agreement or utilizes the benefit of any overpayment of
such Domestic Taxes, Energizer shall retain such refund or utilize the benefit
of such overpayment.
(g) Reimbursement of Other Tax Benefits.
---------------------------------------
Energizer shall reimburse Ralston to the extent of Foreign Tax
benefits derived by any member of the Energizer Group, for payments made by
Ralston to third parties on or after the Distribution Date, which result in a
Tax deduction to Energizer or an Energizer Foreign Affiliate ("Ralston
Payments"), provided such Ralston Payments (a) are not claimed as a deduction by
Ralston for Foreign Tax purposes, (b) are deductible on a Foreign Tax Return of
the Energizer Group, and (c) result in a reduction of Foreign Taxes of
Energizer, the Energizer Group, or any Energizer Foreign Affiliate. The amount
of the payment required hereunder for any taxable period of Energizer shall be
equal to the actual diminution of any Foreign Taxes by reason of any Ralston
Payments. Provided, however, if for any taxable period, (X) Energizer or
Ralston files an amended Foreign Tax Return (or files a carryback or
carryforward claim relating to a net operating loss), or (Y) the Foreign Tax
authority adjusts any item on any Energizer or Ralston Foreign Tax Return, the
amount of the payment required under this paragraph shall be recomputed (either
at the time of the filing of the amended return, or carryover or carryback
claim, or at the time of the final determination of the adjustment) to reflect
such amended return, claim, or adjustment, and, at such time, either (I) Ralston
shall repay any overpayment by Energizer under this paragraph to Energizer, or
(II) Energizer shall pay any underpayment under this paragraph to Ralston.
ARTICLE IV. NEGOTIATION
For the purposes of this Agreement, all computations or recomputations of
Tax liability, and all computations or recomputations of any amount or any
payment (including, but not limited to, computations of the amount of the tax
liability, any loss or credit or deduction, statutory tax rate for a year,
interest payments, and adjustments) and all determinations of payments or
repayments, or determination of any other nature required to be made pursuant to
this Agreement, shall be based on the assumptions and conclusions of the party
making the computations. If either Ralston or Energizer objects thereto in
writing, addressed to the other party, the provisions of Article XI of the Plan
of Reorganization shall be applicable to resolve any issues under this Tax
Sharing Agreement.
ARTICLE V. ENERGIZER POST-DISTRIBUTION TRANSACTIONS
1. Energizer shall, and shall cause each member of the Energizer Group and
each Energizer Foreign Affiliate to comply with each representation and
statement made, or to be made, to the IRS in connection with any ruling
obtained, or to be obtained, by Ralston from the IRS with respect to any
transaction contemplated by the Plan of Reorganization. Neither Energizer nor
any member of the Energizer Group shall for a period of thirty (30) months, with
respect to transactions described in subparagraphs I, III, IV, V, and VI, below;
and twenty-four months with respect to the transaction described in subparagraph
II below, following the Distribution Date engage in any of the following
transactions, unless, in the sole discretion of Ralston, either (a) an opinion
in form and substance satisfactory to Ralston is obtained from counsel to
Energizer, the selection of which counsel is agreed to by Ralston or (b) a
supplemental ruling is obtained from the IRS, in either case to the effect that
such transactions would not adversely affect the tax consequences of the
transactions contemplated by the Plan of Reorganization to (i) Ralston or any
member of the Ralston Group, (ii) Energizer or any member of the Energizer
Group, or (iii) the Ralston shareholders. The transactions subject to this
provision include: (I) making a material disposition (including transfers from
one member of the Energizer Group to another member of the Energizer Group), by
means of a sale or exchange of assets or shares of stock, a distribution to
shareholders, or otherwise, of any of its assets (other than the transactions
contemplated by the Plan of Reorganization) except in the ordinary course of
business; (II) repurchasing any Energizer Shares, unless such repurchase
satisfies the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30;
(III) issuing capital stock of Energizer (or a successor to Energizer), whether
incident to a stock offering, an acquisition transaction, or otherwise, or
participating in a transaction in which shareholders of Energizer (or a
successor to Energizer) exchange or otherwise dispose of their stock in
Energizer (or a successor to Energizer), if the aggregate amount of shares
issued or disposed of in any such transactions represents a "fifty percent (50%)
or greater interest" in the total issued and outstanding stock of Energizer (or
a successor to Energizer) within the meaning of section 355(d)(4) of the Code;
provided that Energizer further agrees to notify Ralston in advance of any such
transactions that would result in the issuance or disposition of an aggregate
amount of shares representing a ten percent (10%) or greater interest in the
total issued and outstanding stock of Energizer; (IV) liquidating or merging
with any other corporation (including a member of the Energizer Group); (V)
ceasing to engage in the active conduct of a trade or business within the
meaning of Section 355(b)(2) of the Code; or (VI) any other transaction, action,
or event which in any material respect is inconsistent with the representations
and statements set forth on Schedule 8.01(b)(vi) to the Agreement and Plan of
Reorganization. Energizer hereby represents that neither Energizer nor any
member of the Energizer Group has any present intention to undertake any of the
transactions set forth above, except as set forth in the ruling request
submitted to the IRS with respect to the Distribution.
2. Ralston shall, and shall cause each member of the Ralston Group and each
Ralston Foreign Affiliate to refrain from taking any action which would
adversely impact any ruling obtained, or to be obtained, by Ralston from the IRS
with respect to any transaction contemplated by the Agreement of Reorganization.
ARTICLE VI. MISCELLANEOUS PROVISIONS
1. Mutual Cooperation. Ralston and Energizer shall, and shall cause each of
------------------
their Domestic Subsidiaries and Foreign Affiliates to, cooperate with each other
in filing any Tax Returns or consents contemplated by this Agreement and to take
such actions as the other party may reasonably request, including but not
limited to the following: (a) provide data for the preparation of Tax Returns,
including schedules, and make elections that may be required by the other party;
(b) provide required documents and data and cooperate in Audits or
investigations of Tax Returns and execute appropriate powers of attorney in
favor of the other party and/or its agents; (c) file protests or otherwise
contest proposed or asserted tax deficiencies, including filing petitions for
redetermination or prosecuting actions for refund in court, and pursuing the
appeal of such actions; (d) take any of the actions of the type described in
Regulation Section 1.1502-77(a) of the Code (describing the scope of the agency
of the common parent of a group of affiliated corporations); and (v) file
requests for the extension of time within which to file Tax Returns.
2. Maintenance of Books and Records. Until the applicable statute of
------------------------------------
limitations (including periods of waiver), or statute of similar import, has
expired in accordance with laws governing Domestic or Foreign Taxes and Tax
Returns, Ralston and Energizer shall, and shall cause each Domestic Subsidiary
and Foreign Affiliate to, retain all Tax workpapers and related materials
including applicable financial reports in its possession and under its control
used in the preparation of any Tax Return for Tax periods commencing prior to or
on the Distribution Date. Ralston and Energizer will notify the other party
sixty (60) days prior to disposing of any of the aforementioned records and will
deliver to the other party, at the other party's expense, any such records
requested by the other party. In addition, Energizer shall generate and retain
for IRS audit use (i) all necessary electronic data processing ("EDP") records
in accordance with existing agreements with the IRS, and (ii) any necessary
computer hardware or source codes needed to process EDP records for the IRS. As
requested, from time to time, by Energizer or Ralston, Ralston and Energizer
shall each provide the other with timely access to, and right to copy, any
records and other information reasonably requested concerning tax matters
affecting Energizer and Ralston and the cooperation of their respective
accountants and auditors, including, without limitation, information concerning
stock and asset bases, holding period, earnings and profits, intercompany
transactions, balance sheet and income statement tax provisions, reserves and
deferred tax accounts. In no event shall such access to available information
be provided more than thirty (30) days after written request therefor.
3. Payment. Failure to make any payment required under this Agreement will
-------
result in the accrual of interest on such amount due. Any interest payment
required hereunder shall be calculated from the same date and at the rate used
by the IRS, any foreign, state, or local tax authority, as applicable, in
computing the interest payable by it or to it. Unless otherwise provided, all
payments required to be made under this Agreement from one party to another
shall be made within thirty (30) days after the event which gives rise to the
requirement for payment occurs. Any payments made pursuant to this Agreement
are to be adjusted in the event that future events or new information would, had
they occurred or been known at the time of a payment, have altered the amount of
such payment, so that at the time of such future events or knowledge of such
information, appropriate adjustments shall be made retroactively to include the
consequences of such event or information in the original computation.
4. Treatment of Intercompany Payments. To the extent that any payments are
------------------------------------
made between Energizer and Ralston pursuant to this Agreement, for purposes of
Domestic Tax treatment, such payments to Ralston by Energizer shall be treated
as a distribution under Section 301 of the Code by Energizer to Ralston at a
time when the two corporations filed a consolidated federal income tax return,
and such payments by Ralston to Energizer shall be treated as a nontaxable
contribution by Ralston to the capital of Energizer immediately prior to the
Distribution Date. In any event, any payments made between Energizer and Ralston
pursuant to this Agreement shall be subject to any required withholding of Taxes
and shall be made net of any such Taxes required to be withheld on such
payments, provided, however, to the extent feasible, such payments shall be
structured so as to be free of withholding Taxes or to minimize withholding
Taxes. Whenever any such withholding Taxes are payable by or on behalf of the
payor, as promptly as possible thereafter, the payor shall send to the payee a
certified copy or an original official receipt received by the payor showing
payment thereof.
5. Energizer Domestic Tax Accruals. Prior to the Distribution Date,
----------------------------------
Energizer will transfer to the books of Ralston any Domestic Tax accrual
balances (credits) recorded on any books of any Energizer Domestic Subsidiary as
of the Distribution Date. Prior to the Distribution Date, Ralston will transfer
to the books of Energizer any Domestic Tax accrual balances (credits) recorded
on any books of Ralston as of the Distribution Date relating to Foreign Taxes
for which Energizer is, or may become, liable under this Agreement.
6. Tax Sharing Agreements. Any other tax sharing or tax allocation or
------------------------
similar agreement or arrangement in effect between Energizer and Ralston,
whether oral or in writing, shall terminate as between Energizer and Ralston on
the Distribution Date and, notwithstanding anything in such agreement to the
contrary, any rights or obligations of Energizer and Ralston under any such
agreement or arrangement shall be superseded by the terms of this Agreement.
7. No Double Tax Benefit. Anything in this Agreement to the contrary
------------------------
notwithstanding, neither Ralston nor Energizer shall be entitled to any double
benefit both (i) by reason of any payment otherwise required to be made between
the parties under this Agreement and (ii) any Tax benefit or avoidance of any
Tax detriment under applicable Domestic or Foreign Tax law, including, without
limitation, (x) being required to make any payment to the other for any loss of
Tax benefit under this Agreement to the extent that such party is entitled to,
and actually receives, such Tax benefit under applicable Tax law or (y) entitled
to receive any payment under this Agreement for any apparent Tax detriment to
the extent such party is entitled to, and actually is able to, avoid such Tax
detriment, under such Tax law.
8. Governing Law. This Agreement shall be governed and construed in
--------------
accordance with the laws of the State of Missouri, and the United States of
America, notwithstanding any conflict of law provision to the contrary, and
shall be binding on the successors and assigns of the parties hereto.
9. Entire Agreement. Unless otherwise specified, this Agreement contains
-----------------
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior written agreements, memoranda,
negotiations and oral understandings, if any, and may not be amended,
supplemented or discharged except by performance or by an instrument in writing
signed by all of the parties hereto.
10. Controlling Agreement. In the case of a conflict between the Plan of
----------------------
Reorganization and this Agreement, this Agreement shall control.
Notwithstanding anything in this Agreement to the contrary any rights or
obligations with respect to Taxes affecting the Ralston Purina Charitable Trust
shall be controlled by Section 2.07 of the Agreement and Plan of Reorganization.
11. Counterpart. This Agreement may be executed simultaneously in two or
-----------
more counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
12. Intellectual Property. Notwithstanding anything in this Agreement to the
---------------------
contrary, Ralston shall not be liable for any Taxes resulting from the transfer
or registration of any intellectual property for which Ralston does not bear
responsibility for costs under the Intellectual Property Agreement as defined in
Section 5.04 of the Plan of Reorganization between Ralston and Energizer.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
RALSTON PURINA COMPANY
BY /s/ James R. Elsesser
James R. Elsesser
Vice President and Chief Financial Officer
ENERGIZER HOLDINGS, INC.
BY /s/ Harry L. Strachan
Harry L. Strachan
Vice President and General Counsel
<PAGE>
SCHEDULE A
Foreign Transactions for which Energizer is not Liable for Foreign Taxes
- --------------------------------------------------------------------------------
1. ERL Liquidation
2. UK Teddy's Financing
3. CRES Sale
4. RESIB/Iberia Sale
5. Italian Usufruct
6. EUK Debt
7. EPS Sale
8. Agribrands Spin-off
9. Protein Sale
EXHIBIT B
BRIDGING SERVICES AGREEMENT
---------------------------
This Bridging Services Agreement (the "Agreement") is made as of this 1st day of
---
April, 2000, (the "Effective Date") by and between Ralston Purina Company, a
- -----
Missouri Corporation ("Ralston"), and Energizer Holdings, Inc., a Missouri
corporation ("Energizer").
WHEREAS, the parties have entered into an Agreement and Plan of
Reorganization ("Plan of Reorganization") dated as of April 1, 2000;
WHEREAS, Ralston and Eveready Battery Company, Inc., a Delaware corporation
("Eveready") have executed a lease agreement beginning as of April 1, 2000
pursuant to which Eveready will lease certain office space from Ralston (the
"Lease");
WHEREAS, pursuant to the Plan of Reorganization, the parties have agreed
that Ralston and Energizer desire to provide each other and their respective
affiliates with certain services as more fully described on Schedules 1 through
-
31, (and any exhibits attached thereto), all of which are attached hereto and
- --
incorporated herein by reference, (collectively, the "Services"), on an interim
basis after April 1, 2000;
WHEREAS, Ralston and Energizer desire to enter into this Agreement to
confirm the terms and conditions pursuant to which each party will provide to
the other party, for a limited time from and after the Effective Date, the
Services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Services. Subject to the terms of this Agreement, from and after the
---------
Effective Date, the party providing the particular Services (the "Provider")
shall make such Services available to the party receiving such Services (the
"Recipient") in accordance with the practices in effect as of the Effective Date
or as specifically set forth in the Schedules.
2. Price for Services. In consideration for the Services, the Recipient
--------------------
shall pay to the Provider the fee or other charge set forth opposite each such
Service on the applicable Schedule and each Service provided will be separately
invoiced to Recipient in accordance with the billing provisions set forth in the
Schedule with respect to such Service. Unless otherwise provided for in the
applicable Schedule, the basis for price determinations will be cost to the
Provider plus 10%, plus any travel or other out of pocket expenses. Cost shall
be determined by the Provider in a reasonable manner, which absent manifest
error or inaccuracy shall be binding on the parties. Upon written request by
Recipient, Provider will furnish such written documentation as it shall
reasonably determine is necessary to support its cost determination. Unless
otherwise provided for in the applicable Schedule, the price for Services shall
be subject to adjustment effective October 1, 2000, and annually thereafter, to
accommodate annual fiscal year increases in the cost to Provider in providing
the Services. Prices for Services shall also be subject to adjustment upon
thirty (30) days prior written notice from Provider to Recipient, if such
adjustment is the result of an actual cost adjustment by a third party provider
or outside vendor to Provider.
3. Limitations. The following limitations on responsibility and liability
-----------
shall apply to both Providers in connection with their provision of Services
hereunder:
(a) Neither Provider shall be obligated to (i) hire any additional
personnel; (ii) maintain the employment of any person; (iii) purchase, lease,
license or otherwise obtain any equipment, facilities, software, or other items;
or (iv) pay any extraordinary cost or suffer any extraordinary expense in
transferring, converting, preserving, storing or maintaining any records,
information or data belonging to either Recipient. Upon termination of this
Agreement or any applicable Schedule, each Recipient shall promptly return to
each Provider any equipment or other property owned, leased or licensed by or to
such Provider which is in the Recipient's possession, custody or control.
(b) Neither Provider shall be liable to either Recipient for any
liabilities, claims, losses, demands, obligations, costs, expenses, proceedings,
taxes, levies, imposts, duties, deficiencies, assessments, charges, damages or
judgments of any kind, name, nature or description, including without limitation
attorney's fees and expenses (collectively, "Liabilities"), unless such
Liabilities arise solely and directly from the willful misconduct of the
Provider. In such event, the liability of the Provider shall be limited to the
lesser of (i) the Provider's correction of the defect in the Service provided;
or (ii) the return of a pro-rata portion of the fee charged for the Service that
is attributable to the defect in the Service provided.
(c) The provision of any Service hereunder by either Provider shall be
deemed an unqualified acceptance of such Service by the Recipient, and no claim
relating to any defect in Service provided (which shall, in all cases, be
limited by the terms of Section 3(b) hereof) shall be made against the Provider
of the Service more than thirty (30) days after such Service is rendered. All
such claims shall be in writing, stating in reasonable detail the defect in
Service claimed.
(d) Neither Provider shall be liable to any affiliate, contractor, agent or
employee of either Recipient, or to any third party whatsoever, for any
Liabilities arising from or relating to the Provider's performance of this
Agreement.
(e) Neither Provider shall in any event be liable to either Recipient, or to
any of such Recipient's affiliates, contractors, agents or employees, or to any
third party whatsoever, for any special, indirect, incidental, consequential or
punitive damages alleged to arise out of or relate to the performance of this
Agreement.
(f) Neither Provider shall be liable to either Recipient to the extent that
Services provided under a Schedule are terminated, in whole or in part, earlier
than the stated duration if the basis for providing such Services requires the
consent or cooperation of a third party, and such third party refuses to give
such consent or cooperation. In such case, Provider shall be immediately
relieved of any obligation to provide those Services to the Recipient, and
Recipient shall be relieved of any obligation to pay for any Services not yet
performed.
4. Indemnification. Each Recipient of Services hereunder agrees and hereby
----------------
does indemnify and hold harmless each Provider of Services hereunder from and
against any and all Liabilities (as defined in Section 3 (b) hereof) arising out
of or relating to the performance of this Agreement, including any Liabilities
alleged to result solely from the negligence of the Provider, and saving only
such Liabilities as may arise solely and directly from the willful misconduct of
the Provider.
5. Additional Services. If a party to this Agreement wants the other to
---------------------
provide any service other than the Services provided for in the Schedules, such
party shall notify the other in writing, and within thirty (30) days following
the giving of such notice, such other party shall decide, in its sole
discretion, whether to provide such additional service. If such other party
agrees to be a Provider with respect to such additional service, the Recipient
and Provider shall mutually agree on the fee for such service and shall set
forth the terms of their agreement with respect to the additional service in a
separate schedule that shall be incorporated herein. The provision by Provider
of any such additional services shall be considered "Services" hereunder and
subject to all other provisions of this Agreement, as if those additional
services had originally been part of the Schedules to this Agreement.
6. Confidentiality. The parties will use their best efforts to restrict
----------------
any information (including, but not limited to, confidential information) which
is exchanged between the parties under this Agreement to those employees or
agents who are required to know or utilize such information in order to provide
the Services hereunder. Any and all information which is not generally known to
the public and which is exchanged between the parties in connection with this
Agreement, and which consists of employee information (including payroll
records, benefits information, and personnel files), business or marketing
plans, forecasts, financial records, financing information, capital and
operating budgeting information, tax return preparation information, plus any
other information that is identified in writing as "CONFIDENTIAL" by either
party within ten (10) days of disclosure thereof, whether of a technical or
business nature, shall be considered to be confidential. The parties agree that
confidential information shall not be disclosed to any third party or parties
without the prior written consent of the other party. In the event that either
party shall receive a subpoena, order or official request for the disclosure of
the other's confidential information, it shall promptly (and if possible, no
later than seven (7) days prior to the return date) advise the other party of
such subpoena, order or request, in order to enable such other party to seek
relief or appropriate protection from such subpoena, order or official request.
Each party shall take reasonable measures to protect against nondisclosure of
confidential information by its officers, employees and agents. Confidential
information shall not include any information (i) which is or becomes part of
the public domain; (ii) which is obtained from third parties who are not bound
by confidentiality obligations; (iii) which is required to be disclosed by law,
regulation, legal process or the rules of any state or federal regulatory agency
or the New York Stock Exchange; or (iv) which was independently developed by or
for the receiving party. All confidentiality provisions shall expire two years
from April 1, 2000 or the date of disclosure of the confidential information,
whichever is later, unless otherwise specifically agreed to in writing or
provided by law.
7. Legal Advice. The parties acknowledge that none of the Services provided
------------
hereunder shall constitute legal advice or the rendering of legal services.
Each party shall rely solely on its own legal counsel for any legal advice or
legal services.
8. Assignment. Notwithstanding anything to the contrary in this Agreement,
-----------
this Agreement shall not be assignable by either party hereto, to any other
person, firm or entity without the prior written consent of the other party in
its sole and absolute discretion; provided, however, that the Agreement in its
entirety, or any portion of the rights and obligations established hereunder,
may be assigned by either party hereto to one of its directly or indirectly
wholly owned subsidiaries without the prior written consent of the other party.
Except as expressly provided herein, nothing herein shall create or be deemed to
create any third party beneficiary rights in any person or entity not a party to
this Agreement.
9. Waiver, Amendment or Modification. No waiver, amendment or modification
-----------------------------------
of this Agreement shall be valid unless in writing and duly executed by both
parties to this Agreement.
10. Entire Agreement. This Agreement, and the Schedules hereto (including
------------------
any exhibits), constitutes the entire agreement of the parties concerning the
subject matter hereof and supersedes all previous agreements between the
parties, whether written or oral, with respect to such subject matter. To the
extent that the provisions of this Agreement are inconsistent with the
provisions of any Exhibit to a Schedule, the provisions of such Exhibit shall
prevail.
11. Governing Law, Language and Currency. Despite any different result
----------------------------------------
required by any conflicts of law provisions, this Agreement shall be governed by
the laws of the State of Missouri, United States of America. This Agreement is
originally drafted in the English language. Should it be translated into any
other language, the English version shall govern any interpretation thereof.
The price for Services in each Schedule shall be in U.S. dollars unless
otherwise indicated.
12. Notices. All notices, requests, demands, waivers and other
-------
communications (hereinafter "Notices") required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given (i) at the time of delivery, if delivered by hand; (ii) on the date
of transmission, if sent by facsimile, telegram or other standard form of
telecommunications; or (iii) three (3) business days after mailing, if mailed
registered or certified first-class mail, postage prepaid, return receipt
requested. Notices shall be delivered or sent, as the case may be, to the
following addresses or to such other addresses as the parties may hereinafter
designate by like notice similarly provided:
If to Energizer: Energizer Holdings, Inc.
Checkerboard Square
St. Louis, MO 63164
Attn: General Counsel
If to Ralston: Ralston Purina Company
Checkerboard Square
St. Louis, MO 63164
Attn: General Counsel
13. Force Majeure. Anything else in this Agreement notwithstanding, the
---------------
Provider shall be excused from providing Services hereunder while, and to the
extent that, its performance is prevented by fire, drought, explosion, flood,
invasion, rebellion, earthquake, civil commotion, strike or labor disturbance,
governmental or military authority, act of God, mechanical failure or any other
event or casualty beyond the reasonable control of the Provider, whether similar
or dissimilar to those enumerated in this paragraph (hereinafter a "Casualty").
In the event of a Casualty, the Recipient shall be responsible at its own cost
for making its own alternative arrangements with respect to the interrupted
Services.
14. Independent Contractor. The relationship of Provider and Recipient
------------------------
which is created hereunder is that of an independent contractor. This Agreement
is not intended to create and shall not be construed as creating between
Energizer and Ralston the relationship of affiliate, principal and agent, joint
venture, partnership, or any other similar relationship, the existence of which
is hereby expressly denied. Notwithstanding the foregoing, nothing in the
Schedules attached hereto shall cause any employee of the Provider to become a
leased employee or an independent contractor of the Recipient.
15. Billing and Payment. Unless otherwise provided in the applicable
----------------------
Schedule, the Provider shall bill the Recipient on a monthly basis for the
amounts due to the Provider for Services provided pursuant to the terms of this
Agreement. All such bills shall contain reasonable detail and shall be due
thirty (30) days after receipt unless any Schedules hereto provide for a
different payment period in which case such different payment period shall apply
to the applicable Services. The failure of the Recipient to pay any bill on
time shall result in the Recipient owing the Provider an additional handling
charge equal to one percent (1%) per month of the amount due from the date due
to the payment date.
16. Duration of Services. It is intended that the Services be provided by
-----------------------
each party hereto as a temporary accommodation to the other. Each party shall
arrange for the relevant Services to be provided by its own employees or by
third-party providers as soon as is practicable, even if such arrangements
result in greater cost to it than it would incur if the Services were provided
by the other party. In no event, however, shall either party be obligated to
provide any Services after March 31, 2001. Notwithstanding the foregoing, if
any Schedules hereto provide for the provision of Services for a longer period,
such longer period shall govern the provision of such Services. If provided for
in the Schedules, either party may give the other party written notice of its
intent to terminate any one or more of the Services prior to the stated
termination of the Services.
17. Termination. This Agreement shall remain in full force and effect for
-----------
as long as any Services are being provided pursuant to the Schedules attached
hereto. If any person who is not at the effective date of this Agreement an
affiliate of either party should acquire (by any means, including without
limitation by operation of law) a voting or equity interest of twenty percent
(20%) or more in such party, then the other party may terminate this Agreement
(without penalty and without further cause) upon thirty (30) days written notice
to such party.
18. Waiver. The failure of either party at any time or times to enforce or
-------
require performance of any provision hereof shall in no way operate as a waiver
or affect the right of such party at a later time to enforce the same. No
waiver by either party of the breach of any provision contained in this
Agreement shall be construed as a waiver of any subsequent breach of any
provision.
19. Severability. If any provision of this Agreement shall hereafter be
-------------
held to be invalid or unenforceable for any reason, that provision shall be
reformed to the maximum extent permitted to preserve the parties' original
intent, failing which it shall be severed from this Agreement with the balance
of the Agreement continuing in full force and effect. Such occurrence shall not
have the effect of rendering the provision in question invalid in any other
jurisdiction or in any other case or circumstances or of rendering invalid any
other provisions contained herein to the extent that such other provisions are
not themselves actually in conflict with any applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
RALSTON PURINA COMPANY ENERGIZER HOLDINGS, INC.
By:/s/ James Elsesser By: /s/ Harry Strachan
Name: James Elsesser Name: Harry Strachan
Title: Vice President and Chief Title: Vice President and General
Financial Officer Counsel
Index of Schedules to Bridging Services Agreement
NUMBER SCHEDULE
1 Records Management Services
2 Forms Management Services
3 Printing Services
4 Forms Warehousing and Distribution Services
5 Shipping Services
6 Mail Services
7 Maintenance Project Services
8 On-Site Medical Clinic
9 Checkerboard Square Facilities and Services
10 Property Accounting
11 Meeting and Travel Services
12 Employee Benefits Administration
13 Human Resource Information Systems
14 Human Resource Information Center and Payroll Services
15 Payroll Tax and Accounting
16 Telephone Services
17 Checkmark Services
18 Library and Information Services
19 Tax Services
20 Risk Management and Workers' Compensation Services
21 Corporate Public Relations Management Services
22 Internal Audit Services
23 Industrial Hygiene Services
24 Information Systems
25 Exchange of Payments Received in Error
26 Transportation Services
27 International - Singapore
28 International - Argentina
29 International - Canada
30 International - Philippines
31 International - United Kingdom
EXHIBIT C
INTELLECTUAL PROPERTY AGREEMENT
-------------------------------
THIS INTELLECTUAL PROPERTY AGREEMENT dated as of April 1, 2000 is by and between
RALSTON PURINA COMPANY, a corporation organized under the laws of the State of
Missouri, having its principal office at Checkerboard Square, St. Louis,
Missouri 63164 (hereinafter "Ralston") and ENERGIZER HOLDINGS, INC. a
corporation organized under the laws of the State of Missouri, having its
principal office at 800 Chouteau Avenue, St. Louis, Missouri 63102 (hereinafter
"Energizer").
WITNESSETH
WHEREAS, the parties have entered into an Agreement and Plan of Reorganization
of even date herewith; and
WHEREAS, pursuant to said Agreement and Plan of Reorganization, the parties have
agreed to divide certain intellectual property heretofore used in the business
of Ralston, Energizer, and/or its/their Affiliates;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
for other good and valuable consideration, the parties agree as follows:
1. Definitions
(a) Affiliates
Hereunder, an "Affiliate" of, or persons "Affiliated" with, a
specified person, is a person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with the
person specified.
(b) Battery Business
Hereunder, "Battery Business" shall mean a business or portion of a
business devoted to batteries and/or lighting products, including components
therefor and collateral goods related thereto.
(c) Closing
Hereunder "Closing" shall have the same meaning as "Distribution Date"
in the Agreement and Plan of Reorganization.
(d) Intellectual Property
Hereunder, "Intellectual Property" shall include, but not be limited
to, trade secrets and confidential information; statutory, common law and
registered trademarks, trade styles, service marks, service names trade names,
trade dress, copyrights, moral rights, rights of privacy and publicity, Internet
or other electronic communication addresses (e.g., "energizer.com" and
1-800-982-ENRS), business addresses of a proprietary nature (e.g., "Ever Ready
House"), designs, inventions, know-how, issued and unissued patents, and other
property commonly considered intellectual property, all rights to recover for
past infringements of each of the foregoing, and the goodwill of the business to
the extent associated with any and all of the foregoing.
(e) Newco
Hereunder, except as limited hereinbelow, "Newco" shall mean Energizer
and any and all subsidiaries and Affiliates of Energizer. "Newco" shall not,
however, include Ralston and any of its Affiliates whose shares will be owned,
whether directly or indirectly, by Ralston following Closing.
(f) Oldco
Hereunder, "Oldco" shall mean Ralston and any and all of its
Affiliates whose shares it will directly or indirectly own following Closing.
(g) Trademark
Hereinafter "Trademark" shall mean a word, symbol, or device
registrable as a trademark or service mark.
(h) Trade Name
Hereinafter "Trade Name" shall mean corporate name and/or other
business name including, but not limited to, names of corporations,
partnerships, and joint ventures, and domain names.
2. Intellectual Property
(a) Assignments
(i) Except for Trademarks the parties agree to cancel, at or
before Closing, or at such date or dates as Newco may elect, Oldco will assign,
or will have assigned, to Newco, all of Oldco's rights, if any, in Intellectual
Property Oldco owns which is exclusively associated with Oldco's and/or Newco's
Battery Business. Registrations and applications to register Trademarks to be
so assigned or canceled include, but are not necessarily limited to, those
listed on Schedule 2(a)(i) attached hereto and incorporated by reference herein.
(ii) Anything in this Intellectual Property Agreement to the
contrary notwithstanding, Oldco will not assign to Newco any Intellectual
Property consisting of or containing the words, RALSTON, PURINA, CHOW,
CHECKERBOARD, or other word meaning "Checkerboard," the 9-Square Checkerboard or
other Checkerboard or Checkerband designs, any Intellectual Property consisting
of or containing any Intellectual Property now owned by any exclusively
non-Battery-Business Affiliate of Ralston, any Intellectual Property not
exclusively associated with Oldco's and/or Newco's Battery Business, or any
Intellectual Property confusingly similar to any of the Intellectual Property
comprehended by this Subparagraph 2(a)(ii). To the extent any such Intellectual
Property is currently owned by Newco, it will be assigned to Oldco or canceled
on or before Closing or at such date or dates thereafter as Oldco may elect.
(iii) All assignments contemplated by this Intellectual Property
Agreement will be on a quitclaim basis. The assignee will assume all
limitations, undertakings and liabilities related to such assigned Intellectual
Property, including, but not limited to, limitations in contracts relating to
such Intellectual Property entered into by the assignor and binding upon its
successors and/or assigns, and liability for any charge that any such
Intellectual Property infringes rights of any third party, without regard to
whether any such charge arises before or after Closing.
(iv) With respect to Intellectual Property to be assigned pursuant
to this Intellectual Property Agreement in cases where such property exists in
the name of a single owner in more than one jurisdiction, the assignor will
deliver to the assignee at or before Closing a beneficial, multi-jurisdiction
assignment of such Intellectual Property. The assignor shall thereafter
promptly execute and return to the assignee one or more jurisdiction-specific
assignments of such Intellectual Property prepared by the assignee and delivered
to the assignor for such purpose.
(v) With respect to Intellectual Property to be assigned pursuant
to this Intellectual Property Agreement in cases where all such property owned
by a single Affiliate exists in a single jurisdiction, the assignor will
promptly deliver to the assignee at or before Closing, or thereafter as
necessary, a jurisdiction-specific assignment of such property in recordable
form.
(vi) Intellectual Property which is to be assigned pursuant to
Subparagraph 2(a)(v) hereinabove, but which is not assigned at Closing, will be
maintained by its putative assignor for a reasonable period of time for the
benefit of the person to whom it is to be assigned; however, the putative
assignee shall reimburse the putative assignor for all out-of-pocket expenses
incurred for such maintenance.
(vii) Battery-Business-related Intellectual Property, whether or
not assigned hereunder, remains the responsibility of Newco; and Newco retains
such Intellectual Property subject to all limitations, undertakings and
liabilities related to such Intellectual Property, including, but not limited
to, undertakings in contracts relating to such Intellectual Property and
liability for any charge that any such Intellectual Property infringes rights of
any third party, without regard to whether such charge arises before or after
the Closing.
(viii) Non-Battery-Business-related Intellectual Property whether
or not assigned hereunder remains the responsibility of Oldco; and Oldco
retains such Intellectual Property subject to all limitations, undertakings
and liabilities related to such Intellectual Property, including, but not
limited to, undertakings in contracts relating to such Intellectual Property
and liability for any charge that any such Intellectual Property infringes the
rights of any third party, without regard to whether such charge arises
before the Closing.
(ix) At Closing, the parties will execute general Intellectual
Property Assignments in the form shown on Schedule 2(a)(ix)(A) and 2(a)(ix)(B)
Attached hereto and incorporated by reference herein.
(b) Costs of Assignment and Recordation
Oldco shall pay the costs (including attorneys' and accountants` fees,
costs and expenses) of preparing and recording jurisdiction-specific assignments
contemplated by Subparagraph 2(a)(v) above. Oldco shall pay the costs of
preparing and recording jurisdiction-specific assignments contemplated by
Subparagraph 2(a)(iv) above to the extent such costs relate to Trademarks for
which the Oldco assignor is record owner or for which an application to record
such Oldco assignor as record owner was pending more than one month prior to
Closing. Otherwise, such costs shall be borne by Newco.
An application to record shall be deemed pending if instructions to
record the same were sent to such Oldco assignor's attorneys or agents more than
one month prior to Closing. The parties agree that such instructions were sent
to record Energizer UK Company as record owner of Trademarks heretofore owned by
Ever Ready Limited in the jurisdictions listed in Schedule 2(b) hereto; however,
applications to record Energizer UK Company as record owner have not yet been
filed in such jurisdictions. Newco agrees that to the extent Newco does not
confirm its instructions to its outside attorneys or agents to record Energizer
UK Company's ownership of the Trademarks previously owned by Ever Ready Limited
(and, where required, that of Ever Ready Limited's predecessor(s)) in the
jurisdictions listed in Schedule 2(b) within three months following Closing,
then to the extent such failure to confirm such prior instructions results in
the need to record Energizer UK Company's name-change as a necessary step to
record assignments from Energizer UK Company to Energizer Limited, the costs to
record such name-change shall be borne by Newco.
3. Name Changes
(a) Newco Name Changes
Without limitation as to duration or territory, Newco agrees not to
use, register or maintain any Trademark, Trade Name, or other Intellectual
Property consisting of or containing the word RALSTON, PURINA, "Checkerboard,"
"Checkerboard Square," or any word, phrase, symbol or device confusingly similar
thereto, in connection with any product, service or activity. To the extent a
Newco Trademark or Trade Name consists of or contains the word "Ralston" or
other word, phrase, symbol, or device proscribed by this Subparagraph 3(a),
Newco will cancel or change such Trademark or Trade Name within six months
following Closing to eliminate such proscribed word, phrase symbol, or device.
(b) Oldco Name Changes
Without limitation as to duration or territory, Oldco agrees not to
use, register or maintain any Trademark, Trade Name or other Intellectual
Property consisting containing the word ENERGIZER, EVEREADY, EVER READY,
Energizer Bunny, or any word, symbol, or device confusingly similar thereto, in
connection with any product, service, or activity. To the extent an Oldco
Trademark or Trade Name consists of or contains the word ENERGIZER or other
word, phrase, symbol or device proscribed by this Subparagraph 3(b), Oldco will
cancel or change such Trademark or Trade Name within six months following
Closing to eliminate such proscribed word, phrase, symbol, or device.
(c) Costs of Name Changes
Oldco agrees to pay the costs (including attorneys` and accountants`
fees, costs and expenses) of name changes and cancellations required by
Paragraphs 3(a) and 3(b) above, including the cost, where necessary, of
recording the name change against Trademarks and recorded Trademark-related
agreements for which the company whose name is changed is record owner.
4. Costs, General
Except as otherwise provided in this Intellectual Property Agreement, Oldco
shall pay the costs (including attorneys` and accountants` fees, costs and
expenses) necessarily incurred to transfer, divide or cancel Intellectual
Property to the extent required by this Intellectual Property Agreement. Among
costs deemed necessarily incurred hereunder are (a) costs reasonably incurred to
the extent required by this Intellectual Property Agreement to cancel or replace
cancelled intellectual-property-related agreements between an Oldco company and
a Newco company with an equivalent agreement between two Newco companies, (b)
costs reasonably incurred to replace, modify or change
intellectual-property-related agreements between Newco Affiliates to the extent
required as a result of name changes required by this Intellectual Property
Agreement, (c) costs to record, where required by law, such new or modified
intellectual-property-related agreements and (d) costs to cancel Intellectual
Property in lieu of assignments otherwise required by this Intellectual Property
Agreement. Not included among costs deemed necessarily incurred hereunder are
(e) costs incurred in completing and/or recording assignments of Intellectual
Property from Ever Ready Limited to Energizer UK Company, and (f) any costs
resulting from Newco company name changes not required by this Intellectual
Property Agreement.
5. Third-Party Agreements
(a) To the extent assignable without third-party consent, and, if not,
to the extent such consent is obtained, at Closing, license agreements and other
contracts between Oldco and unaffiliated third parties, to the extent related to
the rights in Intellectual Property to be owned by Newco at Closing, will be
assigned from Oldco to Newco. Newco agrees to assume Oldco's obligations under
such agreements and to indemnify Oldco with respect to any of Newco's breaches
or failures to perform thereunder.
(b) To the extent assignable without third-party consent, and, if not,
to the extent such consent is obtained, at Closing, license agreements and other
contracts between Newco and unaffiliated third parties, to the extent related to
rights in Intellectual Property to be owned by Oldco at Closing, will be
assigned from Newco to Oldco. Oldco agrees to assume Newco's obligations under
such agreements and to indemnify Newco with respect to any of Oldco's breaches
or failures to perform thereunder.
6. Phase-Out of Intellectual Property Assigned to or Retained by Others
Newco agrees to remove all Oldco Intellectual Property not assigned to
Newco as well as Intellectual Property assigned from Newco to Oldco, from
Newco's labels, packaging, advertising, signs, letterhead, business cards, and
other materials within six (6) months following Closing. Oldco agrees to remove
all Intellectual Property assigned to Newco from Oldco's labels, packaging,
advertising, signs, letterhead, business cards, and other materials within the
same six (6) month period.
7. Heritage
Oldco, Newco and their successors and assigns, will each be allowed to
refer to its or their pre-spin-off heritage in good faith in truthful articles,
histories and the like to the extent such references do not express or imply a
continuing relationship between Oldco and Newco.
8. Good Faith
The parties agree not to do indirectly, through subsidiaries, Affiliates or
otherwise, what they could not do directly under this Intellectual Property
Agreement.
9. Scope and Modification
This Intellectual Property Agreement, including its schedules, sets forth
the entire agreement between the parties relating to the subject matter hereof
and it supersedes all prior agreements and understandings relating to such
subject matter. None of the terms of this Intellectual Property Agreement may
be waived or modified except as expressly agreed to, in writing, by both
parties.
10. Successors and Assigns
This Intellectual Property Agreement shall be binding upon and inure to the
benefit of the parties and each of their successors and assigns.
11. Interpretation
The section headings in this Intellectual Property Agreement are solely for
the purpose of reference, are not part of the agreement of the parties hereto,
and shall not in any way affect the meaning or interpretation of this
Intellectual Property Agreement.
12. Counterparts
This Intellectual Property Agreement may be executed in two or more
counterparts, each of which may be deemed an original, but all of which together
shall constitute one and the same instrument.
13. Governing Law
This Intellectual Property Agreement is made and entered into, and shall be
governed by and construed and interpreted in accordance with the laws of the
State of Missouri, United States of America, without regard to its conflicts of
laws principles, as to all matters, including those relating to validity,
construction, performance, effect and remedies under this Intellectual Property
Agreement. All matters relating to this Intellectual Property Agreement shall
be adjudicated exclusively in the courts of the State of Missouri located in St.
Louis, Missouri, or in the United States District Court for the Eastern District
of Missouri; and each party hereto consents to the exclusive jurisdiction and
venue of such courts for all such matters.
14. Amendment and Modification; Non-Waiver
This Intellectual Property Agreement may be amended, modified or
supplemented, or rights, powers or options thereunder waived or impaired,
only by a written agreement signed by an officer of Ralston and Energizer.
Neither party shall be deemed to have waived or impaired any right, power or
Option created or reserved by this Intellectual Property Agreement
(including without limitation, each party's right to demand compliance with
every term herein, or to declare any breach a default and exercise its rights in
accordance with the terms hereof) by virtue of: (i) any custom or practice of
the parties at variance with the terms hereof; (ii) any failure, refusal or
neglect to exercise any right hereunder, or to insist upon compliance with any
term; (iii) any waiver, forbearance, delay, failure or omission to exercise
any right or option, whether of the same, similar, or different natures, under
this Intellectual Property Agreement or in any other circumstances; or (iv)
the acceptance by either party of any payment or other consideration from the
other following any breach of this Intellectual Property Agreement. The
rights and remedies set forth in this Intellectual Property Agreement are
in addition to any other rights or remedies which may be granted by law.
15. Additional Documents
The parties agree to execute such additional documents as may be reasonably
required to give effect to their undertakings in this Intellectual Property
Agreement.
IN WITNESS WHEREOF, the parties have executed this Intellectual Property
Agreement as of the date first above written.
RALSTON PURINA COMPANY ENERGIZER HOLDINGS, INC.
By:/s/ James R. Elsesser By:/s/ Harry Strachan
Title: Vice President & Chief Financial Title: Vice President & General
Officer Counsel
Index of Schedules to Intellectual Property Agreement
Schedule 2(a)(i) Oldco Trademark Applications and Registrations
to be assigned to Newco or cancelled
Schedule 2(a)(ix)(A) General Intellectual Property Assignment
Schedule 2(a)(ix)(B) General Intellectual Property Assignment
Schedule 2(b) Jurisdictions in which the Parties agree that
instructions were sent to record Energizer UK
Company as record owner of Trademarks heretofore
Owned by EverReady Limited
364-DAY CREDIT AGREEMENT
Dated as of March 30, 2000
among
RALSTON PURINA COMPANY
as the initial Borrower
prior to the assignment to
and assumption by
ENERGIZER HOLDINGS, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
BANK ONE, NA,
as Administrative Agent
BANK OF AMERICA, N.A.
as Syndication Agent
and
WACHOVIA BANK, N.A.
as Documentation Agent
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Bookrunner
SIDLEY & AUSTIN
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
<PAGE>
364-DAY CREDIT AGREEMENT
This 364-Day Revolving Credit Agreement dated as of March 30, 2000 is
entered into among RALSTON PURINA COMPANY, a Missouri corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to Section 13.3, and BANK
------------
ONE, NA, having its principal office in Chicago, Illinois, in its capacity as
Administrative Agent, BANK OF AMERICA, N.A., as Syndication Agent, and WACHOVIA
BANK, N.A., as Documentation Agent. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
- ----------- -----------
1.1 Certain Defined Terms. In addition to the terms defined above, the
-----------------------
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Accounting Change" is defined in Section 10.9 hereof.
------------------ -------------
"Acquisition" means any transaction, or any series of related transactions,
-----------
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"Adjustment Date" means each date on which the opening pro forma balance sheet
---------------- --- -----
of Energizer and its consolidated Subsidiaries, after giving effect to the
Spin-Off Transactions, is adjusted, which adjustments shall occur simultaneously
with the adjustments made pursuant to the Reorganization Agreement to verify the
calculation of the "Indebtedness" and "Cash Holdings" of Energizer and its
Affiliates thereunder.
"Administrative Agent" means Bank One in its capacity as contractual
---------------------
representative for itself and the Lenders pursuant to Article XI hereof and any
---------- ----------
successor Administrative Agent appointed pursuant to Article XI hereof.
-----------
"Advance" means a borrowing hereunder consisting of the aggregate amount of the
-------
several Loans made by the Lenders to the Borrower of the same Type and, in the
case of Eurodollar Rate Advances, for the same Interest Period.
"Affected Lender" is defined in Section 2.19 hereof.
---------------- -------------
"Affiliate" of any Person means any other Person directly or indirectly
---------
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"Aggregate Revolving Loan Commitment" means the aggregate of the Revolving Loan
------------------------------------
Commitments of all the Lenders, as may be reduced from time to time pursuant to
the terms hereof. The initial Aggregate Revolving Loan Commitment is Two
Hundred Twenty-Five Million and 00/100 Dollars ($225,000,000.00).
"Agreement" means this 364-Day Credit Agreement, as it may be amended, restated
---------
or otherwise modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting principles
-------------------------------
as in effect in the United States from time to time, applied in a manner
consistent with that used in preparing the financial statements of Energizer
referred to in Section 6.7 hereof; provided, however, except as provided in
------------ -------- -------
Section 10.9, that with respect to the calculation of financial ratios and other
--------
financial tests required by this Agreement, "Agreement Accounting Principles"
means generally accepted accounting principles as in effect in the United States
as of the date of this Agreement, applied in a manner consistent with that used
in preparing the financial statements of Energizer referred to in Section 6.7
-----------
hereof.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest per
---------------------
annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
(a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.
"Applicable Facility Fee Percentage" means, as at any date of determination, the
----------------------------------
rate per annum then applicable in the determination of the amount payable under
Section 2.14(C)(i) hereof determined in accordance with the provisions of
- -------------------
Section 2.14(D)(ii) hereof.
- --------------------
"Applicable Margin" means, as at any date of determination, the rate per annum
------------------
then applicable to Advances of any Type at such time, determined in accordance
with the provisions of Section 2.14(D)(ii) hereof.
--------------------
"Arranger" means Banc One Capital Markets, Inc., in its capacity as the lead
--------
arranger and sole bookrunner for the loan transaction evidenced by this
Agreement.
"Assignment Agreement" means an assignment and acceptance agreement entered into
--------------------
in connection with an assignment by a Lender pursuant to Section 13.3 hereof in
------------
substantially the form of Exhibit C.
----------
"Asset Sale" means, with respect to any Person, the sale, lease, conveyance,
-----------
disposition or other transfer by such Person of any of its assets (including by
way of a sale-leaseback transaction, and including the sale or other transfer of
any of the Equity Interests of any Subsidiary of such Person) other than (i) the
sale of Inventory in the ordinary course of business and (ii) the sale or other
disposition of any obsolete manufacturing Equipment disposed of in the ordinary
course of business.
"Authorized Officer" means any of the President, any Vice President (including
-------------------
any Executive Vice President) or the Treasurer of the Borrower, acting singly.
"Bank Book" is defined in Section 6.7(A) hereof.
---------- ---------------
"Bank One" means Bank One, NA, having its principal office in Chicago, Illinois,
--------
in its individual capacity, and its successors.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35) of ERISA
------------
(other than a Multiemployer Plan or Foreign Pension Plan) in respect of which
Energizer or any other member of the Controlled Group is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Borrower" means (i) for the period from the Closing Date until the consummation
--------
of the Debt Assumption, Ralston and (ii) from and after the consummation of the
Debt Assumption, Energizer, in each case, together with its successors and
assigns, including a debtor-in-possession on behalf of the Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
---------------
"Borrowing/Election Notice" is defined in Section 2.7 hereof.
-------------------------- ------------
"Bridge Facilities" means any temporary bridge financing to be provided in favor
-----------------
of Ralston, all or a portion of which may be assumed by Energizer in connection
with the Spin-Off, which shall be refinanced by Energizer shortly after the
Spin-Off Date with the Receivables Purchase Facility and/or the Senior Notes
and/or cash on hand.
"Business Day" means (i) with respect to any borrowing, payment or rate
-------------
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii) in
--------------
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited) and (iv) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such Person as
------------------
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the obligations
------------------------------
of such Person under Capitalized Leases which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement Accounting
Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
-----------------
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and at least 95% of the investments of which are limited
to investment grade securities (i.e., securities rated at least Baa by Moody's
Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group); and
(iv) commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 by Moody's
Investors Service, Inc.; provided that the maturities of such Cash Equivalents
--------
described in the foregoing clauses (i) through (iv) shall not exceed 365 days;
(v) repurchase obligations of any commercial bank organized under the laws of
the United States, any state thereof, the District of Columbia, any foreign
bank, or its branches or agencies having a term not more than thirty (30) days,
with respect to securities issued or fully guaranteed or insured by the United
States government; (vi) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth,
territory, political subdivision, taxing authority or by any foreign government,
the securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
BBB by Standard & Poor's Ratings Group or at least Baa by Moody's Investors
Service, Inc.; (vii) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by any commercial
bank organized under the laws of the United States, any state thereof or the
District of Columbia (which commercial bank shall have a short-term debt rating
of A-1 (or better) by Standard & Poor's Ratings Group or P-1 by Moody's
Investors Service, Inc.), or by any foreign bank (which foreign bank shall have
a rating of B or better from Thomson BankWatch Global Issuer Rating or, if not
rated by Thomson BankWatch Global Issuer Rating, which foreign bank shall be an
institution acceptable to the Administrative Agent), or its branches or
agencies; or (viii) shares of money market mutual or similar funds at least 95%
of the assets of which are invested in the types of investments satisfying the
requirements of clauses (i) through (vii) of this definition.
"Change" is defined in Section 4.2 hereof.
------ ------------
"Change of Control" means an event or series of events by which:
-------------------
(i) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of thirty percent (30%) or more of the voting power of the then
outstanding Capital Stock of Energizer entitled to vote generally in the
election of the directors of Energizer (other than Ralston at any time prior to
the consummation of the Spin-Off);
(ii) during any period of 12 consecutive calendar months, the board of
directors of Energizer shall cease to have as a majority of its members
individuals who either:
(a) were directors of Energizer on the first day of such
period,
(b) were elected or nominated for election to the board of
directors of Energizer at the recommendation of or other approval by at least
a majority of the directors then still in office at the time of such election
or nomination who were directors of Energizer on the first day of such
period, or whose election or nomination for election was so approved, or
(c) were directors of Energizer on the first Business Day following
the Spin-Off Date;
(iii) other than as a result of a transaction not prohibited under the terms
of this Agreement, Energizer (a) shall cease to own, of record and
beneficially, with sole voting and dispositive power, 100% of the outstanding
shares of Capital Stock of each of the Subsidiary Guarantors or (b) shall cease
to have the power, directly or indirectly, to elect all of the members of the
board of directors of each of the Subsidiary Guarantors; or
(iv) Energizer consolidates with or merges into another corporation or
conveys, transfers or leases all or substantially all of its property to any
Person, or any corporation consolidates with or merges into Energizer, in either
event pursuant to a transaction in which the outstanding Capital Stock of
Energizer is reclassified or changed into or exchanged for cash, securities or
other property.
"Closing Date" means the date of this Agreement.
-------------
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"Commission" means the Securities and Exchange Commission of the United States
----------
of America and any Person succeeding to the functions thereof.
"Commitment Termination Date" means the earliest of (a) the Revolving Loan
-----------------------------
Termination Date, (b) the date of termination in whole of the Aggregate
Revolving Loan Commitment pursuant to Section 2.5 hereof or the Revolving Loan
Commitments pursuant to Section 9.1 hereof (other than pursuant to Section
------------ -------
2.2(b)) and (c) if the Spin-Off and Debt Assumption have not occurred prior
- ------- thereto, April 4, 2000.
"Consent Date" is defined in Section 2.2(a) hereof.
------------- ---------------
"Consolidated Assets" means the total assets of Energizer and its Subsidiaries
--------------------
on a consolidated basis.
"Consolidated Net Worth" means, as of any date of determination, the
------------------------
consolidated total stockholders' equity (including capital stock, additional
----------
paid-in capital and retained earnings) of Energizer and its consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles.
"Contaminant" means any waste, pollutant, hazardous substance, toxic substance,
-----------
hazardous waste, special waste, petroleum or petroleum-derived substance or
waste, asbestos or polychlorinated biphenyls ("PCBs"), and includes but is not
limited to these terms as defined in Environmental, Health or Safety
Requirements of Law.
"Contingent Obligation", as applied to any Person, means any Contractual
----------------------
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received. The amount of any Contingent
Obligation shall be equal to the present value of the portion of the obligation
so guaranteed or otherwise supported, in the case of known recurring
obligations, and the maximum reasonably anticipated liability in respect of the
portion of the obligation so guaranteed or otherwise supported assuming such
Person is required to perform thereunder, in all other cases.
"Contractual Obligation", as applied to any Person, means any provision of any
-----------------------
equity or debt securities issued by that Person or any indenture, mortgage, deed
of trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument, in any case in writing, to which that Person is a party
or by which it or any of its properties is bound, or to which it or any of its
properties is subject.
"Controlled Group" means the group consisting of (i) any corporation which is a
-----------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Energizer; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Code) with Energizer; and (iii) a member of the
same affiliated service group (within the meaning of Section 414(m) of the Code)
as Energizer, any corporation described in clause (i) above or any partnership
----------
or trade or business described in clause (ii) above; provided, that after the
----------- --------
Spin-Off Date, such term shall not include Ralston.
"Conversion Date" is defined in Section 2.2(b).
---------------- ---------------
"Converted Loan Termination Date" means the date that is 364 days after the
----------------------------------
Conversion Date (or, if such date is not a Business Day, on the immediately
preceding Business Day).
"Cure Loan" is defined in Section 9.2(iii) hereof.
---------- -----------------
"Customary Permitted Liens" means:
---------------------------
(i) Liens (other than Environmental Liens and Liens in favor of the IRS or
the PBGC or any Plan) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced or
any such proceeding after being commenced is stayed) which are being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained as may be required in accordance with Agreement
Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens imposed
by law created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained as may be required in
accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the IRS or
the PBGC or any Plan) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance or
other types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all such Liens do not in
--------
the aggregate materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair the use
thereof in the operation of the Borrower's or such Subsidiary's businesses taken
as a whole, and (B) all Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$30,000,000;
(iv) Liens arising with respect to zoning restrictions, easements, licenses,
reservations, covenants, rights-of-way, utility easements, building restrictions
and other similar charges or encumbrances on the use of real property 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 the Borrower
or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs or
warrants of attachment, or similar process against the Borrower or any of its
Subsidiaries which do not constitute a Default under Section 8.1(H) hereof;
--------------
(vi) any interest or title of the lessor in the property subject to any
operating lease entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business; and
(vii) Liens of commercial depository institutions arising in the ordinary
course of business constituting a statutory or common law right of setoff
against amounts on deposit with any such institution.
"Debt Assumption" means the assignment and assumption by Energizer of all
- ----------------
of obligations and liabilities of Ralston hereunder and under the Loan Documents
and the concurrent release of Ralston from such obligations and liabilities,
which shall occur on the Spin-Off Date, pursuant to the Debt Assignment,
Assumption and Release Agreement in the form attached as Exhibit I to this
---------
Agreement (the "Debt Assumption Agreement").
"Debt Assumption Agreement" is defined in the definition of "Debt Assumption"
---------------------------
above.
"Default" means an event described in Article VIII hereof.
------- -------------
"Disclosed Litigation" is defined in Section 6.10 hereof.
--------------------- -------------
"Disqualified Stock" means any preferred stock and any Capital Stock that, by
-------------------
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the Revolving Loan Termination Date.
"DOL" means the United States Department of Labor and any Person succeeding to
---
the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United States.
------ -
"EBIT" means, for any period, on a consolidated basis for Energizer and its
----
Subsidiaries, the sum of the amounts for such period, without duplication, of
--
(i) Net Income, plus (ii) Interest Expense to the extent deducted in computing
- ----
Net Income, plus (iii) charges against income for foreign, federal, state and
----
local taxes to the extent deducted in computing Net Income, minus (iv)
-----
extraordinary gains to the extent added in computing Net Income, plus (v) other
----
extraordinary non-cash charges to the extent deducted in computing Net Income.
"EBITDA" means, for any period, on a consolidated basis for Energizer and its
------
Subsidiaries, the sum of the amounts for such period, without duplication, of
-
(i) EBIT, plus (ii) depreciation expense to the extent deducted in computing Net
----
Income, plus (iii) amortization expense, including, without limitation,
----
amortization of goodwill and other intangible assets, to the extent deducted in
computing Net Income.
"Energizer" means Energizer Holdings, Inc., a Missouri corporation, together
- ----------
with its permitted successors and assigns, including a debtor-in-possession on
behalf of Energizer.
"Environmental, Health or Safety Requirements of Law" means all applicable
---------------------------------------------------------
foreign, federal, state and local laws or regulations relating to or addressing
pollution or protection of the environment, or protection of worker health or
safety, including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Occupational
-- ---
Safety and Health Act of 1970, 29 U.S.C. 651 et seq., and the Resource
-- ---
Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq., in each case
-- ---
including any amendments thereto, any successor statutes, and any regulations
promulgated thereunder, and any state or local equivalent thereof.
"Environmental Lien" means a lien in favor of any Governmental Authority for (a)
------------------
any liability under Environmental, Health or Safety Requirements of Law, or (b)
damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Property Transfer Act" means any applicable requirement of law
--------------------------------------
that conditions, restricts, prohibits or requires any notification or disclosure
triggered by the closure of any property or the transfer, sale or lease of any
property or deed or title for any property for environmental reasons, including,
but not limited to, any so-called "Industrial Site Recovery Act" or "Responsible
Property Transfer Act."
"Equipment" means all of the Borrower's and its Subsidiaries' present and future
---------
(i) equipment, including, without limitation, machinery, manufacturing,
distribution, selling, data processing and office equipment, assembly systems,
tools, molds, dies, fixtures, appliances, furniture, furnishings, vehicles,
vessels, aircraft, aircraft engines, and trade fixtures, (ii) other tangible
personal property (other than the Borrower's or Subsidiary's Inventory), and
(iii) any and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof.
"Equity Interests" means Capital Stock and all warrants, options or other rights
----------------
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
-----
from time to time, including (unless the context otherwise requires) any rules
or regulations promulgated thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Advance for the
---------------------
relevant Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Bloomberg Screen BBAM
as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of
such Interest Period, and having a maturity equal to such Interest Period,
provided that, (i) if Bloomberg Screen BBAM is not available to the
Administrative Agent for any reason, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service mutually acceptable
to the Borrower and the Administrative Agent as of 11:00 a.m. (London time) two
(2) Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Administrative Agent,
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Administrative Agent to be the arithmetic
mean (rounded upward, if necessary, to an integral multiple of 1/16th of 1%) of
the rates of interest per annum reported to the Administrative Agent by each
Reference Lender as the rate at which such Reference Lender offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, in the approximate amount of such Reference
Lender's relevant Eurodollar Rate Loan and having a maturity equal to such
Interest Period. If any Reference Lender fails to provide such quotation to the
Administrative Agent, then the Administrative Agent shall determine the
Eurodollar Base Rate on the basis of the quotations of the remaining Reference
Lender(s).
"Eurodollar Rate" means, with respect to a Eurodollar Rate Advance for the
----------------
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period plus
----
(ii) the then Applicable Margin; provided, however, that the foregoing
-------- -------
adjustment for Reserve Requirements shall only be made with respect to that
portion of a Eurodollar Rate Loan made by a Lender which is subject to such
Reserve Requirements.
"Eurodollar Rate Advance" means an Advance which bears interest at the
-------------------------
Eurodollar Rate.
--------
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears interest at
--------------------
the Eurodollar Rate.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
---------------
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Facility Fee" is defined in Section 2.14(C)(i) hereof.
------------- -------------------
"Federal Funds Effective Rate" means, for any day, an interest rate per annum
-------------------------------
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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its reasonable discretion.
"Final Adjustment Date" means the last Adjustment Date, which shall occur no
-----------------------
later than July 31, 2000, in accordance with the Reorganization Agreement.
"Financing Facilities" means this Agreement, the 5-Year Credit Agreement, the
---------------------
Bridge Facilities, the Receivables Purchase Facility, the Senior Notes and any
other financing facilities entered into or to be entered into in connection with
the Spin-Off, in each case, whether consummated prior to, concurrently with or
following the Spin-Off.
"5-Year Credit Agreement" means that certain 5-Year Revolving Credit Agreement
-------------------------
of even date herewith among the Borrower, the institutions from time to time
parties thereto as lenders and Bank One, NA, as Administrative Agent, Bank of
America, N.A., as Syndication Agent and Wachovia Bank, N.A., as Documentation
Agent, as the same may be amended, restated, supplemented or otherwise modified
and as in effect from time to time.
"Floating Rate Advance" means an Advance which bears interest by reference to
-----------------------
the Alternate Base Rate.
-
"Floating Rate Loan" means a Loan, or portion thereof, which bears interest by
--------------------
reference to the Alternate Base Rate.
"Foreign Employee Benefit Plan" means any employee benefit plan as defined in
--------------------------------
Section 3(3) of ERISA which is maintained or contributed to for the benefit of
the employees of Energizer or any member of the Controlled Group, but which is
not covered by ERISA pursuant to Section 4(b)(4) of ERISA.
"Foreign Pension Plan" means any employee pension benefit plan (as defined in
----------------------
Section 3(2) of ERISA) which (i) is maintained or contributed to for the benefit
of employees of Energizer or any other member of the Controlled Group, (ii) is
not covered by ERISA pursuant to Section 4(b)(4) thereof and (iii) under
applicable local law, is required to be funded through a trust or other funding
vehicle.
"Form 10" means the Form 10 General Form for the Registration of Securities, as
--------
amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto, filed
by Energizer (File No. 1-15401) with the Commission in connection with the
Spin-Off, together with all exhibits and appendices thereto.
"Governmental Acts" is defined in Section 3.10(A) hereof.
------------------ ----------------
"Governmental Authority" means any nation or government, any federal, state,
-----------------------
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions.
"Hedging Arrangements" is defined in the definition of "Hedging Obligations"
---------------------
below.
"Hedging Agreements" is defined in Section 7.3(O) hereof.
------------------- ---------------
"Hedging Obligations" of a Person means any and all obligations of such Person,
--------------------
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (i) any and all agreements, devices
or arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, commodity prices, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants or any similar derivative transactions ("Hedging
Arrangements"), and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"Holders of Obligations" means the holders of the Obligations from time to time
-----------------------
and shall include their respective successors, transferees and assigns.
"Indebtedness" of any Person means, without duplication, such Person's (a)
------------
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), which purchase price is due more than six (6) months from the date of
incurrence of the obligation in respect thereof, provided that the related
obligations are not interest bearing, (c) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property or
assets now or hereafter owned or acquired by such Person, (d) obligations which
are evidenced by notes, acceptances or other instruments, (e) Capitalized Lease
Obligations, (f) Contingent Obligations in respect of Indebtedness, (g)
obligations with respect to letters of credit, (h) Off-Balance Sheet
Liabilities, (i) Receivables Facility Attributed Indebtedness and (j)
Disqualified Stock. The amount of Indebtedness of any Person at any date shall
be without duplication (1) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (2) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Indemnified Matters" is defined in Section 10.7(B) hereof.
-------------------- ----------------
"Indemnitees" is defined in Section 10.7(B) hereof.
----------- ----------------
"Initial Funding Date" means the date on which the initial Revolving Loans are
----------------------
advanced hereunder.
"Insolvency Event" is defined in Section 10.14 hereof.
----------------- --------------
"Intercompany Indebtedness" is defined in Section 10.14 hereof.
-------------------------- --------------
"Interest Expense" means, for any period, the total interest expense of
-----------------
Energizer and its consolidated Subsidiaries, whether paid or accrued, including,
without duplication, Off-Balance Sheet Liabilities (including Receivables
Facility Financing Costs) and the interest component of Capitalized Leases, all
as determined in conformity with Agreement Accounting Principles.
"Interest Expense Coverage Ratio" is defined in Section 7.4(B) hereof.
---------------------------------- ---------------
"Interest Period" means, with respect to a Eurodollar Rate Loan, a period of one
---------------
(1), two (2), three (3) or six (6) months and, to the extent available to all of
the Lenders, nine (9) or twelve (12) months, commencing on a Business Day
selected by the Borrower on which a Eurodollar Rate Advance is made to Borrower
pursuant to this Agreement. Such Interest Period shall end on (but exclude) the
day which corresponds numerically to such date one, two, three, six, nine or
twelve months thereafter; provided, however, that if there is no such
-------- -------
numerically corresponding day in such next, second, third, sixth, ninth or
twelfth succeeding month, such Interest Period shall end on the last Business
Day of such next, second, third, sixth, ninth or twelfth succeeding month. If
an Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding Business Day, provided,
--------
however, that if said next succeeding Business Day falls in a new calendar
- -------
month, such Interest Period shall end on the immediately preceding Business Day.
"Inventory" shall mean any and all goods, including, without limitation, goods
---------
in transit, wheresoever located, whether now owned or hereafter acquired by the
Borrower or any of its Subsidiaries, which are held for sale or lease, furnished
under any contract of service or held as raw materials, work in process or
supplies, and all materials used or consumed in the business of Borrower or any
of its Subsidiaries, and shall include all right, title and interest of the
Borrower or any of its Subsidiaries in any property the sale or other
disposition of which has given rise to Receivables and which has been returned
to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"Investment" means, with respect to any Person, (i) any purchase or other
----------
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
- ---- functions thereof.
"Lenders" means the lending institutions listed on the signature pages of this
-------
Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Administrative
- ----------------------
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Administrative Agent.
--
"Leverage Ratio" is defined in Section 7.4(A) hereof.
--------------- ---------------
"Lien" means any lien (statutory or other), mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance or preference, priority or security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"Loan(s)" means, with respect to a Lender, such Lender's portion of any Advance
-------
made pursuant to Section 2.1 hereof, and collectively, all Revolving Loans,
------------
whether made or continued as or converted to Floating Rate Loans or Eurodollar
Rate Loans.
"Loan Account" is defined in Section 2.12(a) hereof.
------------- ----------------
"Loan Documents" means this Agreement, the Subsidiary Guaranty, any promissory
---------------
notes issued pursuant to Section 2.12 and all other documents, instruments and
------------
agreements executed in connection therewith or contemplated thereby, as the same
may be amended, restated or otherwise modified and in effect from time to time.
"Loan Parties" is defined in Section 5.1 hereof.
------------- ------------
"Margin Stock" shall have the meaning ascribed to such term in Regulation U.
-------------
"Material Adverse Effect" means a material adverse effect upon (a) the business,
-----------------------
condition (financial or otherwise), operations, performance, properties or
prospects of Energizer and its Subsidiaries, taken as a whole, (b) the ability
of Energizer and its Subsidiaries, taken as a whole, to perform their
obligations under the Loan Documents in any material respect, or (c) the ability
of the Lenders or the Administrative Agent to enforce in any material respect
the Obligations.
"Material Domestic Subsidiary" means each consolidated Subsidiary (other than
------------------------------
any SPV) of the Borrower (a) incorporated under the laws of any jurisdiction in
the United States and (b) the total assets of which exceed, as at the end of any
calendar quarter or, in the case of consummation of a Permitted Acquisition, at
the time of consummation of such Permitted Acquisition (calculated by Energizer
on a pro forma basis taking into account the consummation of such Permitted
--- -----
Acquisition), three percent (3.0%) of the Consolidated Assets of Energizer and
its consolidated Subsidiaries (other than SPVs).
"Material Foreign Subsidiary" means each consolidated Subsidiary (other than any
---------------------------
SPV) of the Borrower (a) incorporated under the laws of any foreign jurisdiction
and (b) the total assets of which exceed, as at the end of any calendar quarter
or, in the case of consummation of a Permitted Acquisition, at the time of
consummation of such Permitted Acquisition (calculated by Energizer on a pro
---
forma basis taking into account the consummation of such Permitted Acquisition),
five percent (5.0%) of the Consolidated Assets of Energizer and its consolidated
Subsidiaries (other than SPVs).
"Material Indebtedness" means any Indebtedness (other than the Indebtedness
----------------------
hereunder) of a single class with an aggregate outstanding principal amount
equal to or greater than $30,000,000.
"Material Subsidiaries" means each of Energizer's Material Domestic Subsidiaries
---------------------
and Material Foreign Subsidiaries.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
-------------------
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either Energizer or any member of the Controlled Group.
"Net Income" means, for any period, the net earnings (or loss) after taxes of
-----------
Energizer and its Subsidiaries on a consolidated basis for such period taken as
a single accounting period determined in conformity with Agreement Accounting
Principles.
"Net Worth Condition" means the requirement that, as of and after the
---------------------
consummation of the Spin-Off Transactions, the Consolidated Net Worth of
Energizer and its Subsidiaries shall not be less than $625,000,000.
"New Subsidiary" is defined in Section 7.3(F).
--------------- ---------------
"Non-ERISA Commitments" means
----------------------
(i) each pension, medical, dental, life, accident insurance, disability,
group insurance, sick leave, profit sharing, deferred compensation, bonus, stock
option, stock purchase, retirement, savings, severance, stock ownership,
performance, incentive, hospitalization or other insurance, or other welfare,
benefit or fringe benefit plan, policy, trust, understanding or arrangement of
any kind; and
(ii) each employee collective bargaining agreement and each agreement,
understanding or arrangement of any kind, with or for the benefit of any
present or prior officer, director, employee or consultant (including, without
limitation, each employment, compensation, deferred compensation, severance or
consulting agreement or arrangement and any agreement or arrangement associated
with a change in ownership of the Borrower or any member of the Controlled
Group);
to which Energizer or any member of the Controlled Group is a party or with
respect to which Energizer or any member of the Controlled Group is or will be
required to make any payment other than any Plans.
"Non Pro Rata Loan" is defined in Section 9.2 hereof.
- -------------------- ------------
"Non-U.S. Lender" is defined in Section 4.5(iv) hereof.
- ------------------ ----------------
"Note Purchase Agreement" means any agreement entered into by the Borrower with
------------------------
respect to the Borrower's issuance of senior unsecured notes (the "Senior
Notes"), which shall be pari passu with the Obligations hereunder, on
substantially the terms set forth in the confidential Summary of Proposed Terms
relating to the Senior Notes sent by Banc of America Securities LLC to the
Administrative Agent by e-mail transmission on March 27, 2000, as such Note
Purchase Agreement may be amended, modified or supplemented from time to time in
a manner that is not materially adverse to the interests of the Lenders.
"Notice of Assignment" is defined in Section 13.3(B) hereof.
---------------------- ----------------
"Notice to Convert" is defined in Section 2.2(b) hereof.
------------------- ---------------
"Obligations" means all Loans, advances, debts, liabilities, obligations,
-----------
covenants and duties owing by the Borrower or any of its Subsidiaries to the
Administrative Agent, any Lender, the Arranger, any Affiliate of the
Administrative Agent or any Lender, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement or any other Loan Document,
whether or not evidenced by any note, guaranty or other instrument, whether or
not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification, or in any other manner, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising and however acquired.
The term includes, without limitation, all interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, reasonable paralegals' fees (and,
after the occurrence and during the continuance of a Default, all attorney's
fees and disbursements and paralegals' fees, whether or not reasonable), and any
other sum chargeable to the Borrower or any of its Subsidiaries under this
Agreement or any other Loan Document.
"Off-Balance Sheet Liabilities" of a Person means, without duplication, (a) any
------------------------------
Receivables Facility Attributed Indebtedness and repurchase obligation or
liability of such Person or any of its Subsidiaries with respect to Receivables
or notes receivable sold by such Person or any of its Subsidiaries (calculated
to include the unrecovered investment of purchasers or transferees of
Receivables or notes receivable or any other obligation of the Borrower or such
transferor to purchasers/transferees of interests in Receivables or notes
receivables or the agent for such purchasers/transferees), (b) any liability
under any sale and leaseback transactions which do not create a liability on the
consolidated balance sheet of such Person, (c) any liability under any financing
lease or so-called "synthetic" lease transaction, or (d) any obligations arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person and its Subsidiaries.
"Opening Balance Sheet Delivery Date" means the date within fifteen days
---------------------------------------
following the Final Adjustment Date on which the Administrative Agent receives
the opening pro forma balance sheet of Energizer and its consolidated
--- -----
Subsidiaries pursuant to Section 7.1(A)(v).
------------------
"Originators" means the Borrower and/or any of its Subsidiaries in their
-----------
respective capacities as parties to any Receivables Purchase Documents, as
sellers or transferors of any Receivables and Related Security in connection
with a Permitted Receivables Transfer.
"Other Taxes" is defined in Section 4.5 hereof.
------------ ------------
"Participants" is defined in Section 13.2(A) hereof.
------------ ----------------
"Payment Date" means the last day of each March, June, September and December.
-------------
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
----
"Permitted Acquisition" is defined in Section 7.3(F) hereof.
---------------------- ---------------
"Permitted Existing Contingent Obligations" means the Contingent Obligations of
------------------------------------------
Energizer and its Subsidiaries identified on Schedule 1.1.3 to this Agreement.
--------------
"Permitted Existing Investments" means the Investments of Energizer and its
--------------------------------
Subsidiaries identified on Schedule 1.1.1 to this Agreement.
---------------
"Permitted Existing Liens" means the Liens on assets of Energizer and its
--------------------------
Subsidiaries identified on Schedule 1.1.2 to this Agreement.
----- ---------------
"Permitted Receivables Transfer" means (i) a sale or other transfer by an
--------------------------------
Originator to a SPV of Receivables and Related Security for fair market value
and without recourse (except for limited recourse typical of such structured
finance transactions), and/or (ii) a sale or other transfer by a SPV to (a)
purchasers of or other investors in such Receivables and Related Security or (b)
any other Person (including a SPV) in a transaction in which purchasers or other
investors purchase or are otherwise transferred such Receivables and Related
Security, in each case pursuant to and in accordance with the terms of the
Receivables Purchase Documents.
"Person" means any individual, corporation, firm, enterprise, partnership,
------
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA in
----
respect of which Energizer or any member of the Controlled Group is, or within
the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Prime Rate" means a rate per annum equal to the prime rate of interest
-----------
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means, with respect to any Lender, the percentage obtained by
----------------
dividing (A) such Lender's Revolving Loan Commitment at such time (in each case,
as adjusted from time to time in accordance with the provisions of this
Agreement) by (B) the Aggregate Revolving Loan Commitment at such time;
provided, however, from and after the Conversion Date or if all of the Revolving
-------
Loan Commitments are terminated pursuant to the terms of this Agreement, then
"Pro Rata Share" means the percentage obtained by dividing (x) the aggregate
principal balance of such Lender's Loans at such time, by (y) the aggregate
outstanding balance of all Loans at such time.
"Purchasers" is defined in Section 13.3(A) hereof.
---------- ----------------
"Ralston" means Ralston Purina Company, a Missouri corporation, and prior to the
-------
Spin-Off, the owner of all of the outstanding Capital Stock of Energizer,
together with its permitted successors and assigns, including a
debtor-in-possession on behalf of Ralston.
"Receivable(s)" means and includes all of the Borrower's and its Subsidiaries'
-------------
presently existing and hereafter arising or acquired accounts, accounts
receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"Receivables and Related Security" means the Receivables and the related
-----------------------------------
security and collections with respect thereto which are sold or transferred by
any Originator or SPV in connection with any Permitted Receivables Transfer.
"Receivables Facility Attributed Indebtedness" means the amount of obligations
----------------------------------------------
outstanding under a receivables purchase facility on any date of determination
that would be characterized as principal if such facility were structured as a
secured lending transaction rather than as a purchase.
"Receivables Facility Financing Costs" means such portion of the cash fees,
---------------------------------------
service charges, and other costs, as well as all collections or other amounts
retained by purchasers of receivables pursuant to a receivables purchase
facility, which are in excess of amounts paid to the Borrower and its
consolidated Subsidiaries under any receivables purchase facility for the
purchase of receivables pursuant to such facility and are the equivalent of the
interest component of the financing if the transaction were characterized as an
on-balance sheet transaction.
"Receivables Purchase Documents" means any series of receivables purchase or
--------------------------------
sale agreements generally consistent with terms contained in comparable
structured finance transactions pursuant to which an Originator or Originators
sell or transfer to SPVs all of their respective right, title and interest in
and to certain Receivables and Related Security for further sale or transfer to
other purchasers of or investors in such assets (and the other documents,
instruments and agreements executed in connection therewith), as any such
agreements may be amended, restated, supplemented or otherwise modified from
time to time, or any replacement or substitution therefor.
"Receivables Purchase Facility" means the securitization facility made available
-----------------------------
to Energizer, pursuant to which the Receivables and Related Security of the
Originators are transferred to one or more SPVs, and thereafter to certain
investors, pursuant to the terms and conditions of the Receivables Purchase
Documents.
"Reference Lenders" means Bank One, Bank of America, N.A. and Wachovia Bank,
------------------
N.A.
"Register" is defined in Section 13.3(C) hereof.
-------- ----------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
-------------
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
-------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the Federal
-------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying Margin Stock applicable to member banks of the Federal
Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
-------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Release" means any release, spill, emission, leaking, pumping, injection,
-------
deposit, disposal, discharge, dispersal, leaching or migration into the
environment, including the movement of Contaminants through or in the air, soil,
surface water or groundwater.
"Reorganization Agreement" means that certain Agreement and Plan of
-------------------------
Reorganization dated as of April 1, 2000, between Ralston and Energizer, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Replacement Lender" is defined in Section 2.19 hereof.
------------------- -------------
"Reportable Event" means a reportable event as defined in Section 4043 of ERISA
-----------------
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days after such event occurs.
"Required Lenders" means Lenders whose Pro Rata Shares, in the aggregate, are
-----------------
greater than fifty percent (50%); provided, however, that, if any Lender shall
-------- -------
have failed to fund its Pro Rata Share of any Revolving Loan requested by the
Borrower, which such Lender is obligated to fund under the terms of this
Agreement and any such failure has not been cured, then for so long as such
failure continues, "Required Lenders" means Lenders (excluding all Lenders whose
failure to fund their respective Pro Rata Shares of such Revolving Loans has not
been so cured) whose Pro Rata Shares represent greater than fifty percent (50%)
of the aggregate Pro Rata Shares of such Lenders; provided further, however,
-------- ------- -------
that, from and after the Conversion Date or if the Revolving Loan Commitments
have been terminated pursuant to the terms of this Agreement, "Required Lenders"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans are greater than
fifty percent (50%).
"Requirements of Law" means, as to any Person, the charter and by-laws or other
--------------------
organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"Reserve Requirement" means, with respect to an Interest Period, the maximum
--------------------
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on "Eurocurrency
liabilities".
"Revolving Credit Availability" means, at any particular time, the amount by
-------------------------------
which the Aggregate Revolving Loan Commitment at such time exceeds the Revolving
Credit Obligations outstanding at such time.
"Revolving Credit Obligations" means, at any particular time, the outstanding
------------------------------
principal amount of the Revolving Loans at such time.
"Revolving Loan" is defined in Section 2.1 hereof.
--------------- ------------
"Revolving Loan Commitment" means, for each Lender, the obligation of such
---------------------------
Lender to make Revolving Loans not exceeding the amount set forth on Exhibit A
---------
to this Agreement opposite its name thereon under the heading "Revolving Loan
Commitment" or in the Assignment Agreement by which it became a Lender, as such
amount may be modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable Assignment Agreement.
"Revolving Loan Termination Date" means March 29, 2001, or any subsequent date
---------------------------------
to which the Revolving Loan Termination Date has been extended pursuant to the
terms of Section 2.2(a).
---------------
"Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.
------------------------------- ------------
"Senior Management Team" means each Authorized Officer and the Chief Executive
------------------------
Officer of the Borrower.
"Senior Notes" is defined in the definition of "Note Purchase Agreement" above.
-------------
"Solvent" means, when used with respect to any Person, that at the time of
-------
determination:
(i) the fair value of its assets (both at fair valuation and at present fair
saleable value) is equal to or in excess of the total amount of its
liabilities, including, without limitation, contingent liabilities; and
(ii) it is then able and believes that it will be able to pay its debts as
they mature; and
(iii) it has capital sufficient to carry on its business as conducted and as
proposed to be conducted.
With respect to contingent liabilities (such as litigation and guarantees), such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which can be reasonably
be expected to become an actual or matured liability.
"Spin-Off" means the distribution by Ralston to its stockholders in a tax
- ---------
free transaction of all of the outstanding capital stock of Energizer such that
Energizer will become a separate publicly-held corporation owned directly by the
stockholders of Ralston to whom such distribution is made, in connection with
which there shall have been obtained a letter ruling from the IRS substantially
to the effect that the Spin-Off will be treated as a tax-free distribution by
Ralston under Section 355 of the Code (the "Tax Ruling").
"Spin-Off Date" means April 1, 2000.
--------------
"Spin-Off Transactions" means the series of transactions contemplated by and
----------------------
described in the Form 10, including, but not limited to the Spin-Off.
"SPV" means any special purpose entity established for the purpose of purchasing
---
receivables in connection with a receivables securitization transaction
permitted under the terms of this Agreement.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
----------
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
means a Subsidiary of the Borrower.
"Subsidiary Guarantors" means (i) for the period from the Closing Date until the
---------------------
consummation of the Debt Assumption, Energizer and each of its Material Domestic
Subsidiaries; (ii) from and after the consummation of the Debt Assumption, all
of Energizer's Material Domestic Subsidiaries; (iii) all New Subsidiaries which
are Material Domestic Subsidiaries and which have satisfied the provisions of
Section 7.2(K)(a); (iv) all of Energizer's Subsidiaries which become Material
- ------------------
Domestic Subsidiaries and which have satisfied the provisions of Section
-------
7.2(K)(b); and (v) all other Subsidiaries which become Subsidiary Guarantors in
- --------
satisfaction of the provisions of Section 7.2(K)(c), in each case with respect
-----------------
to clauses (i) through (v) above, other than the SPVs and together with their
------------ ---
respective successors and assigns.
"Subsidiary Guaranty" means that certain Guaranty dated as of the Closing Date,
--------------------
executed by the Subsidiary Guarantors in favor of the Administrative Agent, for
the ratable benefit of the Lenders, as it may be amended, modified, supplemented
and/or restated (including to add new Subsidiary Guarantors), and as in effect
from time to time.
"Supplement" shall have the meaning set forth in Section 7.2(K).
---------- ---------------
"Supplemental Financial Statement" is defined in Section 6.7(A) hereof.
---------------------------------- ---------------
"Tax Ruling" is defined in the definition of "Spin-Off" above.
-----------
"Taxes" means any and all present or future taxes, duties, levies, imposts,
-----
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"Termination Date" means the Commitment Termination Date, or if the Borrower
-----------------
shall have converted the Advances hereunder to a term loan pursuant to Section
-------
2.2(b), the Converted Loan Termination Date.
- ------
"Termination Event" means (i) a Reportable Event with respect to any Benefit
------------------
Plan; (ii) the withdrawal of Energizer or any member of the Controlled Group
from a Benefit Plan during a plan year in which Energizer or such Controlled
Group member was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA with respect to such plan; (iii) the imposition of an obligation under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c)
of ERISA; (iv) the institution by the PBGC or any foreign governmental authority
of proceedings to terminate or appoint a trustee to administer a Benefit Plan or
Foreign Pension Plan; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of Energizer or any member of the Controlled Group from a
Multiemployer Plan.
"Transaction Documents" means the Loan Documents and the documents executed and
----------------------
delivered by Ralston, Energizer or any of their respective Subsidiaries in
connection with the Spin-Off, the Bridge Facilities, the Receivables Purchase
Facility or the Senior Notes, including, without limitation, the Form 10, the
Debt Assumption Agreement, the Receivables Purchase Documents, the Senior Notes,
the Note Purchase Agreement and any documents evidencing the Bridge Facilities.
"Transactions" means the Spin-Off Transactions, the Financing Facilities
------------
(including, without limitation, this Agreement and the financing transactions
evidenced by the Loan Documents) and the Debt Assumption.
"Transferee" is defined in Section 13.5 hereof.
---------- -------------
"Type" means, with respect to any Loan, its nature as a Floating Rate Loan or a
----
Eurodollar Rate Loan.
"Unmatured Default" means an event which, but for the lapse of time or the
------------------
giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings customarily
given them in accordance with generally accepted accounting principles in
existence as of the date hereof.
1.2 References. Any references to Subsidiaries of Ralston or Energizer
----------
shall not in any way be construed as consent by the Administrative Agent or any
Lender to the establishment, maintenance or acquisition of any Subsidiary,
except as may otherwise be permitted hereunder.
ARTICLE II: THE REVOLVING LOAN FACILITY
- ------------ ------------------------------
2.1 Revolving Loans. (a) Upon the satisfaction of the conditions precedent
----------------
set forth in Sections 5.1 and 5.2, as applicable, from and including the Initial
------------ ---
Funding Date and prior to the earlier of the Conversion Date and the
Commitment Termination Date, each Lender severally and not jointly agrees, on
the terms and conditions set forth in this Agreement, to make revolving loans to
the Borrower from time to time, in Dollars, in an amount not to exceed such
Lender's Pro Rata Share of Revolving Credit Availability at such time (each
individually, a "Revolving Loan" and, collectively, the "Revolving Loans");
provided, however, at no time shall the Revolving Credit Obligations exceed the
- -------- -------
Aggregate Revolving Loan Commitment. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to
the earlier of the Conversion Date and the Commitment Termination Date. The
Revolving Loans made on the Initial Funding Date or on or before the third (3rd)
Business Day thereafter shall initially be Floating Rate Loans and thereafter
may be continued as Floating Rate Loans or converted into Eurodollar Rate Loans
in the manner provided in Section 2.9 and subject to the other conditions and
-----------
limitations therein set forth and set forth in this Article II and set forth in
----------
the definition of Interest Period; provided, however, that if the Borrower
-------- -------
delivers a Borrowing/Election Notice, signed by it, together with appropriate
documentation in form and substance satisfactory to the Administrative Agent
indemnifying the Lenders for the amounts described in Section 4.4 on or before
-----------
the third (3rd) Business Day prior to the Initial Funding Date, the Revolving
Loans made on the Initial Funding Date may be Eurodollar Rate Loans. Revolving
Loans made after the third (3rd) Business Day after the Initial Funding Date
shall be, at the option of the Borrower, selected in accordance with Section
-------
2.9, either Floating Rate Loans or Eurodollar Rate Loans. On the Termination
- ---
Date, the Borrower shall repay in full the outstanding principal balance of the
Revolving Loans. Each Advance under this Section 2.1 shall consist of Revolving
-----------
Loans made by each Lender ratably in proportion to such Lender's respective Pro
Rata Share.
(b) Borrowing/Election Notice. The Borrower shall deliver to the
--------------------------
Administrative Agent a Borrowing/Election Notice, signed by it, in accordance
with the terms of Section 2.7. The Administrative Agent shall promptly notify
-----------
each Lender of such request.
(c) Making of Revolving Loans. Promptly after receipt of the
----------------------------
Borrowing/Election Notice under Section 2.7 in respect of Revolving Loans, the
-----------
Administrative Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission, of the requested Revolving Loan. Each Lender
shall make available its Revolving Loan in accordance with the terms of Section
-------
2.6. The Administrative Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Administrative Agent's office in
Chicago, Illinois on the applicable Borrowing Date and shall disburse such
proceeds in accordance with the Borrower's disbursement instructions set forth
in such Borrowing/Election Notice. The failure of any Lender to deposit the
amount described above with the Administrative Agent on the applicable Borrowing
Date shall not relieve any other Lender of its obligations hereunder to make its
Revolving Loan on such Borrowing Date.
2.2 Extension of Revolving Loan Termination Date; Conversion to Term Loan.
-----------------------------------------------------------------------
(a) Extension of Revolving Loan Termination Date. The Aggregate Revolving
--------------------------------------------
Loan Commitment shall expire on the earlier of the Conversion Date and the
Commitment Termination Date. Within the period beginning 59 days and ending 30
days before the then effective Revolving Loan Termination Date, the Borrower may
request in writing that the Revolving Loan Termination Date be extended for an
additional period of 364 days, including the then effective Revolving Loan
Termination Date as one of the days in the calculation of days elapsed. Within
20 days after such request (such 20th day being the "Consent Date"), each Lender
may, in its sole discretion, agree to such extension to a new Revolving Loan
Termination Date not more than 364 days following such Consent Date by giving
written notice of such agreement to the Borrower and the Administrative Agent
(and the failure to provide such notice shall be deemed to be a decision not to
extend). The Revolving Loan Commitment of each Lender that declines to extend
with respect to the Aggregate Revolving Loan Commitment may, at the option of
the Borrower, be replaced in accordance with Section 13.3(A) (but only to the
---------------
extent a replacement Lender is then available), or the Aggregate Revolving Loan
Commitment shall be reduced. All Obligations due to each Lender that declines
to extend its Revolving Loan Commitment under this Section 2.2(a) shall be paid
--------------
in full to the Administrative Agent for the account of each such Lender on the
then effective Revolving Loan Termination Date (without giving effect to any
such requested extension thereto). The Required Lenders and the Borrower must
agree to any extension with respect to the Revolving Loan Termination Date for
any such extension to become effective.
(b) Conversion to Term Loan. From and after the consummation of the Debt
--------------------------
Assumption up until and including the Commitment Termination Date, at the
Borrower's option upon written notice (a "Notice to Convert") to the
Administrative Agent (who shall promptly notify each of the Lenders), the
Borrower may convert the then outstanding aggregate principal amount of the
Advances hereunder to a term loan. The Notice to Convert shall expressly state
the date on which such conversion shall occur (such date being the "Conversion
Date") and shall be irrevocable once given and shall constitute a representation
and warranty by the Borrower that the conditions contained in Section 5.2 have
-----------
been satisfied as of the date of such Notice to Convert and as of the Conversion
Date. Upon delivery of such Notice to Convert, (i) the Borrower's option to
request extensions of the Revolving Loan Termination Date under clause (a) above
----------
and to borrow and reborrow Revolving Loans hereunder, shall terminate, (ii) the
Aggregate Revolving Loan Commitment shall be reduced to zero, and (iii) the
outstanding principal balance of all Loans hereunder shall be due and payable on
the Converted Loan Termination Date. All references in this Agreement to
Revolving Loans shall include such Loans as converted hereunder.
2.3 Rate Options for all Advances; Maximum Interest Periods. The Revolving
--------------------------------------------------------
Loans may be Floating Rate Advances or Eurodollar Rate Advances, or a
combination thereof, selected by the Borrower in accordance with Section 2.10.
------------
The Borrower may select, in accordance with Section 2.9, rate options and
-----------
Interest Periods applicable to the Revolving Loans; provided that there shall be
--------
no more than eight (8) Interest Periods in effect with respect to all of
the Loans at any time.
2.4 Optional Payments. The Borrower may from time to time and at any time
------------------
upon at least one (1) Business Day's prior written notice repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate Advances
in an aggregate minimum amount of $10,000,000 and in integral multiples of
$1,000,000 in excess thereof. Eurodollar Rate Advances may be voluntarily repaid
or prepaid prior to the last day of the applicable Interest Period, subject to
the indemnification provisions contained in Section 4.4, provided, that the
----------- --------
Borrower may not so prepay Eurodollar Rate Advances unless it shall have
provided at least three (3) Business Days' prior written notice to the
Administrative Agent of such prepayment and provided, further, that optional
-------- -------
prepayments of Eurodollar Rate Advances made pursuant to Section 2.1 shall be
-----------
for the entire amount of the outstanding Eurodollar Rate Advance.
2.5 Reduction of Revolving Loan Commitments. Prior to the Conversion Date,
----------------------------------------
the Borrower may permanently reduce the Aggregate Revolving Loan Commitment in
whole, or in part ratably among the Lenders, in an aggregate minimum amount of
$25,000,000 and integral multiples of $5,000,000 in excess of that amount
(unless the Aggregate Revolving Loan Commitment is reduced in whole), upon at
least three (3) Business Day's prior written notice to the Administrative Agent,
which notice shall specify the amount of any such reduction; provided, however,
-------- -------
that the amount of the Aggregate Revolving Loan Commitment may not be reduced
below the aggregate principal amount of the outstanding Revolving Credit
Obligations. All accrued Facility Fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Loans hereunder
(other than a termination of such obligations pursuant to Section 2.2(b)) or any
--------------
reduction of the Aggregate Revolving Loan Commitment on the amount so reduced.
2.6 Method of Borrowing. Not later than 2:00 p.m. (Chicago time) on each
---------------------
Borrowing Date, each Lender shall make available its Revolving Loan, in
immediately available funds, to the Administrative Agent at its address
specified pursuant to Article XIV. The Administrative Agent will promptly make
-----------
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.7 Method of Selecting Types and Interest Periods for Advances. The
------------------------------------------------------------------
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Administrative Agent irrevocable notice in
substantially the form of Exhibit B hereto (a "Borrowing/Election Notice") not
---------
later than 11:00 a.m. (Chicago time) (a) on or before the Borrowing Date of each
Floating Rate Advance and (b) three (3) Business Days before the Borrowing Date
for each Eurodollar Rate Advance specifying: (i) the Borrowing Date (which
shall be a Business Day) of such Advance; (ii) the aggregate amount of such
Advance; (iii) the Type of Advance selected; and (iv) in the case of each
Eurodollar Rate Advance, the Interest Period applicable thereto; provided,
--------
however, that with respect to the borrowing on the Initial Funding Date, such
notice shall be delivered in accordance with the terms of Section 2.1(a) and
--------------
shall be accompanied by the documentation specified in such Section. The
Borrower shall select Interest Periods so that, to the best of the Borrower's
knowledge, it will not be necessary to prepay all or any portion of any
Eurodollar Rate Advance prior to the last day of the applicable Interest Period
in order to make mandatory prepayments as required pursuant to the terms hereof.
Each Floating Rate Advance and all Obligations other than Loans shall bear
interest from and including the date of the making of such Advance, in the case
of Floating Rate Advances, and the date such Obligation is due and owing in the
case of such other Obligations, to (but not including) the date of repayment
thereof at the Alternate Base Rate, changing when and as such Alternate Base
Rate changes. Changes in the rate of interest on that portion of the Loans
maintained as Floating Rate Loans will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Rate Advance, changing
when and as the Applicable Margin changes. Changes in the rate of interest on
that portion of the Loans maintained as Eurodollar Rate Advances will take
effect simultaneously with each change in the Applicable Margin.
2.8 Minimum Amount of Each Advance. Each Advance shall be in the minimum
---------------------------------
amount of $10,000,000 (and in multiples of $1,000,000 if in excess thereof);
provided, however, that any Floating Rate Advance may be in the amount of the
----- -------
unused Aggregate Revolving Loan Commitment.
2.9 Method of Selecting Types and Interest Periods for Conversion and
------------------------------------------------------------------------
Continuation of Advances.
- --------------------------
(A) Right to Convert. The Borrower may elect from time to time, subject to
-----------------
the provisions of Section 2.3 and this Section 2.9, to convert all or any part
----------- -----------
of a Loan of any Type into any other Type or Types of Loans; provided that any
--------
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
----------------------------------------
continue as Floating Rate Loans unless and until such Floating Rate Loans are
repaid or converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall
continue as Eurodollar Rate Loans until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have repaid such
Loans or given the Administrative Agent a Borrowing/Election Notice in
accordance with Section 2.9(D) requesting that, at the end of such Interest
---------------
Period, such Eurodollar Rate Loans continue as a Eurodollar Rate Loan.
(C) No Conversion Post-Default. Notwithstanding anything to the contrary
----------------------------
contained in Section 2.9(A) or Section 2.9(B), no Loan may be converted into or
-------------- --------------
continued as a Eurodollar Rate Loan (except with the consent of the Required
Lenders) when any Default has occurred and is continuing.
(D) Borrowing/Election Notice. The Borrower shall give the Administrative
--------------------------
Agent an irrevocable Borrowing/Election Notice of each conversion of a Floating
Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan
not later than 11:00 a.m. (Chicago time) three (3) Business Days prior to the
date of the requested conversion or continuation, specifying: (i) the requested
date (which shall be a Business Day) of such conversion or continuation; (ii)
the amount and Type of the Loan to be converted or continued; and (iii) the
amount of Eurodollar Rate Loan(s) into which such Loan is to be converted or
continued, and the duration of the Interest Period applicable thereto.
2.10 Default Rate. After the occurrence and during the continuance of a
-------------
Default, the Administrative Agent or the Required Lenders may, at their option,
by notice to the Borrower declare that, (a) the interest rate(s) applicable to
the Obligations (other than Eurodollar Rate Advances) shall be equal to the
Alternate Base Rate, changing as and when the Alternate Base Rate changes, or,
for Eurodollar Rate Advances, the then highest Eurodollar Rate (utilizing the
highest Applicable Margin in effect from time to time), in each case, plus two
----
percent (2.00%) per annum for all Loans and other Obligations, and (b) the
Facility Fees shall be calculated using the highest Applicable Facility Fee
Percentage; provided, that after the occurrence and during the continuance of a
--------
Default under Sections 8.1(F), (G) or (I), the interest rate described in clause
---------------- --- --- ------
(a) above and the Facility Fee described in clause (b) above shall be
- --- ----------
applicable without any election or action on the part of the Administrative
Agent or any other Lender.
2.11 Method of Payment. All payments of principal, interest, fees and
-------------------
commissions hereunder shall be made, without setoff, deduction or counterclaim,
in immediately available funds to the Administrative Agent at the Administrative
Agent's address specified pursuant to Article XIV, or at any other Lending
------------
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by 2:00 p.m. (Chicago time) on the date
when due and shall be made ratably among the Lenders (unless such amount is not
to be shared ratably in accordance with the terms hereof). Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds which the Administrative Agent received at its address specified
pursuant to Article XIV or at any Lending Installation specified in a notice
------------
received by the Administrative Agent from such Lender. The Borrower authorizes
the Administrative Agent to charge the account of the Borrower maintained with
Bank One for each payment of principal, interest, fees and commissions as it
becomes due hereunder.
2.12 Evidence of Debt.
------------------
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts (a "Loan Account") evidencing the indebtedness of the
-------------
Borrower to such Lender owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Register maintained by the Administrative Agent pursuant to Section
-------
13.3(C) shall include a control account, and a subsidiary account for each
- ------
Lender, in which accounts (taken together) shall be recorded (i) the date and
the amount of each Loan made hereunder, the Type thereof and the Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, (iii) the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto pursuant to Section
-------
13.3, (iv) the amount of any sum received by the Administrative Agent hereunder
- ----
for the account of the Lenders and each Lender's share thereof, and (v) all
other appropriate debits and credits as provided in this Agreement, including,
without limitation, all fees, charges, expenses and interest.
(c) The entries made in the Loan Account, the Register and the other accounts
maintained pursuant to subsections (a) or (b) of this Section shall be
---------------- ---
conclusive and binding for all purposes, absent manifest error, unless the
Borrower objects to information contained in the Loan Accounts, the Register or
the other accounts within thirty (30) days of the Borrower's receipt of such
information; provided that the failure of any Lender or the Administrative Agent
--------
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms
of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note for such Loans payable to the order of
such Lender and in a form approved by the Administrative Agent in its reasonable
discretion and consistent with the terms of this Agreement. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 13.3) be represented by one or
------------
more promissory notes in such form payable to the order of the payee named
therein.
2.13 Telephonic Notices. The Borrower authorizes the Lenders and the
-------------------
Administrative Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Administrative Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation, signed by an
Authorized Officer, if such confirmation is requested by the Administrative
Agent or any Lender, of each telephonic notice. If the written confirmation
differs in any material respect from the action taken by the Administrative
Agent and the Lenders, the records of the Administrative Agent and the Lenders
with respect to such telephonic notice shall govern absent manifest error. In
case of disagreement concerning such notices, if the Administrative Agent has
recorded telephonic Borrowing/Election Notices, such recordings will be made
available to the Borrower upon the Borrower's request therefor.
2.14 Promise to Pay; Interest and Facility Fees; Interest Payment Dates;
-----------------------------------------------------------------------
Interest and Fee Basis; Loan and Control Accounts.
-----------------------------------------------------
(A) Promise to Pay. The Borrower unconditionally promises to pay when due
----------------
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the other Loan Documents.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
------------------------
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar quarter, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) Facility Fees and Administrative Agent's Fees. (i) The Borrower shall
----------------------------------------------
pay to the Administrative Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, from and after the Closing Date until the
Termination Date, a facility fee (the "Facility Fee") accruing at the per annum
rate of the then Applicable Facility Fee Percentage, on the Aggregate Revolving
Loan Commitment (whether used or unused) (or, from and after the earlier of the
Conversion Date or the Commitment Termination Date, the average daily aggregate
principal amount of all Loans). All such Facility Fees payable under this
clause (C) shall be payable quarterly in arrears on each Payment Date occurring
- ----------
after the Closing Date (with the first such payment being calculated for the
period from the Closing Date and ending on June 30, 2000) and on the Termination
Date.
(ii) Ralston shall pay or shall cause Energizer to pay to the
Administrative Agent for the sole account of the Administrative Agent and the
Arranger (unless otherwise agreed between the Administrative Agent and the
Arranger and any Lender) the fees set forth in the letter agreement among the
Administrative Agent, the Arranger, Ralston and Energizer dated February 16,
2000, payable at the times and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Margin and Applicable Facility Fee
------------------------------------------------------------------------
Percentage.
- ----------
(i) Interest accrued on Eurodollar Rate Advances, Facility Fees and
Floating Rate Advances where the basis for calculation is the Federal Funds
Effective Rate shall be calculated for actual days elapsed on the basis of a
year of 360 days, and interest accrued on Floating Rate Advances where the basis
for calculation is the Prime Rate shall be calculated for actual days elapsed on
the basis of a year of 365, or when appropriate 366, days. Interest shall be
payable for the day an Obligation is incurred but not for the day of any payment
on the amount paid if payment is received prior to 2:00 p.m. (Chicago time) at
the place of payment. If any payment of principal of or interest on a Loan or
any payment of any other Obligations shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest, fees and commissions in connection with such
payment.
(ii) The Applicable Margin and Applicable Facility Fee Percentage shall be
determined from time to time by reference to the table set forth below, on the
basis of the then applicable Leverage Ratio as described in this Section
-------
2.14(D)(ii):
- ----------
Applicable
Facility Fee
Leverage Ratio Applicable Margin Percentage
-------------- ----------------- ----------
Level I
<1.0 to 1.0 0.40% 0.10%
Level II
1.0 to 1.0 and
<1.5 to 1.0 0.525% 0.10%
Level III
1.5 to 1.0 and
<2.0 to 1.0 0.625% 0.125%
Level IV
2.0 to 1.0 and
<2.5 to 1.0 0.850% 0.150%
Level V
2.5 to 1.0 1.075% 0.175%
For purposes of this Section 2.14(D)(ii), the Leverage Ratio shall be calculated
-------------------
as provided in Section 7.4(A). Upon receipt of the financial statements
---------------
delivered pursuant to Section 7.1(A)(i) and (ii), as applicable, the Applicable
----------------- ----
Margin and Applicable Facility Fee Percentage and shall be adjusted, such
adjustment being effective five (5) Business Days following the Administrative
Agent's receipt of such financial statements and the compliance certificate
required to be delivered in connection therewith pursuant to Section
-------
7.1(A)(iii); provided, that if the Borrower shall not have timely delivered its
- ----------- --------
financial statements in accordance with Section 7.1(A)(i) or (ii), as
------------------ ----
applicable, then commencing on the date upon which such financial statements
should have been delivered and continuing until five (5) Business Days following
the date such financial statements are actually delivered, it shall be assumed
for purposes of determining the Applicable Margin and Applicable Facility Fee
Percentage that the Leverage Ratio was greater than 2.5 to 1.0 and Level V
pricing shall be applicable.
(iii) Notwithstanding anything herein to the contrary, from the Closing
Date to but not including the fifth Business Day following receipt of the
Borrower's financial statements delivered pursuant to Section 7.1(A)(i) for the
-----------------
fiscal quarter ending June 30, 2000, the Applicable Margin and Applicable
Facility Fee Percentage shall be set at the greater of (a) Level III and (b) the
Level determined in accordance with clause (ii) above.
2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
-----------------------------------------------------------------------
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the
- ---------------------------------------
Administrative Agent will notify each Lender of the contents of each Aggregate
Revolving Loan Commitment reduction notice, Borrowing/Election Notice repayment
notice and issuance of Letter of Credit notice received by it hereunder. The
Administrative Agent will notify each Lender of the interest rate applicable to
each Eurodollar Rate Loan promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.
2.16 Lending Installations. Each Lender may book its Loans at any Lending
----------------------
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation. Subject to the provisions of Section 4.6, each Lender may, by
-----------
written or facsimile notice to the Administrative Agent and the Borrower,
designate a Lending Installation through which Loans will be made by it and for
whose account Loan payments are to be made.
2.17 Non-Receipt of Funds by the Administrative Agent. Unless the Borrower
-------------------------------------------------
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.18 Termination Date. This Agreement shall be effective until the
-----------------
Termination Date. Notwithstanding the termination of this Agreement, until all
of the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied in cash (to the full extent that such
Obligations are payable in cash) and all financing arrangements among the
Borrower and the Lenders shall have been terminated, all of the rights and
remedies under this Agreement and the other Loan Documents shall survive.
2.19 Replacement of Certain Lenders. In the event a Lender ("Affected
---------------------------------
Lender") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, which such Lender is obligated to fund under the
terms of this Agreement and which failure has not been cured, (ii) requested
compensation from the Borrower under Sections 4.1, 4.2 or 4.5 to recover Taxes,
------------ --- ---
Other Taxes or other additional costs incurred by such Lender which are not
being incurred generally by the other Lenders, (iii) delivered a notice pursuant
to Section 4.3 claiming that such Lender is unable to extend Eurodollar Rate
------------
Loans to the Borrower for reasons not generally applicable to the other Lenders
or (iv) has invoked Section 10.2, then, in any such case, the Borrower or the
------------
Administrative Agent may make written demand on such Affected Lender (with a
copy to the Administrative Agent in the case of a demand by the Borrower and a
copy to the Borrower in the case of a demand by the Administrative Agent) for
the Affected Lender to assign, and such Affected Lender shall use commercially
reasonable efforts to assign pursuant to one or more duly executed Assignment
Agreements five (5) Business Days after the date of such demand, to one or more
financial institutions that comply with the provisions of Section 13.3 which the
------------
Borrower or the Administrative Agent, as the case may be, shall have engaged for
such purpose ("Replacement Lender"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Revolving Loan Commitment and all Loans owing to it) in
accordance with Section 13.3. The Administrative Agent agrees, upon the
-------------
occurrence of such events with respect to an Affected Lender and upon the
written request of the Borrower, to use its reasonable efforts to obtain the
commitments from one or more financial institutions to act as a Replacement
Lender. The Administrative Agent is authorized to execute one or more of such
Assignment Agreements as attorney-in-fact for any Affected Lender failing to
execute and deliver the same within five (5) Business Days after the date of
such demand. Further, with respect to such assignment the Affected Lender shall
have concurrently received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the Loans owed to such
Lender, together with accrued interest thereon through the date of such
assignment, amounts payable under Sections 4.1, 4.2 and 4.5 with respect to such
------------ --- ---
Affected Lender and compensation payable under Section 2.14(C) in the event of
---------------
any replacement of any Affected Lender under clause (ii) or clause (iii) of this
----------- ------------
Section 2.19; provided that upon such Affected Lender's replacement, such
- ------------- --------
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 4.1, 4.2, 4.4, 4.5 and 10.7, as well as to
------------ --- --- --- ----
any fees accrued for its account hereunder and not yet paid, and shall continue
to be obligated under Section 11.8 with respect to losses, obligations,
-------------
liabilities, damages, penalties, actions, judgements, costs, expenses or
disbursements for matters which occurred prior to the date the Affected Lender
is replaced. Upon the replacement of any Affected Lender pursuant to this
Section 2.19, the provisions of Section 9.2 shall continue to apply with respect
- ------------ -----------
to Loans which are then outstanding with respect to which the Affected Lender
failed to fund its Pro Rata Share and which failure has not been cured.
ARTICLE III: [RESERVED]
- ------------- ----------
ARTICLE IV: YIELD PROTECTION; TAXES
- ------------ -------------------------
4.1 Yield Protection. If, on or after the date of this Agreement, the
-----------------
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to any Taxes,
or changes the basis of taxation of payments (other than with respect to
Excluded Taxes) to any Lender in respect of its Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Rate
Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding or
maintaining its Loans or reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with its Loans, or requires any
Lender or any applicable Lending Installation to make any payment calculated by
reference to the amount of Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Loans or Revolving
Loan Commitment or to reduce the return received by such Lender or applicable
Lending Installation in connection with such Loans or Revolving Loan Commitment,
then, within fifteen (15) days of demand by such Lender, the Borrower shall pay
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduction in amount received.
Notwithstanding the foregoing provisions of this Section 4.1, if any Lender
-----------
fails to notify the Borrower of any event or circumstance which will entitle
such Lender to compensation pursuant to this Section 4.1 within ninety (90) days
-----------
after such Lender obtains knowledge of such event or circumstance, then such
Lender shall not be entitled to compensation from the Borrower for any amount
arising prior to the date which is ninety (90) days before the date on which
such Lender notifies the Borrower of such event or circumstance.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
-------------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender reasonably determines is attributable to this Agreement,
its Loans or its Revolving Loan Commitment hereunder (after taking into account
such Lender's customary policies as to capital adequacy). "Change" means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 Availability of Types of Advances. If any Lender determines that
-------------------------------------
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Rate Advances are
not available or (ii) the interest rate applicable to Eurodollar Rate Advances
does not accurately reflect the cost of making or maintaining Eurodollar Rate
Advances, then the Administrative Agent shall suspend the availability of
Eurodollar Rate Advances and require any affected Eurodollar Rate Advances to be
repaid or converted to Floating Rate Advances, subject to the payment of any
funding indemnification amounts required by Section 4.4.
------------
4.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance
------------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom (excluding loss of margin),
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Rate Advance.
4.5 Taxes. (i) All payments by the Borrower to or for the account of any
-----
Lender or the Administrative Agent hereunder or under any of the other Loan
Documents shall be made free and clear of and without deduction for any and all
Taxes. If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender or the Administrative Agent,
(a) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.5) such Lender or the Administrative Agent (as the case may
-----------
be) receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the
Administrative Agent the original copy of a receipt evidencing payment thereof
within thirty (30) days after such payment is made. Such Lender or the
Administrative Agent, as the case may be, shall promptly reimburse the Borrower
for such payments to the extent such Lender or the Administrative Agent receives
actual knowledge that it has received any tax credit or other benefit in
connection with such tax payments and that such tax credit or benefit is clearly
attributable to this Agreement.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any
promissory note issued hereunder or from the execution or delivery of, or
otherwise with respect to, this Agreement or any promissory note issued
hereunder ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Administrative Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 4.5) paid by the Administrative Agent or such Lender and any liability
- ------------
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within thirty
(30) days of the date the Administrative Agent or such Lender makes demand
therefor pursuant to Section 4.6.
------------
(iv) Each Lender that is not incorporated under the laws of the United States
of America or a state thereof (each a "Non-U.S. Lender") agrees that it will,
not less than ten (10) Business Days after the date of this Agreement, deliver
to each of the Borrower and the Administrative Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 4.5 with respect to Taxes imposed by the United States; provided
------------
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request (without cost to the
Borrower) to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any promissory
note issued hereunder pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the Administrative Agent),
at the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental authority
of the United States or any other country or any political subdivision thereof
asserts a claim that the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason other than as a
result of the gross negligence or willful misconduct of the Administrative
Agent), such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this subsection, together with all costs and expenses
related thereto (including attorneys fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the Administrative
Agent). The obligations of the Lenders under this Section 4.5(vii) shall
----------------
survive the payment of the Obligations and termination of this Agreement.
4.6 Lender Statements; Survival of Indemnity. To the extent reasonably
--------------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Rate Loans to reduce any liability of the Borrower to
such Lender under Sections 4.1, 4.2 and 4.5 or to avoid the unavailability of
------------ --- ---
Eurodollar Rate Advances under Section 4.3, so long as such designation is not,
-----------
in the reasonable judgment of such Lender, disadvantageous to such Lender. Each
Lender shall deliver a written statement of such Lender to the Borrower
(with a copy to the Administrative Agent) as to the amount due, if any, under
Section 4.1, 4.2, 4.4 or 4.5. Such written statement shall set forth in
- ------------ --- --- ---
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Rate Loan shall be calculated as though each Lender
funded its Eurodollar Rate Loan through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not, and without regard to loss of margin. Unless otherwise provided herein,
the amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 4.1, 4.2, 4.4 and 4.5 shall survive payment of
------------ --- --- ---
the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
- ----------- ---------------------
5.1 Initial Advances. The Lenders shall not be required to make the initial
----------------
Loans unless the Borrower has furnished to the Administrative Agent each of
the following, with sufficient copies for the Lenders, all in form and substance
satisfactory to the Administrative Agent and the Lenders:
(1) Copies of the Certificate of Incorporation of Ralston, Energizer and
each of the Subsidiary Guarantors (other than Energizer) (collectively, the
"Loan Parties"), together with all amendments and a certificate of good
standing, both certified by the appropriate governmental officer in its
jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of each of
the Loan Parties, of its By-Laws and of its Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by counsel for
any Lender) authorizing the execution of the Loan Documents entered into by
it;
(3) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each of the Loan Parties, which shall identify by name and title
And bear the signature of the officers of the Loan Parties authorized to
sign the Loan Documents and the officers of Ralston and (from and after the
consummation of the Debt Assumption) Energizer authorized to make borrowings
hereunder, upon which certificate the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower; provided, that any officer
who will neither be a signatory to this Agreement nor an individual
requesting borrowings hereunder, shall be permitted to deliver a facsimile of
such officer's signature in satisfaction of this Section 5.1(3);
---------------
(4) Certificates, in form and substance satisfactory to the Adminis-
trative Agent, (a) signed by the Chief Financial Officer of Ralston, stating
that on the Initial Funding Date all the representations in this Agreement made
by Ralston are true and correct and no Default or Unmatured Default has
occurred and is continuing and (b) signed by the Executive Vice President-
Finance and Control of Energizer, stating that on the Initial Funding Date, all
of the representations in this Agreement to be made by Energizer on the Spin-Off
Date would be true and correct if such representations were made by Energizer
on the Initial Funding Date;
(5) The written opinion of the Loan Parties' counsel, addressed to
the Administrative Agent and the Lenders, in substantially the form attached
hereto as Exhibit D and containing assumptions and qualifications acceptable
to the ---------- Administrative Agent and the Lenders;
(6) A certificate in form and substance satisfactory to the Administra-
tive Agent, signed by the chief financial officer or Treasurer of Energizer,
stating that, after taking into consideration all information available at
such time, such officer neither knows nor should know of any information that
would prevent the Net Worth Condition from being satisfied as of the
Spin-Off Date, after giving effect to the Spin-Off Transactions and after
all post-closing adjustments have been made;
(7) Evidence satisfactory to the Administrative Agent that, except as set
forth on Schedule 6.21 of this Agreement, (i) all conditions precedent
to the consummation of the Spin-Off have been satisfied in all material
respects, (ii) the Spin-Off Transactions have been approved by all necessary
corporate action of Ralston's and Energizer's Board of Directors and, if
required, shareholders, and the terms of the Spin-Off Transactions have not
been amended, waived or modified in any material respect from those set forth in
the Form 10 without the approval of the Administrative Agent (such
approval not to be unreasonably withheld); (iii) the Tax Ruling and all nece-
ssary regulatory approvals have been obtained for the consummation of the
Spin-Off Transactions; and (iv) the aggregate amount of all loans and
Committed Financing Facilities (including this Agreement and the 5-Year
Credit Agreement) available to Energizer upon consummation of the Spin-
Off Transactions equals or exceeds $650,000,000, and all such commitments are
identified on Schedule 6.21(iv) attached hereto;
(8) Evidence satisfactory to the Administrative Agent that there exists
no injunction or temporary restraining order which, in the judgment of the
Administrative Agent, would prohibit the making of the Loans, the consummation
of the Spin-Off Transactions, the consummation of the Debt Assumption and the
other transactions contemplated by the Transaction Documents or any litigation
seeking such an injunction or restraining order;
(9) Written money transfer instructions reasonably requested by the
Administrative Agent, addressed to the Administrative Agent and signed by an
Authorized Officer;
(10) Opinions of value, solvency and other appropriate factual information
and advice in form and substance reasonably satisfactory to it and from the
chief financial officer of Energizer supporting the conclusions that after
giving effect to the Spin-Off Transactions and the Debt Assumption, Energizer
and its Subsidiaries on a consolidated basis are Solvent and will be Solvent
subsequent to incurring the indebtedness contemplated under the Transaction
Documents, will be able to pay its debts and liabilities as they become due and
Will not be left with unreasonably small working capital for general
corporate purposes;
(11) Evidence satisfactory to the Administrative Agent that Ralston had
paid or has caused Energizer to pay to the Administrative Agent and the
Arranger the fees agreed to in the fee letter dated February 16, 2000,
among the Administrative Agent, the Arranger, Ralston and Energizer; and
(12) Such other documents as the Administrative Agent or any Lender
or its counsel may have reasonably requested, including, without limitation,
the Subsidiary Guaranty, opinions of counsel, an officer's no-default certifi-
cate and each other document reflected on the List of Closing Documents
attached as Exhibit E to this Agreement.
----------
5.2 Each Advance. The Lenders shall not be required to make any Advance
-------------
unless on the applicable Borrowing Date, both before and after taking into
account the proposed borrowing:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in Article VI are true
----------
and correct in all material respects as of such Borrowing Date except for
changes in the Schedules to this Agreement reflecting transactions permitted
by or not in violation of this Agreement; and
(iii) The Revolving Credit Obligations do not, and after making
such proposed Advance would not, exceed the Aggregate Revolving Loan
Commitment.
Each Borrowing/Election Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 5.2(i) and (ii) have been satisfied. Any Lender may
---------------- ----
require a duly completed officer's certificate in substantially the form of
Exhibit F hereto and/or a duly completed compliance certificate in substantially
- ---------
the form of Exhibit G hereto as a condition to making an Advance.
----------
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
- ------------ --------------------------------
In order to induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and the other financial accommodations to
Ralston and, after the consummation of the Debt Assumption, Energizer, (a)
Ralston represents and warrants as follows in Section 6.1, 6.2, 6.3, 6.14, 6.18
----------- --- --- ---- ----
and 6.21 to each Lender and the Administrative Agent as of the Closing Date, the
----
Initial Funding Date and the Spin-Off Date, giving effect to the consummation of
the transactions contemplated by the Transaction Documents as of each such date,
(b) Energizer represents and warrants as follows in Sections 6.4 through 6.23
------------ ----
and Section 6.25 to each Lender and the Administrative Agent as of the Spin-Off
------------
Date (immediately following the consummation of the Debt Assumption), giving
effect to the consummation of the transactions contemplated by the Transaction
Documents as of such date, and thereafter on each date as required by Section
-------
5.2 (other than with respect to Section 6.8 which shall only be made by
------------
Energizer as of the Spin-Off Date) and (c) Energizer represents and warrants as
follows in Section 6.24 to each Lender and the Administrative Agent as a
-------------
condition to the Debt Assumption, on each Adjustment Date and on the Opening
Balance Sheet Delivery Date (in each case, as of the Spin-Off Date, taking into
account the post-closing adjustments made as of such date):
6.1 Organization; Corporate Powers of Ralston. Each of Ralston and
---------------------------------------------
Energizer (i) is a corporation, limited liability company, partnership or other
commercial entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign entity and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.
6.2 Authority of Ralston.
----------------------
(A) Ralston has the requisite power and authority to execute, deliver and
perform each of the Transaction Documents which are to be executed by it in
connection with the Transactions or which have been executed by it as required
by this Agreement and the other Loan Documents and (ii) to file the Transaction
Documents which must be filed by it in connection with the Transactions or which
have been filed by it as required by this Agreement, the other Loan
Documents or otherwise with any Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be, of
each of the Transaction Documents which must be executed or filed by Ralston in
connection with the Transactions or which have been executed or filed as
required by this Agreement, the other Loan Documents or otherwise and to which
Ralston is party, and the consummation of the transactions contemplated thereby,
have been duly approved by the respective boards of directors of Ralston and
Energizer and, if necessary, the shareholders of Ralston, and such approvals
have not been rescinded. No other action or proceedings on the part of Ralston
or Energizer are necessary to consummate such transactions.
(C) Each of the Transaction Documents to which Ralston is a party has been
duly executed, delivered or filed, as the case may be, by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms (except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles, including concepts of reasonableness, materiality,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies (whether enforcement
is sought by proceedings in equity or at law)), is in full force and effect and
no material term or condition thereof has been amended, modified or waived from
the terms and conditions contained in the Transaction Documents delivered to the
Administrative Agent pursuant to Section 5.1 without the prior written consent
-----------
of the Required Lenders (or all of the Lenders if required by Section 9.3), and
-----------
Ralston has performed and complied with all the material terms, provisions,
agreements and conditions set forth therein and required to be performed or
complied with by Ralston on or before the Initial Funding Date, and no unmatured
default, default or breach of any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents for Ralston. The execution, delivery
----------------------------------------------
and performance of each of the Loan Documents and other Transaction
Documents to which Ralston is a party do not and will not (i) conflict with the
certificate or articles of incorporation or by-laws of Ralston or Energizer,
(ii) with respect to the Transaction Documents other than the Loan Documents,
constitute a tortious interference with any Contractual Obligation of Ralston or
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law (including,
without limitation, any Environmental Property Transfer Act) or Contractual
Obligation of Ralston, or require termination of any Contractual Obligation,
except such interference, breach, default or termination which individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iii) with respect to the Loan Documents, constitute a tortious
interference with any Contractual Obligation of Ralston or conflict with, result
in a breach of or constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Ralston, or
require termination of any Contractual Obligation, except such interference,
breach or default which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or assets
of Ralston, other than Liens permitted or created by the Loan Documents, or (v)
require any approval of Ralston's or Energizer's Board of Directors or
shareholders, as applicable, except such as have been obtained. Except as set
forth on Schedule 6.3 to this Agreement, the execution, delivery and performance
------------
of each of the Transaction Documents to which Ralston is a party do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.4 Organization; Corporate Powers of Energizer. Energizer and each of its
--------------------------------------------
Subsidiaries (i) is a corporation, limited liability company, partnership or
other commercial entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
to do business as a foreign entity and is in good standing under the laws of
each jurisdiction in which failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.
6.5 Authority of Energizer.
------------------------
(A) Energizer and each of its Subsidiaries has the requisite power and
authority to execute, deliver and perform each of the Transaction Documents
which are to be executed by it in connection with the Transactions or which have
been executed by it as required by this Agreement and the other Loan
Documents and (ii) to file the Transaction Documents which must be filed by it
in connection with the Transactions or which have been filed by it as required
by this Agreement, the other Loan Documents or otherwise with any Governmental
Authority.
(B) The execution, delivery, performance and filing, as the case may be, of
each of the Transaction Documents which must be executed or filed by Energizer
or any of its Subsidiaries in connection with the Transactions or which have
been executed or filed as required by this Agreement, the other Loan Documents
or otherwise and to which Energizer or any of its Subsidiaries is party, and the
consummation of the transactions contemplated thereby, have been duly approved
by the respective boards of directors and, if necessary, the shareholders of
Energizer and its Subsidiaries, and such approvals have not been rescinded. No
other action or proceedings on the part of Energizer or its Subsidiaries are
necessary to consummate such transactions.
(C) Each of the Transaction Documents to which Energizer or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles,
including concepts of reasonableness, materiality, good faith and fair dealing
and the possible unavailability of specific performance, injunctive relief or
other equitable remedies (whether enforcement is sought by proceedings in equity
or at law)), is in full force and effect (other than as a result of expiration
in accordance with its terms) and no material term or condition thereof has been
amended, modified or waived from the terms and conditions contained in the
Transaction Documents delivered to the Administrative Agent pursuant to Section
-------
5.1 without the prior written consent of the Required Lenders (or all of the
- ---
Lenders if required by Section 9.3), and Energizer and its Subsidiaries have,
-----------
and, to the best of Energizer's and its Subsidiaries' knowledge, all other
parties thereto have, performed and complied with all the material terms,
provisions, agreements and conditions set forth therein and required to be
performed or complied with by such parties on or before the Initial Funding Date
or Spin-Off Date, as applicable, and no unmatured default, default or breach of
any covenant by any such party exists thereunder.
6.6 No Conflict; Governmental Consents for Energizer. The execution,
-----------------------------------------------------
delivery and performance of each of the Loan Documents and other Transaction
Documents to which Energizer or any of its Subsidiaries is a party do not and
will not (i) conflict with the certificate or articles of incorporation or
by-laws of Energizer or any such Subsidiary, (ii) with respect to the
Transaction Documents other than the Loan Documents, constitute a tortious
interference with any Contractual Obligation of any Person or conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Energizer
or any such Subsidiary, or require termination of any Contractual Obligation,
except such interference, breach, default or termination which individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iii) with respect to the Loan Documents, constitute a tortious
interference with any Contractual Obligation of any Person or conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Energizer or
any such Subsidiary, or require termination of any Contractual Obligation,
except such interference, breach or default which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(iv) result in or require the creation or imposition of any Lien whatsoever upon
any of the property or assets of Energizer or any such Subsidiary, other than
Liens permitted or created by the Loan Documents, or (v) require any approval of
Energizer's or any such Subsidiary's Board of Directors or shareholders except
such as have been obtained. Except as set forth on Schedule 6.6 to this
------------
Agreement, the execution, delivery and performance of each of the Transaction
Documents to which Energizer or any of its Subsidiaries is a party do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
6.7 Financial Statements.
---------------------
(A) The pro forma historical balance sheet (as updated by the pro forma
--- ----- --- -----
historical balance sheet prepared with respect to Energizer and its Subsidiaries
as of February 29, 2000 (the "Supplemental Financial Statement")), income
statements and statements of cash flow of Energizer and its Subsidiaries
contained in the Form 10 and the projections and assumptions contained in the
Borrower's Confidential Information Memorandum dated February, 2000 (the "Bank
Book") under Appendix A thereof, copies of which are attached hereto as Schedule
---------- --------
6.7 to this Agreement, present on a pro forma basis the financial condition of
- --- --- -----
Energizer and such Subsidiaries as of such date, and reflect on a pro forma
--- -----
basis those liabilities reflected in the notes thereto and resulting from
consummation of the Transactions and the other transactions contemplated by this
Agreement, and the payment or accrual of all transaction costs payable on the
Initial Funding Date and the Spin-Off Date with respect to any of the foregoing
and demonstrate that, after giving effect to such transactions, Energizer and
its Subsidiaries can repay their debts and satisfy their other obligations as
and when due, and can comply with the requirements of this Agreement. The
projections and assumptions contained in the Bank Book were prepared in good
faith and represent management's opinion based on the information available to
the Borrower at the time so furnished and, since the preparation thereof and of
the pro forma historical financial statements contained in the Form 10 (as
--- -----
updated by the Supplemental Financial Statement) there has occurred no material
adverse change in the business, financial condition, operations, or prospects of
Energizer or any of its Subsidiaries, or Energizer and its Subsidiaries taken as
a whole (it being understood that so long as the representation and warranty
contained in Section 6.24 is true and correct at each time Energizer is required
------------
to make such representation and warranty pursuant to the introduction to this
Article VI, changes from the "Net transactions with RPCO" line item on the pro
- ----------- ---
forma statement of cash flow will not constitute a material adverse change).
- -----
(B) Complete and accurate copies of the audited financial statements and
the audit report related thereto prepared with respect to Energizer and its
Subsidiaries as of September 30, 1999 and unaudited financial statements of
prepared with respect to Energizer and its Subsidiaries as of December 31, 1999
have been delivered to the Administrative Agent.
(C) Since the financial statements prepared as of December 31, 1999, the
historical pro forma financial statements contained in the Form 10 (as updated
--- -----
by the Supplemental Financial Statement), and the projections and assumptions
included as Appendix A of the Bank Book, Energizer and its Subsidiaries have
conducted their respective operations (including, without limitation, any
operations and transactions with Ralston, any holder or holders of any of the
Equity Interests of Energizer, or with any Affiliate of Energizer which is not
its Subsidiary) according to their ordinary and usual course of business and
consistent with past practice, as reflected in such financial statements, Form
10 (as updated by the Supplemental Financial Statement) and the Bank Book, as
applicable, in all material respects (it being understood that so long as the
representation and warranty contained in Section 6.24 is true and correct at
------------
each time Energizer is required to make such representation and warranty
pursuant to the introduction to this Article VI, changes from the "Net
-----------
transactions with RPCO" line item on the pro forma statement of cash flow will
--- -----
not constitute a material deviation from past operations).
6.8 No Material Adverse Change. Since each of (a) December 31, 1999
-----------------------------
(determined by reference to the financial statements prepared with respect to
Energizer and its Subsidiaries), (b) the pro forma historical financial
--- -----
statements set forth in the Form 10 (as updated by the Supplemental Financial
Statement, and (c) the projections and assumptions included as Appendix A of the
Bank Book, there has occurred no change in the business, properties,
condition (financial or otherwise), performance, results of operations or
prospects of Energizer, or Energizer and its Subsidiaries taken as a whole or
any other event which has had or would reasonably be expected to have a Material
Adverse Effect (it being understood that so long as the representation and
warranty contained in Section 6.24 is true and correct at each time Energizer is
------------
required to make such representation and warranty pursuant to the introduction
to this Article VI, changes from the "Net transactions with RPCO" line item on
----------
the pro forma statement of cash flow will not constitute an event which has had
--- -----
or would reasonably be expected to have a Material Adverse Effect).
6.9 Taxes.
-----
(A) Tax Examinations. All deficiencies which have been asserted against
-----------------
Energizer or any of Energizer's Subsidiaries as a result of any federal, state,
local or foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or are
being contested in good faith, and no issue has been raised by any taxing
authority in any such examination which, by application of similar principles,
reasonably can be expected to result in assertion by such taxing authority of a
material deficiency for any other year not so examined which has not been
reserved for in Energizer's consolidated financial statements to the extent, if
any, required by Agreement Accounting Principles. Except as permitted pursuant
to Section 7.2(D), neither Energizer nor any of Energizer's Subsidiaries
---------------
anticipates any material tax liability with respect to the years which have not
been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of Energizer and its
------------------
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. Energizer has no knowledge of any proposed tax
assessment against Energizer or any of its Subsidiaries that will have or could
reasonably be expected to have a Material Adverse Effect.
6.10 Litigation; Loss Contingencies and Violations. Except as set forth in
----------------------------------------------
Schedule 6.10 (the "Disclosed Litigation"), there is no action, suit,
- --------------
proceeding, arbitration or, to Energizer's knowledge, investigation before or by
any Governmental Authority or private arbitrator pending or, to Energizer's
knowledge, threatened against Energizer, any of its Subsidiaries or any property
of any of them. Neither any of the Disclosed Litigation nor any action, suit,
proceeding, arbitration or investigation which has commenced since the Closing
Date (or the most recent update of the Disclosed Litigation) (i) challenges the
validity or the enforceability of any material provision of the Transaction
Documents or (ii) has or could reasonably be expected to have a Material Adverse
Effect. There is no material loss contingency within the meaning of Agreement
Accounting Principles which has not been reflected in the consolidated financial
statements of Energizer prepared and delivered pursuant to Section 7.1(A) for
--------------
the fiscal period during which such material loss contingency was incurred.
Neither Energizer nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will have or could reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or could reasonably be expected to have a Material Adverse
Effect.
6.11 Subsidiaries. Schedule 6.11 to this Agreement (i) contains a
------------ --------------
description of the corporate structure of Energizer, its Subsidiaries and any
other Person in which Energizer or any of its Subsidiaries holds a material
Equity Interest after giving effect to the Spin-Off Transactions; and (ii)
accurately sets forth (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of Energizer and the direct
and indirect Subsidiaries of Energizer are qualified to transact business as a
foreign corporation, (B) the authorized, issued and outstanding shares of each
class of Capital Stock of Energizer and each of its Subsidiaries and the owners
of such shares (both as of the consummation of the Spin-Off and on a
fully-diluted basis), and (C) a summary of the direct and indirect partnership,
joint venture, or other Equity Interests, if any, of Energizer and each
Subsidiary of Energizer in any Person that is not a corporation. After the
formation or acquisition of any New Subsidiary permitted under Section 7.3(F),
--------------
if requested by the Administrative Agent, Energizer shall provide a supplement
to Schedule 6.11 to this Agreement reflecting the addition of such New
--------------
Subsidiary. Except as disclosed on Schedule 6.11, none of the issued and
--------------
outstanding Capital Stock of Energizer or any of Energizer's Subsidiaries is
subject to any vesting, redemption, or repurchase agreement, and there are no
warrants or options outstanding with respect to such Capital Stock. The
outstanding Capital Stock of Energizer and each of its Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and the stock of
Energizer's Subsidiaries is not Margin Stock.
6.12 ERISA. No Benefit Plan has incurred any material accumulated funding
-----
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither Energizer nor any member of the Controlled Group
has incurred any material liability to the PBGC which remains outstanding other
than the payment of premiums. As of the last day of the most recent prior plan
year, the market value of assets under each Benefit Plan, other than any
Multiemployer Plan, was not by a material amount less than the present value of
benefit liabilities thereunder (determined in accordance with the actuarial
valuation assumptions described therein). Neither Energizer nor any member of
the Controlled Group has (i) failed to make a required contribution or payment
to a Multiemployer Plan of a material amount or (ii) incurred a material
complete or partial withdrawal under Section 4203 or Section 4205 of ERISA from
a Multiemployer Plan. Neither Energizer nor any member of the Controlled Group
has failed to make an installment or any other payment of a material amount
required under Section 412 of the Code on or before the due date for such
installment or other payment. Each Plan, Foreign Employee Benefit Plan and
Non-ERISA Commitment complies in all material respects in form, and has been
administered in all material respects in accordance with its terms and, in
accordance with all applicable laws and regulations, including but not limited
to ERISA and the Code. There have been no and there is no prohibited
transaction described in Sections 406 of ERISA or 4975 of the Code with respect
to any Plan for which a statutory or administrative exemption does not exist
which could reasonably be expected to subject Energizer or any of is
Subsidiaries to material liability. Neither Energizer nor any member of the
Controlled Group has taken or failed to take any action which would constitute
or result in a Termination Event, which action or inaction could reasonably be
expected to subject Energizer or any of its Subsidiaries to material liability.
Neither Energizer nor any member of the Controlled Group is subject to any
material liability under, or has any potential material liability under, Section
4063, 4064, 4069, 4204 or 4212(c) of ERISA. The present value of the aggregate
liabilities to provide all of the accrued benefits under any Foreign Pension
Plan do not exceed the current fair market value of the assets held in trust or
other funding vehicle for such plan by a material amount. With respect to any
Foreign Employee Benefit Plan other than a Foreign Pension Plan, reasonable
reserves have been established in accordance with prudent business practice or
where required by ordinary accounting practices in the jurisdiction in which
such plan is maintained. Neither Ralston nor any other member of its controlled
group (within the meaning of Section 414(b), (c), (m) or (o) of the Code) has
taken or failed to take any action, nor has any event occurred, with respect to
any "employee benefit plan" (as defined in section 3(3) of ERISA) which action,
inaction or event could reasonably be expected to subject Energizer or any of
its Subsidiaries to material liability. For purposes of this Section 6.12,
------------
"material" means any amount, noncompliance or other basis for liability which
could reasonably be expected to subject Energizer or any of its Subsidiaries to
liability, individually or in the aggregate with each other basis for liability
under this Section 6.12, in excess of $25,000,000.
-------------
6.13 Accuracy of Information. The information, exhibits and reports
-------------------------
furnished by or on behalf of Energizer and any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents, the representations and warranties of
Ralston, Energizer and their respective Subsidiaries contained in the Loan
Documents, and all certificates and documents delivered to the Administrative
Agent and the Lenders pursuant to the terms thereof, including, without
limitation the Bank Book and the Form 10 (as updated by the Supplemental
Financial Statement), taken as a whole, do not contain as of the date furnished
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
6.14 Securities Activities. Neither Ralston, Energizer nor any of its
----------------------
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.15 Material Agreements. Neither Energizer nor any Subsidiary is a party
--------------------
to any Contractual Obligation or subject to any charter or other corporate or
similar restriction which individually or in the aggregate will have or could
reasonably be expected to have a Material Adverse Effect. Neither Energizer nor
any of its Subsidiaries has received notice or has knowledge that (i) it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, or (ii) any condition exists which, with the giving of notice or the lapse
of time or both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.
6.16 Compliance with Laws. Energizer and its Subsidiaries are in compliance
---------------------
with all Requirements of Law applicable to them and their respective businesses,
in each case where the failure to so comply individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect.
6.17 Assets and Properties. Energizer and each of its Subsidiaries has
-----------------------
legal title to all of its assets and properties (tangible and intangible, real
or personal) owned by it or a valid leasehold interest in all of its leased
assets (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and property are free and clear of all Liens, except Liens permitted
under Section 7.3(C). Substantially all of the assets and properties owned by,
--------------
leased to or used by Energizer and/or each such Subsidiary of Energizer are in
adequate operating condition and repair, ordinary wear and tear excepted.
Neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of Energizer or such Subsidiary in and to any of such assets in a manner that
has or could reasonably be expected to have a Material Adverse Effect.
6.18 Statutory Indebtedness Restrictions. Neither Ralston, Energizer nor
-------------------------------------
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.
6.19 Insurance. The insurance policies and programs in effect with respect
---------
to the respective properties, assets, liabilities and business reflect coverage
that is reasonably consistent with prudent industry practice.
6.20 Labor Matters. No attempt to organize the employees of Energizer, and
--------------
no labor disputes, strikes or walkouts affecting the operations of Energizer or
any of its Subsidiaries, is pending, or, to Energizer's knowledge, threatened,
planned or contemplated, which has or could reasonably be expected to have a
Material Adverse Effect.
6.21 Spin-Off Transactions. Except as set forth in Schedule 6.21 to this
---------------------- -------------
Agreement, (i) (a) all conditions precedent to, and all consents necessary to
permit, the consummation of the Spin-Off Transactions have been satisfied in all
material respects, (b) no additional actions are necessary to consummate the
Spin-Off Transactions other than the passage of time and (c) the Spin-Off will
take effect on April 1, 2000 without any further action on the part of Energizer
or Ralston, (ii) the Spin-Off Transactions have been approved by all necessary
corporate action of Ralston's and Energizer's Board of Directors and, if
required, shareholders, and the terms of the Spin-Off Transactions have not been
amended, waived or modified in any material respect from those set forth in the
Form 10 without the approval of the Administrative Agent and the Required
Lenders (such approval not to be unreasonably withheld); (iii) the Tax Ruling
and all necessary regulatory approvals have been obtained for the consummation
of the Spin-Off Transactions; and (iv) the aggregate amount of all loans and
committed Financing Facilities (including this Agreement and the 5-Year Credit
Agreement) available to Energizer upon consummation of the Spin-Off Transactions
equals or exceeds $650,000,000, and all such commitments are identified on
Schedule 6.21(iv) attached hereto.
- ------------------
6.22 Environmental Matters. (A) Except as disclosed on Schedule 6.22 to
---------------------- -------------
this Agreement
(i) the operations of Energizer and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements of Law;
(ii) Energizer and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or Safety
Requirements of Law and are in material compliance with such permits;
(iii) neither Energizer, any of its Subsidiaries nor any of their
respective present property or operations, or, to Energizer's or any of its
Subsidiaries' knowledge, any of their respective past property or operations,
are subject to or the subject of, any investigation known to Energizer
or any of its Subsidiaries, any judicial or administrative proceeding,
order, judgment, decree, settlement or other agreement respecting: (A) any
material violation of Environmental, Health or Safety Requirements of Law;
(B) any material remedial action; or (C) any material claims or liabilities
arising from the Release or threatened Release of a Contaminant into the
environment;
(iv) there is not now, nor to Energizer's or any of its Subsidi-
aries' knowledge has there ever been, on or in the property of Energizer or any
of its subsidiaries any landfill, waste pile, underground storage tanks,
aboveground storage tanks, surface impoundment or hazardous waste storage
facility of any kind, any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electric transformers or other equipment, or any asbestos containing
material that would result in material remediation costs or material penalties
to Energizer or any of its Subsidiaries; and
(v) neither Energizer nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release of a
Contaminant into the environment.
(B) For purposes of this Section 6.22 "material" means any noncompliance or
------------
other basis for liability which could reasonably be likely to subject Energizer
or any of its Subsidiaries to liability, individually or in the aggregate with
each other basis for liability under this Section 6.22, in excess of
-------------
$25,000,000.
6.23 Solvency. After giving effect to (i) the Loans to be made on the
--------
Initial Funding Date or such other date as Loans requested hereunder are made
and the consummation of the Debt Assumption, (ii) the other transactions
contemplated by this Agreement and the other Transaction Documents, including
consummation of the Spin-Off Transactions, and (iii) the payment and accrual of
all transaction costs with respect to the foregoing, Energizer is, and Energizer
and its Subsidiaries taken as a whole are, Solvent.
6.24 Net Worth Condition. Upon consummation of the Spin-Off Transactions,
---------------------
the Net Worth Condition will be satisfied.
6.25 Benefits. Each of Energizer and its Subsidiaries will benefit from the
--------
financing arrangement established by this Agreement. The Administrative Agent
and the Lenders have stated and Energizer acknowledges that, but for the
agreement by each of the Subsidiary Guarantors to execute and deliver the
Subsidiary Guaranty, the Administrative Agent and the Lenders would not have
made available the credit facilities established hereby on the terms set forth
herein.
ARTICLE VII: COVENANTS
- ------------- ---------
From and after the consummation of the Debt Assumption, Energizer covenants
and agrees that so long as any Revolving Loan Commitments are outstanding and
thereafter until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied in cash
and all financing arrangements among the Borrower and the Lenders shall have
been terminated, unless the Required Lenders shall otherwise give prior written
consent:
7.1 Reporting. Energizer shall:
---------
(A) Financial Reporting. Furnish to the Administrative Agent (with
--------------------
sufficient copies for each of the Lenders, which the Administrative Agent shall
promptly deliver to the Lenders):
(i) Quarterly Reports. As soon as practicable, and in any event
------------------
within forty-five (45) days after the end of each of Energizer's first three
fiscal quarters, the consolidated balance sheet of Energizer and its Subsidi-
aries as at the end of such period and the related consolidated statements of
income and cash flows of Energizer and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year to the end
of such fiscal quarter, certified by the chief financial officer of Energizer
on behalf of Energizer as fairly presenting the consolidated financial
position of Energizer and its Subsidiaries as at the dates indicated and
the results of their operations and cash flows for the periods indicated in
accordance with Agreement Accounting Principles, subject to normal year-end
audit adjustments and the absence of footnotes.
(ii) Annual Reports. As soon as practicable, and in any event within
--------------
ninety (90) days after the end of each fiscal year, (a) the consolidated and
consolidating balance sheet of Energizer and its Subsidiaries as at the end of
such fiscal year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of Energizer and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures for the
previous fiscal year along with consolidating schedules in form and substance
sufficient to calculate the financial covenants set forth in Section 7.4, and
-----------
(b) an audit report on the consolidated financial statements (but not the
consolidating financial statements or schedules) listed in clause (a) hereof of
----------
independent certified public accountants of recognized national standing, which
audit report shall be unqualified and shall state that such financial statements
fairly present the consolidated financial position of Energizer and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flows for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards.
(iii) Officer's Compliance Certificate. Together with each delivery of
---------------------------------
any financial statement (a) pursuant to clauses (i) and (ii) of this Section
----------- ---- --------
7.1(A ), an Officer's Certificate from the chief financial officer or
- ------
Treasurer of Energizer, substantially in the form of Exhibit F attached
---------
hereto and made a part hereof, stating that (x) the representations and
warranties of Energizer contained in Article VI hereof shall have been true
----------
and correct in all material respects as of the date of such Officer's Certifi-
cate and (y) as of the date of such Officer's Certificate no Default or Un-
matured Default exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof and (b) pursuant to clauses (i) and (ii) of
------------ ----
this Section 7.1(A), a compliance certificate, substantially in the form of
--------------
Exhibit G attached hereto and made a part hereof, signed by Energizer's chief
Financial officer or Treasurer, setting forth calculations for the period which
Demonstrate compliance, when applicable, with the provisions of Sections
--------
7.3(A) through (R) and Section 7.4, and which calculate the Leverage Ratio for
- ------ --- -----------
purposes of determining the then Applicable Margin and Applicable Facility
Fee Percentage.
(iv) Officer's Net Worth Condition Certificate. On each Adjustment Date
-----------------------------------------
(including the Final Adjustment Date) and on the Opening Balance Sheet Delivery
Date, a certificate in form and substance satisfactory to the Administrative
Agent, signed by the chief financial officer or Treasurer of Energizer, stating
that, after giving effect to the Spin-Off Transactions and after all
post-closing adjustments as of such date have been effected, the Net Worth
Condition was satisfied as of the Spin-Off Date.
(v) Opening Pro Forma Balance Sheet. On the Opening Balance Sheet
--------------------------------
Delivery Date, copies of the pro forma opening consolidated balance sheet of
--- -----
Energizer and its Subsidiaries, after giving effect to the Spin-Off Trans-
actions and including all post-closing adjustments.
(B) Notice of Default and Adverse Developments. Promptly upon any of the
---------------------------------------------
chief executive officer, chief operating officer, chief financial officer,
treasurer or controller of Energizer obtaining actual knowledge (i) of any
condition or event which constitutes a Default or Unmatured Default, or becoming
aware that any Lender or Administrative Agent has given any written notice
with respect to a claimed Default or Unmatured Default under this Agreement,
(ii) that any Person having the authority to give such a notice has given any
written notice to Energizer or any Subsidiary of Energizer or taken any other
action with respect to a claimed default or event or condition of the type
referred to in Section 8.1(E), or (iii) that any other development, financial or
--------------
otherwise, which could reasonably be expected to have a Material Adverse Effect
has occurred specifying (a) the nature and period of existence of any such
claimed default, Default, Unmatured Default, condition or event, (b) the notice
given or action taken by such Person in connection therewith, and (c) what
action Energizer has taken, is taking and proposes to take with respect thereto.
(C) ERISA Notices. Deliver or cause to be delivered to the Administrative
--------------
Agent and the Lenders, at Energizer's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after any member of the Controlled
Group obtains knowledge that a Termination Event has occurred which could
Reasonably be expected to subject Energizer to liability individually or in
the aggregate in excess of $20,000,000, a written statement of the Chief
Financial Officer of Energizer describing such Termination Event and the
action, if any, which the member of the Controlled Group has taken, is taking
or proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the filing of any funding
waiver request with the IRS, a copy of such funding waiver request and there-
after all communications received by Energizer or a member of the Controlled
Group with respect to such request within ten (10) Business Days such
communication is received; and
(iii) within ten (10) Business Days after Energizer or any member
of the Controlled Group knows or has reason to know that (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a Multi-
employer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan, a notice describing such matter. For
purposes of this Section 7.1(C), Energizer and any member of the Controlled
--------------
Group shall be deemed to know all facts known by the administrator of any Plan
of which Energizer or any member of the Controlled Group is the plan sponsor.
(D) Other Indebtedness. Deliver to the Administrative Agent (i) a copy of
-------------------
each regular report, notice or communication regarding potential or actual
defaults (including any accompanying officer's certificate) delivered by or on
behalf of Energizer to the holders of funded Material Indebtedness, including
the Senior Notes and the investors parties to the Receivable Purchase Facility
or any Bridge Facilities, pursuant to the terms of the agreements governing such
Indebtedness, such delivery to be made at the same time and by the same
means as such notice or other communication is delivered to such holders, and
(ii) a copy of each notice received by Energizer from the from the holders of
funded Material Indebtedness who are authorized and/or have standing to deliver
such notice pursuant to the terms of such Indebtedness, such delivery to be made
promptly after such notice is received by Energizer.
(E) Other Reports. Deliver or cause to be delivered to the Administrative
--------------
Agent and the Lenders copies of all financial statements, reports and notices,
if any, sent by Energizer to its securities holders or filed with the Commission
by Energizer.
(F) Environmental Notices. As soon as possible and in any event within ten
----------------------
(10) days after receipt by Energizer, a copy of (i) any notice or claim to the
effect that Energizer or any of its Subsidiaries is or may be liable to any
Person as a result of the Release by Energizer, any of its Subsidiaries, or any
other Person of any Contaminant into the environment, and (ii) any notice
alleging any violation of any Environmental, Health or Safety Requirements of
Law by Energizer or any of its Subsidiaries if, in either case, such notice or
claim relates to an event which could reasonably be expected to subject
Energizer and each of its Subsidiaries to liability individually or in the
aggregate in excess of $20,000,000.
(G) Amendments to Financing Facilities. Promptly after the execution
-------------------------------------
thereof, copies of all material amendments to (i) any of the documents
evidencing Indebtedness extended under the Bridge Facilities, (ii) any of the
Receivables Purchase Documents or (iii) the Note Purchase Agreement or the
Senior Notes.
(H) Other Information. Promptly upon receiving a request therefor from the
------------------
Administrative Agent, prepare and deliver to the Administrative Agent and the
Lenders such other information with respect to Energizer, any of its
Subsidiaries, or their respective businesses and assets, including, without
limitation, schedules identifying and describing any Asset Sale (and the use of
the net cash proceeds thereof), as from time to time may be reasonably requested
by the Administrative Agent.
7.2 Affirmative Covenants.
----------------------
(A) Corporate Existence, Etc. Except as permitted pursuant to Section
--------------------------- -------
7.3(H), Energizer shall, and shall cause each of its Subsidiaries to, at all
-
times maintain its existence and preserve and keep, or cause to be preserved and
kept, in full force and effect its rights and franchises material to its
businesses.
(B) Corporate Powers; Conduct of Business. Energizer shall, and shall cause
-------------------------------------
each of its Material Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or would
reasonably be expected to have a Material Adverse Effect. Energizer will, and
will cause each Material Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted unless the failure of Energizer or its Material
Subsidiaries to carry on and conduct its business as so described would not
reasonably be expected to have a Material Adverse Effect.
(C) Compliance with Laws, Etc. Energizer shall, and shall cause its
-----------------------------
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless, in either
case, failure to comply or obtain such permits would not reasonably be expected
to have a Material Adverse Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. Energizer shall pay,
-------------------------------------------------
and cause each of its Subsidiaries to pay, (i) all taxes, assessments and other
governmental charges imposed upon it or on any of its properties or assets or in
respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by Section 7.3(C)) upon any of Energizer's or such
---------------
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, however, that no such taxes,
-------- -------
assessments and governmental charges referred to in clause (i) above or claims
----------
referred to in clause (ii) above (and interest, penalties or fines relating
------------
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor.
(E) Insurance. Energizer shall maintain for itself and its Subsidiaries, or
---------
shall cause each of its Subsidiaries to maintain in full force and effect,
insurance policies and programs, with such deductibles or self-insurance amounts
as reflect coverage that is reasonably consistent with prudent industry practice
as determined by Energizer.
(F) Inspection of Property; Books and Records; Discussions. Energizer shall
------------------------------------------------------
permit and cause each of Energizer's Subsidiaries to permit, any authorized
representative(s) designated by either the Administrative Agent or any Lender to
visit and inspect any of the properties of Energizer or any of its Subsidiaries,
to examine their respective financial and accounting records and other material
data relating to their respective businesses or the transactions contemplated
hereby (including, without limitation, in connection with environmental
compliance, hazard or liability), and to discuss their affairs, finances and
accounts with their officers and independent certified public accountants, all
upon reasonable notice and at such reasonable times during normal business
hours, as often as may be reasonably requested (provided that an officer of
Energizer or any of its Subsidiaries may, if it so desires, be present at and
participate in any such discussion). Energizer shall keep and maintain, and
cause each of Energizer's Subsidiaries to keep and maintain, in all material
respects, proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and transactions
in relation to their respective businesses and activities. If a Default has
occurred and is continuing, Energizer, upon the Administrative Agent's request,
shall turn over copies of any such records to the Administrative Agent or its
representatives.
(G) ERISA Compliance. Energizer shall, and shall cause each of Energizer's
-----------------
Subsidiaries to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA and shall operate all Plans and
Non-ERISA Commitments to comply in all material respects with the applicable
provisions of the Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans and Non-ERISA Commitments, except for any noncompliance
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(H) Maintenance of Property. Energizer shall cause all property necessary
-------------------------
for the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of Energizer may be necessary for the conduct of its business;
provided, however, that nothing in this Section 7.2(H) shall prevent Energizer
------- --------------
from discontinuing the operation or maintenance of any of such property if such
discontinuance is, in the judgment of Energizer, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Administrative Agent or the Lenders.
(I) Environmental Compliance. (a) Energizer and its Subsidiaries shall
-------------------------
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject
Energizer or any of its Subsidiaries, individually or in the aggregate, to
liability in excess of $25,000,000.
(J) Use of Proceeds. (a) Prior to the consummation of the Debt Assumption,
----------------
Ralston shall use the proceeds of the Loans for its working capital needs and
other general corporate purposes of Ralston and its Subsidiaries, and (b) from
and after the consummation of the Debt Assumption, Energizer shall use the
proceeds of any subsequent Loans for the general corporate purposes of Energizer
and its Subsidiaries, including, without limitation, to finance Permitted
Acquisitions.
(K) Addition of Subsidiary Guarantors. (a) New Subsidiaries. Energizer
------------------------------------ ----------------
shall cause each New Subsidiary that is, at any time, a Material Domestic
Subsidiary (other than a SPV) to deliver to the Administrative Agent an executed
Supplement to become a Subsidiary Guarantor under the Subsidiary Guaranty in the
form of Exhibit H attached hereto (a "Supplement") and appropriate corporate
----------
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Administrative Agent, such Supplement and other
documentation to be delivered to the Administrative Agent as promptly as
possible upon the creation, acquisition of or capitalization thereof or if
otherwise necessary to remain in compliance with Section 7.3(R), but in any
--------------
event within thirty (30) days of such creation, acquisition or capitalization.
(b) Additional Material Domestic Subsidiaries. If any consolidated
--------------------------------------------
Subsidiary of Energizer (other than a New Subsidiary to the extent addressed in
Section 7.2(K)(a) or a SPV) becomes a Material Domestic Subsidiary, Energizer
- ------------------
shall cause any such Material Domestic Subsidiary to deliver to the
Administrative Agent an executed Supplement to become a Subsidiary Guarantor
and appropriate corporate resolutions, opinions and other documentation in form
and substance reasonably satisfactory to the Administrative Agent in connection
therewith, such Supplement and other documentation to be delivered to the
Administrative Agent as promptly as possible but in any event within thirty (30)
days following the date on which such consolidated Subsidiary became a
Material Domestic Subsidiary.
(c) Additional Subsidiary Guarantors. (i) If at any time an Authorized
----------------------------------
Officer of Energizer has actual knowledge that the aggregate assets of all of
Energizer's domestic consolidated Subsidiaries (other than SPVs) which are not
Subsidiary Guarantors exceed ten percent (10%) of Consolidated Assets of
Energizer and its consolidated Subsidiaries (other than the SPVs), as calculated
by Energizer, Energizer shall cause such domestic consolidated Subsidiaries as
are necessary to reduce such aggregate assets to or below ten percent (10%) of
such Consolidated Assets to deliver to the Administrative Agent executed
Supplements to become Subsidiary Guarantors and appropriate corporate
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Administrative Agent in connection therewith, such
Supplements and other documentation to be delivered to the Administrative Agent
as promptly as possible but in any event within thirty (30) days following the
initial date on which such aggregate assets exceed ten percent (10%) of such
Consolidated Assets.
(ii) If at any time any domestic Subsidiary of Energizer which is not a
Subsidiary Guarantor guaranties any Indebtedness of Energizer other than the
Indebtedness hereunder or under the 5-Year Credit Agreement, Energizer shall
cause such Subsidiary to deliver to the Administrative Agent an executed
Supplement to become a Subsidiary Guarantor and appropriate corporate
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Administrative Agent in connection therewith, such
Supplement and other documentation to be delivered to the Administrative Agent
concurrently with the delivery of the guaranty of such other Indebtedness.
7.3 Negative Covenants.
-------------------
(A) Subsidiary Indebtedness.(A) Subsidiary Indebtedness Energizer shall
------------------------
not permit any of its Subsidiaries directly or indirectly to create, incur,
assume or otherwise become or remain directly or indirectly liable with respect
to any Indebtedness, except:
(i) Indebtednes of the Subsidiaries under the Subsidiary Guaranty;
(ii) Indebtedness in respect of guaranties executed by any Subsidiary
Guarantor with respect to any Indebtedness of Energizer, provided such
--------
Indebtedness is not incurred by Energizer in violation of this Agreement;
(iii) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(iv) Indebtedness constituting Contingent Obligations permitted by
Section 7.3(E);
- --------------
(v) Indebtedness arising from loans (a) from any Subsidiary to any
wholly-owned Subsidiary or (b) from Energizer to any wholly-owned Subsidiary;
provided, that if any Subsidiary Guarantor is the obligor on such Indebtedness,
- --------
such Indebtedness shall be expressly subordinate to the payment in full in cash
of the Obligations on terms satisfactory to the Administrative Agent;
(vi) Indebtedness in respect of Hedging Obligations permitted under
Section 7.3(O);
- --------------
(vii) Indebtedness with respect to surety, appeal and performance
bonds obtained by any of Energizer's Subsidiaries in the ordinary course of
business;
(viii) Indebtedness incurred in connection with the Receivables
Purchase Documents, provided, that Receivables Facility Attributed Indebted-
--------
ness incurred in connection therewith does not exceed $250,000,000 in the
aggregate at any time; and
(ix) Other Indebtedness in addition to that referred to elsewhere in
this Section 7.3(A) incurred by Energizer's Subsidiaries; provided that no De-
------------ --------
fault or Unmatured Default shall have occurred and be continuing at the
date of such incurrence or would result therefrom; and provided further that
----------------
the aggregate outstanding amount of all Indebtedness incurred by Energizer's
Subsidiaries (other than Indebtedness incurred pursuant to clauses (i), (ii),
----------- ---
(v), (vi) and (viii) of this Section 7.3(A)) shall not at any time
- --- --- ------
exceed $250,000,000.
(B) Sales of Assets. Neither Energizer nor any of its Subsidiaries shall
-----------------
sell, assign, transfer, lease, convey or otherwise dispose of any property,
whether now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of Equipment that
is obsolete, excess or no longer used or useful in Energizer's or its Subsidi-
aries' businesses;
(iii) any transfer of an interest in Receivables, Receivables Related
Security, accounts or notes receivable on a limited recourse basis under the
Receivables Purchase Documents, provided that such transfer qualifies as a legal
--------
sale and as a sale under Agreement Accounting Principles and that the amount of
Receivables Facility Attributed Indebtedness does not exceed $250,000,000 at any
one time outstanding; and
(iv) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than pursuant to clauses (i), (ii) and (iii)
----------- ---- -----
above) if such transaction (a) is for not less than fair market value, and (b)
when combined with all such other transactions (each such transaction being
valued at book value) during the period from the Closing Date, to the date of
such proposed transaction, represents the disposition of not greater than twenty
percent (20%) of Energizer's Consolidated Assets (such Consolidated Assets being
calculated for the end of the fiscal year immediately preceding that in which
such transaction is proposed to be entered into).
(C) Liens. Neither Energizer nor any of its Subsidiaries shall directly or
-----
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of their respective property or assets except:
(i) Liens, if any, created by the Loan Documents or otherwise securing
the Obligations, or Liens created by the "Loan Documents" under and as
defined in the 5-Year Credit Agreement or otherwise Securing the "Obligations"
(as such terms are defined in the 5-Year Credit Agreement;
(ii) Customary Permitted Liens;
(iii) Liens arising under the Receivables Purchase Documents; and
(iv) other Liens, including Permitted Existing Liens, (a) securing
Indebtedness of Energizer and/or (b) securing Indebtedness of Energizer's
Subsidiaries as permitted pursuant to Section 7.3(A) and in an aggregate
---------------
outstanding amount not to exceed five percent (5%) of Consolidated Assets at any
time.
In addition, neither Energizer nor any of its Subsidiaries shall become a party
to any agreement, note, indenture or other instrument, or take any other action,
which would prohibit the creation of a Lien on any of its properties or other
assets in favor of the Administrative Agent for the benefit of itself and the
Holders of Obligations, as collateral for the Obligations; provided, that any
--------
agreement, note, indenture or other instrument in connection with purchase money
indebtedness (including Capitalized Leases) may prohibit the creation of a Lien
in favor of the Administrative Agent for the benefit of itself and the Holders
of Obligations on the items of property obtained with the proceeds of such
purchase money indebtedness; provided, further, that (a) the Note Purchase
-------- -------
Agreement in connection with the Senior Notes may prohibit the creation of a
Lien in favor of the Administrative Agent for the benefit of itself and the
Holders of Obligations, as collateral for the Obligations unless the holders of
the Senior Notes shall be provided with an equal and ratable Lien and (b) the
Receivables Purchase Documents may prohibit the creation of a Lien with respect
to all of the assets of the SPV and with respect to the Receivables and Related
Security of any of the Originators in favor of the Administrative Agent for the
benefit of itself and the Holders of Obligations, as collateral for the
Obligations.
(D) Investments. Except to the extent permitted pursuant to paragraph (G)
----------- -------------
below, neither Energizer nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than the
amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by Energizer
and its Subsidiaries;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by Section 7.3(B);
---------------
(vi) Investments in any consolidated Subsidiaries (other than joint
ventures);
(vii) Investments in joint ventures and nonconsolidated Subsidiaries
in an aggregate amount not to exceed $50,000,000.
(viii) Investments constituting Permitted Acquisitions;
(ix) Investments constituting Indebtedness permitted by Section 7.3(A)
--------------
or Contingent Obligations permitted by Section 7.3(E);
---------------
(x) Investments in th e SPVs (a) required in connection with the
Receivables Purchase Documents and (b) resulting from the transfers
permitted by Section 7.3(B)(iii); and
------------------
(xi) Investments in addition to those referred to elsewhere in this
Section 7.3(D) in an aggregate amount not to exceed $50,000,000.
- -------------
(E) Contingent Obligations. None of Energizer's Subsidiaries shall directly
----------------------
or indirectly create or become or be liable with respect to any Contingent
Obligation, except: (i) recourse obligations resulting from endorsement of
negotiable instruments for collection in the ordinary course of business; (ii)
Permitted Existing Contingent Obligations; (iii) obligations, warranties, and
indemnities, not relating to Indebtedness of any Person, which have been or are
undertaken or made in the ordinary course of business and not for the benefit of
or in favor of an Affiliate of Energizer or such Subsidiary; (iv) Contingent
Obligations with respect to surety, appeal and performance bonds obtained by
Energizer or any Subsidiary in the ordinary course of business; (v) Contingent
Obligations of the Subsidiary Guarantors under the Subsidiary Guaranty; (vi)
Contingent Obligations of Subsidiaries which are guarantors under a guaranty of
the Indebtedness evidenced by the Senior Notes and the Note Purchase Agreements;
(vii) Contingent Obligations of Energizer or any of its Subsidiaries arising
under the Receivables Purchase Documents and (viii) Contingent Obligations
incurred in the ordinary course of business by any of Energizer's Subsidiaries
in respect of obligations of any Subsidiary.
(F) Conduct of Business; New Subsidiaries; Acquisitions. Except as
--------------------------------------------------------
expressly provided in clause (c) in the definition of "Permitted Acquisition"
----------
below, neither Energizer nor any of its Subsidiaries shall engage in any
business other than the businesses engaged in by Energizer and its Subsidiaries
on the date of such transaction and any business or activities which are
substantially similar, related or incidental thereto. Energizer may create,
acquire in a Permitted Acquisition or capitalize any Subsidiary (a "New
Subsidiary") after the date hereof if (i) no Default or Unmatured Default shall
have occurred and be continuing or would result therefrom; (ii) after such
creation, acquisition or capitalization, all of the representations and
warranties contained herein shall be true and correct; and (iii) after such
creation, acquisition or capitalization Energizer shall be in compliance with
the terms of Sections 7.2(K) and 7.3(R).
---------------- -------
Without in any way limiting the foregoing, Energizer shall not make any
Acquisitions, other than Acquisitions meeting the following requirements or
otherwise approved by the Required Lenders (each such Acquisition constituting a
"Permitted Acquisition"):
(a) no Default or Unmatured Default shall have occurred and be continu-
ing or would result from such Acquisition or the incurrence of any Indebtedness
in connection therewith, and all of the representations and warranties
contained herein shall be true and correct on and as of the date such Acquisi-
tion with the same effect as though made on and as of such date;
(b) the purchase is consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis pursuant to an acquisition agreement approved
by the board of directors or other applicable governing body of the Seller prior
to the commencement thereof;
(c) the businesses being acquired shall be consumer product companiesor
other businesses that are substantially similar, related or incidental to the
businesses or activities engaged in by Energizer and its Subsidiaries as of the
consummation of the Debt Assumption or such future business or activities
engaged in by Energizer and its Subsidiaries, as well as suppliers to or
distributors of products similar to those of Energizer and its Subsidiaries;
provided, however, that Energizer and its Subsidiaries shall be permitted to
- -------- -------
acquire businesses that do not satisfy the foregoing criteria in this clause (c)
----------
so long as the aggregate purchase price for all such acquisitions does not
exceed five percent (5%) of Energizer's consolidated tangible net assets (on a
pro forma basis) as of the date of the consummation of such Acquisition; and
(d) prior to each such Acquisition, Energizer shall determine that after
giving effect to such Acquisition and the incurrence of any Indebtedness by
Energizer or any of its Subsidiaries, to the extent permitted by Section 7.3(A),
--------------
in connection therewith, on a pro forma basis using historical audited and
--- -----
reviewed unaudited financial statements obtained from the seller, broken down by
fiscal quarter in Energizer's reasonable judgment, as if the Acquisition and
such incurrence of Indebtedness had occurred on the first day of the
twelve-month period ending on the last day of Energizer's most recently
completed fiscal quarter, Energizer would have been in compliance with the
financial covenants in Section 7.4 and not otherwise in Default.
------------
(G) Transactions with Ralston's Shareholders and Affiliates. Except for (a)
-------------------------------------------------------
the transactions set forth on Schedule 7.3(G), (b) Permitted Receivables
---------------
Transfers and (c) Investments permitted by Section 7.3(D), neither Energizer nor
--------------
any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with Ralston, any
holder or holders of any of the Equity Interests of Energizer, or with any
Affiliate of Energizer which is not its Subsidiary, on terms that are less
favorable to Energizer or any of its Subsidiaries, as applicable, than those
that might be obtained in an arm's length transaction at the time from Persons
who are not such a holder or Affiliate.
(H) Restriction on Fundamental Changes. Neither Energizer nor any of its
-------------------------------------
Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of Energizer's or any such Subsidiary's business or
property, whether now or hereafter acquired, except (i) transactions permitted
under Sections 7.3(B) or 7.3(F), and (ii) a Subsidiary of Energizer may be
---------------- ------
merged into, liquidated into or consolidated with Energizer (in which case
Energizer shall be the surviving corporation) or any wholly-owned Subsidiary of
Energizer, provided if a Subsidiary Guarantor is merged into, liquidated into or
--------
consolidated with another Subsidiary of Energizer, the surviving Subsidiary
shall also be or shall become a Subsidiary Guarantor.
(I) Sales and Leasebacks. Neither Energizer nor any of its Subsidiaries
----------------------
shall become liable, directly, by assumption or by Contingent Obligation, with
respect to any lease, whether an operating lease or a Capitalized Lease, of any
property (whether real or personal or mixed), (i) which it or one of its
Subsidiaries sold or transferred or is to sell or transfer to any other Person,
or (ii) which it or one of its Subsidiaries intends to use for substantially the
same purposes as any other property which has been or is to be sold or
transferred by it or one of its Subsidiaries to any other Person in connection
with such lease, unless in either case the sale involved is not prohibited under
Section 7.3(B) and the lease involved is not prohibited under Section 7.3(A).
- --------------- --------------
(J) Margin Regulations. Neither Energizer nor any of its Subsidiaries,
-------------------
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
(K) ERISA. Energizer shall not:
-----
(i) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Code), with respect to any Benefit Plan,
whether or not waived;
(ii) terminate, or permit any Controlled Group member to terminate, any
Benefit Plan which would result in liability of Energizer or any Controlled
Group member under Title IV of ERISA;
(iii) fail, or ermit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of the Code
on or before the due date for such installment or other payment; or
(iv) permit any unfunded liabilities with respect to any Foreign Pension
Plan;
except where such transactions, events, circumstances, or failures are not,
individually or in the aggregate, reasonably expected to result in liability
individually or in the aggregate in excess of $25,000,000 or have a Material
Adverse Effect.
(L) Corporate Documents. Neither Energizer nor any of its Subsidiaries
--------------------
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the date hereof in
any manner adverse to the interests of the Lenders, without the prior written
consent of the Required Lenders.
(M) Fiscal Year. Neither Energizer nor any of its consolidated Subsidiaries
-----------
shall change its fiscal year for accounting or tax purposes from a twelve-month
period ending September 30 of each year.
(N) Subsidiary Covenants. Energizer will not, and will not permit any
---------------------
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, redeem or repurchase its
stock, make any other similar payment or distribution, pay any Indebtedness or
other Obligation owed to Energizer or any other Subsidiary, make loans or
advances or other Investments in Energizer or any other Subsidiary, to sell,
transfer or otherwise convey any of its property to Energizer or any other
Subsidiary or merge, consolidate with or liquidate into Energizer or any other
Subsidiary other than pursuant to the Receivables Purchase Documents.
(O) Hedging Obligations. Energizer shall not and shall not permit any of
--------------------
its Subsidiaries to enter into any Hedging Arrangements other than Hedging
Arrangements entered into by Energizer or its Subsidiaries pursuant to which
Energizer or such Subsidiary has hedged its or its Subsidiaries' reasonably
estimated interest rate, foreign currency or commodity exposure and which are of
a non-speculative nature. Such permitted Hedging Arrangements entered into by
Energizer and any Lender or any affiliate of any Lender are sometimes referred
to herein as "Hedging Agreements."
(P) Issuance of Disqualified Stock. From and after the Closing Date,
---------------------------------
neither Energizer, nor any of its Subsidiaries shall issue any Disqualified
Stock. All issued and outstanding Disqualified Stock shall be treated as
Indebtedness for borrowed money for all purposes of this Agreement, and the
amount of such deemed Indebtedness shall be the aggregate amount of the
liquidation preference of such Disqualified Stock.
(Q) Non-Guarantor Subsidiaries. Energizer will not at any time permit the
---------------------------
aggregate assets of all of Energizer's domestic consolidated Subsidiaries (other
than the SPVs) which are not Subsidiary Guarantors to exceed ten percent (10%)
of Consolidated Assets of Energizer and its consolidated Subsidiaries (other
than the SPVs). Energizer shall not permit any of its Subsidiaries to guaranty
any Indebtedness of Energizer other than the Indebtedness hereunder or under the
5-Year Agreement unless each such Subsidiary is a Subsidiary Guarantor under the
Subsidiary Guaranty.
(R) Tax Ruling. Notwithstanding anything herein to the contrary, neither
------------
Energizer nor any of its Subsidiaries shall engage in any transaction (i)
described in Section 8.01(b) of the Reorganization Agreement for the time
periods specified therein unless Energizer or such Subsidiary shall have
obtained and/or delivered such documentation as may be required by Section
8.01(a) thereof, or (ii) that would otherwise adversely affect the Tax Ruling.
7.4 Financial Covenants. Energizer shall comply with the following:
--------------------
(A) Maximum Leverage Ratio. Energizer shall not permit the ratio (the
------------------------
"Leverage Ratio") of (i) the sum of (a) all Indebtedness of Energizer and its
Subsidiaries to (ii) EBITDA at any time to be greater than 3.00 to 1.00. The
Leverage Ratio shall be calculated, in each case, determined as of the last day
of each fiscal quarter based upon (a) for Indebtedness, Indebtedness as of the
last day of each such fiscal quarter; and (b) for EBITDA, the actual amount for
the four-quarter period ending on such day, calculated, with respect to
Permitted Acquisitions, on a pro forma basis using unadjusted historical audited
--- -----
and reviewed unaudited financial statements obtained from the seller (with
the EBITDA component thereof broken down by fiscal quarter in Energizer's
reasonable judgment).
(B) Minimum Interest Expense Coverage Ratio. Energizer shall maintain a
-------------------------------------------
ratio (the "Interest Expense Coverage Ratio") for any applicable period of (a)
EBIT for such period to (b) Interest Expense for such period of greater than
3.00 to 1.00 for each fiscal quarter. The Interest Expense Coverage Ratio shall
be calculated as of the last day of each fiscal quarter for the four-quarter
period ending on such day; provided, that (i) for the fiscal quarter ending June
--------
30, 2000, the Interest Expense Coverage Ratio shall be calculated using EBIT and
Interest Expense for the fiscal quarter ending June 30, 2000, (b) for the fiscal
quarter ending September 30, 2000, the Interest Expense Coverage Ratio shall be
calculated using EBIT and Interest Expense for the two fiscal quarter period
ending September 30, 2000, and (iii) for the fiscal quarter ending December 31,
2000, the Interest Expense Coverage Ratio shall be calculated using such items
for Energizer and its consolidated Subsidiaries for the three fiscal quarter
period ending December 31, 2000.
ARTICLE VIII: DEFAULTS
- -------------- --------
8.1 Defaults. Each of the following occurrences shall constitute a Default
--------
under this Agreement:
(A) Failure to Make Payments When Due. The Borrower shall (i) fail to pay
-----------------------------------
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within five (5) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) Breach of Certain Covenants. The Borrower shall fail duly and
------------------------------
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower or there shall otherwise be a breach of any covenant under:
(i) Sections 7.1 or 7.2 and such failure or breach shall continue
----------- ---
unremedied for thirty (30) days after the earlier to occur of (a) the date on
which written notice from the Administrative Agent or any Lender is received
by the Borrower of such breach and (b) the date on which a member of the
Senior Management Team of the Borrower or any Subsidiary Guarantor had knowledge
of the existence of such breach or should have known of the existence of such
breach; or
(ii) Sections 7.3 or 7.4.
------------- ---
(C) Breach of Representation or Warranty. Any representation or warranty
---------------------------------------
made or deemed made by the Borrower to the Administrative Agent or any Lender
herein or by the Borrower or any of its Subsidiaries in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
(D) Other Defaults. The Borrower shall default in the performance of or
---------------
compliance with any term contained in this Agreement (other than as covered by
paragraphs (A) or (B) of this Section 8.1), or the Borrower or any of its
- --------------- --- ------------
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the earlier to occur of (a) the date on which written
notice from the Administrative Agent or any Lender is received by the Borrower
of such breach and (b) the date on which a member of the Senior Management Team
of the Borrower or any Subsidiary Guarantor had knowledge of the existence of
such breach or should have known of the existence of such breach.
(E) Default as to Other Indebtedness. The Borrower or any of its
------------------------------------
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), beyond any
period of grace provided, with respect to (i) any Indebtedness incurred pursuant
to the 5-Year Credit Agreement or (ii) any other Indebtedness (other than
Indebtedness hereunder) which individually or together with other such
Indebtedness as to which any such failure exists (other than hereunder or under
the 5-Year Credit Agreement) constitutes Material Indebtedness; or any breach,
default or event of default (including any "Amortization Event" or event of like
import in connection with the Receivables Purchase Facility) shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness under the 5-Year Credit Agreement or
Material Indebtedness having such aggregate outstanding principal amount, beyond
any period of grace, if any, provided with respect thereto, if the effect
thereof is to cause an acceleration, mandatory redemption, a requirement that
the Borrower offer to purchase such Indebtedness under the 5-Year Credit
Agreement or Material Indebtedness or other required repurchase of such
Indebtedness under the 5-Year Credit Agreement or Material Indebtedness, or
permit the holder(s) of such Indebtedness under the 5-Year Credit Agreement or
Material Indebtedness to accelerate the maturity of any such Indebtedness under
the 5-Year Credit Agreement or Material Indebtedness or require a redemption or
other repurchase of such Indebtedness under the 5-Year Credit Agreement or
Material Indebtedness; or any such Indebtedness under the 5-Year Credit
Agreement or Material Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Borrower or any of its Subsidiaries (other than by
a regularly scheduled required prepayment) prior to the stated maturity thereof.
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the Borrower or
any of the Borrower's Material Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Borrower or any of
the Borrower's Material Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereinafter in
effect; or any other similar relief shall be granted under any applicable
federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee, custo-
dian or other officer having similar powers over the Borrower or any of the
Borrower's Material Subsidiaries or over all or a substantial part of the
property of the Borrower or any of the Borrower's Material Subsidiaries shall
be entered; or an interim receiver, trustee or other custodian of the
Borrower or any of the Borrower's Material Subsidiaries or of all or a substan-
tial part of the property of the Borrower or any of the Borrower's
Material Subsidiaries shall be appointed or a warrant of attachment, execu-
tion or similar process against any substantial part of the property of the
Borrower or any of the Borrower's Material Subsidiaries shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days after entry, appointment or issuance.
(G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or any
---------------------------------------------------
of the Borrower's Material Subsidiaries shall (i) commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, (iii) consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property, (iv) make any assignment for the benefit of creditors, (v)
take any corporate action to authorize any of the foregoing or (vi) is
generally not paying, or admits in writing its inability to pay, its debts as
they become due.
(H) Judgments and Attachments. Any money judgment(s) (other than a money
---------------------------
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $30,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(I) Dissolution. Any order, judgment or decree shall be entered against the
-----------
Borrower decreeing its involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
the Borrower shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement.
(J) Loan Documents. At any time, for any reason, any Loan Document as a
---------------
whole that materially affects the ability of the Administrative Agent, or any of
the Lenders to enforce the Obligations ceases to be in full force and effect or
the Borrower or any of the Borrower's Subsidiaries party thereto seeks to
repudiate its obligations under any Loan Document.
(K) Termination Event. Any Termination Event occurs which the Required
------------------
Lenders believe is reasonably likely to subject either the Borrower or any of
its Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
(L) Waiver of Minimum Funding Standard. If the plan administrator of any
-------------------------------------
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the Required Lenders believe
the substantial business hardship upon which the application for the waiver is
based could reasonably be expected to subject either the Borrower or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
(M) Change of Control. A Change of Control shall occur.
-------------------
(N) Hedging Agreements. Nonpayment by the Borrower of any material
-------------------
obligation under any Hedging Agreement or the breach by the Borrower of any
material term, provision or condition contained in any such Hedging Agreement.
(O) Environmental Matters. The Borrower or any of its Subsidiaries shall be
---------------------
the subject of any proceeding or investigation pertaining to (i) the Release by
the Borrower or any of its Subsidiaries of any Contaminant into the environment,
(ii) the liability of the Borrower or any of its Subsidiaries arising from the
Release by any other Person of any Contaminant into the environment, or (iii)
any violation of any Environmental, Health or Safety Requirements of Law which
by the Borrower or any of its Subsidiaries, which, in any case, has or is
reasonably likely to subject either the Borrower or its Subsidiaries to
liability individually or in the aggregate in excess of $25,000,000.
(P) Subsidiary Guarantor Revocation. Any Subsidiary Guarantor shall
---------------------------------
terminate or revoke any of its obligations under the Subsidiary Guaranty or
breach any of the material terms of such Subsidiary Guaranty.
(Q) Receivables Purchase Document Events. Other than at the request of
---------------------------------------
Energizer, the "Amortization Date" or an event of like import resulting in the
termination of the reinvestment of collections or proceeds of Receivables and
Related Security shall occur under any Receivables Purchase Document.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
------------
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
- ------------ --------------------------------------------------------------
REMEDIES
- --------
9.1 Termination of Revolving Loan Commitments; Acceleration. If any Default
-------------------------------------------------------
described in Section 8.1(F), (G) or (I) occurs with respect to the Borrower
-------------- --- ---
and the obligations of the Lenders to make Loans hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Administrative Agent or any Lender.
If any other Default occurs, the Required Lenders may terminate or suspend the
obligations of the Lenders to make Loans hereunder or declare the Obligations to
be due and payable, or both, whereupon the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower expressly waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its Pro
------------------
Rata Share of any Advance requested or deemed requested by the Borrower, which
such Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "Non Pro Rata Loan"),
until the earlier of such Lender's cure of such failure and the termination of
the Revolving Loan Commitments, the proceeds of all amounts thereafter repaid to
the Administrative Agent by the Borrower and otherwise required to be applied to
such Lender's share of all other Obligations pursuant to the terms of this
Agreement shall be advanced to the Borrower by the Administrative Agent on
behalf of such Lender to cure, in full or in part, such failure by such Lender,
but shall nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply only
------------
with respect to the proceeds of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section 2.9;
------------
(ii) any such Lender shall be deemed to have cured its failure to
fund its Pro Rata Share, of any Advance at such time as an amount equal to such
Lender's original Pro Rata Share of the requested principal portion of such
Advance is fully funded to the Borrower, whether made by such Lender itself or
by operation of the terms of this Section 9.2, and whether or not the Non Pro
-----------
Rata Loan with respect thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in part, any
such Lender's failure to fund its Pro Rata Share of any Advance ("Cure Loans")
shall bear interest at the rate applicable to Floating Rate Loans in effect
from time to time, and for all other purposes of this Agreement shall be
treated as if they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in accordance
with the other terms of this Agreement, would be applied to the outstanding
Floating Rate Loans shall be applied first, ratably to all Floating Rate Loans
-----
constituting Non Pro Rata Loans, second, ratably to Floating Rate Loans other
------
than those constituting Non Pro Rata Loans or Cure Loans and, third,
ratably to Floating Rate Loans constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's cure
of the failure to fund its Pro Rata Share of any Advance and the termination
of the Revolving Loan Commitments, the term "Required Lenders" for purposes
of this Agreement shall mean Lenders (excluding all Lenders whose failure to
fund their respective Pro Rata Share of such Advance have not been so cured)
whose Pro Rata Shares represent greater than fifty percent (50%) of the
aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund its Pro
Rata Share of any Advance is cured in accordance with Section 9.2(ii), such
Lender shall not be entitled to any Facility Fees with respect to its
Revolving Loan Commitment, which Facility Fees shall accrue in favor of the
Lenders which have funded their respective Pro Rata Share of such
requested Advance, shall be allocated among such performing Lenders ratably
based upon their relative Revolving Loan Commitments, and shall be
calculated based upon the average amount by which the aggregate Revolving
Loan Commitments of such performing Lenders exceeds the outstanding
principal amount of the Loans owing to such performing Lenders.
9.3 Amendments. Subject to the provisions of this Article IX, the Required
---------- ----------
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
-------- -------
agreement shall, without the consent of each Lender (which is not a defaulting
Lender under the provisions of Section 9.2) affected thereby:
------------
(i) Postpone or extend the Revolving Loan Termination Date or any other date
fixed for any payment of principal of, or interest on, the Loans or any
fees or other amounts payable to such Lender (other than (a) as expressly
permitted by the terms of Section 2.2 and (b) any modifications of the
------------
provisions relating to amounts, timing or application of prepayments of the
Loans and other Obligations, which modifications shall require the approval only
of the Required Lenders).
(ii) Reduce the principal amount of any Loans, or reduce the rate or extend
the time of payment of interest or fees thereon (other than (a) as expressly
permitted by Section 2.2, (b) a waiver of the application of the default rate of
-----------
interest pursuant to Section 2.10 hereof and (c) as a result of a change in the
------------
definition of Leverage Ratio or any of the components thereof or the method of
calculation thereof).
(iii) Reduce the percentage specified in the definition of Required Lenders
or any other percentage of Lenders specified to be the applicable percentage in
this Agreement to act on specified matters or amend the definitions of "Required
Lenders" or "Pro Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment of such Lender
hereunder or increase such Lender's Pro Rata Share.
(v) Permit the Borrower to assign its rights under this Agreement, other
than pursuant to the Debt Assumption.
(vi) other than pursuant to a transaction permitted by the terms of this
Agreement, release any guarantor from its obligations under the Subsidiary
Guaranty.
(vii) Amend this Section 9.3.
------------
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent may waive payment of the fee required under
Section 13.3(B) without obtaining the consent of any of the Lenders.
- ----------------
9.4 Preservation of Rights. No delay or omission of the Lenders or the
------------------------
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 9.3, and
-----------
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until all of the
Obligations (other than contingent indemnity obligations) shall have been fully
and indefeasibly paid and satisfied in cash and all financing arrangements among
the Borrower and the Lenders shall have been terminated.
ARTICLE X: GENERAL PROVISIONS
- ----------- -------------------
10.1 Survival of Representations. All representations and warranties of the
---------------------------
Borrower contained in this Agreement shall survive delivery of this
Agreement and the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
------------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that after the
----------------------------
occurrence and during the continuance of a Default, the Administrative Agent
may, but shall have no obligation to, make any payment or perform any act
required of the Borrower under any Loan Document to the extent the
Administrative Agent determines that such action shall be necessary or advisable
in order to protect or preserve the rights of the Lenders hereunder. The
Administrative Agent shall use its reasonable efforts to give the Borrower
notice of any action taken under this Section 10.3 prior to the taking of such
------------
action or promptly thereafter provided the failure to give such notice shall not
affect the Borrower's obligations in respect thereof. The Borrower agrees to
pay the Administrative Agent, upon demand, the principal amount of all funds
advanced by the Administrative Agent under this Section 10.3, together with
------------
interest thereon at the rate from time to time applicable to Floating Rate Loans
from the date of such advance until the outstanding principal balance thereof is
paid in full. If the Borrower fails to make payment in respect of any such
advance under this Section 10.3 within one (1) Business Day after the date the
------------
Borrower receives written demand therefor from the Administrative Agent, the
Administrative Agent shall promptly notify each Lender and each Lender agrees
that it shall thereupon make available to the Administrative Agent, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata Share
of such advance. If such funds are not made available to the Administrative
Agent by such Lender within one (1) Business Day after the Administrative
Agent's demand therefor, the Administrative Agent will be entitled to recover
any such amount from such Lender together with interest thereon at the Federal
Funds Effective Rate for each day during the period commencing on the date of
such demand and ending on the date such amount is received. The failure of any
Lender to make available to the Administrative Agent its Pro Rata Share of any
such unreimbursed advance under this Section 10.3 shall neither relieve any
------------
other Lender of its obligation hereunder to make available to the Administrative
Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Administrative Agent. All outstanding principal of, and
interest on, advances made under this Section 10.3 shall constitute Obligations
------------
subject to the terms of this Agreement until paid in full by the Borrower.
10.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
-----------------
understanding among the Borrower, the Administrative Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
----------------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
10.7 Expenses; Indemnification.
--------------------------
(A) Expenses. The Borrower shall reimburse the Administrative Agent and the
--------
Arranger for any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees and time charges
of attorneys and paralegals for the Administrative Agent, which attorneys and
paralegals may be employees of the Administrative Agent) paid or incurred by the
Administrative Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment modification
and, after the occurrence and during the continuance of a Default or an
Unmatured Default, administration of the Loan Documents. The Borrower also
agrees to reimburse the Administrative Agent and the Arranger and the Lenders
for any reasonable costs and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Administrative Agent and the Arranger and the Lenders, which attorneys and
paralegals may be employees of the Administrative Agent or the Arranger or the
Lenders) paid or incurred by the Administrative Agent or the Arranger or any
Lender in connection with the collection of the Obligations and enforcement of
the Loan Documents; provided, that after the occurrence and during the
--------
continuance of a Default, the Borrower agrees to reimburse the Administrative
Agent, the Arranger and the Lenders for all such costs and out-of-pocket
expenses, whether or not reasonable.
(B) Indemnity. The Borrower further agrees to defend, protect, indemnify,
---------
and hold harmless the Administrative Agent, the Arranger, the Syndication Agent,
the Documentation Agent and each and all of the Lenders and each of their
respective Affiliates, and each of such Administrative Agent's, Syndication
Agent's, Documentation Agent's, Arranger's, Lender's, or Affiliate's respective
officers, directors, trustees, investment advisors, employees, attorneys and
agents (including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "Indemnitees") from and against any and all
- ----------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, the other Loan Documents or any of the Transaction
Documents, or any act, event or transaction related or attendant thereto or to
the Transactions and the making of the Loans hereunder, the management of such
Loans, the use or intended use of the proceeds of the Loans hereunder, or any of
the other transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or threat
to the environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting fees
and costs of investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future relating to violation
of any Environmental, Health or Safety Requirements of Law arising from or in
connection with the past, present or future operations of the Borrower, its
Subsidiaries or any of their respective predecessors in interest, or, the past,
present or future environmental, health or safety condition of any respective
property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant into the
environment (collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
- -------- -------
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnitee with respect to the
Loan Documents, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.
Each Indemnitee, with respect to any action against it in respect of which
indemnity may be sought under this Section, shall give written notice of the
commencement of such action to the Borrower within a reasonable time after such
Indemnitee is made a party to such action. Upon receipt of any such notice by
the Borrower, unless such Indemnitee shall be advised by its counsel that there
are or may be legal defenses available to such Indemnitee that are different
from, in addition to, or in conflict with, the defenses available to the
Borrower or any of its Subsidiaries, the Borrower may participate with the
Indemnitee in the defense of such Indemnified Matter, including the employment
of counsel consented to by such Indemnitee (which consent shall not be
unreasonably withheld); provided, however, nothing provided herein shall entitle
-------- -------
(a) the Borrower or any of its Subsidiaries to assume the defense of such
Indemnified Matter or (b) any Indemnitee to effect any settlement in respect of
any indemnified matter without the Borrower's consent, such consent not to be
unreasonably withheld.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower further
-------------------------------------------------
agrees to assert no claim against any of the Indemnitees on any theory of
liability seeking consequential, special, indirect, exemplary or punitive
damages. No settlement of any claim asserted against or likely to be asserted
against an Indemnitee shall be entered into by the Borrower or any if its
Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the other Loan Documents or in connection with the Transactions
(whether or not the Administrative Agent or any Lender or any Indemnitee is a
party thereto) unless such settlement releases such Indemnitee from any and all
liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the Borrower
-----------------------
under this Section 10.7 shall survive the termination of this Agreement.
-------------
10.8 Numbers of Documents. All statements, notices, closing documents, and
---------------------
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all accounting
----------
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles. If
any changes in generally accepted accounting principles are hereafter required
or permitted and are adopted by the Borrower or any of its Subsidiaries with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Borrower's
and its Subsidiaries' financial condition shall be the same after such changes
as if such changes had not been made; provided, however, until such provisions
-------- -------
are amended in a manner reasonably satisfactory to the Administrative Agent and
the Required Lenders, no Accounting Change shall be given effect in such
calculations and all financial statements and reports required to be delivered
hereunder shall be prepared in accordance with Agreement Accounting Principles
without taking into account such Accounting Changes. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
the date of such amendment.
10.10 Severability of Provisions. Any provision in any Loan Document that
----------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower and
-------------------------
the Lenders and the Administrative Agent shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent
nor any Lender undertakes any responsibility to the Borrower to review or inform
the Borrower of any matter in connection with any phase of the Borrower's
business or operations.
10.12 GOVERNING LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS AGREEMENT, ON
--------------
BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; JURY TRIAL.
---------------------------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
----------------------- --------------
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM
IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
--------------
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE AGENT,
-------------------
ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH
PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) IN ORDER TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON BUT SHALL
ONLY BE PERMITTED TO BRING ANY SUCH PERMISSIVE COUNTERCLAIM IN A PROCEEDING
BROUGHT PURSUANT TO CLAUSE (A). THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
-----------
HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
---------------
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
-----
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
----- --- ----------
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
--------------------
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
-------------------
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.
- ------------- --------------
10.14 Subordination of Intercompany Indebtedness. The Borrower agrees that
-------------------------------------------
any and all claims of the Borrower against any of its Subsidiaries that is a
Subsidiary Guarantor with respect to any "Intercompany Indebtedness" (as
hereinafter defined), any endorser, obligor or any other guarantor of all or any
part of the Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in
cash, of all Obligations and Hedging Obligations under Hedging Agreements;
provided that, and not in contravention of the foregoing, so long as no Default
- --------
has occurred and is continuing the Borrower may make loans to and receive
payments in the ordinary course with respect to such Intercompany Indebtedness
from each such Subsidiary Guarantor to the extent permitted by the terms of this
Agreement and the other Loan Documents. Notwithstanding any right of the
Borrower to ask, demand, sue for, take or receive any payment from any
Subsidiary Guarantor, all rights, liens and security interests of the Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
Subsidiary Guarantor shall be and are subordinated to the rights of the holders
of the Obligations and the Administrative Agent in those assets. The Borrower
shall have no right to possession of any such asset or to foreclose upon any
such asset, whether by judicial action or otherwise, unless and until all of the
Obligations (other than contingent indemnity obligations) and the Hedging
Obligations under Hedging Agreements shall have been fully paid and satisfied
(in cash) and all financing arrangements pursuant to any Loan Document or
Hedging Agreement among the Borrower and the holders of the Obligations (or any
affiliate thereof) have been terminated. If all or any part of the assets of
any Subsidiary Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Subsidiary
Guarantor, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the business of
any such Subsidiary Guarantor is dissolved or if substantially all of the assets
of any such Subsidiary Guarantor are sold, then, and in any such event (such
events being herein referred to as an "Insolvency Event"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
indebtedness of any Subsidiary Guarantor to the Borrower ("Intercompany
Indebtedness") shall be paid or delivered directly to the Administrative Agent
for application on any of the Obligations and Hedging Obligations under the
Hedging Agreements, due or to become due, until such Obligations and Hedging
Obligations (other than contingent indemnity obligations) shall have first been
fully paid and satisfied (in cash). Should any payment, distribution, security
or instrument or proceeds thereof be received by the Borrower upon or with
respect to the Intercompany Indebtedness after an Insolvency Event prior to the
satisfaction of all of the Obligations (other than contingent indemnity
obligations) and Hedging Obligations under Hedging Agreements and the
termination of all financing arrangements pursuant to any Loan Document or
Hedging Agreement among the Borrower and the holders of Obligations (and their
affiliates), the Borrower shall receive and hold the same in trust, as trustee,
for the benefit of the holders of the Obligations and such Hedging Obligations
and shall forthwith deliver the same to the Administrative Agent, for the
benefit of such Persons, in precisely the form received (except for the
endorsement or assignment of the Borrower where necessary), for application to
any of the Obligations and such Hedging Obligations, due or not due, and, until
so delivered, the same shall be held in trust by the Borrower as the property of
the holders of the Obligations and such Hedging Obligations. If the Borrower
fails to make any such endorsement or assignment to the Administrative Agent,
the Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same. The Borrower agrees that until the Obligations
(other than the contingent indemnity obligations) and such Hedging Obligations
have been paid in full (in cash) and satisfied and all financing arrangements
pursuant to any Loan Document or Hedging Agreement among the Borrower and the
holders of the Obligations (and their affiliates) have been terminated, the
Borrower will not assign or transfer to any Person (other than the
Administrative Agent) any claim the Borrower has or may have against any
Subsidiary Guarantor.
ARTICLE XI: THE ADMINISTRATIVE AGENT
- ------------ --------------------------
11.1 Appointment; Nature of Relationship. Bank One, NA, having its
---------------------------------------
principal office in Chicago, Illinois is appointed by the Lenders as the
Administrative Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Administrative Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article XI. Notwithstanding the use of the defined term
-----------
"Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Holder
of Obligations by reason of this Agreement and that the Administrative
Agent is merely acting as the representative of the Lenders with only those
duties as are expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders' contractual representative, the
Administrative Agent (i) does not assume any fiduciary duties to any of the
Holders of Obligations, (ii) is a "representative" of the Holders of Obligations
within the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is
acting as an independent contractor, the rights and duties of which are limited
to those expressly set forth in this Agreement and the other Loan Documents.
Each of the Lenders, for itself and on behalf of its affiliates as Holders of
Obligations, agrees to assert no claim against the Administrative Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Holder of Obligations waives.
11.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action hereunder or under any of the other Loan Documents
except any action specifically provided by the Loan Documents required to be
taken by the Administrative Agent.
11.3 General Immunity. Neither the Administrative Agent nor any of its
-----------------
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is found in a final
judgment by a court of competent jurisdiction to have arisen solely from the
gross negligence or willful misconduct of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither
-------------------------------------------------------------
the Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
---------
required to be delivered solely to the Administrative Agent; (iv) the existence
or possible existence of any Default or (v) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith. The Administrative Agent shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or in
any of the other Loan Documents, for the perfection or priority of the Liens on
collateral, if any, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 Action on Instructions of Lenders. The Administrative Agent shall in
-----------------------------------
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders (or all of the Lenders in the event that and to the
extent that this Agreement expressly requires such), and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders and on all owners of Loans and on all Holders of Obligations. The
Administrative Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 Employment of Administrative Agents and Counsel. The Administrative
--------------------------------------------------
Agent may execute any of its duties as the Administrative Agent hereunder and
under any other Loan Document by or through employees, agents, and
attorney-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Administrative Agent
and the Lenders and all matters pertaining to the Administrative Agent's duties
hereunder and under any other Loan Document.
11.7 Reliance on Documents; Counsel. The Administrative Agent shall be
---------------------------------
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 The Administrative Agent's Reimbursement and Indemnification. The
-----------------------------------------------------------------
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Pro Rata Shares (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
--------
that no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have arisen solely from the gross negligence or willful
misconduct of the Administrative Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment and
-------------------
Loans made by it, the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as though it were not the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
------------------------
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
11.11 Successor Administrative Agent. The Administrative Agent may resign
--------------------------------
at any time by giving written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint,
on behalf of the Borrower and the Lenders, a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. Notwithstanding anything herein to the
contrary, so long as no Default has occurred and is continuing, each such
successor Administrative Agent shall be subject to approval by the Borrower,
which approval shall not be unreasonably withheld. Such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article XI shall continue in effect for its benefit in
----------
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent hereunder and under the other Loan Documents.
11.12 No Duties Imposed Upon Syndication Agent, Documentation Agent or
-----------------------------------------------------------------
Arranger. None of the Persons identified on the cover page to this Agreement,
- --------
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons identified on the cover page
to this Agreement, the signature pages to this Agreement or otherwise in this
Agreement as a "Syndication Agent" or "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary duty to or fiduciary relationship with
any Lender. In addition to the agreement set forth in Section 11.10, each of
-------------
the Lenders acknowledges that it has not relied, and will not rely, on any of
the Persons so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
- ------------- --------------------------
12.1 Setoff. In addition to, and without limitation of, any rights of the
------
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
-----------------
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
- --------- --- --- ---
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 Application of Payments. Subject to the provisions of Section 9.2, the
----------------------- -----------
Administrative Agent shall, unless otherwise specified at the direction of the
Required Lenders which direction shall be consistent with the last sentence of
this Section 12.3, apply all payments and prepayments in respect of any
-------------
Obligations received after the occurrence and during the continuance of a
Default or Unmatured Default in the following order:
(A) first, to pay interest on and then principal of any portion of the Loans
which the Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrower;
(B) second, to pay interest on and then principal of any advance made under
Section 10.3 for which the Administrative Agent has not then been paid by the
- -------------
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Administrative Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders;
(E) fifth, to pay interest due in respect of Loans;
(F) sixth, to the ratable payment or prepayment of principal outstanding on
Loans and Hedging Obligations under Hedging Agreements in such order as the
Administrative Agent may determine in its sole discretion; and
(G) seventh, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans shall be applied to the outstanding Revolving Loans first, to repay
outstanding Floating Rate Loans, and then to repay outstanding Eurodollar Rate
----
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in this Section 12.3 and the related provisions
------------
of this Agreement are set forth solely to determine the rights and priorities of
the Administrative Agent and the Lenders as among themselves. The order of
priority set forth in clauses (D) through (J) of this Section 12.3 may at any
----------- --- ------------
time and from time to time be changed by the Required Lenders without necessity
of notice to or consent of or approval by the Borrower, or any other Person.
The order of priority set forth in clauses (A) through (C) of this Section 12.3
----------- --- ------------
may be changed only with the prior written consent of the Administrative Agent.
12.4 Relations Among Lenders.
-------------------------
(A) Except with respect to the exercise of set-off rights of any Lender in
accordance with Section 12.1, the proceeds of which are applied in accordance
-------------
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document, without the prior written consent of the Required
Lenders or, as may be provided in this Agreement or the other Loan Documents, at
the direction of the Administrative Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Administrative Agent) authorized to act for, any other Lender. The
Administrative Agent shall have the exclusive right on behalf of the Lenders, at
the direction of the Required Lenders, to enforce on the payment of the
principal of and interest on any Loan after the date such principal or interest
has become due and payable pursuant to the terms of this Agreement.
12.5 Representations and Covenants Among Lenders. Each Lender represents
----------------------------------------------
and covenants for the benefit of all other Lenders and the Administrative Agent
that such Lender is not satisfying and shall not satisfy any of its obligations
pursuant to this Agreement with any assets considered for any purposes of ERISA
or Section 4975 of the Code to be assets of or on behalf of any "plan" as
defined in section 3(3) of ERISA or section 4975 of the Code, regardless of
whether subject to ERISA or Section 4975 of the Code.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
- -------------- -----------------------------------------------------
13.1 Successors and Assigns. The terms and provisions of the Loan Documents
----------------------
shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) without the
consent of all of the Lenders, (a) Ralston shall not have the right to assign
its rights or obligations under the Loan Documents other than pursuant to the
Debt Assumption and only if the Net Worth Condition and all other conditions to
the Debt Assumption have been satisfied, and (b) Energizer shall not have the
right to assign its rights or obligations under the Loan Documents, and any such
assignment in violation of this Section 13.1(i) shall be null and void, and (ii)
---------------
any assignment by any Lender must be made in compliance with Section 13.3
------------
hereof. Notwithstanding clause (ii) of this Section 13.1 or Section 13.3, (i)
------------ ------------ ------------
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank and (ii) any Lender which is a fund or
commingled investment vehicle that invests in commercial loans in the ordinary
course of its business may at any time, without the consent of the Borrower or
the Administrative Agent, pledge or assign all or any part of its rights under
this Agreement to a trustee or other representative of holders of obligations
owed or securities issued by such Lender as collateral to secure such
obligations or securities; provided, however, that no such assignment or pledge
-------- -------
shall release the transferor Lender from its obligations hereunder. The
Administrative Agent may treat each Lender as the owner of the Loans made by
such Lender hereunder for all purposes hereof unless and until such Lender
complies with Section 13.3 hereof in the case of an assignment thereof or, in
-------------
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of a Loan, Revolving Loan
Commitment or any other interest of a lender under the Loan Documents agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of any
Loan, shall be conclusive and binding on any subsequent owner, transferee or
assignee of such Loan.
13.2 Participations.
--------------
(A) Permitted Participants; Effect. Subject to the terms set forth in this
-------------------------------
Section 13.2, any Lender may, in the ordinary course of its business and in
- -------------
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Revolving Loan Commitment of such Lender or any other interest of
such Lender under the Loan Documents on a pro rata or non-pro rata basis.
Notice of such participation to the Borrower and the Administrative Agent shall
be required prior to any participation becoming effective with respect to a
Participant which is not a Lender or an Affiliate thereof. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, such Lender shall remain the owner of all Loans made by it
for all purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents except that, for
purposes of Article IV hereof, the Participants shall be entitled to the same
-----------
rights as if they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
--------------
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Revolving Loan Commitment (other than as expressly
permitted by Section 2.2), releases any Subsidiary Guarantor from its
------------
obligations under the Subsidiary Guaranty, or releases all or substantially all
of the collateral, if any, securing any such Loan.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall be
-------------------
deemed to have the right of setoff provided in Section 12.1 hereof in respect to
------------
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
--------
right of setoff provided in Section 12.1 hereof with respect to the amount of
------------
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
Section 12.1 hereof, agrees to share with each Lender, any amount received
- -------------
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
-------------
13.3 Assignments.
-----------
(A) Permitted Assignments. Any Lender may, in the ordinary course of its
----------------------
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment and all Loans owing to it in accordance with the provisions of
this Section 13.3. Each assignment shall be of a constant, and not a varying,
-------------
ratable percentage of all of the assigning Lender's rights and obligations under
this Agreement. Such assignment shall be substantially in the form of
Exhibit C hereto and shall not be permitted hereunder unless such assignment is
- ----------
either for all of such Lender's rights and obligations under the Loan Documents
or, without the prior written consent of the Administrative Agent and (if no
Default or Unmatured Default has occurred or is continuing) the Borrower,
involves loans and commitments in an aggregate amount of at least $5,000,000
(which minimum amount shall not apply to any assignment between Lenders, or to
an Affiliate of any Lender). Other than with respect to any assignment to
another Lender or an Affiliate or successor entity of such Lender, the consent
of the Administrative Agent, and, prior to the occurrence and continuance of a
Default or Unmatured Default, the Borrower (which consent, in each such case,
shall not be unreasonably withheld) shall be required prior to an assignment
becoming effective.
(B) Effect; Effective Date. Upon (i) delivery to the Administrative Agent
------------------------
of a notice of assignment, substantially in the form attached as Appendix I to
----------
Exhibit C hereto (a "Notice of Assignment"), together with any consent required
- ----------
by Section 13.3(A) hereof, and (ii) payment of a $3,500 fee by the assignee or
----------------
the assignor (as agreed) to the Administrative Agent for processing such
assignment (provided no such fee shall be required in connection with an
assignment by a Lender to an Affiliate or successor entity of such Lender), such
assignment shall become effective on the effective date specified in such Notice
of Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Revolving Loan Commitment or Loans under the applicable Assignment
Agreement constitute for any purpose of ERISA or Section 4975 of the Code assets
of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the Code
and that the rights and interests of the Purchaser in and under the Loan
Documents will not constitute such "plan assets". On and after the effective
date of such assignment, such Purchaser, if not already a Lender, shall for all
purposes be a Lender party to this Agreement and any other Loan Documents
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the Lenders or
the Administrative Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Revolving Loan Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3(B), the transferor Lender, the
----------------
Administrative Agent and the Borrower shall make appropriate arrangements so
that, to the extent notes have been issued to evidence any of the transferred
Loans, replacement notes are issued to such transferor Lender and new notes or,
as appropriate, replacement notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Revolving Loan Commitment (or from and after
the Conversion Date, the outstanding principal balance of such Lender's Loans),
as adjusted pursuant to such assignment.
(C) The Register. The Administrative Agent shall maintain at its address
-------------
referred to in Section 14.1 a copy of each assignment delivered to and accepted
------------
by it pursuant to this Section 13.3 and a register (the "Register") for the
------------
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of and principal amount of the Loans owing to, each Lender from time
to time and whether such Lender is an original Lender or the assignee of another
Lender pursuant to an assignment under this Section 13.3. The entries in the
------------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower and each of its Subsidiaries, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Administrative Agent and
--------------- ------------
the Lenders and their respective representatives shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement and
identified as such by the Borrower in accordance with such Person's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound commercial lending or investment practices and in
any event may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or any securities exchange or similar
self-regulatory organization or representative thereof or pursuant to a
regulatory examination or legal process, or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor, and shall require any such Transferee to agree (and
require any of its Transferees to agree) to comply with this Section 13.4. In
------------
no event shall the Administrative Agent or any Lender be obligated or required
to return any materials furnished by the Borrower; provided, however, each
-------- -------
prospective Transferee shall be required to agree that if it does not become a
participant or assignee it shall return all materials furnished to it by or on
behalf of the Borrower in connection with this Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender to
------------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; provided that prior to any such
--------
disclosure, such prospective Transferee shall agree to preserve in accordance
with Section 13.4 the confidentiality of any confidential information described
------------
therein.
ARTICLE XIV: NOTICES
- ------------- -------
14.1 Giving Notice. Except as otherwise permitted by Section 2.13 with
-------------- ------------
respect to Borrowing/Election Notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Documents
shall be in writing or by telex or by facsimile and addressed or delivered to
such party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid, shall be
deemed given three (3) Business Days after mailed; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes); or, any notice, if transmitted by courier, one (1)
Business Day after deposit with a reputable overnight carrier services, with all
charges paid.
14.2 Change of Address. The Borrower, the Administrative Agent and any
-------------------
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
- ------------ ------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by telex or
telephone, that it has taken such action.
[Remainder of This Page Intentionally Blank]
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
RALSTON PURINA COMPANY, as the Borrower
By:/s/ James R. Elsesser
Name: James R. Elsesser
Title: Chief Financial Officer
Address:
Checkerboard Square
St. Louis, MO 63164
Attention: Chief Financial Officer
Phone: (314) 982-2353
Fax: (314) 982-1092
E-Mail: [email protected]
<PAGE>
BANK ONE, NA (Main Office Chicago), as Administrative Agent, and as
a Lender
By: /s/ William J. Oleferchik
Name: William J. Oleferchik
Title: Vice President
Address:
1 Bank One Plaza
Suite IL1-0173
14th Floor
Chicago, Illinois 60670
Attention: William J. Oleferchik
Telephone No.: (312) 732-2947
Facsimile No.: (312) 732-3888
<PAGE>
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By: /s/ Suzanne B. Smith
Name: Suzanne B. Smith
Title: Managing Director
Address:
901 Main Street
67th Floor
Dallas, TX 75202-3714
Attention: Suzanne B. Smith
Phone: (214) 209-0280
Fax: (214) 209-0980
E-Mail: [email protected]
<PAGE>
WACHOVIA BANK, N.A., as Documentation Agent and as a Lender
By: /s/ Walter R. Gillikin
Name: Walter R. Gillikin
Title: Senior Vice President
Address:
191 Peachtree Street, MC-GA370
Atlanta, GA 30303
Attention: Walter R. Gillikin
Phone: (404) 332-5747
Fax: (404) 332-6898
E-Mail: [email protected]
<PAGE>
THE NORTHERN TRUST COMPANY,
as a Lender
By:/s/ Lisa M. Taylor
Name: Lisa M. Taylor
Title: Second Vice President
Address:
50 South LaSalle
11th Floor
Chicago, IL 60675
Attention: Lisa Taylor
Phone: (312) 444-4196
Fax: (312) 444-5055
E-Mail: [email protected]
<PAGE>
STANDARD CHARTERED BANK,
as a Lender
By: /s/ Andrew Ng
Name: Andrew Ng
Title: Vice President
By:/s/ Marianne R. Murray
Name: Marianne R. Murray
Title: Senior Vice President
Address:
7 World Trade Center
27th Floor
New York, NY 10048
Attention: Marianne R. Murray
Phone: (212) 667-0505
Fax: (212) 667-0225
E-Mail: [email protected]
<PAGE>
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH, as a Lender
By:/s/ Hisashi Miyashiro
Name: Hisashi Miyashiro
Title: Deputy General Manager
Address:
227 West Monroe Street
Suite 2300
Chicago, IL 60606
Attention: Alex Lam
Phone: (312) 696-4662
Fax: (312) 696-4535
E-Mail: [email protected]
<PAGE>
BANK OF NEW YORK, as a Lender
By:/s/ John-Paul Marotta
Name: John-Paul Marotta
Title: Vice President
Address:
One Wall Street
New York, NY 10286
Attention: David Shedd
Phone: (212) 635-8448
Fax: (212) 635-1208
<PAGE>
BANCA COMMERCIALE ITALIANA, CHICAGO BRANCH, as a Lender
By:/s/ Mr. Charles Dougherty
Name: Mr. Charles Dougherty
Title: Vice President
By:/s/ Mr. Edward Bermant
Name: Mr. Edward Bermant
Title: First Vice President
Deputy Manager
Address:
One William Street
New York, NY 10004
Attention: Mr. Charles Dougherty
Phone: (212) 607-3656
Fax: (212) 809-2124
<PAGE>
BANCA NAZIONALE DEL LAVORO S.p.A.-NEW YORK BRANCH, as a Lender
By:/s/ Giulio Giovine
Name: Giulio Giovine
Title: Vice President
By:/s/ Leonardo Valentini
Name: Leonardo Valentini
Title: First Vice President
Address:
25 West 51st Street
New York, NY 10019
Attention: Giulio Giovine
Phone: (212) 314-0239
Fax: (212) 765-2978
E-mail: [email protected]
<PAGE>
BANQUE NATIONALE DE PARIS,
as a Lender
By:/s/ Arnaud Collin du Bocage
Name: Arnaud Collin du Bocage
Title: Executive Vice President
and General Manager
Address:
209 South LaSalle Street
Chicago, IL 60604
Attention: Ms. Kristin Howatt
Phone: (312) 977-1383
Fax: (312) 977-1380
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG, as a Lender
By:/s/ Mark K. Connelly
Name: Mark K. Connelly
Title: Vice President
By:/s/ Lynne McCarthy
Name: Lynne McCarthy
Title: Vice President
Address:
609 Fifth Avenue
New York, NY 10017-1021
Attention: Craig Anderson, Vice President
Phone: (212) 745-1583
Fax: (212) 745-1556/1550
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD.,
as a Lender
By: /s/ Nobuyasu Fukatsu
Name: Nobuyasu Fukatsu
Title: General Manager
Address:
10 South Wacker Drive
26th Floor
Chicago, IL 60606
Attention: Brian Riley
Phone: (312) 876-8600
Fax: (312) 876-2011
E-Mail: [email protected]
<PAGE>
MERCANTILE BANK NATIONAL ASSOCIATION, as a Lender
By:/s/ David F. Higbee
Name: David F. Higbee
Title: Vice President
Address:
One Mercantile Center
Tram 001/1001/12-3
St. Louis, MO 63101
Attention: David F. Higbee
Phone: (314) 418-1967
Fax: (314) 418-2203
E-Mail: [email protected]
<PAGE>
SANPAOLO IMI S.p.A., as a Lender
By:/s/ Luca Sacchi
Name: Luca Sacchi
Title: Vice President
By:/s/ Carlo Persico
Name: Carlo Persico
Title: Deputy General Manager
Address:
245 Park Avenue
New York, NY 10167
Attention: Luca Sacchi
Phone: (212) 692-3130
Fax: (212) 692-3178
E-Mail: [email protected]
<PAGE>
SUNTRUST BANK, as a Lender
By:/s/ Linda L. Dash
Name: Linda L. Dash
Title: Vice President
Address:
303 Peachtree Street, N.E.
Mail Code 1928, 3rd Floor
Atlanta, GA 30308
Attention: Linda L. Dash
Phone: (404) 658-4923
Fax: (404) 658-4905
<PAGE>
WESTPAC BANKING CORPORATION,
as a Lender
By:/s/ Lewis Love
Name: Lewis Love
Title: Head of Legal & Compliance
Europe & Americas
Address:
575 Fifth Avenue
New York, NY 10017
Attention: Ms. Kate Perry
Phone: (212) 551-1808
Fax: (212) 551-1995
E-Mail: [email protected]
<PAGE>
Effective as of April __, 2000,
assigned to and assumed pursuant
to the terms of that certain Debt
Assignment, Assumption
and Release Agreement
dated as of April __, 2000
among Ralston, Energizer and the
Administrative Agent
ENERGIZER HOLDINGS, INC.
/s/ Daniel E. Corbin
Name: Daniel E. Corbin
Title: Executive Vice President - Finance and Control
Address:
Checkerboard Square
800 Chouteau Avenue
St. Louis, MO 63102
Attention: Daniel Corbin
Phone: (314) 982-1801
Fax: (314) 982-1180
E-mail: [email protected]
<PAGE>
Exhibits
EXHIBIT A -- Revolving Loan Commitments (Definitions)
EXHIBIT B -- Form of Borrowing/Election Notice (Section 2.2 and Section
----------- -------
2.7 and Section 2.9)
--- ------------
EXHIBIT C Form of Assignment and Acceptance Agreement (Sections
--------
2.19 and 13.3)
---- ----
EXHIBIT D -- Form of Borrower's Counsel's Opinion (Section 5.1)
------------
EXHIBIT E -- List of Closing Documents (Section 5.1)
------------
EXHIBIT F -- Form of Officer's Certificate (Sections 5.2
and 7.1(A)(iii)) -------------
-------------
EXHIBIT G -- Form of Compliance Certificate (Sections 5.2 and
7.1(A)(iii)) ------------------
-------------
EXHIBIT H -- Form of Supplement to Subsidiary Guaranty
(Definitions)
EXHIBIT I -- Form of Debt Assumption Agreement (Definitions)
<PAGE>
Schedules
Schedule 1.1.1 -- Permitted Existing Investments (Definitions)
Schedule 1.1.2 -- Permitted Existing Liens (Definitions)
Schedule 1.1.3 -- Permitted Existing Contingent Obligations
(Definitions)
Schedule 6.3 -- Ralston Conflicts; Ralston Governmental Consents
(Section 6.3)
-------------
Schedule 6.6 -- Energizer Conflicts; Energizer Governmental
Consents (Section 6.6)
------------
Schedule 6.7 -- Pro Forma Financial Statements (Section 6.7(A))
---------------
Schedule 6.10 -- Litigation; Loss Contingencies (Section 6.10)
-------------
Schedule 6.11 -- Subsidiaries (Section 6.11)
-------------
Schedule 6.20 -- Spin-Off Transactions (Section 6.20)
-------------
Schedule 6.21 -- Outstanding Spin-Off Conditions (Section 6.21,
Section 5.1(7)) ---------------
----------------
Schedule 6.21 (iv) -- Committed Financing Facilities (Section 6.21(iv),
Section 5.1(7)(iv)) -----------------
----------------
Schedule 6.22 -- Environmental Matters (Section 6.22)
-------------
Schedule 7.3 -- Transactions with Ralston's Shareholders and
Affiliates (Section 7.3(G))
---------------
<PAGE>
Table of Contents
-----------------
Page
----
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms 1
1.2 References 21
ARTICLE II: THE REVOLVING LOAN FACILITY
2.1 Revolving Loans 21
2.2 Extension of Revolving Loan Termination Date; Conversion to Term
Loan 22
2.3 Rate Options for all Advances; Maximum Interest Periods 23
2.4 Optional Payments 23
2.5 Reduction of Revolving Loan Commitments 23
2.6 Method of Borrowing 24
2.7 Method of Selecting Types and Interest Periods for Advances 24
2.8 Minimum Amount of Each Advance 24
2.9 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances. 24
2.10 Default Rate 25
2.11 Method of Payment 25
2.12 Evidence of Debt. 25
2.13 Telephonic Notices 26
2.14 Promise to Pay; Interest and Facility Fees; Interest Payment Dates;
Interest and Fee Basis; Loan and Control Accounts. 26
1.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions 28
1.16 Lending Installations 29
1.17 Non-Receipt of Funds by the Administrative Agent 29
1.18 Termination Date 29
1.19 Replacement of Certain Lenders 29
ARTICLE III: [RESERVED]
ARTICLE IV: YIELD PROTECTION; TAXES
4.1 Yield Protection 30
4.2 Changes in Capital Adequacy Regulations 31
4.3 Availability of Types of Advances 31
4.4 Funding Indemnification 32
4.5 Taxes 32
4.6 Lender Statements; Survival of Indemnity 33
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances 34
5.2 Each Advance 36
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers of Ralston 36
6.2 Authority of Ralston. 36
6.3 No Conflict; Governmental Consents for Ralston 37
6.4 Organization; Corporate Powers of Energizer 38
6.5 Authority of Energizer. 38
6.6 No Conflict; Governmental Consents for Energizer 39
6.7 Financial Statements. 39
6.8 No Material Adverse Change 40
6.9 Taxes. 40
6.10 Litigation; Loss Contingencies and Violations 41
6.11 Subsidiaries 41
6.12 ERISA 42
6.13 Accuracy of Information 42
6.14 Securities Activities 43
6.15 Material Agreements 43
6.16 Compliance with Laws 43
6.17 Assets and Properties 43
6.18 Statutory Indebtedness Restrictions 43
6.19 Insurance 43
6.20 Labor Matters 44
6.21 Spin-Off Transactions 44
6.22 Environmental Matters 44
6.23 Solvency 45
6.24 Net Worth Condition 45
6.25 Benefits 45
ARTICLE VII: COVENANTS
7.1 Reporting 45
7.2 Affirmative Covenants. 48
7.3 Negative Covenants. 51
7.4 Financial Covenants 57
ARTICLE VIII: DEFAULTS
8.1 Defaults 57
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 Termination of Revolving Loan Commitments; Acceleration 61
9.2 Defaulting Lender 61
9.3 Amendments 62
9.4 Preservation of Rights 63
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations 63
10.2 Governmental Regulation 63
10.3 Performance of Obligations 63
10.4 Headings 64
10.5 Entire Agreement 64
10.6 Several Obligations; Benefits of this Agreement 64
10.7 Expenses; Indemnification. 64
10.8 Numbers of Documents 66
10.9 Accounting 66
10.10 Severability of Provisions 67
10.11 Nonliability of Lenders 67
10.12 GOVERNING LAW 67
10.13 CONSENT TO JURISDICTION; JURY TRIAL. 67
10.14 Subordination of Intercompany Indebtedness 68
ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1 Appointment; Nature of Relationship 69
11.2 Powers 70
11.3 General Immunity 70
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc 70
11.5 Action on Instructions of Lenders 70
11.6 Employment of Administrative Agents and Counsel 71
11.7 Reliance on Documents; Counsel 71
11.8 The Administrative Agent's Reimbursement and Indemnification 71
11.9 Rights as a Lender 71
11.10 Lender Credit Decision 71
11.11 Successor Administrative Agent 72
11.12 No Duties Imposed Upon Syndication Agent, Documentation Agent or
Arranger 72
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff 72
12.2 Ratable Payments 72
12.3 Application of Payments 73
12.4 Relations Among Lenders. 73
12.5 Representations and Covenants Among Lenders 74
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns 74
13.2 Participations. 75
13.3 Assignments. 75
13.4 Confidentiality 77
13.5 Dissemination of Information 77
ARTICLE XIV: NOTICES
14.1 Giving Notice 77
14.2 Change of Address 77
ARTICLE XV: COUNTERPARTS
5-YEAR REVOLVING CREDIT AGREEMENT
Dated as of March 30, 2000
among
RALSTON PURINA COMPANY
as the initial Borrower
prior to the assignment to
and assumption by
ENERGIZER HOLDINGS, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
BANK ONE, NA,
as Administrative Agent
BANK OF AMERICA, N.A.
as Syndication Agent
and
WACHOVIA BANK, N.A.,
as Documentation Agent
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Bookrunner
SIDLEY & AUSTIN
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
<PAGE>
5-YEAR REVOLVING CREDIT AGREEMENT
This 5-Year Revolving Credit Agreement dated as of March 30, 2000 is
entered into among RALSTON PURINA COMPANY, a Missouri corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to Section 13.3, and BANK
------------
ONE, NA, having its principal office in Chicago, Illinois, in its capacity as
Administrative Agent, BANK OF AMERICA, N.A., as Syndication Agent, and WACHOVIA
BANK, N.A., as Documentation Agent. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
- ----------- -----------
1.1 Certain Defined Terms. In addition to the terms defined above, the
-----------------------
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Accounting Change" is defined in Section 10.9 hereof.
- ------------------- -------------
"Acquisition" means any transaction, or any series of related transactions,
- ------------
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"Adjustment Date" means each date on which the opening pro forma balance sheet
- ----------------- --- -----
of Energizer and its consolidated Subsidiaries, after giving effect to the
Spin-Off Transactions, is adjusted, which adjustments shall occur simultaneously
with the adjustments made pursuant to the Reorganization Agreement to verify the
calculation of the "Indebtedness" and "Cash Holdings" of Energizer and its
Affiliates thereunder.
"Administrative Agent" means Bank One in its capacity as contractual
- ----------------------
representative for itself and the Lenders pursuant to Article XI hereof and any
----------
successor Administrative Agent appointed pursuant to Article XI hereof.
-----------
"Advance" means a borrowing hereunder consisting of the aggregate amount of the
- --------
several Loans made by the Lenders to the Borrower of the same Type and, in the
case of Eurodollar Rate Advances, for the same Interest Period.
"Affected Lender" is defined in Section 2.19 hereof.
- ----------------- -------------
"Affiliate" of any Person means any other Person directly or indirectly
- ----------
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"Aggregate Revolving Loan Commitment" means the aggregate of the Revolving Loan
- -------------------------------------
Commitments of all the Lenders, as may be reduced from time to time pursuant to
the terms hereof. The initial Aggregate Revolving Loan Commitment is Two
Hundred Twenty-Five Million and 00/100 Dollars ($225,000,000.00).
"Agreement" means this 5-Year Revolving Credit Agreement, as it may be amended,
restated or otherwise modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting principles
- --------------------------------
as in effect in the United States from time to time, applied in a manner
consistent with that used in preparing the financial statements of Energizer
referred to in Section 6.7 hereof; provided, however, except as provided in
------------ -------- -------
Section 10.9, that with respect to the calculation of financial ratios and other
- ------------
financial tests required by this Agreement, "Agreement Accounting Principles"
means generally accepted accounting principles as in effect in the United States
as of the date of this Agreement, applied in a manner consistent with that used
in preparing the financial statements of Energizer referred to in Section 6.7
-----------
hereof.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest per
- ----------------------
annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
(a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.
"Applicable Facility Fee Percentage" means, as at any date of determination, the
- -----------------------------------
rate per annum then applicable in the determination of the amount payable under
Section 2.14(C)(i) hereof determined in accordance with the provisions of
- -------------------
Section 2.14(D)(ii) hereof.
- --------------------
"Applicable Margin" means, as at any date of determination, the rate per annum
- -------------------
then applicable to Advances of any Type at such time, determined in accordance
with the provisions of Section 2.14(D)(ii) hereof.
--------------------
"Applicable L/C Fee Percentage" means, as at any date of determination, the rate
- -----------------------------
per annum then applicable in the determination of the amount payable under
Section 3.8(i) hereof determined in accordance with the provisions of Section
- -------------- -------
2.14(D)(ii) hereof.
- -----------
"Arranger" means Banc One Capital Markets, Inc., in its capacity as the lead
- ---------
arranger and sole bookrunner for the loan transaction evidenced by this
Agreement.
"Assignment Agreement" means an assignment and acceptance agreement entered into
- ---------------------
in connection with an assignment by a Lender pursuant to Section 13.3 hereof in
------------
substantially the form of Exhibit D.
----------
"Asset Sale" means, with respect to any Person, the sale, lease, conveyance,
- ------------
disposition or other transfer by such Person of any of its assets (including by
way of a sale-leaseback transaction, and including the sale or other transfer of
any of the Equity Interests of any Subsidiary of such Person) other than (i) the
sale of Inventory in the ordinary course of business and (ii) the sale or other
disposition of any obsolete manufacturing Equipment disposed of in the ordinary
course of business.
"Authorized Officer" means any of the President, any Vice President (including
- --------------------
any Executive Vice President) or the Treasurer of the Borrower, acting singly.
"Bank Book" is defined in Section 6.7(A) hereof.
- ----------- ---------------
"Bank One" means Bank One, NA, having its principal office in Chicago, Illinois,
- ---------
in its individual capacity, and its successors.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35) of ERISA
- -------------
(other than a Multiemployer Plan or Foreign Pension Plan) in respect of which
Energizer or any other member of the Controlled Group is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Borrower" means (i) for the period from the Closing Date until the consummation
- ---------
of the Debt Assumption, Ralston and (ii) from and after the consummation of the
Debt Assumption, Energizer, in each case, together with its successors and
assigns, including a debtor-in-possession on behalf of the Borrower.
"Borrowing Date" means a date on which an Advance or Swing Line Loan is made
- ----------------
hereunder.
"Borrowing/Election Notice" is defined in Section 2.7 hereof.
-------------------------- ------------
"Bridge Facilities" means any temporary bridge financing to be provided in favor
- ------------------
of Ralston, all or a portion of which may be assumed by Energizer in connection
with the Spin-Off, which shall be refinanced by Energizer shortly after the
Spin-Off Date with the Receivables Purchase Facility and/or the Senior Notes
and/or cash on hand.
"Business Day" means (i) with respect to any borrowing, payment or rate
- --------------
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii) in
- ---------------
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited) and (iv) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such Person as
- -------------------
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the obligations
- -------------------------------
of such Person under Capitalized Leases which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement Accounting
Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
- ------------------
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and at least 95% of the investments of which are limited
to investment grade securities (i.e., securities rated at least Baa by Moody's
Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group); and
(iv) commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 by Moody's
Investors Service, Inc.; provided that the maturities of such Cash Equivalents
--------
described in the foregoing clauses (i) through (iv) shall not exceed 365 days;
(v) repurchase obligations of any commercial bank organized under the laws of
the United States, any state thereof, the District of Columbia, any foreign
bank, or its branches or agencies having a term not more than thirty (30) days,
with respect to securities issued or fully guaranteed or insured by the United
States government; (vi) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth,
territory, political subdivision, taxing authority or by any foreign government,
the securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
BBB by Standard & Poor's Ratings Group or at least Baa by Moody's Investors
Service, Inc.; (vii) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by any commercial
bank organized under the laws of the United States, any state thereof or the
District of Columbia (which commercial bank shall have a short-term debt rating
of A-1 (or better) by Standard & Poor's Ratings Group or P-1 by Moody's
Investors Service, Inc.), or by any foreign bank (which foreign bank shall have
a rating of B or better from Thomson BankWatch Global Issuer Rating or, if not
rated by Thomson BankWatch Global Issuer Rating, which foreign bank shall be an
institution acceptable to the Administrative Agent), or its branches or
agencies; or (viii) shares of money market mutual or similar funds at least 95%
of the assets of which are invested in the types of investments satisfying the
requirements of clauses (i) through (vii) of this definition.
"Change" is defined in Section 4.2 hereof.
- ------- ------------
"Change of Control" means an event or series of events by which:
- --------------------
(i) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of thirty percent (30%) or more of the voting power of the then
outstanding Capital Stock of Energizer entitled to vote generally in the
election of the directors of Energizer (other than Ralston at any time prior to
the consummation of the Spin-Off);
(ii) during any period of 12 consecutive calendar months, the board of
directors of Energizer shall cease to have as a majority of its members
individuals who either:
(a) were directors of Energizer on the first day of such period,
(b were elected or nominated for election to the board of directors of
Energizer at the recommendation of or other approval by at least a majority of
the directors then still in office at the time of such election or nomination
who were directors of Energizer on the first day of such period, or whose
election or nomination for election was so approved, or
(c) were directors of Energizer on the first Business Day following the
Spin-Off Date;
(iii) other than as a result of a transaction not prohibited under the terms
of this Agreement, Energizer (a) shall cease to own, of record and
beneficially, with sole voting and dispositive power, 100% of the outstanding
shares of Capital Stock of each of the Subsidiary Guarantors or (b) shall cease
to have the power, directly or indirectly, to elect all of the members of the
board of directors of each of the Subsidiary Guarantors; or
(iv) Energizer consolidates with or merges into another corporation or
conveys, transfers or leases all or substantially all of its property to any
Person, or any corporation consolidates with or merges into Energizer, in either
event pursuant to a transaction in which the outstanding Capital Stock of
Energizer is reclassified or changed into or exchanged for cash, securities or
other property.
"Closing Date" means the date of this Agreement.
-------------
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
- -----
otherwise modified from time to time.
"Commission" means the Securities and Exchange Commission of the United States
- -----------
of America and any Person succeeding to the functions thereof.
"Consolidated Assets" means the total assets of Energizer and its Subsidiaries
- ---------------------
on a consolidated basis.
"Consolidated Net Worth" means, as of any date of determination, the
- -------------------------
consolidated total stockholders' equity (including capital stock, additional
- -----------
paid-in capital and retained earnings) of Energizer and its consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles.
"Contaminant" means any waste, pollutant, hazardous substance, toxic substance,
- ------------
hazardous waste, special waste, petroleum or petroleum-derived substance or
waste, asbestos or polychlorinated biphenyls ("PCBs"), and includes but is not
limited to these terms as defined in Environmental, Health or Safety
Requirements of Law.
"Contingent Obligation", as applied to any Person, means any Contractual
- -----------------------
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received. The amount of any Contingent
Obligation shall be equal to the present value of the portion of the obligation
so guaranteed or otherwise supported, in the case of known recurring
obligations, and the maximum reasonably anticipated liability in respect of the
portion of the obligation so guaranteed or otherwise supported assuming such
Person is required to perform thereunder, in all other cases.
"Contractual Obligation", as applied to any Person, means any provision of any
- ------------------------
equity or debt securities issued by that Person or any indenture, mortgage, deed
of trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument, in any case in writing, to which that Person is a party
or by which it or any of its properties is bound, or to which it or any of its
properties is subject.
"Controlled Group" means the group consisting of (i) any corporation which is a
- ------------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Energizer; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Code) with Energizer; and (iii) a member of the
same affiliated service group (within the meaning of Section 414(m) of the Code)
as Energizer, any corporation described in clause (i) above or any partnership
----------
or trade or business described in clause (ii) above; provided, that after the
----------- --------
Spin-Off Date, such term shall not include Ralston.
"Cure Loan" is defined in Section 9.2(iii) hereof.
- ----------- -----------------
"Customary Permitted Liens" means:
- ----------------------------
(i) Liens (other than Environmental Liens and Liens in favor of the IRS or
the PBGC or any Plan) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced or
any such proceeding after being commenced is stayed) which are being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained as may be required in accordance with Agreement
Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens imposed
by law created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained as may be required in
accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the IRS or
the PBGC or any Plan) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance or
other types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all such Liens do not in
--------
the aggregate materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair the use
thereof in the operation of the Borrower's or such Subsidiary's businesses taken
as a whole, and (B) all Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$30,000,000;
(iv) Liens arising with respect to zoning restrictions, easements, licenses,
reservations, covenants, rights-of-way, utility easements, building restrictions
and other similar charges or encumbrances on the use of real property 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 the Borrower
or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs or
warrants of attachment, or similar process against the Borrower or any of its
Subsidiaries which do not constitute a Default under Section 8.1(H) hereof;
--------------
(vi) any interest or title of the lessor in the property subject to any
operating lease entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business; and
(vii) Liens of commercial depository institutions arising in the ordinary
course of business constituting a statutory or common law right of setoff
against amounts on deposit with any such institution.
"Debt Assumption" means the assignment and assumption by Energizer of all
- -----------------
of obligations and liabilities of Ralston hereunder and under the Loan Documents
and the concurrent release of Ralston from such obligations and liabilities,
which shall occur on the Spin-Off Date, pursuant to the Debt Assignment,
Assumption and Release Agreement in the form attached as Exhibit J to this
---------
Agreement (the "Debt Assumption Agreement").
"Debt Assumption Agreement" is defined in the definition of "Debt Assumption"
- ----------------------------
above.
"Default" means an event described in Article VIII hereof.
- -------- -------------
"Disclosed Litigation" is defined in Section 6.10 hereof.
- ---------------------- -------------
"Disqualified Stock" means any preferred stock and any Capital Stock that, by
- --------------------
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the Revolving Loan Termination Date.
"DOL" means the United States Department of Labor and any Person succeeding to
- ----
the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United States.
- ------- -
"EBIT" means, for any period, on a consolidated basis for Energizer and its
- -----
Subsidiaries, the sum of the amounts for such period, without duplication, of
(i) Net Income, plus (ii) Interest Expense to the extent deducted in computing
----
Net Income, plus (iii) charges against income for foreign, federal, state and
----
local taxes to the extent deducted in computing Net Income, minus (iv)
-----
extraordinary gains to the extent added in computing Net Income, plus (v) other
----
extraordinary non-cash charges to the extent deducted in computing Net Income.
"EBITDA" means, for any period, on a consolidated basis for Energizer and its
- -------
Subsidiaries, the sum of the amounts for such period, without duplication, of
(i) EBIT, plus (ii) depreciation expense to the extent deducted in computing Net
----
Income, plus (iii) amortization expense, including, without limitation,
----
amortization of goodwill and other intangible assets, to the extent deducted in
computing Net Income.
"Energizer" means Energizer Holdings, Inc., a Missouri corporation, together
- ----------
with its permitted successors and assigns, including a debtor-in-possession on
behalf of Energizer.
"Environmental, Health or Safety Requirements of Law" means all applicable
- ----------------------------------------------------------
foreign, federal, state and local laws or regulations relating to or addressing
pollution or protection of the environment, or protection of worker health or
safety, including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Occupational
-- ---
Safety and Health Act of 1970, 29 U.S.C. 651 et seq., and the Resource
-- ---
Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq., in each case
-- ---
including any amendments thereto, any successor statutes, and any regulations
promulgated thereunder, and any state or local equivalent thereof.
"Environmental Lien" means a lien in favor of any Governmental Authority for (a)
- --------------------
any liability under Environmental, Health or Safety Requirements of Law, or (b)
damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Property Transfer Act" means any applicable requirement of law
- ---------------------------------------
that conditions, restricts, prohibits or requires any notification or disclosure
triggered by the closure of any property or the transfer, sale or lease of any
property or deed or title for any property for environmental reasons, including,
but not limited to, any so-called "Industrial Site Recovery Act" or "Responsible
Property Transfer Act."
"Equipment" means all of the Borrower's and its Subsidiaries' present and future
- ----------
(i) equipment, including, without limitation, machinery, manufacturing,
distribution, selling, data processing and office equipment, assembly systems,
tools, molds, dies, fixtures, appliances, furniture, furnishings, vehicles,
vessels, aircraft, aircraft engines, and trade fixtures, (ii) other tangible
personal property (other than the Borrower's or Subsidiary's Inventory), and
(iii) any and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof.
"Equity Interests" means Capital Stock and all warrants, options or other rights
- -----------------
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
- ------
from time to time, including (unless the context otherwise requires) any rules
or regulations promulgated thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Advance for the
- ----------------------
relevant Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Bloomberg Screen BBAM
as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of
such Interest Period, and having a maturity equal to such Interest Period,
provided that, (i) if Bloomberg Screen BBAM is not available to the
Administrative Agent for any reason, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service mutually acceptable
to the Borrower and the Administrative Agent as of 11:00 a.m. (London time) two
(2) Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Administrative Agent,
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Administrative Agent to be the arithmetic
mean (rounded upward, if necessary, to an integral multiple of 1/16th of 1%) of
the rates of interest per annum reported to the Administrative Agent by each
Reference Lender as the rate at which such Reference Lender offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, in the approximate amount of such Reference
Lender's relevant Eurodollar Rate Loan and having a maturity equal to such
Interest Period. If any Reference Lender fails to provide such quotation to the
Administrative Agent, then the Administrative Agent shall determine the
Eurodollar Base Rate on the basis of the quotations of the remaining Reference
Lender(s).
"Eurodollar Rate" means, with respect to a Eurodollar Rate Advance for the
- -----------------
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period plus
----
(ii) the then Applicable Margin; provided, however, that the foregoing
-------- -------
adjustment for Reserve Requirements shall only be made with respect to that
portion of a Eurodollar Rate Loan made by a Lender which is subject to such
Reserve Requirements.
"Eurodollar Rate Advance" means an Advance which bears interest at the
- --------------------------
Eurodollar Rate.
- ---------
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears interest at
- ---------------------
the Eurodollar Rate.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
- ----------------
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Facility Fee" is defined in Section 2.14(C)(i) hereof.
- -------------- -------------------
"Federal Funds Effective Rate" means, for any day, an interest rate per annum
- --------------------------------
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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its reasonable discretion.
"Final Adjustment Date" means the last Adjustment Date, which shall occur no
- ------------------------
later than July 31, 2000, in accordance with the Reorganization Agreement.
"Financing Facilities" means this Agreement, the 364-Day Credit Agreement, the
- ----------------------
Bridge Facilities, the Receivables Purchase Facility, the Senior Notes and any
other financing facilities entered into or to be entered into in connection with
the Spin-Off, in each case, whether consummated prior to, concurrently with or
following the Spin-Off.
"Floating Rate Advance" means an Advance which bears interest by reference to
- ------------------------
the Alternate Base Rate.
"Floating Rate Loan" means a Loan, or portion thereof, which bears interest by
- ---------------------
reference to the Alternate Base Rate.
"Foreign Employee Benefit Plan" means any employee benefit plan as defined in
- ---------------------------------
Section 3(3) of ERISA which is maintained or contributed to for the benefit of
the employees of Energizer or any member of the Controlled Group, but which is
not covered by ERISA pursuant to Section 4(b)(4) of ERISA.
"Foreign Pension Plan" means any employee pension benefit plan (as defined in
- -----------------------
Section 3(2) of ERISA) which (i) is maintained or contributed to for the benefit
of employees of Energizer or any other member of the Controlled Group, (ii) is
not covered by ERISA pursuant to Section 4(b)(4) thereof and (iii) under
applicable local law, is required to be funded through a trust or other funding
vehicle.
"Form 10" means the Form 10 General Form for the Registration of Securities, as
- ---------
amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto, filed
by Energizer (File No. 1-15401) with the Commission in connection with the
Spin-Off, together with all exhibits and appendices thereto.
"Governmental Acts" is defined in Section 3.10(A) hereof.
- ------------------- ----------------
"Governmental Authority" means any nation or government, any federal, state,
- ------------------------
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions.
"Hedging Arrangements" is defined in the definition of "Hedging Obligations"
- ----------------------
below.
"Hedging Agreements" is defined in Section 7.3(O) hereof.
- -------------------- ---------------
"Hedging Obligations" of a Person means any and all obligations of such Person,
- ---------------------
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (i) any and all agreements, devices
or arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, commodity prices, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants or any similar derivative transactions ("Hedging
Arrangements"), and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"Holders of Obligations" means the holders of the Obligations from time to time
- ------------------------
and shall include their respective successors, transferees and assigns.
"Indebtedness" of any Person means, without duplication, such Person's (a)
- -------------
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), which purchase price is due more than six (6) months from the date of
incurrence of the obligation in respect thereof, provided that the related
obligations are not interest bearing, (c) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property or
assets now or hereafter owned or acquired by such Person, (d) obligations which
are evidenced by notes, acceptances or other instruments, (e) Capitalized Lease
Obligations, (f) Contingent Obligations in respect of Indebtedness, (g)
obligations with respect to letters of credit, (h) Off-Balance Sheet
Liabilities, (i) Receivables Facility Attributed Indebtedness and (j)
Disqualified Stock. The amount of Indebtedness of any Person at any date shall
be without duplication (1) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (2) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Indemnified Matters" is defined in Section 10.7(B) hereof.
- --------------------- ----------------
"Indemnitees" is defined in Section 10.7(B) hereof.
- ------------ ----------------
"Initial Funding Date" means the date on which the initial Revolving Loans are
- -----------------------
advanced hereunder.
"Insolvency Event" is defined in Section 10.14 hereof.
- ------------------ --------------
"Intercompany Indebtedness" is defined in Section 10.14 hereof.
- --------------------------- --------------
"Interest Expense" means, for any period, the total interest expense of
- ------------------
Energizer and its consolidated Subsidiaries, whether paid or accrued, including,
without duplication, Off-Balance Sheet Liabilities (including Receivables
Facility Financing Costs) and the interest component of Capitalized Leases, all
as determined in conformity with Agreement Accounting Principles.
"Interest Expense Coverage Ratio" is defined in Section 7.4(B) hereof.
- ----------------------------------- ---------------
"Interest Period" means, with respect to a Eurodollar Rate Loan, a period of one
- ----------------
(1), two (2), three (3) or six (6) months and, to the extent available to all of
the Lenders, nine (9) or twelve (12) months, commencing on a Business Day
selected by the Borrower on which a Eurodollar Rate Advance is made to Borrower
pursuant to this Agreement. Such Interest Period shall end on (but exclude) the
day which corresponds numerically to such date one, two, three, six, nine or
twelve months thereafter; provided, however, that if there is no such
-------- -------
numerically corresponding day in such next, second, third, sixth, ninth or
twelfth succeeding month, such Interest Period shall end on the last Business
Day of such next, second, third, sixth, ninth or twelfth succeeding month. If
an Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding Business Day, provided,
--------
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.
"Inventory" shall mean any and all goods, including, without limitation, goods
- ----------
in transit, wheresoever located, whether now owned or hereafter acquired by the
Borrower or any of its Subsidiaries, which are held for sale or lease, furnished
under any contract of service or held as raw materials, work in process or
supplies, and all materials used or consumed in the business of Borrower or any
of its Subsidiaries, and shall include all right, title and interest of the
Borrower or any of its Subsidiaries in any property the sale or other
disposition of which has given rise to Receivables and which has been returned
to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"Investment" means, with respect to any Person, (i) any purchase or other
- -----------
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"Issuing Bank(s)" means (i) Bank One in its separate capacity as an issuer of
- -----------------
Letters of Credit pursuant to Section 3.1 hereunder with respect to each Letter
-----------
of Credit issued by Bank One upon the Borrower's request and (ii) any Lender
(other than Bank One) reasonably acceptable to the Administrative Agent, in such
Lender's separate capacity as an issuer of Letters of Credit pursuant to Section
-------
3.1
- ----
hereunder with respect to any and all Letters of Credit issued by such
Lender in its sole discretion upon the Borrower's request. All references
contained in this Agreement and the other Loan Documents to the "Issuing Bank"
shall be deemed to apply equally to each of the institutions referred to in
clauses (i) and (ii) of this definition in their respective capacities as
- ------------ ----
issuers of any and all Letters of Credit issued by each such institution.
"L/C Documents" is defined in Section 3.4 hereof.
- --------------- ------------
"L/C Draft" means a draft drawn on an Issuing Bank pursuant to a Letter of
- -----------
Credit.
"L/C Interest" shall have the meaning ascribed to such term in Section 3.6
- -------------- -----------
hereof.
"L/C Obligations" means, without duplication, an amount equal to the sum of (i)
- -----------------
the aggregate of the amount then available for drawing under each of the Letters
of Credit, (ii) the face amount of all outstanding L/C Drafts corresponding to
the Letters of Credit, which L/C Drafts have been accepted by an Issuing Bank,
(iii) the aggregate outstanding amount of all Reimbursement Obligations at such
time and (iv) the aggregate face amount of all Letters of Credit requested by
the Borrower but not yet issued (unless the request for an unissued Letter of
Credit has been denied).
"Lenders" means the lending institutions listed on the signature pages of this
- --------
Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Administrative
- ----------------------
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Administrative Agent.
"Letter of Credit" means the standby letters of credit to be issued by an
- -------------------
Issuing Bank pursuant to Section 3.1 hereof.
------------
"Leverage Ratio" is defined in Section 7.4(A) hereof.
- ---------------- ---------------
"Lien" means any lien (statutory or other), mortgage, pledge, hypothecation,
- -----
assignment, deposit arrangement, encumbrance or preference, priority or security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"Loan(s)" means, with respect to a Lender, such Lender's portion of any Advance
- --------
made pursuant to Section 2.1 hereof, and in the case of the Swing Line Bank, any
-----------
Swing Line Loan made pursuant to Section 2.2 hereof, and collectively, all
-----------
Revolving Loans and Swing Line Loans, whether made or continued as or converted
to Floating Rate Loans or Eurodollar Rate Loans.
"Loan Account" is defined in Section 2.12(a) hereof.
- -------------- ----------------
"Loan Documents" means this Agreement, the Subsidiary Guaranty, any promissory
- ----------------
notes issued pursuant to Section 2.12, the L/C Documents and all other
-------------
documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
"Loan Parties" is defined in Section 5.1 hereof.
- -------------- ------------
"Margin Stock" shall have the meaning ascribed to such term in Regulation U.
- --------------
"Material Adverse Effect" means a material adverse effect upon (a) the business,
- ------------------------
condition (financial or otherwise), operations, performance, properties or
prospects of Energizer and its Subsidiaries, taken as a whole, (b) the ability
of Energizer and its Subsidiaries, taken as a whole, to perform their
obligations under the Loan Documents in any material respect, or (c) the ability
of the Lenders, the Issuing Banks or the Administrative Agent to enforce in any
material respect the Obligations.
"Material Domestic Subsidiary" means each consolidated Subsidiary (other than
- -------------------------------
any SPV) of the Borrower (a) incorporated under the laws of any jurisdiction in
the United States and (b) the total assets of which exceed, as at the end of any
calendar quarter or, in the case of consummation of a Permitted Acquisition, at
the time of consummation of such Permitted Acquisition (calculated by Energizer
on a pro forma basis taking into account the consummation of such Permitted
--- -----
Acquisition), three percent (3.0%) of the Consolidated Assets of Energizer and
its consolidated Subsidiaries (other than SPVs).
"Material Foreign Subsidiary" means each consolidated Subsidiary (other than any
- ----------------------------
SPV) of the Borrower (a) incorporated under the laws of any foreign jurisdiction
and (b) the total assets of which exceed, as at the end of any calendar quarter
or, in the case of consummation of a Permitted Acquisition, at the time of
consummation of such Permitted Acquisition (calculated by Energizer on a pro
---
forma basis taking into account the consummation of such Permitted Acquisition),
- -----
five percent (5.0%) of the Consolidated Assets of Energizer and its consolidated
Subsidiaries (other than SPVs).
"Material Indebtedness" means any Indebtedness (other than the Indebtedness
- -----------------------
hereunder) of a single class with an aggregate outstanding principal amount
equal to or greater than $30,000,000.
"Material Subsidiaries" means each of Energizer's Material Domestic Subsidiaries
- ----------------------
and Material Foreign Subsidiaries.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
- --------------------
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either Energizer or any member of the Controlled Group.
"Net Income" means, for any period, the net earnings (or loss) after taxes of
- ------------
Energizer and its Subsidiaries on a consolidated basis for such period taken as
a single accounting period determined in conformity with Agreement Accounting
Principles.
"Net Worth Condition" means the requirement that, as of and after the
- ----------------------
consummation of the Spin-Off Transactions, the Consolidated Net Worth of
Energizer and its Subsidiaries shall not be less than $625,000,000.
"New Subsidiary" is defined in Section 7.3(F).
- ---------------- ---------------
"Non-ERISA Commitments" means
- -----------------------
(i) each pension, medical, dental, life, accident insurance, disability,
group insurance, sick leave, profit sharing, deferred compensation, bonus, stock
option, stock purchase, retirement, savings, severance, stock ownership,
performance, incentive, hospitalization or other insurance, or other welfare,
benefit or fringe benefit plan, policy, trust, understanding or arrangement of
any kind; and
(ii) each employee collective bargaining agreement and each agreement,
understanding or arrangement of any kind, with or for the benefit of any
present or prior officer, director, employee or consultant (including, without
limitation, each employment, compensation, deferred compensation, severance or
consulting agreement or arrangement and any agreement or arrangement associated
with a change in ownership of the Borrower or any member of the Controlled
Group);
to which Energizer or any member of the Controlled Group is a party or with
respect to which Energizer or any member of the Controlled Group is or will be
required to make any payment other than any Plans.
"Non Pro Rata Loan" is defined in Section 9.2 hereof.
- --------------------- ------------
"Non-U.S. Lender" is defined in Section 4.5(iv) hereof.
- ----------------- ----------------
"Note Purchase Agreement" means any agreement entered into by the Borrower with
- -------------------------
respect to the Borrower's issuance of senior unsecured notes (the "Senior
Notes"), which shall be pari passu with the Obligations hereunder, on
substantially the terms set forth in the confidential Summary of Proposed Terms
relating to the Senior Notes sent by Banc of America Securities LLC to the
Administrative Agent by e-mail transmission on March 27, 2000, as such Note
Purchase Agreement may be amended, modified or supplemented from time to time in
a manner that is not materially adverse to the interests of the Lenders.
"Notice of Assignment" is defined in Section 13.3(B) hereof.
- ----------------------- ----------------
"Obligations" means all Loans, L/C Obligations, advances, debts, liabilities,
- ------------
obligations, covenants and duties owing by the Borrower or any of its
Subsidiaries to the Administrative Agent, any Lender, the Swing Line Bank, the
Arranger, any Affiliate of the Administrative Agent or any Lender, the Issuing
Banks or any Indemnitee, of any kind or nature, present or future, arising under
this Agreement, the L/C Documents or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, reasonable
attorneys' fees and disbursements, reasonable paralegals' fees (and, after the
occurrence and during the continuance of a Default, all attorney's fees and
disbursements and paralegals' fees, whether or not reasonable), and any other
sum chargeable to the Borrower or any of its Subsidiaries under this Agreement
or any other Loan Document.
"Off-Balance Sheet Liabilities" of a Person means, without duplication, (a) any
- -------------------------------
Receivables Facility Attributed Indebtedness and repurchase obligation or
liability of such Person or any of its Subsidiaries with respect to Receivables
or notes receivable sold by such Person or any of its Subsidiaries (calculated
to include the unrecovered investment of purchasers or transferees of
Receivables or notes receivable or any other obligation of the Borrower or such
transferor to purchasers/transferees of interests in Receivables or notes
receivables or the agent for such purchasers/transferees), (b) any liability
under any sale and leaseback transactions which do not create a liability on the
consolidated balance sheet of such Person, (c) any liability under any financing
lease or so-called "synthetic" lease transaction, or (d) any obligations arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person and its Subsidiaries.
"Opening Balance Sheet Delivery Date" means the date within fifteen days
- ----------------------------------------
following the Final Adjustment Date on which the Administrative Agent receives
the opening pro forma balance sheet of Energizer and its consolidated
--- -----
Subsidiaries pursuant to Section 7.1(A)(v).
------------------
"Originators" means the Borrower and/or any of its Subsidiaries in their
- ------------
respective capacities as parties to any Receivables Purchase Documents, as
sellers or transferors of any Receivables and Related Security in connection
with a Permitted Receivables Transfer.
"Other Taxes" is defined in Section 4.5 hereof.
------------ ------------
"Participants" is defined in Section 13.2(A) hereof.
- ------------- ----------------
"Payment Date" means the last day of each March, June, September and December.
- --------------
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
- -----
"Permitted Acquisition" is defined in Section 7.3(F) hereof.
- ----------------------- ---------------
"Permitted Existing Contingent Obligations" means the Contingent Obligations of
- -------------------------------------------
Energizer and its Subsidiaries identified on Schedule 1.1.3 to this Agreement.
--------------
"Permitted Existing Investments" means the Investments of Energizer and its
- ---------------------------------
Subsidiaries identified on Schedule 1.1.1 to this Agreement.
- ----- ---------------
"Permitted Existing Liens" means the Liens on assets of Energizer and its
- ---------------------------
Subsidiaries identified on Schedule 1.1.2 to this Agreement.
----- ---------------
"Permitted Receivables Transfer" means (i) a sale or other transfer by an
- ---------------------------------
Originator to a SPV of Receivables and Related Security for fair market value
and without recourse (except for limited recourse typical of such structured
finance transactions), and/or (ii) a sale or other transfer by a SPV to (a)
purchasers of or other investors in such Receivables and Related Security or (b)
any other Person (including a SPV) in a transaction in which purchasers or other
investors purchase or are otherwise transferred such Receivables and Related
Security, in each case pursuant to and in accordance with the terms of the
Receivables Purchase Documents.
"Person" means any individual, corporation, firm, enterprise, partnership,
- -------
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which Energizer or any member of the Controlled Group is, or within
the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Prime Rate" means a rate per annum equal to the prime rate of interest
- ------------
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means, with respect to any Lender, the percentage obtained by
- -----------------
dividing (A) such Lender's Revolving Loan Commitment at such time (in each case,
as adjusted from time to time in accordance with the provisions of this
Agreement) by (B) the Aggregate Revolving Loan Commitment at such time;
provided, however, if all of the Revolving Loan Commitments are terminated
-------
pursuant to the terms of this Agreement, then "Pro Rata Share" means the
percentage obtained by dividing (x) the sum of (A) such Lender's Revolving
Loans, plus (B) such Lender's share of the obligations to purchase
----
participations in Swing Line Loans and Letters of Credit, by (y) the sum of (A)
the aggregate outstanding amount of Revolving Loans, plus (B) the aggregate
----
outstanding amount of all Swing Line Loans and Letters of Credit.
"Purchasers" is defined in Section 13.3(A) hereof.
- ----------- ----------------
"Ralston" means Ralston Purina Company, a Missouri corporation, and prior to the
- --------
Spin-Off, the owner of all of the outstanding Capital Stock of Energizer,
together with its permitted successors and assigns, including a
debtor-in-possession on behalf of Ralston.
"Receivable(s)" means and includes all of the Borrower's and its Subsidiaries'
- --------------
presently existing and hereafter arising or acquired accounts, accounts
receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"Receivables and Related Security" means the Receivables and the related
- ------------------------------------
security and collections with respect thereto which are sold or transferred by
any Originator or SPV in connection with any Permitted Receivables Transfer.
"Receivables Facility Attributed Indebtedness" means the amount of obligations
- -----------------------------------------------
outstanding under a receivables purchase facility on any date of determination
that would be characterized as principal if such facility were structured as a
secured lending transaction rather than as a purchase.
"Receivables Facility Financing Costs" means such portion of the cash fees,
- ----------------------------------------
service charges, and other costs, as well as all collections or other amounts
retained by purchasers of receivables pursuant to a receivables purchase
facility, which are in excess of amounts paid to the Borrower and its
consolidated Subsidiaries under any receivables purchase facility for the
purchase of receivables pursuant to such facility and are the equivalent of the
interest component of the financing if the transaction were characterized as an
on-balance sheet transaction.
"Receivables Purchase Documents" means any series of receivables purchase or
- ---------------------------------
sale agreements generally consistent with terms contained in comparable
structured finance transactions pursuant to which an Originator or Originators
sell or transfer to SPVs all of their respective right, title and interest in
and to certain Receivables and Related Security for further sale or transfer to
other purchasers of or investors in such assets (and the other documents,
instruments and agreements executed in connection therewith), as any such
agreements may be amended, restated, supplemented or otherwise modified from
time to time, or any replacement or substitution therefor.
"Receivables Purchase Facility" means the securitization facility made available
- ------------------------------
to Energizer, pursuant to which the Receivables and Related Security of the
Originators are transferred to one or more SPVs, and thereafter to certain
investors, pursuant to the terms and conditions of the Receivables Purchase
Documents.
"Reference Lenders" means Bank One, Bank of America, N.A. and Wachovia Bank,
- -------------------
N.A.
"Register" is defined in Section 13.3(C) hereof.
- --------- ----------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
- --------------
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
- --------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the Federal
- --------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying Margin Stock applicable to member banks of the Federal
Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
- --------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligation" is defined in Section 3.7 hereof.
- -------------------------- ------------
"Release" means any release, spill, emission, leaking, pumping, injection,
- --------
deposit, disposal, discharge, dispersal, leaching or migration into the
environment, including the movement of Contaminants through or in the air, soil,
surface water or groundwater.
"Reorganization Agreement" means that certain Agreement and Plan of
- --------------------------
Reorganization dated as of April 1, 2000, between Ralston and Energizer, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Replacement Lender" is defined in Section 2.19 hereof.
- -------------------- -------------
"Reportable Event" means a reportable event as defined in Section 4043 of ERISA
- ------------------
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days after such event occurs.
"Required Lenders" means Lenders whose Pro Rata Shares, in the aggregate, are
- ------------------
greater than fifty percent (50%); provided, however, that, if any Lender shall
-------- -------
have failed to fund its Pro Rata Share of (i) any Revolving Loan requested by
the Borrower, (ii) any Revolving Loan required to be made in connection with
reimbursement for any L/C Obligations or (iii) any Swing Line Loan as requested
by the Administrative Agent, which such Lender is obligated to fund under the
terms of this Agreement and any such failure has not been cured, then for so
long as such failure continues, "Required Lenders" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Revolving
Loans or Swing Line Loans has not been so cured) whose Pro Rata Shares represent
greater than fifty percent (50%) of the aggregate Pro Rata Shares of such
Lenders; provided further, however, that, if the Revolving Loan Commitments have
-------- ------- -------
been terminated pursuant to the terms of this Agreement, "Required Lenders"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C Obligations
are greater than fifty percent (50%).
"Requirements of Law" means, as to any Person, the charter and by-laws or other
- ---------------------
organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"Reserve Requirement" means, with respect to an Interest Period, the maximum
- ---------------------
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on "Eurocurrency
liabilities".
"Revolving Credit Availability" means, at any particular time, the amount by
- --------------------------------
which the Aggregate Revolving Loan Commitment at such time exceeds the Revolving
Credit Obligations outstanding at such time.
"Revolving Credit Obligations" means, at any particular time, the sum of (i) the
- -----------------------------
outstanding principal amount of the Revolving Loans at such time, plus (ii) the
----
outstanding principal amount of the Swing Line Loans at such time, plus (iii)
----
the outstanding L/C Obligations at such time.
"Revolving Loan" is defined in Section 2.1 hereof.
- ---------------- ------------
"Revolving Loan Commitment" means, for each Lender, the obligation of such
- ----------------------------
Lender to make Revolving Loans and to purchase participations in Letters of
Credit and to participate in Swing Line Loans not exceeding the amount set forth
on Exhibit A to this Agreement opposite its name thereon under the heading
----------
"Revolving Loan Commitment" or in the Assignment Agreement by which it became a
Lender, as such amount may be modified from time to time pursuant to the terms
of this Agreement or to give effect to any applicable Assignment Agreement.
"Revolving Loan Termination Date" means March 30, 2005.
- -----------------------------------
"Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.
- -------------------------------- ------------
"Senior Management Team" means each Authorized Officer and the Chief Executive
- -------------------------
Officer of the Borrower.
"Senior Notes" is defined in the definition of "Note Purchase Agreement" above.
- --------------
"Solvent" means, when used with respect to any Person, that at the time of
- --------
determination:
(i) the fair value of its assets (both at fair valuation and at present fair
saleable value) is equal to or in excess of the total amount of its
liabilities, including, without limitation, contingent liabilities; and
(ii) it is then able and believes that it will be able to pay its debts as
they mature; and
(iii) it has capital sufficient to carry on its business as conducted and as
proposed to be conducted.
With respect to contingent liabilities (such as litigation and guarantees), such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which can be reasonably
be expected to become an actual or matured liability.
"Spin-Off" means the distribution by Ralston to its stockholders in a tax
--------
free transaction of all of the outstanding capital stock of Energizer such that
Energizer will become a separate publicly-held corporation owned directly by the
stockholders of Ralston to whom such distribution is made, in connection with
which there shall have been obtained a letter ruling from the IRS substantially
to the effect that the Spin-Off will be treated as a tax-free distribution by
Ralston under Section 355 of the Code (the "Tax Ruling").
"Spin-Off Date" means April 1, 2000.
--------------
"Spin-Off Transactions" means the series of transactions contemplated by and
- -----------------------
described in the Form 10, including, but not limited to the Spin-Off.
"SPV" means any special purpose entity established for the purpose of purchasing
- ----
receivables in connection with a receivables securitization transaction
permitted under the terms of this Agreement.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
- -----------
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
means a Subsidiary of the Borrower.
"Subsidiary Guarantors" means (i) for the period from the Closing Date until the
---------------------
consummation of the Debt Assumption, Energizer and each of its Material Domestic
Subsidiaries; (ii) from and after the consummation of the Debt Assumption, all
of Energizer's Material Domestic Subsidiaries; (iii) all New Subsidiaries which
are Material Domestic Subsidiaries and which have satisfied the provisions of
Section 7.2(K)(a); (iv) all of Energizer's Subsidiaries which become Material
- ------------------
Domestic Subsidiaries and which have satisfied the provisions of Section
-------
7.2(K)(b); and (v) all other Subsidiaries which become Subsidiary Guarantors in
- --------
satisfaction of the provisions of Section 7.2(K)(c), in each case with respect
-----------------
to clauses (i) through (v) above, other than the SPVs and together with their
------------ ---
respective successors and assigns.
"Subsidiary Guaranty" means that certain Guaranty dated as of the Closing Date,
- ---------------------
executed by the Subsidiary Guarantors in favor of the Administrative Agent, for
the ratable benefit of the Lenders, the Swing Line Bank and the Issuing Banks,
as it may be amended, modified, supplemented and/or restated (including to add
new Subsidiary Guarantors), and as in effect from time to time.
"Supplement" shall have the meaning set forth in Section 7.2(K).
- ----------- ---------------
"Supplemental Financial Statement" is defined in Section 6.7(A) hereof.
---------------------------------- ---------------
"Swing Line Bank" means Bank One pursuant to the terms hereof.
- ------------------
"Swing Line Commitment" means the commitment of the Swing Line Bank, in its
- ------------------------
discretion, to make Swing Line Loans up to a maximum principal amount of
$10,000,000 at any one time outstanding.
"Swing Line Loan" means a Loan made available to the Borrower by the Swing Line
- -----------------
Bank pursuant to Section 2.2 hereof.
------------
"Tax Ruling" is defined in the definition of "Spin-Off" above.
- ------------
"Taxes" means any and all present or future taxes, duties, levies, imposts,
- ------
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"Termination Date" means the earliest of (a) the Revolving Loan Termination
- ------------------
Date, (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.5 hereof or the Revolving Loan Commitments
pursuant to Section 9.1 hereof and (c) if the Spin-Off and Debt Assumption have
-----------
not occurred prior thereto, April 4, 2000.
"Termination Event" means (i) a Reportable Event with respect to any Benefit
- -------------------
Plan; (ii) the withdrawal of Energizer or any member of the Controlled Group
from a Benefit Plan during a plan year in which Energizer or such Controlled
Group member was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA with respect to such plan; (iii) the imposition of an obligation under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c)
of ERISA; (iv) the institution by the PBGC or any foreign governmental authority
of proceedings to terminate or appoint a trustee to administer a Benefit Plan or
Foreign Pension Plan; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of Energizer or any member of the Controlled Group from a
Multiemployer Plan.
"364-Day Credit Agreement" means that certain 364-Day Credit Agreement of even
- ---------------------------
date herewith among the Borrower, the institutions from time to time parties
thereto as lenders and Bank One, NA, as Administrative Agent, Bank of America,
N.A., as Syndication Agent and Wachovia Bank, N.A., as Documentation Agent, as
the same may be amended, restated, supplemented or otherwise modified and as in
effect from time to time.
"Transaction Documents" means the Loan Documents and the documents executed and
- -----------------------
delivered by Ralston, Energizer or any of their respective Subsidiaries in
connection with the Spin-Off, the Bridge Facilities, the Receivables Purchase
Facility or the Senior Notes, including, without limitation, the Form 10, the
Debt Assumption Agreement, the Receivables Purchase Documents, the Senior Notes,
the Note Purchase Agreement and any documents evidencing the Bridge Facilities.
"Transactions" means the Spin-Off Transactions, the Financing Facilities
- -------------
(including, without limitation, this Agreement and the financing transactions
evidenced by the Loan Documents) and the Debt Assumption.
"Transferee" is defined in Section 13.5 hereof.
- ----------- -------------
"Type" means, with respect to any Loan, its nature as a Floating Rate Loan or a
- -----
Eurodollar Rate Loan.
"Unmatured Default" means an event which, but for the lapse of time or the
- -------------------
giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings customarily
given them in accordance with generally accepted accounting principles in
existence as of the date hereof.
1.2 References. Any references to Subsidiaries of Ralston or Energizer
----------
shall not in any way be construed as consent by the Administrative Agent or any
Lender to the establishment, maintenance or acquisition of any Subsidiary,
except as may otherwise be permitted hereunder.
ARTICLE II: THE REVOLVING LOAN FACILITY
- ------------ ------------------------------
2.1 Revolving Loans. (a) Upon the satisfaction of the conditions precedent
----------------
set forth in Sections 5.1 and 5.2, as applicable, from and including the Initial
------------ ---
Funding Date and prior to the Termination Date, each Lender severally and
not jointly agrees, on the terms and conditions set forth in this Agreement, to
make revolving loans to the Borrower from time to time, in Dollars, in an amount
not to exceed such Lender's Pro Rata Share of Revolving Credit Availability at
such time (each individually, a "Revolving Loan" and, collectively, the
"Revolving Loans"); provided, however, at no time shall the Revolving Credit
-------- -------
Obligations exceed the Aggregate Revolving Loan Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow Revolving
Loans at any time prior to the Termination Date. The Revolving Loans made on
the Initial Funding Date or on or before the third (3rd) Business Day thereafter
shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in Section 2.9 and subject to the other conditions and limitations
------------
therein set forth and set forth in this Article II and set forth in the
-----------
definition of Interest Period; provided, however, that if the Borrower delivers
-------- -------
a Borrowing/Election Notice, signed by it, together with appropriate
documentation in form and substance satisfactory to the Administrative Agent
indemnifying the Lenders for the amounts described in Section 4.4 on or before
-----------
the third (3rd) Business Day prior to the Initial Funding Date, the Revolving
Loans made on the Initial Funding Date may be Eurodollar Rate Loans. Revolving
Loans made after the third (3rd) Business Day after the Initial Funding Date
shall be, at the option of the Borrower, selected in accordance with Section
-------
2.9, either Floating Rate Loans or Eurodollar Rate Loans. On the Termination
Date, the Borrower shall repay in full the outstanding principal balance of the
Revolving Loans. Each Advance under this Section 2.1 shall consist of Revolving
-----------
Loans made by each Lender ratably in proportion to such Lender's respective Pro
Rata Share.
(b) Borrowing/Election Notice. The Borrower shall deliver to the
--------------------------
Administrative Agent a Borrowing/Election Notice, signed by it, in accordance
with the terms of Section 2.7. The Administrative Agent shall promptly notify
-----------
each Lender of such request.
(c) Making of Revolving Loans. Promptly after receipt of the
----------------------------
Borrowing/Election Notice under Section 2.7 in respect of Revolving Loans, the
-----------
Administrative Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission, of the requested Revolving Loan. Each Lender
shall make available its Revolving Loan in accordance with the terms of Section
-------
2.6. The Administrative Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Administrative Agent's office in
Chicago, Illinois on the applicable Borrowing Date and shall disburse such
proceeds in accordance with the Borrower's disbursement instructions set forth
in such Borrowing/Election Notice. The failure of any Lender to deposit the
amount described above with the Administrative Agent on the applicable Borrowing
Date shall not relieve any other Lender of its obligations hereunder to make its
Revolving Loan on such Borrowing Date.
2.2 Swing Line Loans. (A) Amount of Swing Line Loans. Upon the
------------------ ------------------------------
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, as
----------- ---
applicable, from and including the Initial Funding Date and prior to the
Termination Date, the Swing Line Bank may, in its discretion, on the terms and
conditions set forth in this Agreement, make swing line loans to the Borrower
from time to time, in Dollars, in an amount not to exceed the Swing Line
Commitment (each, individually, a "Swing Line Loan" and collectively, the "Swing
Line Loans"); provided, however, at no time shall the Revolving Credit
-------- -------
Obligations exceed the Aggregate Revolving Loan Commitment; and provided,
--------
further, that at no time shall the sum of (a) the outstanding amount of the
- -------
Swing Line Loans, plus (b) the outstanding amount of Revolving Loans made
by the Swing Line Bank pursuant to Section 2.1, exceed the Swing Line Bank's
-----------
Revolving Loan Commitment at such time. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Swing Line Loans
any time prior to the Termination Date.
(B) Borrowing/Election Notice for Swing Line Loans. The Borrower shall
---------------------------------------------------
deliver to the Administrative Agent and the Swing Line Bank a Borrowing/Election
Notice, signed by it, not later than 11:00 a.m. (Chicago time) on the
Borrowing Date of each Swing Line Loan, specifying (i) the applicable Borrowing
Date (which date shall be a Business Day and which may be the same date as the
date the Borrowing/Election Notice is given), and (ii) the aggregate amount of
the requested Swing Line Loan which shall be an amount not less than $1,000,000
and increments of $100,000 in excess thereof. The Swing Line Loans shall at all
times be Floating Rate Loans or shall bear interest at such other rate as shall
be agreed to between the Borrower and the Swing Line Bank at the time of the
making of such Swing Line Loans.
(C) Making of Swing Line Loans. Promptly after receipt of the
------------------------------
Borrowing/Election Notice under Section 2.2(B) in respect of Swing Line Loans,
--------------
the Swing Line Bank may, in its sole discretion make available its Swing Line
Loan, in funds immediately available in Chicago to the Administrative Agent at
its address specified pursuant to Article XIV. The Administrative Agent will
-----------
promptly make the funds so received from the Swing Line Bank available to the
Borrower on the Borrowing Date at the Administrative Agent's aforesaid address.
(D) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid in
--------------------------------
full by the Borrower on or before the fifth (5th) Business Day after the
Borrowing Date for such Swing Line Loan. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans or, in a minimum
amount of $1,000,000 and increments of $100,000 in excess thereof, any portion
of the outstanding Swing Line Loans, upon notice to the Administrative Agent and
the Swing Line Bank. In addition, the Administrative Agent (i) may at any time
in its sole discretion with respect to any outstanding Swing Line Loan, or (ii)
shall, in the event the Borrower shall not have otherwise repaid such Loan, on
the fifth (5th) Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Bank) to make a Revolving Loan in
the amount of such Lender's Pro Rata Share of such Swing Line Loan, for the
purpose of repaying such Swing Line Loan. The making of such Revolving Loans by
the Lenders shall discharge the Borrower's obligation under the first sentence
of this Section 2.2(D) and such failure to pay shall not constitute a Default by
--------------
the Borrower. Promptly following receipt of notice pursuant to this Section
-------
2.2(D) from the Administrative Agent, each Lender shall make available its
- ------
required Revolving Loan or Revolving Loans, in funds immediately available in
Chicago to the Administrative Agent at its address specified pursuant to Article
-------
XIV. Revolving Loans made pursuant to this Section 2.2(D) shall initially be
- --- --------------
Floating Rate Loans and thereafter may be continued as Floating Rate Loans or
converted into Eurodollar Rate Loans in the manner provided in Section 2.9 and
-----------
subject to the other conditions and limitations therein set forth and set forth
in this Article II. Unless a Lender shall have notified the Swing Line Bank,
-----------
prior to its making any Swing Line Loan, that any applicable condition precedent
set forth in Sections 5.1 and 5.2, as applicable, had not then been satisfied,
------------ ---
such Lender's obligation to make Revolving Loans pursuant to this Section 2.2(D)
--------------
to repay Swing Line Loans shall be unconditional, continuing, irrevocable and
absolute and shall not be affected by any circumstances, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Administrative Agent, the Swing Line Bank
or any other Person, (b) the occurrence or continuance of a Default or Unmatured
Default, (c) any adverse change in the condition (financial or otherwise) of the
Borrower or (d) any other circumstances, happening or event whatsoever. In the
event that any Lender fails to make payment to the Administrative Agent of any
amount due under this Section 2.2(D), the Administrative Agent shall be entitled
--------------
to receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Administrative Agent
receives such payment from such Lender or such obligation is otherwise fully
satisfied. In addition to the foregoing, if for any reason any Lender fails to
make payment to the Administrative Agent of any amount due under this Section
-------
2.2(D), such Lender shall be deemed, at the option of the Administrative Agent,
- ------
to have unconditionally and irrevocably purchased from the Swing Line Bank,
without recourse or warranty, an undivided interest and participation in the
applicable Swing Line Loan in the amount of such Revolving Loan, and such
interest and participation may be recovered from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of demand and ending on the date such amount is
received. On the Termination Date, the Borrower shall repay in full the
outstanding principal balance of the Swing Line Loans.
2.3 Rate Options for all Advances; Maximum Interest Periods. The Swing Line
-------------------------------------------------------
Loans shall be Floating Rate Loans at all times or shall bear interest at
such other rate as may be agreed to between the Borrower and the Swing Line Bank
at the time of the making of any such Swing Line Loan. The Revolving Loans may
be Floating Rate Advances or Eurodollar Rate Advances, or a combination thereof,
selected by the Borrower in accordance with Section 2.10. The Borrower may
------------
select, in accordance with Section 2.9, rate options and Interest Periods
------------
applicable to the Revolving Loans; provided that there shall be no more than
--------
eight (8) Interest Periods in effect with respect to all of the Loans at any
time.
2.4 Optional Payments. The Borrower may from time to time and at any time
------------------
upon at least one (1) Business Day's prior written notice repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate Advances
in an aggregate minimum amount of $10,000,000 and in integral multiples of
$1,000,000 in excess thereof. Eurodollar Rate Advances may be voluntarily repaid
or prepaid prior to the last day of the applicable Interest Period, subject to
the indemnification provisions contained in Section 4.4, provided, that the
----------- --------
Borrower may not so prepay Eurodollar Rate Advances unless it shall have
provided at least three (3) Business Days' prior written notice to the
Administrative Agent of such prepayment and provided, further, that optional
-------- -------
prepayments of Eurodollar Rate Advances made pursuant to Section 2.1 shall be
-----------
for the entire amount of the outstanding Eurodollar Rate Advance.
2.5 Reduction of Revolving Loan Commitments. The Borrower may permanently
-----------------------------------------
reduce the Aggregate Revolving Loan Commitment in whole, or in part ratably
among the Lenders, in an aggregate minimum amount of $25,000,000 and integral
multiples of $5,000,000 in excess of that amount (unless the Aggregate Revolving
Loan Commitment is reduced in whole), upon at least three (3) Business Day's
prior written notice to the Administrative Agent, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
-------- -------
Aggregate Revolving Loan Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Obligations. All accrued
Facility Fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder or any reduction of the
Aggregate Revolving Loan Commitment on the amount so reduced.
2.6 Method of Borrowing. Not later than 2:00 p.m. (Chicago time) on each
---------------------
Borrowing Date, each Lender shall make available its Revolving Loan, in
immediately available funds, to the Administrative Agent at its address
specified pursuant to Article XIV. The Administrative Agent will promptly make
-----------
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.7 Method of Selecting Types and Interest Periods for Advances. The
------------------------------------------------------------------
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Administrative Agent irrevocable notice in
substantially the form of Exhibit B hereto (a "Borrowing/Election Notice") not
---------
later than 11:00 a.m. (Chicago time) (a) on or before the Borrowing Date of each
Floating Rate Advance and (b) three (3) Business Days before the Borrowing Date
for each Eurodollar Rate Advance specifying: (i) the Borrowing Date (which
shall be a Business Day) of such Advance; (ii) the aggregate amount of such
Advance; (iii) the Type of Advance selected; and (iv) in the case of each
Eurodollar Rate Advance, the Interest Period applicable thereto; provided,
--------
however, that with respect to the borrowing on the Initial Funding Date, such
notice shall be delivered in accordance with the terms of Section 2.1(a) and
--------------
shall be accompanied by the documentation specified in such Section. The
Borrower shall select Interest Periods so that, to the best of the Borrower's
knowledge, it will not be necessary to prepay all or any portion of any
Eurodollar Rate Advance prior to the last day of the applicable Interest Period
in order to make mandatory prepayments as required pursuant to the terms hereof.
Each Floating Rate Advance and all Obligations other than Loans shall bear
interest from and including the date of the making of such Advance, in the case
of Floating Rate Advances, and the date such Obligation is due and owing in the
case of such other Obligations, to (but not including) the date of repayment
thereof at the Alternate Base Rate, changing when and as such Alternate Base
Rate changes. Changes in the rate of interest on that portion of the Loans
maintained as Floating Rate Loans will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Rate Advance, changing
when and as the Applicable Margin changes. Changes in the rate of interest on
that portion of the Loans maintained as Eurodollar Rate Advances will take
effect simultaneously with each change in the Applicable Margin.
2.8 Minimum Amount of Each Advance. Each Advance (other than an Advance to
-------------------------------
repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum
amount of $10,000,000 (and in multiples of $1,000,000 if in excess thereof);
provided, however, that any Floating Rate Advance may be in the amount of the
- -------- -------
unused Aggregate Revolving Loan Commitment.
2.9 Method of Selecting Types and Interest Periods for Conversion and
------------------------------------------------------------------------
Continuation of Advances.
- --------------------------
(A) Right to Convert. The Borrower may elect from time to time, subject to
-----------------
the provisions of Section 2.3 and this Section 2.9, to convert all or any part
----------- -----------
of a Loan of any Type into any other Type or Types of Loans; provided that any
--------
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
----------------------------------------
continue as Floating Rate Loans unless and until such Floating Rate Loans are
repaid or converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall
continue as Eurodollar Rate Loans until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have repaid such
Loans or given the Administrative Agent a Borrowing/Election Notice in
accordance with Section 2.9(D) requesting that, at the end of such Interest
---------------
Period, such Eurodollar Rate Loans continue as a Eurodollar Rate Loan.
(C) No Conversion Post-Default. Notwithstanding anything to the contrary
----------------------------
contained in Section 2.9(A) or Section 2.9(B), no Loan may be converted into or
-------------- --------------
continued as a Eurodollar Rate Loan (except with the consent of the Required
Lenders) when any Default has occurred and is continuing.
(D) Borrowing/Election Notice. The Borrower shall give the Administrative
--------------------------
Agent an irrevocable Borrowing/Election Notice of each conversion of a Floating
Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan
not later than 11:00 a.m. (Chicago time) three (3) Business Days prior to the
date of the requested conversion or continuation, specifying: (i) the requested
date (which shall be a Business Day) of such conversion or continuation; (ii)
the amount and Type of the Loan to be converted or continued; and (iii) the
amount of Eurodollar Rate Loan(s) into which such Loan is to be converted or
continued, and the duration of the Interest Period applicable thereto.
2.10 Default Rate. After the occurrence and during the continuance of a
-------------
Default, the Administrative Agent or the Required Lenders may, at their option,
by notice to the Borrower declare that, (a) the interest rate(s) applicable to
the Obligations (other than Eurodollar Rate Advances) shall be equal to the
Alternate Base Rate, changing as and when the Alternate Base Rate changes, or,
for Eurodollar Rate Advances, the then highest Eurodollar Rate (utilizing the
highest Applicable Margin in effect from time to time), in each case, plus two
----
percent (2.00%) per annum for all Loans and other Obligations, (b) the fees
payable under Section 3.8 with respect to Letters of Credit shall be calculated
-----------
using the highest Applicable L/C Fee Percentage plus two percent (2.00%) per
----
annum and (c) the Facility Fees shall be calculated using the highest Applicable
Facility Fee Percentage; provided, that after the occurrence and during the
--------
continuance of a Default under Sections 8.1(F), (G) or (I), the interest rate
---------------- --- ---
described in clause (a) above, the Letter of Credit Fee described in clause (b)
---------- ----------
above and the Facility Fee described in clause (c) above shall be applicable
----------
without any election or action on the part of the Administrative Agent or any
other Lender.
2.11 Method of Payment. All payments of principal, interest, fees,
-------------------
commissions and L/C Obligations hereunder shall be made, without setoff,
deduction or counterclaim, in immediately available funds to the Administrative
Agent at the Administrative Agent's address specified pursuant to Article XIV,
-----------
or at any other Lending Installation of the Administrative Agent specified in
writing by the Administrative Agent to the Borrower, by 2:00 p.m. (Chicago time)
on the date when due and shall be made ratably among the Lenders (unless such
amount is not to be shared ratably in accordance with the terms hereof). Each
payment delivered to the Administrative Agent for the account of any Lender
shall be delivered promptly by the Administrative Agent to such Lender in the
same type of funds which the Administrative Agent received at its address
specified pursuant to Article XIV or at any Lending Installation specified in a
-----------
notice received by the Administrative Agent from such Lender. The Borrower
authorizes the Administrative Agent to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest, fees,
commissions and L/C Obligations as it becomes due hereunder. Each reference to
the Administrative Agent in this Section 2.11 shall also be deemed to refer, and
------------
shall apply equally, to each Issuing Bank, in the case of payments required to
be made by the Borrower to such Issuing Bank pursuant to Article III.
-----------
2.12 Evidence of Debt.
------------------
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts (a "Loan Account") evidencing the indebtedness of the
-------------
Borrower to such Lender owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Register maintained by the Administrative Agent pursuant to Section
-------
13.3(C) shall include a control account, and a subsidiary account for each
- -------
Lender, in which accounts (taken together) shall be recorded (i) the date and
the amount of each Loan made hereunder, the Type thereof and the Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, (iii) the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto pursuant to Section
-------
13.3, (iv) the amount of any sum received by the Administrative Agent hereunder
- ----
for the account of the Lenders and each Lender's share thereof, and (v) all
other appropriate debits and credits as provided in this Agreement, including,
without limitation, all fees, charges, expenses and interest.
(c) The entries made in the Loan Account, the Register and the other accounts
maintained pursuant to subsections (a) or (b) of this Section shall be
---------------- ---
conclusive and binding for all purposes, absent manifest error, unless the
Borrower objects to information contained in the Loan Accounts, the Register or
the other accounts within thirty (30) days of the Borrower's receipt of such
information; provided that the failure of any Lender or the Administrative Agent
--------
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms
of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note for such Loans payable to the order of
such Lender and in a form approved by the Administrative Agent in its reasonable
discretion and consistent with the terms of this Agreement. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 13.3) be represented by one or
------------
more promissory notes in such form payable to the order of the payee named
therein.
2.13 Telephonic Notices. The Borrower authorizes the Lenders and the
-------------------
Administrative Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Administrative Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation, signed by an
Authorized Officer, if such confirmation is requested by the Administrative
Agent or any Lender, of each telephonic notice. If the written confirmation
differs in any material respect from the action taken by the Administrative
Agent and the Lenders, the records of the Administrative Agent and the Lenders
with respect to such telephonic notice shall govern absent manifest error. In
case of disagreement concerning such notices, if the Administrative Agent has
recorded telephonic Borrowing/Election Notices, such recordings will be made
available to the Borrower upon the Borrower's request therefor.
2.14 Promise to Pay; Interest and Facility Fees; Interest Payment Dates;
-----------------------------------------------------------------------
Interest and Fee Basis; Loan and Control Accounts.
- --------------------------------------------------------
(A) Promise to Pay. The Borrower unconditionally promises to pay when due
----------------
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the other Loan Documents.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
------------------------
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar quarter, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) Facility Fees and Administrative Agent's Fees. (i) The Borrower shall
----------------------------------------------
pay to the Administrative Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, from and after the Closing Date until the
Termination Date, a facility fee (the "Facility Fee") accruing at the per annum
rate of the then Applicable Facility Fee Percentage, on the Aggregate Revolving
Loan Commitment (whether used or unused). All such Facility Fees payable under
this clause (C) shall be payable quarterly in arrears on each Payment Date
-----------
occurring after the Closing Date (with the first such payment being calculated
for the period from the Closing Date and ending on June 30, 2000), and on the
Termination Date.
(ii) Ralston shall pay or shall cause Energizer to pay to the
Administrative Agent for the sole account of the Administrative Agent and the
Arranger (unless otherwise agreed between the Administrative Agent and the
Arranger and any Lender) the fees set forth in the letter agreement among the
Administrative Agent, the Arranger, Ralston and Energizer dated February 16,
2000, payable at the times and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Margin, Applicable Facility Fee
------------------------------------------------------------------------
Percentage and Applicable L/C Fee Percentage.
- -------------------------------------------------
(i) Interest accrued on Eurodollar Rate Advances, fees payable with
respect to Letters of Credit, Facility Fees, and Floating Rate Advances and
Swing Line Loans where the basis for calculation is the Federal Funds Effective
Rate shall be calculated for actual days elapsed on the basis of a year of 360
days, and interest accrued on Floating Rate Advances and Swing Line Loans where
the basis for calculation is the Prime Rate shall be calculated for actual days
elapsed on the basis of a year of 365, or when appropriate 366, days. Interest
shall be payable for the day an Obligation is incurred but not for the day of
any payment on the amount paid if payment is received prior to 2:00 p.m.
(Chicago time) at the place of payment. If any payment of principal of or
interest on a Loan or any payment of any other Obligations shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest, fees and commissions in
connection with such payment.
(ii) The Applicable Margin, Applicable Facility Fee Percentage and Applicable
L/C Fee Percentage shall be determined from time to time by reference to the
table set forth below, on the basis of the then applicable Leverage Ratio as
described in this Section 2.14(D)(ii):
--------------------
Applicable Fees
----------------
Applicable
Applicable L/C Fee Facility Fee
Leverage Ratio Applicable Margin Percentage Percentage
- ------------- ----------------- ---------- ----------
Level I
<1.0 to 1.0 0.375% 0.375% 0.125%
- ------------- ------ ------ ------
Level II
1.0 to 1.0 and
<1.5 to 1.0 0.50% 0.50% 0.125%
----- ------ ------
Level III
1.5 to 1.0 and
<2.0 to 1.0 0.60% 0.60% 0.15%
----- ----- -----
Level IV
2.0 to 1.0 and
<2.5 to 1.0 0.825% 0.825% 0.175%
------ ------ ------
Level V
2.5 to 1.0 1.05% 1.05% 0.20%
------- ----- -----
For purposes of this Section 2.14(D)(ii), the Leverage Ratio shall be calculated
-------------------
as provided in Section 7.4(A). Upon receipt of the financial statements
---------------
delivered pursuant to Section 7.1(A)(i) and (ii), as applicable, the Applicable
----------------- ----
Margin, Applicable Facility Fee Percentage and Applicable L/C Fee Percentage
shall be adjusted, such adjustment being effective five (5) Business Days
following the Administrative Agent's receipt of such financial statements and
the compliance certificate required to be delivered in connection therewith
pursuant to Section 7.1(A)(iii); provided, that if the Borrower shall not have
------------------- --------
timely delivered its financial statements in accordance with Section 7.1(A)(i)
-----------------
or (ii), as applicable, then commencing on the date upon which such financial
----
statements should have been delivered and continuing until five (5) Business
Days following the date such financial statements are actually delivered, it
shall be assumed for purposes of determining the Applicable Margin, Applicable
Facility Fee Percentage and Applicable L/C Fee Percentage that the Leverage
Ratio was greater than 2.5 to 1.0 and Level V pricing shall be applicable.
(iii) Notwithstanding anything herein to the contrary, from the Closing
Date to but not including the fifth Business Day following receipt of the
Borrower's financial statements delivered pursuant to Section 7.1(A)(i) for the
-----------------
fiscal quarter ending June 30, 2000, the Applicable Margin, Applicable Facility
Fee Percentage and Applicable L/C Fee Percentage shall be set at the greater of
(a) Level III and (b) the Level determined in accordance with clause (ii) above.
2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
-----------------------------------------------------------------------
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the
- ---------------------------------------
Administrative Agent will notify each Lender of the contents of each Aggregate
Revolving Loan Commitment reduction notice, Borrowing/Election Notice repayment
notice and issuance of Letter of Credit notice received by it hereunder. The
Administrative Agent will notify each Lender of the interest rate applicable to
each Eurodollar Rate Loan promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.
2.16 Lending Installations. Each Lender may book its Loans or Letters of
----------------------
Credit at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation. Subject to the provisions of Section 4.6,
-----------
each Lender may, by written or facsimile notice to the Administrative Agent and
the Borrower, designate a Lending Installation through which Loans will be made
by it and for whose account Loan payments and/or payments of L/C Obligations are
to be made.
2.17 Non-Receipt of Funds by the Administrative Agent. Unless the Borrower
-------------------------------------------------
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.18 Termination Date. This Agreement shall be effective until the
-----------------
Termination Date. Notwithstanding the termination of this Agreement, until all
of the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied in cash (to the full extent that such
Obligations are payable in cash), all financing arrangements among the Borrower
and the Lenders shall have been terminated and all of the Letters of Credit
shall have expired, been canceled or terminated, all of the rights and remedies
under this Agreement and the other Loan Documents shall survive.
2.19 Replacement of Certain Lenders. In the event a Lender ("Affected
---------------------------------
Lender") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans or Reimbursement Obligations, which such Lender is obligated to fund
under the terms of this Agreement and which failure has not been cured, (ii)
requested compensation from the Borrower under Sections 4.1, 4.2 or 4.5 to
------------ --- ---
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
------------
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked Section 10.2, then, in any such case, the
------------
Borrower or the Administrative Agent may make written demand on such Affected
Lender (with a copy to the Administrative Agent in the case of a demand by the
Borrower and a copy to the Borrower in the case of a demand by the
Administrative Agent) for the Affected Lender to assign, and such Affected
Lender shall use commercially reasonable efforts to assign pursuant to one or
more duly executed Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of Section 13.3 which the Borrower or the Administrative Agent, as
-------------
the case may be, shall have engaged for such purpose ("Replacement Lender"), all
of such Affected Lender's rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its Revolving Loan
Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit and Swing Line Loans hereunder) in accordance with Section
-------
13.3. The Administrative Agent agrees, upon the occurrence of such events with
- ----
respect to an Affected Lender and upon the written request of the Borrower, to
use its reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. The Administrative Agent is
authorized to execute one or more of such Assignment Agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within five (5) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
Sections 4.1, 4.2 and 4.5 with respect to such Affected Lender and compensation
- --------- --- --- ---
payable under Section 2.14(C) in the event of any replacement of any Affected
----------------
Lender under clause (ii) or clause (iii) of this Section 2.19; provided that
------------ ------------ ------------ --------
upon such Affected Lender's replacement, such Affected Lender shall cease to be
a party hereto but shall continue to be entitled to the benefits of Sections
--------
4.1, 4.2, 4.4, 4.5 and 10.7, as well as to any fees accrued for its account
- --- --- --- --- ----
hereunder and not yet paid, and shall continue to be obligated under Section
-------
11.8 with respect to losses, obligations, liabilities, damages, penalties,
- ----
actions, judgments, costs, expenses or disbursements for matters which occurred
prior to the date the Affected Lender is replaced. Upon the replacement of any
Affected Lender pursuant to this Section 2.19, the provisions of Section 9.2
------------ -----------
shall continue to apply with respect to Loans which are then outstanding with
respect to which the Affected Lender failed to fund its Pro Rata Share and which
failure has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
- ------------- ---------------------------------
3.1 Obligation to Issue Letters of Credit. Subject to the terms and
------------------------------------------
conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the Borrower herein set forth, each Issuing Bank
hereby agrees to issue for the account of the Borrower through such Issuing
Bank's branches as it and the Borrower may jointly agree, one or more standby
Letters of Credit denominated in Dollars in accordance with this Article III,
-----------
from time to time during the period, commencing on the Initial Funding Date and
ending on the fifth Business Day prior to the Revolving Loan Termination Date.
3.2 [Reserved].
----------
3.3 Types and Amounts. No Issuing Bank shall have any obligation to and no
------------------
Issuing Bank shall:
(i) issue (or amend) any Letter of Credit if on the date of issuance (or
amendment), before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would exceed the
Aggregate Revolving Loan Commitment at such time, or (b) the aggregate
outstanding amount of the L/C Obligations would exceed $10,000,000; or
(ii) issue (or amend) any Letter of Credit which has an expiration date
later than the date which is the earlier of (a) one (1) year after the date of
issuance thereof or (b) five (5) Business Days immediately preceding the
Revolving Loan Termination Date; provided that any Letter of Credit with a
--------
one-year tenor may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
------
(b) above).
- ---
3.4 Conditions. In addition to being subject to the satisfaction of the
----------
conditions contained in Sections 5.1 and 5.2, the obligation of any Issuing Bank
------------ ---
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to such Issuing Bank (with copies
delivered simultaneously to the Administrative Agent) at such times and in such
manner as such Issuing Bank may reasonably prescribe, a request for issuance of
such Letter of Credit in substantially the form of Exhibit C hereto, duly
---------
executed applications for such Letter of Credit, and such other documents,
instructions and agreements as may be required pursuant to the terms thereof
(all such applications, documents, instructions, and agreements being referred
to herein as the "L/C Documents"), and the proposed Letter of Credit shall be
reasonably satisfactory to such Issuing Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit and no law, rule
or regulation applicable to such Issuing Bank and no request or directive
(whether or not having the force of law) from a Governmental Authority with
jurisdiction over such Issuing Bank shall prohibit or request that such Issuing
Bank refrain from the issuance of Letters of Credit generally or the issuance of
that Letter of Credit.
3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the terms
--------------------------------------------
and conditions of this Article III and provided that the applicable conditions
-----------
set forth in Sections 5.1 and 5.2 hereof have been satisfied, the applicable
------------- ---
Issuing Bank shall, on the requested date, issue a Letter of Credit on behalf of
the Borrower in accordance with such Issuing Bank's usual and customary
business practices and, in this connection, such Issuing Bank may assume that
the applicable conditions set forth in Section 5.2 hereof have been satisfied
-----------
unless it shall have received notice to the contrary from the Administrative
Agent or a Lender or has knowledge that the applicable conditions have not been
met.
(b) Immediately upon such issuance, the applicable Issuing Bank shall give
the Administrative Agent written or telex notice, or telephonic notice confirmed
promptly thereafter in writing, of the issuance of a Letter of Credit, provided,
--------
however, that the failure to provide such notice shall not result in any
- -------
liability on the part of such Issuing Bank.
(c) The applicable Issuing Bank shall not extend (including as a result of any
evergreen provision) or amend any Letter of Credit unless the requirements of
this Section 3.5 are met as though a new Letter of Credit was being requested
------------
and issued.
3.6 Letter of Credit Participation. Immediately upon the issuance of each
--------------------------------
Letter of Credit hereunder, each Lender with a Pro Rata Share shall be deemed to
have automatically, irrevocably and unconditionally purchased and received
from each Issuing Bank an undivided interest and participation in and to each
Letter of Credit, the obligations of the Borrower in respect thereof, and the
liability of the applicable Issuing Bank thereunder (collectively, an "L/C
Interest") in an amount equal to the amount available for drawing under such
Letter of Credit multiplied by such Lender's Pro Rata Share. If the Borrower
fails at any time to repay a Reimbursement Obligation pursuant to Section 3.7,
-----------
promptly following receipt of notice from the Administrative Agent or the
applicable Issuing Bank, each Lender shall make payment to the Administrative
Agent, for the account of the applicable Issuing Bank, in immediately available
funds in an amount equal to such Lender's Pro Rata Share of the amount of any
unreimbursed payment of an L/C Draft or other draw under a Letter of Credit.
The obligation of each Lender to reimburse the applicable Issuing Bank under
this Section 3.6 shall be unconditional, continuing, irrevocable and absolute.
------------
In the event that any Lender fails to make payment to the Administrative Agent
of any amount due under this Section 3.6, the Administrative Agent shall be
-----------
entitled to receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Administrative
Agent receives such payment from such Lender or such obligation is otherwise
fully satisfied; provided, however, that nothing contained in this sentence
-------- -------
shall relieve such Lender of its obligation to reimburse the applicable Issuing
Bank for such amount in accordance with this Section 3.6.
------------
3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
-------------------------
irrevocably and absolutely to pay immediately to the Administrative Agent, for
the account of the Lenders, the amount of each advance drawn under or pursuant
to a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Administrative Agent for an advance made under a
Letter of Credit or L/C Draft being hereinafter referred to as a "Reimbursement
Obligation" with respect to such Letter of Credit or L/C Draft), each such
reimbursement to be made by the Borrower no later than the Business Day on which
the applicable Issuing Bank makes payment of each such L/C Draft or, in the case
of any other draw on a Letter of Credit, the date specified in the demand of the
applicable Issuing Bank. If the Borrower at any time fails to repay a
Reimbursement Obligation pursuant to this Section 3.7, such failure shall not
-----------
constitute a Default if the Revolving Credit Obligations do not, and after
making Revolving Loans in repayment of such Reimbursement Obligation would not,
exceed the Aggregate Revolving Loan Commitments and the conditions set forth in
Sections 5.2(i) and (ii) have been satisfied, and the Borrower shall be deemed
- ---------------- ----
to have elected to borrow Revolving Loans from the Lenders, as of the date of
the advance giving rise to the Reimbursement Obligation, equal in amount to the
amount of the unpaid Reimbursement Obligation. Such Revolving Loans shall be
made as of the date of the payment giving rise to such Reimbursement Obligation,
automatically, without notice and without any requirement to satisfy the
conditions precedent otherwise applicable to an Advance of Revolving Loans.
Such Revolving Loans shall constitute a Floating Rate Advance, the proceeds of
which Advance shall be used to repay such Reimbursement Obligation. If, for any
reason, the Borrower fails to repay a Reimbursement Obligation on the day such
Reimbursement Obligation arises and, for any reason, the Lenders are unable to
make or have no obligation to make Revolving Loans, then such Reimbursement
Obligation shall bear interest from and after such day, until paid in full, at
the interest rate applicable to a Floating Rate Advance.
3.8 Letter of Credit Fees. The Borrower agrees to pay:
------------------------
(i) quarterly, in arrears, to the Administrative Agent for the ratable
benefit of the Lenders, except as set forth in Section 9.2, a letter of credit
-----------
fee at a rate per annum equal to the Applicable L/C Fee Percentage on the
average daily outstanding face amount available for drawing under all standby
Letters of Credit;
(ii) quarterly, in arrears, to the applicable Issuing Bank, a letter of
credit fronting fee in an amount or at a rate per annum to be negotiated by the
Borrower and the applicable Issuing Bank at the time of issuance of each standby
Letter of Credit on the average daily outstanding face amount available for
drawing under all Letters of Credit issued by such Issuing Bank; and
(iii) to the applicable Issuing Bank, all customary fees and other issuance,
amendment, cancellation, document examination, negotiation, transfer and
presentment expenses and related charges in connection with the issuance,
amendment, cancellation, presentation of L/C Drafts, negotiation, transfer and
the like customarily charged by such Issuing Bank with respect to standby
Letters of Credit, payable at the time of invoice of such amounts.
3.9 Issuing Bank Reporting Requirements. Upon the request of any Lender,
-------------------------------------
each Issuing Bank shall furnish to such Lender copies of any Letter of Credit
and any application for or reimbursement agreement with respect to a Letter of
Credit to which such Issuing Bank is party.
3.10 Indemnification; Exoneration. (A) In addition to amounts payable as
-----------------------------
elsewhere provided in this Article III, the Borrower hereby agrees to protect,
-----------
indemnify, pay and save harmless the Administrative Agent, each Issuing Bank and
each Lender from and against any and all liabilities and costs which the
Administrative Agent, such Issuing Bank or such Lender may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit other than, in the case of such Issuing Bank, as a result of its gross
negligence or willful misconduct, as determined by the final judgment of a court
of competent jurisdiction, or (ii) the failure of such Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
------- --------
Authority (all such acts or omissions herein called "Governmental Acts").
(B) As among the Borrower, the Lenders, the Administrative Agent and each
Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter of Credit by, the beneficiary of any Letters of Credit.
In furtherance and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit applications and Letter of Credit reimbursement
agreements executed by the Borrower at the time of request for any Letter of
Credit, neither the Administrative Agent, any Issuing Bank nor any Lender shall
be responsible (in the absence of gross negligence or willful misconduct in
connection therewith, as determined by the final judgment of a court of
competent jurisdiction): (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
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) for failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Administrative Agent, the Issuing Banks and the Lenders, including, without
limitation, any Governmental Acts. None of the above shall affect, impair, or
prevent the vesting of any Issuing Bank's rights or powers under this Section
-------
3.10.
- ----
(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put such Issuing Bank, the Administrative Agent or any Lender
under any resulting liability to the Borrower or relieve the Borrower of any of
its obligations hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 3.10 shall survive the payment in full of principal and interest
- -------------
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
3.11 Cash Collateral. Notwithstanding anything to the contrary herein or in
---------------
any application for a Letter of Credit, after the occurrence and during the
continuance of a Default, the Borrower shall, upon the Administrative Agent's
demand, deliver to the Administrative Agent for the benefit of the Lenders and
the Issuing Banks, cash, or other collateral of a type satisfactory to the
Required Lenders, having a value, as determined by such Lenders, equal to the
aggregate outstanding L/C Obligations. In addition, but without duplication of
amounts deposited pursuant to the foregoing sentence, if the Revolving Credit
Availability is at any time less than the amount of contingent L/C Obligations
outstanding at any time, the Borrower shall deposit cash collateral with the
Administrative Agent in an amount equal to the amount by which such L/C
Obligations exceed such Revolving Credit Availability. Any such collateral
shall be held by the Administrative Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Administrative Agent for the benefit of
the Lenders and the Issuing Banks as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the other Obligations
as the Administrative Agent shall determine. If no Default shall be continuing,
amounts remaining in any cash collateral account established pursuant to this
Section 3.11 which are not to be applied to reimburse the Issuing Banks for
- -------------
amounts actually paid or to be paid by the Issuing Banks in respect of a Letter
of Credit or L/C Draft, shall be returned promptly to the Borrower (after
deduction of the Administrative Agent's reasonable out-of-pocket expenses
incurred in connection with such cash collateral account) as the Letters of
Credit expire.
ARTICLE IV: YIELD PROTECTION; TAXES
- ------------ -------------------------
4.1 Yield Protection. If, on or after the date of this Agreement, the
-----------------
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to any Taxes,
or changes the basis of taxation of payments (other than with respect to
Excluded Taxes) to any Lender in respect of its Loans or L/C Interests, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Rate
Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding or
maintaining its Loans or L/C Interests or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with its Loans or
L/C Interests, or requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Loans, L/C
Interests or Revolving Loan Commitment or to reduce the return received by such
Lender or applicable Lending Installation in connection with such Loans, L/C
Interests or Revolving Loan Commitment, then, within fifteen (15) days of demand
by such Lender, the Borrower shall pay such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduction in
amount received.
Notwithstanding the foregoing provisions of this Section 4.1, if any Lender
-----------
fails to notify the Borrower of any event or circumstance which will entitle
such Lender to compensation pursuant to this Section 4.1 within ninety (90) days
-----------
after such Lender obtains knowledge of such event or circumstance, then such
Lender shall not be entitled to compensation from the Borrower for any amount
arising prior to the date which is ninety (90) days before the date on which
such Lender notifies the Borrower of such event or circumstance.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
-------------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender reasonably determines is attributable to this Agreement,
its Loans, L/C Interests or its Revolving Loan Commitment hereunder (after
taking into account such Lender's customary policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 Availability of Types of Advances. If any Lender determines that
-------------------------------------
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Rate Advances are
not available or (ii) the interest rate applicable to Eurodollar Rate Advances
does not accurately reflect the cost of making or maintaining Eurodollar Rate
Advances, then the Administrative Agent shall suspend the availability of
Eurodollar Rate Advances and require any affected Eurodollar Rate Advances to be
repaid or converted to Floating Rate Advances, subject to the payment of any
funding indemnification amounts required by Section 4.4.
------------
4.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance
------------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom (excluding loss of margin),
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Rate Advance.
4.5 Taxes. (i) All payments by the Borrower to or for the account of any
-----
Lender or the Administrative Agent hereunder or under any of the other Loan
Documents shall be made free and clear of and without deduction for any and all
Taxes. If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, any Issuing Bank or the
Administrative Agent, (a) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.5) such Lender, such Issuing Bank
-----------
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (b) the Borrower
shall make such deductions, (c) the Borrower shall pay the full amount deducted
to the relevant authority in accordance with applicable law and (d) the Borrower
shall furnish to the Administrative Agent the original copy of a receipt
evidencing payment thereof within thirty (30) days after such payment is made.
Such Lender, such Issuing Bank or the Administrative Agent, as the case may be,
shall promptly reimburse the Borrower for such payments to the extent such
Lender, such Issuing Bank or the Administrative Agent receives actual knowledge
that it has received any tax credit or other benefit in connection with such tax
payments and that such tax credit or benefit is clearly attributable to this
Agreement.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any
promissory note issued hereunder or from the execution or delivery of, or
otherwise with respect to, this Agreement or any promissory note issued
hereunder ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Administrative Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 4.5) paid by the Administrative Agent or such Lender and any liability
- ------------
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within thirty
(30) days of the date the Administrative Agent or such Lender makes demand
therefor pursuant to Section 4.6.
------------
(iv) Each Lender that is not incorporated under the laws of the United States
of America or a state thereof (each a "Non-U.S. Lender") agrees that it will,
not less than ten (10) Business Days after the date of this Agreement, deliver
to each of the Borrower and the Administrative Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 4.5 with respect to Taxes imposed by the United States; provided
------------
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request (without cost to the
Borrower) to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any promissory
note issued hereunder pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the Administrative Agent),
at the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental authority
of the United States or any other country or any political subdivision thereof
asserts a claim that the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason other than as a
result of the gross negligence or willful misconduct of the Administrative
Agent), such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this subsection, together with all costs and expenses
related thereto (including attorneys fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the Administrative
Agent). The obligations of the Lenders under this Section 4.5(vii) shall
----------------
survive the payment of the Obligations, the termination of the Letters of Credit
and termination of this Agreement.
4.6 Lender Statements; Survival of Indemnity. To the extent reasonably
--------------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Rate Loans to reduce any liability of the Borrower to
such Lender under Sections 4.1, 4.2 and 4.5 or to avoid the unavailability of
------------ --- ---
Eurodollar Rate Advances under Section 4.3, so long as such designation is not,
-----------
in the reasonable judgment of such Lender, disadvantageous to such Lender. Each
Lender shall deliver a written statement of such Lender to the Borrower
(with a copy to the Administrative Agent) as to the amount due, if any, under
Section 4.1, 4.2, 4.4 or 4.5. Such written statement shall set forth in
- ------------ --- --- ---
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Rate Loan shall be calculated as though each Lender
funded its Eurodollar Rate Loan through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not, and without regard to loss of margin. Unless otherwise provided herein,
the amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 4.1, 4.2, 4.4 and 4.5 shall survive payment of
------------ --- --- ---
the Obligations, termination of the Letters of Credit and termination of this
Agreement.
ARTICLE V: CONDITIONS PRECEDENT
- ----------- ---------------------
5.1 Initial Advances and Letters of Credit. The Lenders shall not be
-------------------------------------------
required to make the initial Loans or issue any Letters of Credit unless the
Borrower has furnished to the Administrative Agent each of the following, with
sufficient copies for the Lenders, all in form and substance satisfactory to the
Administrative Agent and the Lenders:
(1) Copies of the Certificate of Incorporation of Ralston, Energizer and
each of the Subsidiary Guarantors (other than Energizer) (collectively, the
"Loan Parties"), together with all amendments and a certificate of good
standing, both certified by the appropriate governmental officer in its
jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of each of the
Loan Parties, of its By-Laws and of its Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the execution of the Loan Documents entered into by it;
(3) An incumbency certificate, executed by the Secretary or Assistant Secre-
taryof each of the Loan Parties, which shall identify by name and title and bear
the signature of the officers of the Loan Parties authorized to sign the Loan
Documents and the officers of Ralston and (from and after the consummation of
the Debt Assumption) Energizer authorized to make borrowings hereunder, upon
which certificate the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower; provided, that any officer who will neither
be a signatory to this Agreement nor an individual requesting borrowings
hereunder, shall be permitted to deliver a facsimile of such officer's signature
in satisfaction of this Section 5.1(3);
---------------
(4) Certificates, in form and substance satisfactory to the Administrative
Agent, (a) signed by the Chief Financial Officer of Ralston, stating that on the
Initial Funding Date all the representations in this Agreement made by Ralston
are true and correct and no Default or Unmatured Default has occurred and is
continuing and (b) signed by the Executive Vice President-Finance and Control of
Energizer, stating that on the Initial Funding Date, all of the representations
in this Agreement to be made by Energizer on the Spin-Off Date would be true and
correct if such representations were made by Energizer on the Initial Funding
Date;
(5) The written opinion of the Loan Parties' counsel, addressed to the
Administrative Agent and the Lenders, in substantially the form attached hereto
as Exhibit E and containing assumptions and qualifications acceptable to the
----------
Administrative Agent and the Lenders;
(6) A certificate in form and substance satisfactory to the Administrative
Agent, signed by the chief financial officer or Treasurer of Energizer, stating
that, after taking into consideration all information available at such time,
such officer neither knows nor should know of any information that would prevent
the Net Worth Condition from being satisfied as of the Spin-Off Date, after
giving effect to the Spin-Off Transactions and after all post-closing
adjustments have been made;
(7) Evidence satisfactory to the Administrative Agent that, except as set
forth on Schedule 6.21 of this Agreement, (i) all conditions precedent to the
consummation of the Spin-Off have been satisfied in all material respects, (ii)
the Spin-Off Transactions have been approved by all necessary corporate action
of Ralston's and Energizer's Board of Directors and, if required, shareholders,
and the terms of the Spin-Off Transactions have not been amended, waived or
modified in any material respect from those set forth in the Form 10 without the
approval of the Administrative Agent (such approval not to be unreasonably
withheld); (iii) the Tax Ruling and all necessary regulatory approvals have been
obtained for the consummation of the Spin-Off Transactions; and (iv) the
aggregate amount of all loans and committed Financing Facilities (including this
Agreement and the 364-Day Credit Agreement) available to Energizer upon
consummation of the Spin-Off Transactions equals or exceeds $650,000,000, and
all such commitments are identified on Schedule 6.21(iv) attached hereto;
(8) Evidence satisfactory to the Administrative Agent that there exists no
injunction or temporary restraining order which, in the judgment of the
Administrative Agent, would prohibit the making of the Loans, the consummation
of the Spin-Off Transactions, the consummation of the Debt Assumption and the
other transactions contemplated by the Transaction Documents or any litigation
seeking such an injunction or restraining order;
(9) Written money transfer instructions reasonably requested by the
Administrative Agent, addressed to the Administrative Agent and signed by an
Authorized Officer;
(10) Opinions of value, solvency and other appropriate factual information and
advice in form and substance reasonably satisfactory to it and from the chief
financial officer of Energizer supporting the conclusions that after giving
effect to the Spin-Off Transactions and the Debt Assumption, Energizer and its
Subsidiaries on a consolidated basis are Solvent and will be Solvent subsequent
to incurring the indebtedness contemplated under the Transaction Documents, will
be able to pay its debts and liabilities as they become due and will not be left
with unreasonably small working capital for general corporate purposes;
(11) Evidence satisfactory to the Administrative Agent that Ralston had paid
or has caused Energizer to pay to the Administrative Agent and the Arranger the
fees agreed to in the fee letter dated February 16, 2000, among the
Administrative Agent, the Arranger, Ralston and Energizer; and
(12) Such other documents as the Administrative Agent or any Lender or its
counsel may have reasonably requested, including, without limitation, the
Subsidiary Guaranty, opinions of counsel, an officer's no-default certificate
and each other document reflected on the List of Closing Documents attached as
Exhibit F to this Agreement.
- ----------
5.2 Each Advance and Letter of Credit. The Lenders shall not be required to
---------------------------------
make any Advance, or issue any Letter of Credit, unless on the applicable
Borrowing Date, or in the case of a Letter of Credit, the date on which the
Letter of Credit is to be issued, both before and after taking into account the
proposed borrowing or Letter of Credit:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in Article VI are true and
----------
correct in all material respects as of such Borrowing Date except for changes in
the Schedules to this Agreement reflecting transactions permitted by or not in
violation of this Agreement; and
(iii) The Revolving Credit Obligations do not, and after making such
proposed Advance or issuing such Letter of Credit would not, exceed the
Aggregate Revolving Loan Commitment.
Each Borrowing/Election Notice with respect to each such Advance and the
letter of credit application with respect to each Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 5.2(i) and (ii) have been satisfied. Any Lender may
---------------- ----
require a duly completed officer's certificate in substantially the form of
Exhibit G hereto and/or a duly completed compliance certificate in substantially
- ---------
the form of Exhibit H hereto as a condition to making an Advance.
----------
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
- ------------ --------------------------------
In order to induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and the other financial accommodations to
Ralston and, after the consummation of the Debt Assumption, Energizer, and to
issue the Letters of Credit described herein, (a) Ralston represents and
warrants as follows in Section 6.1, 6.2, 6.3, 6.14, 6.18 and 6.21 to each Lender
----------- --- --- ---- ---- ---
and the Administrative Agent as of the Closing Date, the Initial Funding Date
and the Spin-Off Date, giving effect to the consummation of the transactions
contemplated by the Transaction Documents as of each such date, (b) Energizer
represents and warrants as follows in Sections 6.4 through 6.23 and Section 6.25
------------ ---- ------------
to each Lender and the Administrative Agent as of the Spin-Off Date (immediately
following the consummation of the Debt Assumption), giving effect to the
consummation of the transactions contemplated by the Transaction Documents as of
such date, and thereafter on each date as required by Section 5.2 (other than
-----------
with respect to Section 6.8 which shall only be made by Energizer as of the
------------
Spin-Off Date) and (c) Energizer represents and warrants as follows in Section
-------
6.24 to each Lender and the Administrative Agent as a condition to the Debt
- ----
Assumption, on each Adjustment Date and on the Opening Balance Sheet Delivery
Date (in each case, as of the Spin-Off Date, taking into account the
post-closing adjustments made as of such date):
6.1 Organization; Corporate Powers of Ralston. Each of Ralston and
---------------------------------------------
Energizer (i) is a corporation, limited liability company, partnership or other
commercial entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign entity and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.
6.2 Authority of Ralston.
----------------------
(A) Ralston has the requisite power and authority to execute, deliver and
perform each of the Transaction Documents which are to be executed by it in
connection with the Transactions or which have been executed by it as required
by this Agreement and the other Loan Documents and (ii) to file the Transaction
Documents which must be filed by it in connection with the Transactions or which
have been filed by it as required by this Agreement, the other Loan
Documents or otherwise with any Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be, of
each of the Transaction Documents which must be executed or filed by Ralston in
connection with the Transactions or which have been executed or filed as
required by this Agreement, the other Loan Documents or otherwise and to which
Ralston is party, and the consummation of the transactions contemplated thereby,
have been duly approved by the respective boards of directors of Ralston and
Energizer and, if necessary, the shareholders of Ralston, and such approvals
have not been rescinded. No other action or proceedings on the part of Ralston
or Energizer are necessary to consummate such transactions.
(C) Each of the Transaction Documents to which Ralston is a party has been
duly executed, delivered or filed, as the case may be, by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms (except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles, including concepts of reasonableness, materiality,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies (whether enforcement
is sought by proceedings in equity or at law)), is in full force and effect and
no material term or condition thereof has been amended, modified or waived from
the terms and conditions contained in the Transaction Documents delivered to the
Administrative Agent pursuant to Section 5.1 without the prior written consent
-----------
of the Required Lenders (or all of the Lenders if required by Section 9.3), and
-----------
Ralston has performed and complied with all the material terms, provisions,
agreements and conditions set forth therein and required to be performed or
complied with by Ralston on or before the Initial Funding Date, and no unmatured
default, default or breach of any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents for Ralston. The execution, delivery
----------------------------------------------
and performance of each of the Loan Documents and other Transaction
Documents to which Ralston is a party do not and will not (i) conflict with the
certificate or articles of incorporation or by-laws of Ralston or Energizer,
(ii) with respect to the Transaction Documents other than the Loan Documents,
constitute a tortious interference with any Contractual Obligation of Ralston or
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law (including,
without limitation, any Environmental Property Transfer Act) or Contractual
Obligation of Ralston, or require termination of any Contractual Obligation,
except such interference, breach, default or termination which individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iii) with respect to the Loan Documents, constitute a tortious
interference with any Contractual Obligation of Ralston or conflict with, result
in a breach of or constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Ralston, or
require termination of any Contractual Obligation, except such interference,
breach or default which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or assets
of Ralston, other than Liens permitted or created by the Loan Documents, or (v)
require any approval of Ralston's or Energizer's Board of Directors or
shareholders, as applicable, except such as have been obtained. Except as set
forth on Schedule 6.3 to this Agreement, the execution, delivery and performance
------------
of each of the Transaction Documents to which Ralston is a party do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.4 Organization; Corporate Powers of Energizer. Energizer and each of its
--------------------------------------------
Subsidiaries (i) is a corporation, limited liability company, partnership or
other commercial entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
to do business as a foreign entity and is in good standing under the laws of
each jurisdiction in which failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.
6.5 Authority of Energizer.
------------------------
(A) Energizer and each of its Subsidiaries has the requisite power and
authority to execute, deliver and perform each of the Transaction Documents
which are to be executed by it in connection with the Transactions or which have
been executed by it as required by this Agreement and the other Loan
Documents and (ii) to file the Transaction Documents which must be filed by it
in connection with the Transactions or which have been filed by it as required
by this Agreement, the other Loan Documents or otherwise with any Governmental
Authority.
(B) The execution, delivery, performance and filing, as the case may be, of
each of the Transaction Documents which must be executed or filed by Energizer
or any of its Subsidiaries in connection with the Transactions or which have
been executed or filed as required by this Agreement, the other Loan Documents
or otherwise and to which Energizer or any of its Subsidiaries is party, and the
consummation of the transactions contemplated thereby, have been duly approved
by the respective boards of directors and, if necessary, the shareholders of
Energizer and its Subsidiaries, and such approvals have not been rescinded. No
other action or proceedings on the part of Energizer or its Subsidiaries are
necessary to consummate such transactions.
(C) Each of the Transaction Documents to which Energizer or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles,
including concepts of reasonableness, materiality, good faith and fair dealing
and the possible unavailability of specific performance, injunctive relief or
other equitable remedies (whether enforcement is sought by proceedings in equity
or at law)), is in full force and effect (other than as a result of expiration
in accordance with its terms) and no material term or condition thereof has been
amended, modified or waived from the terms and conditions contained in the
Transaction Documents delivered to the Administrative Agent pursuant to Section
-------
5.1 without the prior written consent of the Required Lenders (or all of the
Lenders if required by Section 9.3), and Energizer and its Subsidiaries have,
-----------
and, to the best of Energizer's and its Subsidiaries' knowledge, all other
parties thereto have, performed and complied with all the material terms,
provisions, agreements and conditions set forth therein and required to be
performed or complied with by such parties on or before the Initial Funding Date
or Spin-Off Date, as applicable, and no unmatured default, default or breach of
any covenant by any such party exists thereunder.
6.6 No Conflict; Governmental Consents for Energizer. The execution,
-----------------------------------------------------
delivery and performance of each of the Loan Documents and other Transaction
Documents to which Energizer or any of its Subsidiaries is a party do not and
will not (i) conflict with the certificate or articles of incorporation or
by-laws of Energizer or any such Subsidiary, (ii) with respect to the
Transaction Documents other than the Loan Documents, constitute a tortious
interference with any Contractual Obligation of any Person or conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Energizer
or any such Subsidiary, or require termination of any Contractual Obligation,
except such interference, breach, default or termination which individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iii) with respect to the Loan Documents, constitute a tortious
interference with any Contractual Obligation of any Person or conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of Energizer or
any such Subsidiary, or require termination of any Contractual Obligation,
except such interference, breach or default which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(iv) result in or require the creation or imposition of any Lien whatsoever upon
any of the property or assets of Energizer or any such Subsidiary, other than
Liens permitted or created by the Loan Documents, or (v) require any approval of
Energizer's or any such Subsidiary's Board of Directors or shareholders except
such as have been obtained. Except as set forth on Schedule 6.6 to this
------------
Agreement, the execution, delivery and performance of each of the Transaction
Documents to which Energizer or any of its Subsidiaries is a party do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
6.7 Financial Statements.
---------------------
(A) The pro forma historical balance sheet (as updated by the pro forma
--- ----- --- -----
historical balance sheet prepared with respect to Energizer and its Subsidiaries
as of February 29, 2000 (the "Supplemental Financial Statement")), income
statements and statements of cash flow of Energizer and its Subsidiaries
contained in the Form 10 and the projections and assumptions contained in the
Borrower's Confidential Information Memorandum dated February, 2000 (the "Bank
Book") under Appendix A thereof, copies of which are attached hereto as Schedule
---------- --------
6.7 to this Agreement, present on a pro forma basis the financial condition of
- --- --- -----
Energizer and such Subsidiaries as of such date, and reflect on a pro forma
--- -----
basis those liabilities reflected in the notes thereto and resulting from
consummation of the Transactions and the other transactions contemplated by this
Agreement, and the payment or accrual of all transaction costs payable on the
Initial Funding Date and the Spin-Off Date with respect to any of the foregoing
and demonstrate that, after giving effect to such transactions, Energizer and
its Subsidiaries can repay their debts and satisfy their other obligations as
and when due, and can comply with the requirements of this Agreement. The
projections and assumptions contained in the Bank Book were prepared in good
faith and represent management's opinion based on the information available to
the Borrower at the time so furnished and, since the preparation thereof and of
the pro forma historical financial statements contained in the Form 10 (as
--- -----
updated by the Supplemental Financial Statement) there has occurred no material
adverse change in the business, financial condition, operations, or prospects of
Energizer or any of its Subsidiaries, or Energizer and its Subsidiaries taken as
a whole (it being understood that so long as the representation and warranty
contained in Section 6.24 is true and correct at each time Energizer is required
------------
to make such representation and warranty pursuant to the introduction to this
Article VI, changes from the "Net transactions with RPCO" line item on the pro
- ----------- ---
forma statement of cash flow will not constitute a material adverse change).
- -----
(B) Complete and accurate copies of the audited financial statements and
the audit report related thereto prepared with respect to Energizer and its
Subsidiaries as of September 30, 1999 and unaudited financial statements of
prepared with respect to Energizer and its Subsidiaries as of December 31, 1999
have been delivered to the Administrative Agent.
(C) Since the financial statements prepared as of December 31, 1999, the
historical pro forma financial statements contained in the Form 10 (as updated
--- -----
by the Supplemental Financial Statement), and the projections and assumptions
included as Appendix A of the Bank Book, Energizer and its Subsidiaries have
conducted their respective operations (including, without limitation, any
operations and transactions with Ralston, any holder or holders of any of the
Equity Interests of Energizer, or with any Affiliate of Energizer which is not
its Subsidiary) according to their ordinary and usual course of business and
consistent with past practice, as reflected in such financial statements, Form
10 (as updated by the Supplemental Financial Statement) and the Bank Book, as
applicable, in all material respects (it being understood that so long as the
representation and warranty contained in Section 6.24 is true and correct at
------------
each time Energizer is required to make such representation and warranty
pursuant to the introduction to this Article VI, changes from the "Net
-----------
transactions with RPCO" line item on the pro forma statement of cash flow will
--- -----
not constitute a material deviation from past operations).
6.8 No Material Adverse Change. Since each of (a) December 31, 1999
-----------------------------
(determined by reference to the financial statements prepared with respect to
Energizer and its Subsidiaries), (b) the pro forma historical financial
--- -----
statements set forth in the Form 10 (as updated by the Supplemental Financial
Statement), and (c) the projections and assumptions included as Appendix A of
the Bank Book, there has occurred no change in the business, properties,
condition (financial or otherwise), performance, results of operations or
prospects of Energizer, or Energizer and its Subsidiaries taken as a whole or
any other event which has had or would reasonably be expected to have a Material
Adverse Effect (it being understood that so long as the representation and
warranty contained in Section 6.24 is true and correct at each time Energizer is
------------
required to make such representation and warranty pursuant to the introduction
to this Article VI, changes from the "Net transactions with RPCO" line item on
----------
the pro forma statement of cash flow will not constitute an event which has had
--- -----
or would reasonably be expected to have a Material Adverse Effect).
6.9 Taxes.
-----
(A) Tax Examinations. All deficiencies which have been asserted against
-----------------
Energizer or any of Energizer's Subsidiaries as a result of any federal, state,
local or foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or are
being contested in good faith, and no issue has been raised by any taxing
authority in any such examination which, by application of similar principles,
reasonably can be expected to result in assertion by such taxing authority of a
material deficiency for any other year not so examined which has not been
reserved for in Energizer's consolidated financial statements to the extent, if
any, required by Agreement Accounting Principles. Except as permitted pursuant
to Section 7.2(D), neither Energizer nor any of Energizer's Subsidiaries
---------------
anticipates any material tax liability with respect to the years which have not
been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of Energizer and its
------------------
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. Energizer has no knowledge of any proposed tax
assessment against Energizer or any of its Subsidiaries that will have or could
reasonably be expected to have a Material Adverse Effect.
6.10 Litigation; Loss Contingencies and Violations. Except as set forth in
----------------------------------------------
Schedule 6.10 (the "Disclosed Litigation"), there is no action, suit,
- --------------
proceeding, arbitration or, to Energizer's knowledge, investigation before or by
- ----------
any Governmental Authority or private arbitrator pending or, to Energizer's
knowledge, threatened against Energizer, any of its Subsidiaries or any property
of any of them. Neither any of the Disclosed Litigation nor any action, suit,
proceeding, arbitration or investigation which has commenced since the Closing
Date (or the most recent update of the Disclosed Litigation) (i) challenges the
validity or the enforceability of any material provision of the Transaction
Documents or (ii) has or could reasonably be expected to have a Material Adverse
Effect. There is no material loss contingency within the meaning of Agreement
Accounting Principles which has not been reflected in the consolidated financial
statements of Energizer prepared and delivered pursuant to Section 7.1(A) for
--------------
the fiscal period during which such material loss contingency was incurred.
Neither Energizer nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will have or could reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or could reasonably be expected to have a Material Adverse
Effect.
6.11 Subsidiaries. Schedule 6.11 to this Agreement (i) contains a
------------ --------------
description of the corporate structure of Energizer, its Subsidiaries and any
other Person in which Energizer or any of its Subsidiaries holds a material
Equity Interest after giving effect to the Spin-Off Transactions; and (ii)
accurately sets forth (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of Energizer and the direct
and indirect Subsidiaries of Energizer are qualified to transact business as a
foreign corporation, (B) the authorized, issued and outstanding shares of each
class of Capital Stock of Energizer and each of its Subsidiaries and the owners
of such shares (both as of the consummation of the Spin-Off and on a
fully-diluted basis), and (C) a summary of the direct and indirect partnership,
joint venture, or other Equity Interests, if any, of Energizer and each
Subsidiary of Energizer in any Person that is not a corporation. After the
formation or acquisition of any New Subsidiary permitted under Section 7.3(F),
--------------
if requested by the Administrative Agent, Energizer shall provide a supplement
to Schedule 6.11 to this Agreement reflecting the addition of such New
--------------
Subsidiary. Except as disclosed on Schedule 6.11, none of the issued and
--------------
outstanding Capital Stock of Energizer or any of Energizer's Subsidiaries is
subject to any vesting, redemption, or repurchase agreement, and there are no
warrants or options outstanding with respect to such Capital Stock. The
outstanding Capital Stock of Energizer and each of its Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and the stock of
Energizer's Subsidiaries is not Margin Stock.
6.12 ERISA. No Benefit Plan has incurred any material accumulated funding
-----
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither Energizer nor any member of the Controlled Group
has incurred any material liability to the PBGC which remains outstanding other
than the payment of premiums. As of the last day of the most recent prior plan
year, the market value of assets under each Benefit Plan, other than any
Multiemployer Plan, was not by a material amount less than the present value of
benefit liabilities thereunder (determined in accordance with the actuarial
valuation assumptions described therein). Neither Energizer nor any member of
the Controlled Group has (i) failed to make a required contribution or payment
to a Multiemployer Plan of a material amount or (ii) incurred a material
complete or partial withdrawal under Section 4203 or Section 4205 of ERISA from
a Multiemployer Plan. Neither Energizer nor any member of the Controlled Group
has failed to make an installment or any other payment of a material amount
required under Section 412 of the Code on or before the due date for such
installment or other payment. Each Plan, Foreign Employee Benefit Plan and
Non-ERISA Commitment complies in all material respects in form, and has been
administered in all material respects in accordance with its terms and, in
accordance with all applicable laws and regulations, including but not limited
to ERISA and the Code. There have been no and there is no prohibited
transaction described in Sections 406 of ERISA or 4975 of the Code with respect
to any Plan for which a statutory or administrative exemption does not exist
which could reasonably be expected to subject Energizer or any of is
Subsidiaries to material liability. Neither Energizer nor any member of the
Controlled Group has taken or failed to take any action which would constitute
or result in a Termination Event, which action or inaction could reasonably be
expected to subject Energizer or any of its Subsidiaries to material liability.
Neither Energizer nor any member of the Controlled Group is subject to any
material liability under, or has any potential material liability under, Section
4063, 4064, 4069, 4204 or 4212(c) of ERISA. The present value of the aggregate
liabilities to provide all of the accrued benefits under any Foreign Pension
Plan do not exceed the current fair market value of the assets held in trust or
other funding vehicle for such plan by a material amount. With respect to any
Foreign Employee Benefit Plan other than a Foreign Pension Plan, reasonable
reserves have been established in accordance with prudent business practice or
where required by ordinary accounting practices in the jurisdiction in which
such plan is maintained. Neither Ralston nor any other member of its controlled
group (within the meaning of Section 414(b), (c), (m) or (o) of the Code) has
taken or failed to take any action, nor has any event occurred, with respect to
any "employee benefit plan" (as defined in section 3(3) of ERISA) which action,
inaction or event could reasonably be expected to subject Energizer or any of
its Subsidiaries to material liability. For purposes of this Section 6.12,
------------
"material" means any amount, noncompliance or other basis for liability which
could reasonably be expected to subject Energizer or any of its Subsidiaries to
liability, individually or in the aggregate with each other basis for liability
under this Section 6.12, in excess of $25,000,000.
-------------
6.13 Accuracy of Information. The information, exhibits and reports
-------------------------
furnished by or on behalf of Energizer and any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents, the representations and warranties of
Ralston, Energizer and their respective Subsidiaries contained in the Loan
Documents, and all certificates and documents delivered to the Administrative
Agent and the Lenders pursuant to the terms thereof, including, without
limitation the Bank Book and the Form 10 (as updated by the Supplemental
Financial Statement), taken as a whole, do not contain as of the date furnished
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
6.14 Securities Activities. Neither Ralston, Energizer nor any of its
----------------------
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.15 Material Agreements. Neither Energizer nor any Subsidiary is a party
--------------------
to any Contractual Obligation or subject to any charter or other corporate or
similar restriction which individually or in the aggregate will have or could
reasonably be expected to have a Material Adverse Effect. Neither Energizer nor
any of its Subsidiaries has received notice or has knowledge that (i) it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, or (ii) any condition exists which, with the giving of notice or the lapse
of time or both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.
6.16 Compliance with Laws. Energizer and its Subsidiaries are in compliance
---------------------
with all Requirements of Law applicable to them and their respective businesses,
in each case where the failure to so comply individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect.
6.17 Assets and Properties. Energizer and each of its Subsidiaries has
-----------------------
legal title to all of its assets and properties (tangible and intangible, real
or personal) owned by it or a valid leasehold interest in all of its leased
assets (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and property are free and clear of all Liens, except Liens permitted
under Section 7.3(C). Substantially all of the assets and properties owned by,
--------------
leased to or used by Energizer and/or each such Subsidiary of Energizer are in
adequate operating condition and repair, ordinary wear and tear excepted.
Neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of Energizer or such Subsidiary in and to any of such assets in a manner that
has or could reasonably be expected to have a Material Adverse Effect.
6.18 Statutory Indebtedness Restrictions. Neither Ralston, Energizer nor
-------------------------------------
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.
6.19 Insurance. The insurance policies and programs in effect with respect
---------
to the respective properties, assets, liabilities and business reflect coverage
that is reasonably consistent with prudent industry practice.
6.20 Labor Matters. No attempt to organize the employees of Energizer, and
--------------
no labor disputes, strikes or walkouts affecting the operations of Energizer or
any of its Subsidiaries, is pending, or, to Energizer's knowledge, threatened,
planned or contemplated, which has or could reasonably be expected to have a
Material Adverse Effect.
6.21 Spin-Off Transactions. Except as set forth in Schedule 6.21 to this
---------------------- -------------
Agreement, (i) (a) all conditions precedent to, and all consents necessary to
permit, the consummation of the Spin-Off Transactions have been satisfied in all
material respects, (b) no additional actions are necessary to consummate the
Spin-Off Transactions other than the passage of time and (c) the Spin-Off will
take effect on April 1, 2000 without any further action on the part of Energizer
or Ralston, (ii) the Spin-Off Transactions have been approved by all necessary
corporate action of Ralston's and Energizer's Board of Directors and, if
required, shareholders, and the terms of the Spin-Off Transactions have not been
amended, waived or modified in any material respect from those set forth in the
Form 10 without the approval of the Administrative Agent and the Required
Lenders (such approval not to be unreasonably withheld); (iii) the Tax Ruling
and all necessary regulatory approvals have been obtained for the consummation
of the Spin-Off Transactions; and (iv) the aggregate amount of all loans and
committed Financing Facilities (including this Agreement and the 364-Day Credit
Agreement) available to Energizer upon consummation of the Spin-Off Transactions
equals or exceeds $650,000,000, and all such commitments are identified on
Schedule 6.21(iv) attached hereto.
-------------
6.22 Environmental Matters. (A) Except as disclosed on Schedule 6.22 to
---------------------- -------------
this Agreement
(i) the operations of Energizer and its Subsidiaries comply in all material
respects with Environmental, Health or Safety Requirements of Law;
(ii) Energizer and its Subsidiaries have all material permits, licenses or
other authorizations required under Environmental, Health or Safety Requirements
of Law and are in material compliance with such permits;
(iii) neither Energizer, any of its Subsidiaries nor any of their respective
present property or operations, or, to Energizer's or any of its Subsidiaries'
knowledge, any of their respective past property or operations, are subject to
or the subject of, any investigation known to Energizer or any of its
Subsidiaries, any judicial or administrative proceeding, order, judgment,
decree, settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material remedial
action; or (C) any material claims or liabilities arising from the Release or
threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to Energizer's or any of its Subsidiaries'
knowledge has there ever been, on or in the property of Energizer or any of its
Subsidiaries any landfill, waste pile, underground storage tanks, aboveground
storage tanks, surface impoundment or hazardous waste storage facility of any
kind, any polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material that would
result in material remediation costs or material penalties to Energizer or any
of its Subsidiaries; and
(v) neither Energizer nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release of a
Contaminant into the environment.
(B) For purposes of this Section 6.22 "material" means any noncompliance or
------------
other basis for liability which could reasonably be likely to subject Energizer
or any of its Subsidiaries to liability, individually or in the aggregate with
each other basis for liability under this Section 6.22, in excess of
-------------
$25,000,000.
6.23 Solvency. After giving effect to (i) the Loans to be made on the
--------
Initial Funding Date or such other date as Loans requested hereunder are made
and the consummation of the Debt Assumption, (ii) the other transactions
contemplated by this Agreement and the other Transaction Documents, including
consummation of the Spin-Off Transactions, and (iii) the payment and accrual of
all transaction costs with respect to the foregoing, Energizer is, and Energizer
and its Subsidiaries taken as a whole are, Solvent.
6.24 Net Worth Condition. Upon consummation of the Spin-Off Transactions,
---------------------
the Net Worth Condition will be satisfied.
6.25 Benefits. Each of Energizer and its Subsidiaries will benefit from the
--------
financing arrangement established by this Agreement. The Administrative Agent
and the Lenders have stated and Energizer acknowledges that, but for the
agreement by each of the Subsidiary Guarantors to execute and deliver the
Subsidiary Guaranty, the Administrative Agent and the Lenders would not have
made available the credit facilities established hereby on the terms set forth
herein.
ARTICLE VII: COVENANTS
- ------------- ---------
From and after the consummation of the Debt Assumption, Energizer covenants
and agrees that so long as any Revolving Loan Commitments are outstanding and
thereafter until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied in cash,
all financing arrangements among the Borrower and the Lenders shall have been
terminated and all of the Letters of Credit shall have expired, been canceled or
terminated, unless the Required Lenders shall otherwise give prior written
consent:
7.1 Reporting. Energizer shall:
---------
(A) Financial Reporting. Furnish to the Administrative Agent (with
--------------------
sufficient copies for each of the Lenders, which the Administrative Agent shall
-
promptly deliver to the Lenders):
(i) Quarterly Reports. As soon as practicable, and in any event within
------------------
forty-five (45) days after the end of each of Energizer's first three fiscal
quarters, the consolidated balance sheet of Energizer and its Subsidiaries as at
the end of such period and the related consolidated statements of income
and cash flows of Energizer and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end of such
fiscal quarter, certified by the chief financial officer of Energizer on behalf
of Energizer as fairly presenting the consolidated financial position of
Energizer and its Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in accordance with
Agreement Accounting Principles, subject to normal year-end audit adjustments
and the absence of footnotes.
(ii) Annual Reports. As soon as practicable, and in any event within ninety
--------------
(90) days after the end of each fiscal year, (a) the consolidated and
consolidating balance sheet of Energizer and its Subsidiaries as at the end of
such fiscal year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of Energizer and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures for the
previous fiscal year along with consolidating schedules in form and substance
sufficient to calculate the financial covenants set forth in Section 7.4, and
-----------
(b) an audit report on the consolidated financial statements (but not the
consolidating financial statements or schedules) listed in clause (a) hereof of
----------
independent certified public accountants of recognized national standing, which
audit report shall be unqualified and shall state that such financial statements
fairly present the consolidated financial position of Energizer and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flows for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards.
(iii) Officer's Compliance Certificate. Together with each delivery of any
---------------------------------
financial statement (a) pursuant to clauses (i) and (ii) of this Section 7.1(A),
----------- ---- --------------
an Officer's Certificate from the chief financial officer or Treasurer of
Energizer, substantially in the form of Exhibit G attached hereto and made a
---------
part hereof, stating that (x) the representations and warranties of Energizer
contained in Article VI hereof shall have been true and correct in all material
----------
respects as of the date of such Officer's Certificate and (y) as of the date of
such Officer's Certificate no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof and
(b) pursuant to clauses (i) and (ii) of this Section 7.1(A), a compliance
------------ ---- --------------
certificate, substantially in the form of Exhibit H attached hereto and made a
---------
part hereof, signed by Energizer's chief financial officer or Treasurer, setting
forth calculations for the period which demonstrate compliance, when applicable,
with the provisions of Sections 7.3(A) through (R) and Section 7.4, and which
--------------- --- -----------
calculate the Leverage Ratio for purposes of determining the then Applicable
Margin, Applicable Facility Fee Percentage and Applicable L/C Fee Percentage.
(iv) Officer's Net Worth Condition Certificate. On each Adjustment Date
---------------------------------------------
(including the Final Adjustment Date) and on the Opening Balance Sheet Delivery
Date, a certificate in form and substance satisfactory to the Administrative
Agent, signed by the chief financial officer or Treasurer of Energizer, stating
that, after giving effect to the Spin-Off Transactions and after all
post-closing adjustments as of such date have been effected, the Net Worth
Condition was satisfied as of the Spin-Off Date.
(v) Opening Pro Forma Balance Sheet. On the Opening Balance Sheet Delivery
--------------------------------
Date, copies of the pro forma opening consolidated balance sheet of Energizer
--- -----
and its Subsidiaries, after giving effect to the Spin-Off Transactions and
including all post-closing adjustments.
(B) Notice of Default and Adverse Developments. Promptly upon any of the
---------------------------------------------
chief executive officer, chief operating officer, chief financial officer,
treasurer or controller of Energizer obtaining actual knowledge (i) of any
condition or event which constitutes a Default or Unmatured Default, or becoming
aware that any Lender or Administrative Agent has given any written notice
with respect to a claimed Default or Unmatured Default under this Agreement,
(ii) that any Person having the authority to give such a notice has given any
written notice to Energizer or any Subsidiary of Energizer or taken any other
action with respect to a claimed default or event or condition of the type
referred to in Section 8.1(E), or (iii) that any other development, financial or
--------------
otherwise, which could reasonably be expected to have a Material Adverse Effect
has occurred specifying (a) the nature and period of existence of any such
claimed default, Default, Unmatured Default, condition or event, (b) the notice
given or action taken by such Person in connection therewith, and (c) what
action Energizer has taken, is taking and proposes to take with respect thereto.
(C) ERISA Notices. Deliver or cause to be delivered to the Administrative
--------------
Agent and the Lenders, at Energizer's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after any member of the Controlled Group
obtains knowledge that a Termination Event has occurred which could reasonably
be expected to subject Energizer to liability individually or in the aggregate
in excess of $20,000,000, a written statement of the Chief Financial Officer of
Energizer describing such Termination Event and the action, if any, which the
member of the Controlled Group has taken, is taking or proposes to take with
respect thereto, and when known, any action taken or threatened by the IRS, DOL
or PBGC with respect thereto;
(ii) within ten (10) Business Days after the filing of any funding waiver
request with the IRS, a copy of such funding waiver request and thereafter all
communications received by Energizer or a member of the Controlled Group with
respect to such request within ten (10) Business Days such communication is
received; and
(iii) within ten (10) Business Days after Energizer or any member of the
Controlled Group knows or has reason to know that (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, a notice describing such matter.
For purposes of this Section 7.1(C), Energizer and any member of the Controlled
--------------
Group shall be deemed to know all facts known by the administrator of any Plan
of which Energizer or any member of the Controlled Group is the plan sponsor.
(D) Other Indebtedness. Deliver to the Administrative Agent (i) a copy of
-------------------
each regular report, notice or communication regarding potential or actual
defaults (including any accompanying officer's certificate) delivered by or on
behalf of Energizer to the holders of funded Material Indebtedness, including
the Senior Notes and the investors parties to the Receivable Purchase Facility
or any Bridge Facilities, pursuant to the terms of the agreements governing such
Indebtedness, such delivery to be made at the same time and by the same
means as such notice or other communication is delivered to such holders, and
(ii) a copy of each notice received by Energizer from the from the holders of
funded Material Indebtedness who are authorized and/or have standing to deliver
such notice pursuant to the terms of such Indebtedness, such delivery to be made
promptly after such notice is received by Energizer.
(E) Other Reports. Deliver or cause to be delivered to the Administrative
--------------
Agent and the Lenders copies of all financial statements, reports and notices,
if any, sent by Energizer to its securities holders or filed with the Commission
by Energizer.
(F) Environmental Notices. As soon as possible and in any event within ten
----------------------
(10) days after receipt by Energizer, a copy of (i) any notice or claim to the
effect that Energizer or any of its Subsidiaries is or may be liable to any
Person as a result of the Release by Energizer, any of its Subsidiaries, or any
other Person of any Contaminant into the environment, and (ii) any notice
alleging any violation of any Environmental, Health or Safety Requirements of
Law by Energizer or any of its Subsidiaries if, in either case, such notice or
claim relates to an event which could reasonably be expected to subject
Energizer and each of its Subsidiaries to liability individually or in the
aggregate in excess of $20,000,000.
(G) Amendments to Financing Facilities. Promptly after the execution
-------------------------------------
thereof, copies of all material amendments to (i) any of the documents
evidencing Indebtedness extended under the Bridge Facilities, (ii) any of the
Receivables Purchase Documents or (iii) the Note Purchase Agreement or the
Senior Notes.
(H) Other Information. Promptly upon receiving a request therefor from the
------------------
Administrative Agent, prepare and deliver to the Administrative Agent and the
Lenders such other information with respect to Energizer, any of its
Subsidiaries, or their respective businesses and assets, including, without
limitation, schedules identifying and describing any Asset Sale (and the use of
the net cash proceeds thereof), as from time to time may be reasonably requested
by the Administrative Agent.
7.2 Affirmative Covenants.
----------------------
(A) Corporate Existence, Etc. Except as permitted pursuant to Section
--------------------------- -------
7.3(H), Energizer shall, and shall cause each of its Subsidiaries to, at all
- -----
times maintain its existence and preserve and keep, or cause to be preserved and
kept, in full force and effect its rights and franchises material to its
businesses.
(B) Corporate Powers; Conduct of Business. Energizer shall, and shall cause
-------------------------------------
each of its Material Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or would
reasonably be expected to have a Material Adverse Effect. Energizer will, and
will cause each Material Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted unless the failure of Energizer or its Material
Subsidiaries to carry on and conduct its business as so described would not
reasonably be expected to have a Material Adverse Effect.
(C) Compliance with Laws, Etc. Energizer shall, and shall cause its
-----------------------------
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless, in either
case, failure to comply or obtain such permits would not reasonably be expected
to have a Material Adverse Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. Energizer shall pay,
-------------------------------------------------
and cause each of its Subsidiaries to pay, (i) all taxes, assessments and other
governmental charges imposed upon it or on any of its properties or assets or in
respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by Section 7.3(C)) upon any of Energizer's or such
---------------
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, however, that no such taxes,
-------- -------
assessments and governmental charges referred to in clause (i) above or claims
----------
referred to in clause (ii) above (and interest, penalties or fines relating
------------
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor.
(E) Insurance. Energizer shall maintain for itself and its Subsidiaries, or
---------
shall cause each of its Subsidiaries to maintain in full force and effect,
insurance policies and programs, with such deductibles or self-insurance amounts
as reflect coverage that is reasonably consistent with prudent industry practice
as determined by Energizer.
(F) Inspection of Property; Books and Records; Discussions. Energizer shall
------------------------------------------------------
permit and cause each of Energizer's Subsidiaries to permit, any authorized
representative(s) designated by either the Administrative Agent or any Lender to
visit and inspect any of the properties of Energizer or any of its Subsidiaries,
to examine their respective financial and accounting records and other material
data relating to their respective businesses or the transactions contemplated
hereby (including, without limitation, in connection with environmental
compliance, hazard or liability), and to discuss their affairs, finances and
accounts with their officers and independent certified public accountants, all
upon reasonable notice and at such reasonable times during normal business
hours, as often as may be reasonably requested (provided that an officer of
Energizer or any of its Subsidiaries may, if it so desires, be present at and
participate in any such discussion). Energizer shall keep and maintain, and
cause each of Energizer's Subsidiaries to keep and maintain, in all material
respects, proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and transactions
in relation to their respective businesses and activities. If a Default has
occurred and is continuing, Energizer, upon the Administrative Agent's request,
shall turn over copies of any such records to the Administrative Agent or its
representatives.
(G) ERISA Compliance. Energizer shall, and shall cause each of Energizer's
-----------------
Subsidiaries to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA and shall operate all Plans and
Non-ERISA Commitments to comply in all material respects with the applicable
provisions of the Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans and Non-ERISA Commitments, except for any noncompliance
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(H) Maintenance of Property. Energizer shall cause all property necessary
-------------------------
for the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of Energizer may be necessary for the conduct of its business;
provided, however, that nothing in this Section 7.2(H) shall prevent Energizer
------- --------------
from discontinuing the operation or maintenance of any of such property if such
discontinuance is, in the judgment of Energizer, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Administrative Agent or the Lenders.
(I) Environmental Compliance. (a) Energizer and its Subsidiaries shall
-------------------------
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject
Energizer or any of its Subsidiaries, individually or in the aggregate, to
liability in excess of $25,000,000.
(J) Use of Proceeds. (a) Prior to the consummation of the Debt Assumption,
----------------
Ralston shall use the proceeds of the Loans for its working capital needs and
other general corporate purposes of Ralston and its Subsidiaries, and (b) from
and after the consummation of the Debt Assumption, Energizer shall use the
proceeds of any subsequent Loans for the general corporate purposes of Energizer
and its Subsidiaries, including, without limitation, to finance Permitted
Acquisitions.
(K) Addition of Subsidiary Guarantors. (a) New Subsidiaries. Energizer
------------------------------------ ----------------
shall cause each New Subsidiary that is, at any time, a Material Domestic
Subsidiary (other than a SPV) to deliver to the Administrative Agent an executed
Supplement to become a Subsidiary Guarantor under the Subsidiary Guaranty in the
form of Exhibit I attached hereto (a "Supplement") and appropriate corporate
----------
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Administrative Agent, such Supplement and other
documentation to be delivered to the Administrative Agent as promptly as
possible upon the creation, acquisition of or capitalization thereof or if
otherwise necessary to remain in compliance with Section 7.3(R), but in any
--------------
event within thirty (30) days of such creation, acquisition or capitalization.
(b) Additional Material Domestic Subsidiaries. If any consolidated
--------------------------------------------
Subsidiary of Energizer (other than a New Subsidiary to the extent addressed in
Section 7.2(K)(a) or a SPV) becomes a Material Domestic Subsidiary, Energizer
- ------------------
shall cause any such Material Domestic Subsidiary to deliver to the
Administrative Agent an executed Supplement to become a Subsidiary Guarantor
and appropriate corporate resolutions, opinions and other documentation in form
and substance reasonably satisfactory to the Administrative Agent in connection
therewith, such Supplement and other documentation to be delivered to the
Administrative Agent as promptly as possible but in any event within thirty (30)
days following the date on which such consolidated Subsidiary became a Material
Domestic Subsidiary.
(c) Additional Subsidiary Guarantors. (i) If at any time an Authorized
-----------------------------------
Officer of Energizer has actual knowledge that the aggregate assets of all of
Energizer's domestic consolidated Subsidiaries (other than SPVs) which are not
Subsidiary Guarantors exceed ten percent (10%) of Consolidated Assets of
Energizer and its consolidated Subsidiaries (other than the SPVs), as calculated
by Energizer, Energizer shall cause such domestic consolidated Subsidiaries as
are necessary to reduce such aggregate assets to or below ten percent (10%) of
such Consolidated Assets to deliver to the Administrative Agent executed
Supplements to become Subsidiary Guarantors and appropriate corporate
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Administrative Agent in connection therewith, such
Supplements and other documentation to be delivered to the Administrative Agent
as promptly as possible but in any event within thirty (30) days following the
initial date on which such aggregate assets exceed ten percent (10%) of such
Consolidated Assets.
(ii) If at any time any domestic Subsidiary of Energizer which is not
a Subsidiary Guarantor guaranties any Indebtedness of Energizer other than the
Indebtedness hereunder or under the 364-Day Agreement, Energizer shall cause
such Subsidiary to deliver to the Administrative Agent an executed Supplement to
become a Subsidiary Guarantor and appropriate corporate resolutions, opinions
and other documentation in form and substance reasonably satisfactory to the
Administrative Agent in connection therewith, such Supplement and other
documentation to be delivered to the Administrative Agent concurrently with the
delivery of the guaranty of such other Indebtedness.
7.3 Negative Covenants.
-------------------
(A) Subsidiary Indebtedness.(A) Subsidiary Indebtedness Energizer shall
------------------------
not permit any of its Subsidiaries directly or indirectly to create, incur,
assume or otherwise become or remain directly or indirectly liable with respect
to any Indebtedness, except:
(i) Indebtedness of the Subsidiaries under the Subsidiary Guaranty;
(ii) Indebtedness in respect of guaranties executed by any Subsidiary
Guarantor with respect to any Indebtedness of Energizer, provided such
--------
Indebtedness is not incurred by Energizer in violation of this Agreement;
(iii) Indebtedness in respect of obligations secured by Customary Permitted
Liens;
(iv) Indebtedness constituting Contingent Obligations permitted by Section
-------
7.3(E);
- ------
(v) Indebtedness arising from loans (a) from any Subsidiary to any
wholly-owned Subsidiary or (b) from Energizer to any wholly-owned Subsidiary;
provided, that if any Subsidiary Guarantor is the obligor on such Indebtedness,
- --------
such Indebtedness shall be expressly subordinate to the payment in full in cash
of the Obligations on terms satisfactory to the Administrative Agent;
(vi) Indebtedness in respect of Hedging Obligations permitted under Section
-------
7.3(O);
- ------
(vii) Indebtedness with respect to surety, appeal and performance bonds
obtained by any of Energizer's Subsidiaries in the ordinary course of business;
(viii) Indebtedness incurred in connection with the Receivables Purchase
Documents, provided, that Receivables Facility Attributed Indebtedness incurred
--------
in connection therewith does not exceed $250,000,000 in the aggregate at any
time; and
(ix) Other Indebtedness in addition to that referred to elsewhere in this
Section 7.3(A) incurred by Energizer's Subsidiaries; provided that no Default or
- -------------- --------
Unmatured Default shall have occurred and be continuing at the date of such
incurrence or would result therefrom; and provided further that the aggregate
-------- -------
outstanding amount of all Indebtedness incurred by Energizer's Subsidiaries
(other than Indebtedness incurred pursuant to clauses (i), (ii), (v), (vi) and
----------- ---- --- ----
(viii) of this Section 7.3(A)) shall not at any time exceed $250,000,000.
- ------ --------------
(B) Sales of Assets. Neither Energizer nor any of its Subsidiaries shall
-----------------
sell, assign, transfer, lease, convey or otherwise dispose of any property,
whether now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of Equipment that is
obsolete, excess or no longer used or useful in Energizer's or its Subsidiaries'
businesses;
(iii) any transfer of an interest in Receivables, Receivables Related
Security, accounts or notes receivable on a limited recourse basis under the
Receivables Purchase Documents, provided that such transfer qualifies as a legal
--------
sale and as a sale under Agreement Accounting Principles and that the amount of
Receivables Facility Attributed Indebtedness does not exceed $250,000,000 at any
one time outstanding; and
(iv) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than pursuant to clauses (i), (ii) and (iii)
----------- ---- -----
above) if such transaction (a) is for not less than fair market value, and (b)
when combined with all such other transactions (each such transaction being
valued at book value) during the period from the Closing Date, to the date of
such proposed transaction, represents the disposition of not greater than twenty
percent (20%) of Energizer's Consolidated Assets (such Consolidated Assets being
calculated for the end of the fiscal year immediately preceding that in which
such transaction is proposed to be entered into).
(C) Liens. Neither Energizer nor any of its Subsidiaries shall directly or
-----
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of their respective property or assets except:
(i) Liens, if any, created by the Loan Documents or otherwise securing the
Obligations, or Liens created by the "Loan Documents" under and as defined in
the 364-Day Credit Agreement or otherwise Securing the "Obligations" (as such
terms are defined in the 364-Day Credit Agreement;
(ii) Customary Permitted Liens;
(iii) Liens arising under the Receivables Purchase Documents; and
(iv) other Liens, including Permitted Existing Liens, (a) securing
Indebtedness of Energizer and/or (b) securing Indebtedness of Energizer's
Subsidiaries as permitted pursuant to Section 7.3(A) and in an aggregate
---------------
outstanding amount not to exceed five percent (5%) of Consolidated Assets at any
time.
In addition, neither Energizer nor any of its Subsidiaries shall become a party
to any agreement, note, indenture or other instrument, or take any other action,
which would prohibit the creation of a Lien on any of its properties or other
assets in favor of the Administrative Agent for the benefit of itself and the
Holders of Obligations, as collateral for the Obligations; provided, that any
--------
agreement, note, indenture or other instrument in connection with purchase money
indebtedness (including Capitalized Leases) may prohibit the creation of a Lien
in favor of the Administrative Agent for the benefit of itself and the Holders
of Obligations on the items of property obtained with the proceeds of such
purchase money indebtedness; provided, further, that (a) the Note Purchase
-------- -------
Agreement in connection with the Senior Notes may prohibit the creation of a
Lien in favor of the Administrative Agent for the benefit of itself and the
Holders of Obligations, as collateral for the Obligations unless the holders of
the Senior Notes shall be provided with an equal and ratable Lien and (b) the
Receivables Purchase Documents may prohibit the creation of a Lien with respect
to all of the assets of the SPV and with respect to the Receivables and Related
Security of any of the Originators in favor of the Administrative Agent for the
benefit of itself and the Holders of Obligations, as collateral for the
Obligations.
(D) Investments. Except to the extent permitted pursuant to paragraph (G)
----------- -------------
below, neither Energizer nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than the amount
thereof on the Closing Date;
(iii) Investments in trade receivables or received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by Energizer and
its Subsidiaries;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by Section 7.3(B);
---------------
(vi) Investments in any consolidated Subsidiaries (other than joint
ventures);
(vii) Investments in joint ventures and nonconsolidated Subsidiaries in an
aggregate amount not to exceed $50,000,000;
(viii) Investments constituting Permitted Acquisitions;
(ix) Investments constituting Indebtedness permitted by Section 7.3(A) or
--------------
Contingent Obligations permitted by Section 7.3(E);
---------------
(x) Investments in the SPVs (a) required in connection with the Receivables
Purchase Documents and (b) resulting from the transfers permitted by Section
-------
7.3(B)(iii); and
--------
(xi) Investments in addition to those referred to elsewhere in this Section
-------
7.3(D) in an aggregate amount not to exceed $50,000,000.
- ------
(E) Contingent Obligations. None of Energizer's Subsidiaries shall directly
----------------------
or indirectly create or become or be liable with respect to any Contingent
Obligation, except: (i) recourse obligations resulting from endorsement of
negotiable instruments for collection in the ordinary course of business; (ii)
Permitted Existing Contingent Obligations; (iii) obligations, warranties, and
indemnities, not relating to Indebtedness of any Person, which have been or are
undertaken or made in the ordinary course of business and not for the benefit of
or in favor of an Affiliate of Energizer or such Subsidiary; (iv) Contingent
Obligations with respect to surety, appeal and performance bonds obtained by
Energizer or any Subsidiary in the ordinary course of business; (v) Contingent
Obligations of the Subsidiary Guarantors under the Subsidiary Guaranty; (vi)
Contingent Obligations of Subsidiaries which are guarantors under a guaranty of
the Indebtedness evidenced by the Senior Notes and the Note Purchase Agreements;
(vii) Contingent Obligations of Energizer or any of its Subsidiaries arising
under the Receivables Purchase Documents and (viii) Contingent Obligations
incurred in the ordinary course of business by any of Energizer's Subsidiaries
in respect of obligations of any Subsidiary.
(F) Conduct of Business; New Subsidiaries; Acquisitions. Except as
--------------------------------------------------------
expressly provided in clause (c) in the definition of "Permitted Acquisition"
----------
below, neither Energizer nor any of its Subsidiaries shall engage in any
business other than the businesses engaged in by Energizer and its Subsidiaries
on the date of such transaction and any business or activities which are
substantially similar, related or incidental thereto. Energizer may create,
acquire in a Permitted Acquisition or capitalize any Subsidiary (a "New
Subsidiary") after the date hereof if (i) no Default or Unmatured Default shall
have occurred and be continuing or would result therefrom; (ii) after such
creation, acquisition or capitalization, all of the representations and
warranties contained herein shall be true and correct; and (iii) after such
creation, acquisition or capitalization Energizer shall be in compliance with
the terms of Sections 7.2(K) and 7.3(R).
---------------- -------
Without in any way limiting the foregoing, Energizer shall not make any
Acquisitions, other than Acquisitions meeting the following requirements or
otherwise approved by the Required Lenders (each such Acquisition constituting a
"Permitted Acquisition"):
(a) no Default or Unmatured Default shall have occurred and be continuing or
would result from such Acquisition or the incurrence of any Indebtedness in
connection therewith, and all of the representations and warranties contained
herein shall be true and correct on and as of the date such Acquisition with the
same effect as though made on and as of such date;
(b) the purchase is consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis pursuant to an acquisition agreement approved
by the board of directors or other applicable governing body of the Seller prior
to the commencement thereof;
(c) the businesses being acquired shall be consumer product companies or
other businesses that are substantially similar, related or incidental to the
businesses or activities engaged in by Energizer and its Subsidiaries as of the
consummation of the Debt Assumption or such future business or activities
engaged in by Energizer and its Subsidiaries, as well as suppliers to or
distributors of products similar to those of Energizer and its Subsidiaries;
provided, however, that Energizer and its Subsidiaries shall be permitted to
- -------- -------
acquire businesses that do not satisfy the foregoing criteria in this clause (c)
----------
so long as the aggregate purchase price for all such acquisitions does not
exceed five percent (5%) of Energizer's consolidated tangible net assets (on a
pro forma basis) as of the date of the consummation of such Acquisition; and
(d) prior to each such Acquisition, Energizer shall determine that after
giving effect to such Acquisition and the incurrence of any Indebtedness by
Energizer or any of its Subsidiaries, to the extent permitted by Section 7.3(A),
--------------
in connection therewith, on a pro forma basis using historical audited and
--- -----
reviewed unaudited financial statements obtained from the seller, broken down by
fiscal quarter in Energizer's reasonable judgment, as if the Acquisition and
such incurrence of Indebtedness had occurred on the first day of the
twelve-month period ending on the last day of Energizer's most recently
completed fiscal quarter, Energizer would have been in compliance with the
financial covenants in Section 7.4 and not otherwise in Default.
------------
(G) Transactions with Ralston's Shareholders and Affiliates. Except for (a)
-------------------------------------------------------
the transactions set forth on Schedule 7.3(G), (b) Permitted Receivables
---------------
Transfers and (c) Investments permitted by Section 7.3(D), neither Energizer nor
--------------
any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with Ralston, any
holder or holders of any of the Equity Interests of Energizer, or with any
Affiliate of Energizer which is not its Subsidiary, on terms that are less
favorable to Energizer or any of its Subsidiaries, as applicable, than those
that might be obtained in an arm's length transaction at the time from Persons
who are not such a holder or Affiliate.
(H) Restriction on Fundamental Changes. Neither Energizer nor any of its
-------------------------------------
Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of Energizer's or any such Subsidiary's business or
property, whether now or hereafter acquired, except (i) transactions permitted
under Sections 7.3(B) or 7.3(F), and (ii) a Subsidiary of Energizer may be
---------------- ------
merged into, liquidated into or consolidated with Energizer (in which case
Energizer shall be the surviving corporation) or any wholly-owned Subsidiary of
Energizer, provided if a Subsidiary Guarantor is merged into, liquidated into or
--------
consolidated with another Subsidiary of Energizer, the surviving Subsidiary
shall also be or shall become a Subsidiary Guarantor.
(I) Sales and Leasebacks. Neither Energizer nor any of its Subsidiaries
----------------------
shall become liable, directly, by assumption or by Contingent Obligation, with
respect to any lease, whether an operating lease or a Capitalized Lease, of any
property (whether real or personal or mixed), (i) which it or one of its
Subsidiaries sold or transferred or is to sell or transfer to any other Person,
or (ii) which it or one of its Subsidiaries intends to use for substantially the
same purposes as any other property which has been or is to be sold or
transferred by it or one of its Subsidiaries to any other Person in connection
with such lease, unless in either case the sale involved is not prohibited under
Section 7.3(B) and the lease involved is not prohibited under Section 7.3(A).
- --------------- --------------
(J) Margin Regulations. Neither Energizer nor any of its Subsidiaries,
-------------------
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
(K) ERISA. Energizer shall not:
-----
(i) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Code), with respect to any Benefit Plan,
whether or not waived;
(ii) terminate, or permit any Controlled Group member to terminate, any
Benefit Plan which would result in liability of Energizer or any Controlled
Group member under Title IV of ERISA;
(iii) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of the Code
on or before the due date for such installment or other payment; or
(iv) permit any unfunded liabilities with respect to any Foreign Pension
Plan;
except where such transactions, events, circumstances, or failures are not,
individually or in the aggregate, reasonably expected to result in liability
individually or in the aggregate in excess of $25,000,000 or have a Material
Adverse Effect.
(L) Corporate Documents. Neither Energizer nor any of its Subsidiaries
--------------------
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the date hereof in
any manner adverse to the interests of the Lenders, without the prior written
consent of the Required Lenders.
(M) Fiscal Year. Neither Energizer nor any of its consolidated Subsidiaries
-----------
shall change its fiscal year for accounting or tax purposes from a twelve-month
period ending September 30 of each year.
(N) Subsidiary Covenants. Energizer will not, and will not permit any
---------------------
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, redeem or repurchase its
stock, make any other similar payment or distribution, pay any Indebtedness or
other Obligation owed to Energizer or any other Subsidiary, make loans or
advances or other Investments in Energizer or any other Subsidiary, to sell,
transfer or otherwise convey any of its property to Energizer or any other
Subsidiary or merge, consolidate with or liquidate into Energizer or any other
Subsidiary other than pursuant to the Receivables Purchase Documents.
(O) Hedging Obligations. Energizer shall not and shall not permit any of
--------------------
its Subsidiaries to enter into any Hedging Arrangements other than Hedging
Arrangements entered into by Energizer or its Subsidiaries pursuant to which
Energizer or such Subsidiary has hedged its or its Subsidiaries' reasonably
estimated interest rate, foreign currency or commodity exposure and which are of
a non-speculative nature. Such permitted Hedging Arrangements entered into by
Energizer and any Lender or any affiliate of any Lender are sometimes referred
to herein as "Hedging Agreements."
(P) Issuance of Disqualified Stock. From and after the Closing Date,
---------------------------------
neither Energizer, nor any of its Subsidiaries shall issue any Disqualified
Stock. All issued and outstanding Disqualified Stock shall be treated as
Indebtedness for borrowed money for all purposes of this Agreement, and the
amount of such deemed Indebtedness shall be the aggregate amount of the
liquidation preference of such Disqualified Stock.
(Q) Non-Guarantor Subsidiaries. Energizer will not at any time permit the
---------------------------
aggregate assets of all of Energizer's domestic consolidated Subsidiaries (other
than the SPVs) which are not Subsidiary Guarantors to exceed ten percent (10%)
of Consolidated Assets of Energizer and its consolidated Subsidiaries (other
than the SPVs). Energizer shall not permit any of its Subsidiaries to guaranty
any Indebtedness of Energizer other than the Indebtedness hereunder or under the
364-Day Agreement unless each such Subsidiary is a Subsidiary Guarantor under
the Subsidiary Guaranty.
(R) Tax Ruling. Notwithstanding anything herein to the contrary, neither
------------
Energizer nor any of its Subsidiaries shall engage in any transaction (i)
described in Section 8.01(b) of the Reorganization Agreement for the time
----------------
periods specified therein unless Energizer or such Subsidiary shall have
obtained and/or delivered such documentation as may be required by Section
-------
8.01(a) thereof, or (ii) that would otherwise adversely affect the Tax Ruling.
- ------
7.4 Financial Covenants. Energizer shall comply with the following:
--------------------
(A) Maximum Leverage Ratio. Energizer shall not permit the ratio (the
------------------------
"Leverage Ratio") of (i) the sum of (a) all Indebtedness of Energizer and its
Subsidiaries to (ii) EBITDA at any time to be greater than 3.00 to 1.00. The
Leverage Ratio shall be calculated, in each case, determined as of the last day
of each fiscal quarter based upon (a) for Indebtedness, Indebtedness as of the
last day of each such fiscal quarter; and (b) for EBITDA, the actual amount for
the four-quarter period ending on such day, calculated, with respect to
Permitted Acquisitions, on a pro forma basis using unadjusted historical audited
--- -----
and reviewed unaudited financial statements obtained from the seller (with
the EBITDA component thereof broken down by fiscal quarter in Energizer's
reasonable judgment).
(B) Minimum Interest Expense Coverage Ratio. Energizer shall maintain a
-------------------------------------------
ratio (the "Interest Expense Coverage Ratio") for any applicable period of (a)
EBIT for such period to (b) Interest Expense for such period of greater than
3.00 to 1.00 for each fiscal quarter. The Interest Expense Coverage Ratio shall
be calculated as of the last day of each fiscal quarter for the four-quarter
period ending on such day; provided, that (i) for the fiscal quarter ending June
--------
30, 2000, the Interest Expense Coverage Ratio shall be calculated using EBIT and
Interest Expense for the fiscal quarter ending June 30, 2000, (b) for the fiscal
quarter ending September 30, 2000, the Interest Expense Coverage Ratio shall be
calculated using EBIT and Interest Expense for the two fiscal quarter period
ending September 30, 2000, and (iii) for the fiscal quarter ending December 31,
2000, the Interest Expense Coverage Ratio shall be calculated using such items
for Energizer and its consolidated Subsidiaries for the three fiscal quarter
period ending December 31, 2000.
ARTICLE VIII: DEFAULTS
- -------------- --------
8.1 Defaults. Each of the following occurrences shall constitute a Default
--------
under this Agreement:
(A) Failure to Make Payments When Due. The Borrower shall (i) fail to pay
-----------------------------------
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within five (5) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) Breach of Certain Covenants. The Borrower shall fail duly and
------------------------------
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower or there shall otherwise be a breach of any covenant under:
(i) Sections 7.1 or 7.2 and such failure or breach shall continue unremedied
------------ ---
for thirty (30) days after the earlier to occur of (a) the date on which
written notice from the Administrative Agent or any Lender is received by the
Borrower of such breach and (b) the date on which a member of the Senior
Management Team of the Borrower or any Subsidiary Guarantor had knowledge of the
existence of such breach or should have known of the existence of such breach;
or
(ii) Sections 7.3 or 7.4.
------------- ---
(C) Breach of Representation or Warranty. Any representation or warranty
---------------------------------------
made or deemed made by the Borrower to the Administrative Agent or any Lender
herein or by the Borrower or any of its Subsidiaries in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
(D) Other Defaults. The Borrower shall default in the performance of or
---------------
compliance with any term contained in this Agreement (other than as covered by
paragraphs (A) or (B) of this Section 8.1), or the Borrower or any of its
- -------------- --- ------------
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the earlier to occur of (a) the date on which written
notice from the Administrative Agent or any Lender is received by the Borrower
of such breach and (b) the date on which a member of the Senior Management Team
of the Borrower or any Subsidiary Guarantor had knowledge of the existence of
such breach or should have known of the existence of such breach.
(E) Default as to Other Indebtedness. The Borrower or any of its
------------------------------------
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), beyond any
period of grace provided, with respect to (i) any Indebtedness incurred pursuant
to the 364-Day Credit Agreement or (ii) any other Indebtedness (other than
Indebtedness hereunder) which individually or together with other such
Indebtedness as to which any such failure exists (other than hereunder or under
the 364-Day Credit Agreement) constitutes Material Indebtedness; or any breach,
default or event of default (including any "Amortization Event" or event of like
import in connection with the Receivables Purchase Facility) shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness under the 364-Day Credit Agreement or
Material Indebtedness having such aggregate outstanding principal amount, beyond
any period of grace, if any, provided with respect thereto, if the effect
thereof is to cause an acceleration, mandatory redemption, a requirement that
the Borrower offer to purchase such Indebtedness under the 364-Day Credit
Agreement or Material Indebtedness or other required repurchase of such
Indebtedness under the 364-Day Credit Agreement or Material Indebtedness, or
permit the holder(s) of such Indebtedness under the 364-Day Credit Agreement or
Material Indebtedness to accelerate the maturity of any such Indebtedness under
the 364-Day Credit Agreement or Material Indebtedness or require a redemption or
other repurchase of such Indebtedness under the 364-Day Credit Agreement or
Material Indebtedness; or any such Indebtedness under the 364-Day Credit
Agreement or Material Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Borrower or any of its Subsidiaries (other than by
a regularly scheduled required prepayment) prior to the stated maturity thereof.
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the Borrower or any of
the Borrower's Material Subsidiaries and the petition shall not be dismissed,
stayed, bonded or discharged within sixty (60) days after commencement of the
case; or a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Borrower or any of the Borrower's Material
Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency
or other similar law now or hereinafter in effect; or any other similar
relief shall be granted under any applicable federal, state, local or foreign
law.
(ii) A decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Borrower or any of the Borrower's
Material Subsidiaries or over all or a substantial part of the property of the
Borrower or any of the Borrower's Material Subsidiaries shall be entered; or an
interim receiver, trustee or other custodian of the Borrower or any of the
Borrower's Material Subsidiaries or of all or a substantial part of the property
of the Borrower or any of the Borrower's Material Subsidiaries shall be
appointed or a warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the Borrower's
Material Subsidiaries shall be issued and any such event shall not be stayed,
dismissed, bonded or discharged within sixty (60) days after entry, appointment
or issuance.
(G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or any
---------------------------------------------------
of the Borrower's Material Subsidiaries shall (i) commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, (iii) consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property, (iv) make any assignment for the benefit of creditors, (v)
take any corporate action to authorize any of the foregoing or (vi) is
generally not paying, or admits in writing its inability to pay, its debts as
they become due.
(H) Judgments and Attachments. Any money judgment(s) (other than a money
---------------------------
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $30,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(I) Dissolution. Any order, judgment or decree shall be entered against the
-----------
Borrower decreeing its involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
the Borrower shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement.
(J) Loan Documents. At any time, for any reason, any Loan Document as a
---------------
whole that materially affects the ability of the Administrative Agent, or any of
the Lenders to enforce the Obligations ceases to be in full force and effect or
the Borrower or any of the Borrower's Subsidiaries party thereto seeks to
repudiate its obligations under any Loan Document.
(K) Termination Event. Any Termination Event occurs which the Required
------------------
Lenders believe is reasonably likely to subject either the Borrower or any of
its Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
(L) Waiver of Minimum Funding Standard. If the plan administrator of any
-------------------------------------
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the Required Lenders believe
the substantial business hardship upon which the application for the waiver is
based could reasonably be expected to subject either the Borrower or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
(M) Change of Control. A Change of Control shall occur.
-------------------
(N) Hedging Agreements. Nonpayment by the Borrower of any material
-------------------
obligation under any Hedging Agreement or the breach by the Borrower of any
material term, provision or condition contained in any such Hedging Agreement.
(O) Environmental Matters. The Borrower or any of its Subsidiaries shall be
---------------------
the subject of any proceeding or investigation pertaining to (i) the Release by
the Borrower or any of its Subsidiaries of any Contaminant into the environment,
(ii) the liability of the Borrower or any of its Subsidiaries arising from the
Release by any other Person of any Contaminant into the environment, or (iii)
any violation of any Environmental, Health or Safety Requirements of Law which
by the Borrower or any of its Subsidiaries, which, in any case, has or is
reasonably likely to subject either the Borrower or its Subsidiaries to
liability individually or in the aggregate in excess of $25,000,000.
(P) Subsidiary Guarantor Revocation. Any Subsidiary Guarantor shall
---------------------------------
terminate or revoke any of its obligations under the Subsidiary Guaranty or
breach any of the material terms of such Subsidiary Guaranty.
(Q) Receivables Purchase Document Events. Other than at the request of
---------------------------------------
Energizer, the "Amortization Date" or an event of like import resulting in the
termination of the reinvestment of collections or proceeds of Receivables and
Related Security shall occur under any Receivables Purchase Document.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
------------
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
- ------------ --------------------------------------------------------------
REMEDIES
- --------
9.1 Termination of Revolving Loan Commitments; Acceleration. If any Default
-------------------------------------------------------
described in Section 8.1(F), (G) or (I) occurs with respect to the
--------------- --- ---
Borrower, the obligations of the Lenders to make Loans hereunder and the
obligation of the Issuing Banks to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Administrative Agent
or any Lender. If any other Default occurs, the Required Lenders may terminate
or suspend the obligations of the Lenders to make Loans hereunder and the
obligation of the Issuing Banks to issue Letters of Credit hereunder, or declare
the Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower expressly waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its Pro
------------------
Rata Share of any Advance requested or deemed requested by the Borrower (or an
Advance to repay Swing Line Loans to the Swing Line Bank or Reimbursement
Obligations to the Issuing Banks), which such Lender is obligated to fund under
the terms of this Agreement (the funded portion of such Advance being
hereinafter referred to as a "Non Pro Rata Loan"), until the earlier of such
Lender's cure of such failure and the termination of the Revolving Loan
Commitments, the proceeds of all amounts thereafter repaid to the Administrative
Agent by the Borrower and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Administrative Agent on behalf of such Lender to
cure, in full or in part, such failure by such Lender, but shall nevertheless be
deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply only with
------------
respect to the proceeds of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section 2.9;
------------
(ii) any such Lender shall be deemed to have cured its failure to fund its
Pro Rata Share, of any Advance at such time as an amount equal to such Lender's
original Pro Rata Share of the requested principal portion of such Advance is
fully funded to the Borrower, whether made by such Lender itself or by operation
of the terms of this Section 9.2, and whether or not the Non Pro Rata Loan with
-----------
respect thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in part, any such
Lender's failure to fund its Pro Rata Share of any Advance ("Cure Loans") shall
bear interest at the rate applicable to Floating Rate Loans in effect from time
to time, and for all other purposes of this Agreement shall be treated as if
they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is continuing,
and notwithstanding the instructions of the Borrower as to its desired
application, all repayments of principal which, in accordance with the other
terms of this Agreement, would be applied to the outstanding Floating Rate Loans
shall be applied first, ratably to all Floating Rate Loans constituting Non Pro
-----
Rata Loans, second, ratably to Floating Rate Loans other than those constituting
------
Non Pro Rata Loans or Cure Loans and, third, ratably to Floating Rate Loans
-----
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's cure of the
failure to fund its Pro Rata Share of any Advance and the termination of the
Revolving Loan Commitments, the term "Required Lenders" for purposes of this
Agreement shall mean Lenders (excluding all Lenders whose failure to fund their
respective Pro Rata Share of such Advance have not been so cured) whose Pro Rata
Shares represent greater than fifty percent (50%) of the aggregate Pro Rata
Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund its Pro Rata
Share of any Advance is cured in accordance with Section 9.2(ii), (A) such
---------------
Lender shall not be entitled to any Facility Fees with respect to its Revolving
Loan Commitment and (B) such Lender shall not be entitled to any letter of
credit fees, which Facility Fees and letter of credit fees shall accrue in favor
of the Lenders which have funded their respective Pro Rata Share of such
requested Advance, shall be allocated among such performing Lenders ratably
based upon their relative Revolving Loan Commitments, and shall be calculated
based upon the average amount by which the aggregate Revolving Loan Commitments
of such performing Lenders exceeds the sum of (I) the outstanding principal
amount of the Loans owing to such performing Lenders, plus (II) the outstanding
----
Reimbursement Obligations owing to such performing Lenders, plus (III) the
----
aggregate participation interests of such performing Lenders arising pursuant to
Section 3.6 with respect to undrawn and outstanding Letters of Credit.
- ------------
9.3 Amendments. Subject to the provisions of this Article IX, the Required
---------- ----------
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
-------- -------
agreement shall, without the consent of each Lender (which is not a defaulting
Lender under the provisions of Section 9.2) affected thereby:
------------
(i) Postpone or extend the Revolving Loan Termination Date or any other date
fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to such Lender
(other than any modifications of the provisions relating to amounts, timing or
application of prepayments of the Loans and other Obligations, which
modifications shall require the approval only of the Required Lenders).
(ii) Reduce the principal amount of any Loans or L/C Obligations, or reduce
the rate or extend the time of payment of interest or fees thereon (other than
(a) a waiver of the application of the default rate of interest pursuant to
Section 2.10 hereof and (b) as a result of a change in the definition of
- -------------
Leverage Ratio or any of the components thereof or the method of calculation
thereof).
(iii) Reduce the percentage specified in the definition of Required Lenders
or any other percentage of Lenders specified to be the applicable percentage in
this Agreement to act on specified matters or amend the definitions of "Required
Lenders" or "Pro Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment of such Lender
hereunder or increase such Lender's Pro Rata Share.
(v) Permit the Borrower to assign its rights under this Agreement, other
than pursuant to the Debt Assumption.
(vi) other than pursuant to a transaction permitted by the terms of this
Agreement, release any guarantor from its obligations under the Subsidiary
Guaranty.
(vii) Amend this Section 9.3.
------------
No amendment of any provision of this Agreement relating to (a) the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, (b) Swing Line Loans shall be effective without the
written consent of the Swing Line Bank and (c) any Issuing Bank shall be
effective without the written consent of such Issuing Bank. The Administrative
Agent may waive payment of the fee required under Section 13.3(B) without
---------------
obtaining the consent of any of the Lenders.
9.4 Preservation of Rights. No delay or omission of the Lenders or the
------------------------
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan or the issuance of a Letter of Credit
notwithstanding the existence of a Default or the inability of the Borrower to
satisfy the conditions precedent to such Loan or issuance of such Letter of
Credit shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to Section 9.3,
-----------
and then only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall be cumulative
and all shall be available to the Administrative Agent and the Lenders until all
of the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied in cash, all financing arrangements
among the Borrower and the Lenders shall have been terminated and all of the
Letters of Credit shall have expired, been canceled or terminated.
ARTICLE X: GENERAL PROVISIONS
- ----------- -------------------
10.1 Survival of Representations. All representations and warranties of the
---------------------------
Borrower contained in this Agreement shall survive delivery of this
Agreement and the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
------------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that after the
----------------------------
occurrence and during the continuance of a Default, the Administrative Agent
may, but shall have no obligation to, make any payment or perform any act
required of the Borrower under any Loan Document to the extent the
Administrative Agent determines that such action shall be necessary or advisable
in order to protect or preserve the rights of the Lenders and Issuing Banks
hereunder. The Administrative Agent shall use its reasonable efforts to give
the Borrower notice of any action taken under this Section 10.3 prior to the
------------
taking of such action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's obligations in respect thereof. The
Borrower agrees to pay the Administrative Agent, upon demand, the principal
amount of all funds advanced by the Administrative Agent under this Section
-------
10.3, together with interest thereon at the rate from time to time applicable to
Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make
payment in respect of any such advance under this Section 10.3 within one (1)
------------
Business Day after the date the Borrower receives written demand therefor from
the Administrative Agent, the Administrative Agent shall promptly notify each
Lender and each Lender agrees that it shall thereupon make available to the
Administrative Agent, in Dollars in immediately available funds, the amount
equal to such Lender's Pro Rata Share of such advance. If such funds are not
made available to the Administrative Agent by such Lender within one (1)
Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending on
the date such amount is received. The failure of any Lender to make available
to the Administrative Agent its Pro Rata Share of any such unreimbursed advance
under this Section 10.3 shall neither relieve any other Lender of its obligation
------------
hereunder to make available to the Administrative Agent such other Lender's Pro
Rata Share of such advance on the date such payment is to be made nor increase
the obligation of any other Lender to make such payment to the Administrative
Agent. All outstanding principal of, and interest on, advances made under this
Section 10.3 shall constitute Obligations subject to the terms of this Agreement
- ------------
until paid in full by the Borrower.
10.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
-----------------
understanding among the Borrower, the Administrative Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
----------------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
10.7 Expenses; Indemnification.
--------------------------
(A) Expenses. The Borrower shall reimburse the Administrative Agent and the
--------
Arranger for any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees and time charges
of attorneys and paralegals for the Administrative Agent, which attorneys and
paralegals may be employees of the Administrative Agent) paid or incurred by the
Administrative Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment modification
and, after the occurrence and during the continuance of a Default or an
Unmatured Default, administration of the Loan Documents. The Borrower also
agrees to reimburse the Administrative Agent and the Arranger and the Lenders
for any reasonable costs and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Administrative Agent and the Arranger and the Lenders, which attorneys and
paralegals may be employees of the Administrative Agent or the Arranger or the
Lenders) paid or incurred by the Administrative Agent or the Arranger or any
Lender in connection with the collection of the Obligations and enforcement of
the Loan Documents; provided, that after the occurrence and during the
--------
continuance of a Default, the Borrower agrees to reimburse the Administrative
Agent, the Arranger and the Lenders for all such costs and out-of-pocket
expenses, whether or not reasonable.
(B) Indemnity. The Borrower further agrees to defend, protect, indemnify,
---------
and hold harmless the Administrative Agent, the Arranger, the Syndication Agent,
the Documentation Agent and each and all of the Lenders and each of their
respective Affiliates, and each of such Administrative Agent's, Syndication
Agent's, Documentation Agent's, Arranger's, Lender's, or Affiliate's respective
officers, directors, trustees, investment advisors, employees, attorneys and
agents (including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "Indemnitees") from and against any and all
- ----------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, the other Loan Documents or any of the Transaction
Documents, or any act, event or transaction related or attendant thereto or to
the Transactions, the making of the Loans, and the issuance of and participation
in Letters of Credit hereunder, the management of such Loans or Letters of
Credit, the use or intended use of the proceeds of the Loans or Letters of
Credit hereunder, or any of the other transactions contemplated by the
Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or threat
to the environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting fees
and costs of investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future relating to violation
of any Environmental, Health or Safety Requirements of Law arising from or in
connection with the past, present or future operations of the Borrower, its
Subsidiaries or any of their respective predecessors in interest, or, the past,
present or future environmental, health or safety condition of any respective
property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant into the
environment (collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
- -------- -------
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnitee with respect to the
Loan Documents, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.
Each Indemnitee, with respect to any action against it in respect of which
indemnity may be sought under this Section, shall give written notice of the
commencement of such action to the Borrower within a reasonable time after such
Indemnitee is made a party to such action. Upon receipt of any such notice by
the Borrower, unless such Indemnitee shall be advised by its counsel that there
are or may be legal defenses available to such Indemnitee that are different
from, in addition to, or in conflict with, the defenses available to the
Borrower or any of its Subsidiaries, the Borrower may participate with the
Indemnitee in the defense of such Indemnified Matter, including the employment
of counsel consented to by such Indemnitee (which consent shall not be
unreasonably withheld); provided, however, nothing provided herein shall entitle
-------- -------
(a) the Borrower or any of its Subsidiaries to assume the defense of such
Indemnified Matter or (b) any Indemnitee to effect any settlement in respect of
any indemnified matter without the Borrower's consent, such consent not to be
unreasonably withheld.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower further
-------------------------------------------------
agrees to assert no claim against any of the Indemnitees on any theory of
liability seeking consequential, special, indirect, exemplary or punitive
damages. No settlement of any claim asserted against or likely to be asserted
against an Indemnitee shall be entered into by the Borrower or any if its
Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the other Loan Documents or in connection with the Transactions
(whether or not the Administrative Agent or any Lender or any Indemnitee is a
party thereto) unless such settlement releases such Indemnitee from any and all
liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the Borrower
-----------------------
under this Section 10.7 shall survive the termination of this Agreement.
-------------
10.8 Numbers of Documents. All statements, notices, closing documents, and
---------------------
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all accounting
----------
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles. If
any changes in generally accepted accounting principles are hereafter required
or permitted and are adopted by the Borrower or any of its Subsidiaries with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Borrower's
and its Subsidiaries' financial condition shall be the same after such changes
as if such changes had not been made; provided, however, until such provisions
-------- -------
are amended in a manner reasonably satisfactory to the Administrative Agent and
the Required Lenders, no Accounting Change shall be given effect in such
calculations and all financial statements and reports required to be delivered
hereunder shall be prepared in accordance with Agreement Accounting Principles
without taking into account such Accounting Changes. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
the date of such amendment.
10.10 Severability of Provisions. Any provision in any Loan Document that
----------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower and
-------------------------
the Lenders and the Administrative Agent shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent
nor any Lender undertakes any responsibility to the Borrower to review or inform
the Borrower of any matter in connection with any phase of the Borrower's
business or operations.
10.12 GOVERNING LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS AGREEMENT, ON
--------------
BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; JURY TRIAL.
---------------------------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
----------------------- --------------
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM
IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
--------------
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE AGENT,
-------------------
ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH
PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) IN ORDER TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON BUT SHALL
ONLY BE PERMITTED TO BRING ANY SUCH PERMISSIVE COUNTERCLAIM IN A PROCEEDING
BROUGHT PURSUANT TO CLAUSE (A). THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
-----------
HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
---------------
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
-----
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
----- --- ----------
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
--------------------
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
-------------------
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.
- ------------- --------------
10.14 Subordination of Intercompany Indebtedness. The Borrower agrees that
-------------------------------------------
any and all claims of the Borrower against any of its Subsidiaries that is a
Subsidiary Guarantor with respect to any "Intercompany Indebtedness" (as
hereinafter defined), any endorser, obligor or any other guarantor of all or any
part of the Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in
cash, of all Obligations and Hedging Obligations under Hedging Agreements;
provided that, and not in contravention of the foregoing, so long as no Default
- --------
has occurred and is continuing the Borrower may make loans to and receive
payments in the ordinary course with respect to such Intercompany Indebtedness
from each such Subsidiary Guarantor to the extent permitted by the terms of this
Agreement and the other Loan Documents. Notwithstanding any right of the
Borrower to ask, demand, sue for, take or receive any payment from any
Subsidiary Guarantor, all rights, liens and security interests of the Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
Subsidiary Guarantor shall be and are subordinated to the rights of the holders
of the Obligations and the Administrative Agent in those assets. The Borrower
shall have no right to possession of any such asset or to foreclose upon any
such asset, whether by judicial action or otherwise, unless and until all of the
Obligations (other than contingent indemnity obligations) and the Hedging
Obligations under Hedging Agreements shall have been fully paid and satisfied
(in cash) and all financing arrangements pursuant to any Loan Document or
Hedging Agreement among the Borrower and the holders of the Obligations (or any
affiliate thereof) have been terminated. If all or any part of the assets of
any Subsidiary Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Subsidiary
Guarantor, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the business of
any such Subsidiary Guarantor is dissolved or if substantially all of the assets
of any such Subsidiary Guarantor are sold, then, and in any such event (such
events being herein referred to as an "Insolvency Event"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
indebtedness of any Subsidiary Guarantor to the Borrower ("Intercompany
Indebtedness") shall be paid or delivered directly to the Administrative Agent
for application on any of the Obligations and Hedging Obligations under the
Hedging Agreements, due or to become due, until such Obligations and Hedging
Obligations (other than contingent indemnity obligations) shall have first been
fully paid and satisfied (in cash). Should any payment, distribution, security
or instrument or proceeds thereof be received by the Borrower upon or with
respect to the Intercompany Indebtedness after an Insolvency Event prior to the
satisfaction of all of the Obligations (other than contingent indemnity
obligations) and Hedging Obligations under Hedging Agreements and the
termination of all financing arrangements pursuant to any Loan Document or
Hedging Agreement among the Borrower and the holders of Obligations (and their
affiliates), the Borrower shall receive and hold the same in trust, as trustee,
for the benefit of the holders of the Obligations and such Hedging Obligations
and shall forthwith deliver the same to the Administrative Agent, for the
benefit of such Persons, in precisely the form received (except for the
endorsement or assignment of the Borrower where necessary), for application to
any of the Obligations and such Hedging Obligations, due or not due, and, until
so delivered, the same shall be held in trust by the Borrower as the property of
the holders of the Obligations and such Hedging Obligations. If the Borrower
fails to make any such endorsement or assignment to the Administrative Agent,
the Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same. The Borrower agrees that until the Obligations
(other than the contingent indemnity obligations) and such Hedging Obligations
have been paid in full (in cash) and satisfied and all financing arrangements
pursuant to any Loan Document or Hedging Agreement among the Borrower and the
holders of the Obligations (and their affiliates) have been terminated, the
Borrower will not assign or transfer to any Person (other than the
Administrative Agent) any claim the Borrower has or may have against any
Subsidiary Guarantor.
ARTICLE XI: THE ADMINISTRATIVE AGENT
- ------------ --------------------------
11.1 Appointment; Nature of Relationship. Bank One, NA, having its
---------------------------------------
principal office in Chicago, Illinois is appointed by the Lenders as the
Administrative Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Administrative Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article XI. Notwithstanding the use of the defined term
-----------
"Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Holder
of Obligations by reason of this Agreement and that the Administrative
Agent is merely acting as the representative of the Lenders with only those
duties as are expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders' contractual representative, the
Administrative Agent (i) does not assume any fiduciary duties to any of the
Holders of Obligations, (ii) is a "representative" of the Holders of Obligations
within the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is
acting as an independent contractor, the rights and duties of which are limited
to those expressly set forth in this Agreement and the other Loan Documents.
Each of the Lenders, for itself and on behalf of its affiliates as Holders of
Obligations, agrees to assert no claim against the Administrative Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Holder of Obligations waives.
11.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action hereunder or under any of the other Loan Documents
except any action specifically provided by the Loan Documents required to be
taken by the Administrative Agent.
11.3 General Immunity. Neither the Administrative Agent nor any of its
-----------------
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is found in a final
judgment by a court of competent jurisdiction to have arisen solely from the
gross negligence or willful misconduct of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither
-------------------------------------------------------------
the Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
---------
required to be delivered solely to the Administrative Agent; (iv) the existence
or possible existence of any Default or (v) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith. The Administrative Agent shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or in
any of the other Loan Documents, for the perfection or priority of the Liens on
collateral, if any, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 Action on Instructions of Lenders. The Administrative Agent shall in
-----------------------------------
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders (or all of the Lenders in the event that and to the
extent that this Agreement expressly requires such), and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders and on all owners of Loans and on all Holders of Obligations. The
Administrative Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 Employment of Administrative Agents and Counsel. The Administrative
--------------------------------------------------
Agent may execute any of its duties as the Administrative Agent hereunder and
under any other Loan Document by or through employees, agents, and
attorney-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Administrative Agent
and the Lenders and all matters pertaining to the Administrative Agent's duties
hereunder and under any other Loan Document.
11.7 Reliance on Documents; Counsel. The Administrative Agent shall be
---------------------------------
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 The Administrative Agent's Reimbursement and Indemnification. The
-----------------------------------------------------------------
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Pro Rata Shares (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
--------
that no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have arisen solely from the gross negligence or willful
misconduct of the Administrative Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment,
---------------------
Loans made by it, and Letters of Credit issued by it, the Administrative Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender or Issuing Bank and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" or
"Issuing Bank" or "Issuing Banks" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any kind
of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
------------------------
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
11.11 Successor Administrative Agent. The Administrative Agent may resign
--------------------------------
at any time by giving written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint,
on behalf of the Borrower and the Lenders, a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. Notwithstanding anything herein to the
contrary, so long as no Default has occurred and is continuing, each such
successor Administrative Agent shall be subject to approval by the Borrower,
which approval shall not be unreasonably withheld. Such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article XI shall continue in effect for its benefit in
----------
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent hereunder and under the other Loan Documents.
11.12 No Duties Imposed Upon Syndication Agent, Documentation Agent or
-----------------------------------------------------------------
Arranger. None of the Persons identified on the cover page to this Agreement,
- --------
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons identified on the cover page
to this Agreement, the signature pages to this Agreement or otherwise in this
Agreement as a "Syndication Agent" or "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary duty to or fiduciary relationship with
any Lender. In addition to the agreement set forth in Section 11.10, each of
-------------
the Lenders acknowledges that it has not relied, and will not rely, on any of
the Persons so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
- ------------- --------------------------
12.1 Setoff. In addition to, and without limitation of, any rights of the
------
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
-----------------
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
--------- --- ---
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 Application of Payments. Subject to the provisions of Section 9.2, the
----------------------- -----------
Administrative Agent shall, unless otherwise specified at the direction of the
Required Lenders which direction shall be consistent with the last sentence of
this Section 12.3, apply all payments and prepayments in respect of any
-------------
Obligations received after the occurrence and during the continuance of a
Default or Unmatured Default in the following order:
(A) first, to pay interest on and then principal of any portion of the Loans
which the Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrower;
(B) second, to pay interest on and then principal of any advance made under
Section 10.3 for which the Administrative Agent has not then been paid by the
- -------------
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Administrative Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing Line
Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal outstanding
on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal outstanding on
Loans (other than Swing Line Loans), Reimbursement Obligations and Hedging
Obligations under Hedging Agreements in such order as the Administrative Agent
may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required pursuant to
Section 3.11; and
- -------------
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied to the outstanding
Revolving Loans first, to repay outstanding Floating Rate Loans, and then to
----
repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods. The order of priority set forth in this
Section 12.3 and the related provisions of this Agreement are set forth solely
- -------------
to determine the rights and priorities of the Administrative Agent, the Lenders,
the Swing Line Bank and the issuer(s) of Letters of Credit as among themselves.
The order of priority set forth in clauses (D) through (J) of this Section 12.3
----------- --- ------------
may at any time and from time to time be changed by the Required Lenders without
necessity of notice to or consent of or approval by the Borrower, or any other
Person; provided, that the order of priority of payments in respect of Swing
--------
Line Loans may be changed only with the prior written consent of the Swing Line
Bank. The order of priority set forth in clauses (A) through (C) of this
----------- ---
Section 12.3 may be changed only with the prior written consent of the
- -------------
Administrative Agent.
12.4 Relations Among Lenders.
-------------------------
(A) Except with respect to the exercise of set-off rights of any Lender in
accordance with Section 12.1, the proceeds of which are applied in accordance
-------------
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document, without the prior written consent of the Required
Lenders or, as may be provided in this Agreement or the other Loan Documents, at
the direction of the Administrative Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Administrative Agent) authorized to act for, any other Lender. The
Administrative Agent shall have the exclusive right on behalf of the Lenders, at
the direction of the Required Lenders, to enforce on the payment of the
principal of and interest on any Loan after the date such principal or interest
has become due and payable pursuant to the terms of this Agreement.
12.5 Representations and Covenants Among Lenders. Each Lender represents
----------------------------------------------
and covenants for the benefit of all other Lenders and the Administrative Agent
that such Lender is not satisfying and shall not satisfy any of its obligations
pursuant to this Agreement with any assets considered for any purposes of ERISA
or Section 4975 of the Code to be assets of or on behalf of any "plan" as
defined in section 3(3) of ERISA or section 4975 of the Code, regardless of
whether subject to ERISA or Section 4975 of the Code.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
- -------------- -----------------------------------------------------
13.1 Successors and Assigns. The terms and provisions of the Loan Documents
----------------------
shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) without the
consent of all of the Lenders, (a) Ralston shall not have the right to assign
its rights or obligations under the Loan Documents other than pursuant to the
Debt Assumption and only if the Net Worth Condition and all other conditions to
the Debt Assumption have been satisfied, and (b) Energizer shall not have the
right to assign its rights or obligations under the Loan Documents, and any such
assignment in violation of this Section 13.1(i) shall be null and void, and (ii)
---------------
any assignment by any Lender must be made in compliance with Section 13.3
------------
hereof. Notwithstanding clause (ii) of this Section 13.1 or Section 13.3, (i)
------------ ------------ ------------
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank and (ii) any Lender which is a fund or
commingled investment vehicle that invests in commercial loans in the ordinary
course of its business may at any time, without the consent of the Borrower or
the Administrative Agent, pledge or assign all or any part of its rights under
this Agreement to a trustee or other representative of holders of obligations
owed or securities issued by such Lender as collateral to secure such
obligations or securities; provided, however, that no such assignment or pledge
-------- -------
shall release the transferor Lender from its obligations hereunder. The
Administrative Agent may treat each Lender as the owner of the Loans made by
such Lender hereunder for all purposes hereof unless and until such Lender
complies with Section 13.3 hereof in the case of an assignment thereof or, in
-------------
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of a Loan, Revolving Loan
Commitment, L/C Interest or any other interest of a lender under the Loan
Documents agrees by acceptance thereof to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of any Loan, shall be conclusive and binding on any
subsequent owner, transferee or assignee of such Loan.
13.2 Participations.
--------------
(A) Permitted Participants; Effect. Subject to the terms set forth in this
-------------------------------
Section 13.2, any Lender may, in the ordinary course of its business and in
- -------------
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Revolving Loan Commitment of such Lender, any L/C Interest of such
Lender or any other interest of such Lender under the Loan Documents on a pro
rata or non-pro rata basis. Notice of such participation to the Borrower and
the Administrative Agent shall be required prior to any participation becoming
effective with respect to a Participant which is not a Lender or an Affiliate
thereof. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of all Loans made by it for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating interests, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents except that, for purposes of Article IV hereof, the
-----------
Participants shall be entitled to the same rights as if they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
--------------
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Letter of Credit or Revolving Loan Commitment
in which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Revolving Loan Commitment, releases any Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty, or releases all or
substantially all of the collateral, if any, securing any such Loan or Letter of
Credit.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall be
-------------------
deemed to have the right of setoff provided in Section 12.1 hereof in respect to
------------
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
--------
right of setoff provided in Section 12.1 hereof with respect to the amount of
------------
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
Section 12.1 hereof, agrees to share with each Lender, any amount received
- -------------
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
-------------
13.3 Assignments.
-----------
(A) Permitted Assignments. Any Lender may, in the ordinary course of its
----------------------
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this Section
-------
13.3. Each assignment shall be of a constant, and not a varying, ratable
- ----
percentage of all of the assigning Lender's rights and obligations under this
Agreement. Such assignment shall be substantially in the form of Exhibit D
---------
hereto and shall not be permitted hereunder unless such assignment is either for
all of such Lender's rights and obligations under the Loan Documents or,
without the prior written consent of the Administrative Agent and (if no Default
or Unmatured Default has occurred or is continuing) the Borrower, involves loans
and commitments in an aggregate amount of at least $5,000,000 (which minimum
amount shall not apply to any assignment between Lenders, or to an Affiliate of
any Lender). Other than with respect to any assignment to another Lender or an
Affiliate or successor entity of such Lender, the consent of the Administrative
Agent, and, prior to the occurrence and continuance of a Default or Unmatured
Default, the Borrower (which consent, in each such case, shall not be
unreasonably withheld) shall be required prior to an assignment becoming
effective.
(B) Effect; Effective Date. Upon (i) delivery to the Administrative Agent
------------------------
of a notice of assignment, substantially in the form attached as Appendix I to
----------
Exhibit D hereto (a "Notice of Assignment"), together with any consent required
- ----------
by Section 13.3(A) hereof, and (ii) payment of a $3,500 fee by the assignee or
----------------
the assignor (as agreed) to the Administrative Agent for processing such
assignment (provided no such fee shall be required in connection with an
assignment to an Affiliate or successor entity of an assignor Lender), such
assignment shall become effective on the effective date specified in such Notice
of Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Revolving Loan Commitment, Loans and L/C Obligations under the applicable
Assignment Agreement constitute for any purpose of ERISA or Section 4975 of the
Code assets of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of
the Code and that the rights and interests of the Purchaser in and under the
Loan Documents will not constitute such "plan assets". On and after the
effective date of such assignment, such Purchaser, if not already a Lender,
shall for all purposes be a Lender party to this Agreement and any other Loan
Documents executed by the Lenders and shall have all the rights and obligations
of a Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower, the
Lenders or the Administrative Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Revolving Loan
Commitment, Loans and Letter of Credit participations assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 13.3(B), the transferor Lender, the Administrative Agent and the
----------------
Borrower shall make appropriate arrangements so that, to the extent notes have
been issued to evidence any of the transferred Loans, replacement notes are
issued to such transferor Lender and new notes or, as appropriate, replacement
notes, are issued to such Purchaser, in each case in principal amounts
reflecting their Revolving Loan Commitment, as adjusted pursuant to such
assignment.
(C) The Register. The Administrative Agent shall maintain at its address
-------------
referred to in Section 14.1 a copy of each assignment delivered to and accepted
------------
by it pursuant to this Section 13.3 and a register (the "Register") for the
------------
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of and principal amount of the Loans owing to, each Lender from time
to time and whether such Lender is an original Lender or the assignee of another
Lender pursuant to an assignment under this Section 13.3. The entries in the
------------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower and each of its Subsidiaries, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Administrative Agent and
--------------- ------------
the Lenders and their respective representatives shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement and
identified as such by the Borrower in accordance with such Person's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound commercial lending or investment practices and in
any event may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or any securities exchange or similar
self-regulatory organization or representative thereof or pursuant to a
regulatory examination or legal process, or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor, and shall require any such Transferee to agree (and
require any of its Transferees to agree) to comply with this Section 13.4. In
------------
no event shall the Administrative Agent or any Lender be obligated or required
to return any materials furnished by the Borrower; provided, however, each
-------- -------
prospective Transferee shall be required to agree that if it does not become a
participant or assignee it shall return all materials furnished to it by or on
behalf of the Borrower in connection with this Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender to
------------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; provided that prior to any such
--------
disclosure, such prospective Transferee shall agree to preserve in accordance
with Section 13.4 the confidentiality of any confidential information described
------------
therein.
ARTICLE XIV: NOTICES
- ------------- -------
14.1 Giving Notice. Except as otherwise permitted by Section 2.13 with
-------------- ------------
respect to Borrowing/Election Notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Documents
shall be in writing or by telex or by facsimile and addressed or delivered to
such party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid, shall be
deemed given three (3) Business Days after mailed; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes); or, any notice, if transmitted by courier, one (1)
Business Day after deposit with a reputable overnight carrier services, with all
charges paid.
14.2 Change of Address. The Borrower, the Administrative Agent and any
-------------------
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
- ------------ ------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by telex or
telephone, that it has taken such action.
[Remainder of This Page Intentionally Blank]
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
RALSTON PURINA COMPANY, as the Borrower
By:/s/ James R. Elsesser
Name: James R. Elsesser
Title: Chief Financial Officer
Address:
Checkerboard Square
St. Louis, MO 63164
Attention: Chief Financial Officer
Phone: (314) 982-2353
Fax: (314) 982-1092
E-Mail: [email protected]
<PAGE>
BANK ONE, NA (Main Office Chicago), as Administrative Agent, an Issuing
Lender, the Swing Line Bank and as a Lender
By:/s/ William J. Oleferchik
Name: William J.Oleferchik
Title: Vice President
Address:
1 Bank One Plaza
Suite IL1-0173
14th Floor
Chicago, Illinois 60670
Attention: William J. Oleferchik
Telephone No.: (312) 732-2947
Facsimile No.: (312) 732-3888
<PAGE>
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By:/s/ Suzanne B. Smith
Name: Suzanne B. Smith
Title: Managing Director
Address:
901 Main Street
67th Floor
Dallas, TX 75202-3714
Attention: Suzanne B. Smith
Phone: (214) 209-0280
Fax: (214) 209-0980
E-Mail: [email protected]
<PAGE>
WACHOVIA BANK, N.A., as Documentation Agent and as a Lender
By:/s/ Walter R. Gillikin
Name: Walter R. Gillikin
Title: Senior Vice President
Address:
191 Peachtree Street, MC-GA370
Atlanta, GA 30303
Attention: Walter R. Gillikin
Phone: (404) 332-5747
Fax: (404) 332-6898
E-Mail: [email protected]
<PAGE>
THE NORTHERN TRUST COMPANY,
as a Lender
By:/s/ Lisa M. Taylor
Name: Lisa M. Taylor
Title: Second Vice President
Address:
50 South LaSalle
11th Floor
Chicago, IL 60675
Attention: Lisa Taylor
Phone: (312) 444-4196
Fax: (312) 444-5055
E-Mail: [email protected]
<PAGE>
STANDARD CHARTERED BANK,
as a Lender
By:/s/Andrew Ng
Name: Andrew Ng
Title: Vice President
By:/s/Marianne R. Murray
Name: Marianne R. Murray
Title: Senior Vice President
Address:
7 World Trade Center
27th Floor
New York, NY 10048
Attention: Marianne R. Murray
Phone: (212) 667-0505
Fax: (212) 667-0225
E-Mail: [email protected]
<PAGE>
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH, as a Lender
By:/s/Hisashi Miyashiro
Name: Hisashi Miyashiro
Title: Deputy General Manager
Address:
227 West Monroe Street
Suite 2300
Chicago, IL 60606
Attention: Alex Lam
Phone: (312) 696-4662
Fax: (312) 696-4535
E-mail: [email protected]
<PAGE>
BANK OF NEW YORK, as a Lender
By:/s/John-Paul Marotta
Name: John-Paul Marotta
Title: Vice President
Address:
One Wall Street
New York, NY 10286
Attention: David Shedd
Phone: (212) 635-8448
Fax: (212) 635-1208
<PAGE>
BANCA COMMERCIALE ITALIANA, CHICAGO BRANCH, as a Lender
By:/s/Mr. Charles Dougherty
Name: Mr. Charles Dougherty
Title: Vice President
By:/s/Mr. Edward Bermant
Name: Mr. Edward Bermant
Title: First Vice President
Deputy Manager
Address:
One William Street
New York, NY 10004
Attention: Mr. Charles Dougherty
Phone: (212) 607-3656
Fax: (212) 809-2124
<PAGE>
BANCA NAZIONALE DEL LAVORO S.p.A.-NEW YORK BRANCH, as a Lender
By:/s/Giulio Giovine
Name: Giulio Giovine
Title: Vice President
By:/s/Leonardo Valentini
Name: Leonardo Valentini
Title: First Vice President
Address:
25 West 51st Street
New York, NY 10019
Attention: Giulio Giovine
Phone: (212) 314-0239
Fax: (212) 765-2978
E-mail: [email protected]
<PAGE>
BANQUE NATIONALE DE PARIS,
as a Lender
By:/s/Arnaud Collin du Bocage
Name: Arnaud Collin du Bocage
Title: Executive Vice President
and General Manager
Address:
209 South LaSalle Street
Chicago, IL 60604
Attention: Ms. Kristin Howatt
Phone: (312) 977-1383
Fax: (312) 977-1380
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG, as a Lender
By: /s/Mark K. Connelly
Name: Mark K. Connelly
Title: Vice President
By:/s/Lynne McCarthy
Name: Lynne McCarthy
Title: Vice President
Address:
609 Fifth Avenue
New York, NY 10017-1021
Attention: Craig Anderson, Vice President
Phone: (212) 745-1583
Fax: (212) 745-1556/1550
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD.,
as a Lender
By: /s/Nobuyasu Fukatsu
Name: Nobuyasu Fukatsu
Title: General Manager
Address:
10 South Wacker Drive
26th Floor
Chicago, IL 60606
Attention: Brian Riley
Phone: (312) 876-8600
Fax: (312) 876-2011
E-Mail: [email protected]
<PAGE>
MERCANTILE BANK NATIONAL ASSOCIATION, as a Lender
By:/s/David F. Higbee
Name: David F. Higbee
Title: Vice President
Address:
One Mercantile Center
Tram 001/1001/12-3
St. Louis, MO 63101
Attention: David F. Hibgee
Phone: (314) 418-1967
Fax: (314) 418-2203
E-Mail: [email protected]
<PAGE>
SANPAOLO IMI S.p.A., as a Lender
By:/s/Luca Sacchi
Name: Luca Sacchi
Title: Vice President
By:/s/Carlo Persico
Name: Carlo Persico
Title: Deputy General Manager
Address:
245 Park Avenue
New York, NY 10167
Attention: Luca Sacchi
Phone: (212) 692-3130
Fax: (212) 692-3178
E-Mail: [email protected]
<PAGE>
SUNTRUST BANK, as a Lender
By:/s/Linda L. Dash
Name: Linda L. Dash
Title: Vice President
Address:
303 Peachtree Street, N.E.
Mail Code 1928, 3rd Floor
Atlanta, GA 30308
Attention: Linda L. Dash
Phone: (404) 658-4923
Fax: (404) 658-4905
<PAGE>
WESTPAC BANKING CORPORATION,
as a Lender
By:/s/Lewis Love
Name: Lewis Love
Title: Head of Legal & Compliance
Europe & Americas
Address:
575 Fifth Avenue
New York, NY 10017
Attention: Ms. Kate Perry
Phone: (212) 551-1808
Fax: (212) 551-1995
E-Mail: [email protected]
<PAGE>
Effective as of April __, 2000,
assigned to and assumed pursuant
to the terms of that certain Debt
Assignment, Assumption
and Release Agreement
dated as of April __, 2000
among Ralston, Energizer and the
Administrative Agent
ENERGIZER HOLDINGS, INC.
/s/Daniel E. Corbin
Name: Daniel E. Corbin
Title: Executive Vice President - Finance and Control
Address:
Checkerboard Square
800 Chouteau Avenue
St. Louis, MO 63102
Attention: Daniel Corbin
Phone: (314) 982-1801
Fax: (314) 982-1180
E-mail: [email protected]
<PAGE>
Exhibits
EXHIBIT A -- Revolving Loan Commitment (Definitions
EXHIBIT B -- Form of Borrowing/Election Notice (Section 2.2 and
-----------
2.7 and Section 2.9)
---- -------------
EXHIBIT C -- Form of Request for Letter of Credit (Section 3.4)
------------
EXHIBIT D -- Form of Assignment and Acceptance Agreement (Sections
---------
2.19 and 13.3)
---- ----
EXHIBIT E -- Form of Borrower's Counsel's Opinion (Section 5.1)
------------
EXHIBIT F -- List of Closing Documents (Section 5.1)
------------
EXHIBIT G -- Form of Officer's Certificate (Sections 5.2 and
-------------
7.1(A)(iii))
-----------
EXHIBIT H -- Form of Compliance Certificate (Sections 5.2 and
-------------
7.1(A)(iii))
------------
EXHIBIT I -- Form of Supplement to Subsidiary Guaranty
(Definitions)
EXHIBIT J -- Form of Debt Assumption Agreement (Definitions)
<PAGE>
Schedules
Schedule 1.1.1 -- Permitted Existing Investments (Definitions)
Schedule 1.1.2 -- Permitted Existing Liens (Definitions)
Schedule 1.1.3 -- Permitted Existing Contingent Obligations
Definitions)
Schedule 6.3 -- Ralston Conflicts; Ralston Governmental Consents
(Section 6.3)
-------------
Schedule 6.6 -- Energizer Conflicts; Energizer Governmental Consents
(Section 6.6)
------------
Schedule 6.7 -- Pro Forma Financial Statements (Section 6.7(A))
---------------
Schedule 6.10 -- Litigation; Loss Contingencies (Section 6.10)
-------------
Schedule 6.11 -- Subsidiaries (Section 6.11)
-------------
Schedule 6.20 -- Spin-Off Transactions (Section 6.20)
-------------
Schedule 6.21 -- Outstanding Spin-Off Conditions (Section 6.21,
-------------
Section 5.1(7))
---------------
Schedule 6.21(iv)-- Committed Financing Facilities (Section 6.21(iv),
---------------
Section 5.1(7)(iv))
-------------------
Schedule 6.22(iv)-- Environmental Matters (Section 6.22)
-------------
Schedule 7.3(G) -- Transactions with Ralston's Shareholders and
Affiliates (Section 7.3(G))
--------------
<PAGE>
Table of Contents
-----------------
Page
----
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms 1
1.2 References 21
ARTICLE II: THE REVOLVING LOAN FACILITY
2.1 Revolving Loans 21
2.2 Swing Line Loans 22
2.3 Rate Options for all Advances; Maximum Interest Periods 24
2.4 Optional Payments 24
2.5 Reduction of Revolving Loan Commitments 24
2.6 Method of Borrowing 24
2.7 Method of Selecting Types and Interest Periods for Advances 25
2.8 Minimum Amount of Each Advance 25
2.9 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances. 25
2.10 Default Rate 26
2.11 Method of Payment 26
2.12 Evidence of Debt. 26
2.13 Telephonic Notices 27
2.14 Promise to Pay; Interest and Facility Fees; Interest Payment Dates;
Interest and Fee Basis; Loan and Control Accounts. 27
1.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions 29
1.16 Lending Installations 29
1.17 Non-Receipt of Funds by the Administrative Agent 30
1.18 Termination Date 30
1.19 Replacement of Certain Lenders 30
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue Letters of Credit 31
3.2 [Reserved]. 31
3.3 Types and Amounts 31
3.4 Conditions 31
3.5 Procedure for Issuance of Letters of Credit 32
3.6 Letter of Credit Participation 32
3.7 Reimbursement Obligation 33
3.8 Letter of Credit Fees 33
3.9 Issuing Bank Reporting Requirements 34
3.10 Indemnification; Exoneration 34
3.11 Cash Collateral 35
ARTICLE IV: YIELD PROTECTION; TAXES
4.1 Yield Protection 35
4.2 Changes in Capital Adequacy Regulations 36
4.3 Availability of Types of Advances 36
4.4 Funding Indemnification 36
4.5 Taxes 37
4.6 Lender Statements; Survival of Indemnity 38
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit 39
5.2 Each Advance and Letter of Credit 40
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers of Ralston 41
6.2 Authority of Ralston. 41
6.3 No Conflict; Governmental Consents for Ralston 42
6.4 Organization; Corporate Powers of Energizer 43
6.5 Authority of Energizer. 43
6.6 No Conflict; Governmental Consents for Energizer 43
6.7 Financial Statements. 44
6.8 No Material Adverse Change 45
6.9 Taxes. 45
6.10 Litigation; Loss Contingencies and Violations 46
6.11 Subsidiaries 46
6.12 ERISA 46
6.13 Accuracy of Information 47
6.14 Securities Activities 47
6.15 Material Agreements 48
6.16 Compliance with Laws 48
6.17 Assets and Properties 48
6.18 Statutory Indebtedness Restrictions 48
6.19 Insurance 48
6.20 Labor Matters 48
6.21 Spin-Off Transactions 48
6.22 Environmental Matters 49
6.23 Solvency 49
6.24 Net Worth Condition 50
6.25 Benefits 50
ARTICLE VII: COVENANTS
7.1 Reporting 50
7.2 Affirmative Covenants. 53
7.3 Negative Covenants. 55
7.4 Financial Covenants 61
ARTICLE VIII: DEFAULTS
8.1 Defaults 62
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 Termination of Revolving Loan Commitments; Acceleration 65
9.2 Defaulting Lender 65
9.3 Amendments 66
9.4 Preservation of Rights 67
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations 67
10.2 Governmental Regulation 67
10.3 Performance of Obligations 67
10.4 Headings 68
10.5 Entire Agreement 68
10.6 Several Obligations; Benefits of this Agreement 68
10.7 Expenses; Indemnification. 68
10.8 Numbers of Documents 70
10.9 Accounting 70
10.10 Severability of Provisions 71
10.11 Nonliability of Lenders 71
10.12 GOVERNING LAW 71
10.13 CONSENT TO JURISDICTION; JURY TRIAL. 71
10.14 Subordination of Intercompany Indebtedness 72
ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1 Appointment; Nature of Relationship 73
11.2 Powers 74
11.3 General Immunity 74
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc 74
11.5 Action on Instructions of Lenders 74
11.6 Employment of Administrative Agents and Counsel 75
11.7 Reliance on Documents; Counsel 75
11.8 The Administrative Agent's Reimbursement and Indemnification 75
11.9 Rights as a Lender 75
11.10 Lender Credit Decision 75
11.11 Successor Administrative Agent 76
11.12 No Duties Imposed Upon Syndication Agent, Documentation Agent or
Arranger 76
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff 76
12.2 Ratable Payments 76
12.3 Application of Payments 77
12.4 Relations Among Lenders. 78
12.5 Representations and Covenants Among Lenders 78
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns 78
13.2 Participations. 79
13.3 Assignments. 79
13.4 Confidentiality 81
13.5 Dissemination of Information 81
ARTICLE XIV: NOTICES
14.1 Giving Notice 81
14.2 Change of Address 81
ARTICLE XV: COUNTERPARTS
March 30, 2000
Ralston Purina Company
Checkerboard Square
St. Louis, MO 63164-0001
Attention: James R. Elsesser
Chief Financial Officer
Energizer Holdings, Inc.
Checkerboard Square
St. Louis, MO 63164-0001
Attention: Daniel Corbin
Executive Vice President -
Finance and Control
Gentlemen:
Reference is hereby made to the 5-Year Credit Agreement dated as of March
30, 2000 among Ralston Purina Company, a corporation organized under the laws
of the State of Missouri (the "Ralston") as the initial borrower prior to the
assignment to and assumption by Energizer Holdings, Inc., a corporation
organized under the laws of the State of Missouri ("Borrower"), the financial
institutions parties thereto as lenders, Bank One, NA, in its capacity as
administrative agent, Bank of America, N.A., in its capacity as syndication
agent, and Wachovia Bank, N.A., in its capacity as documentation agent (the
"5-Year Credit Agreement"). Capitalized terms used herein and not defined
herein shall have the meanings given to them in the 5-Year Credit Agreement.
In connection with the consummation of the Transactions, Ralston has
requested a term loan in the aggregate principal amount of $67,000,000 (the
"Term Loan") which would be made in a single advance on March 30, 2000 and would
mature on the date which is the earliest of (1) if the Spin-Off and Debt
Assumption have not occurred prior thereto, April 4, 2000; (2) the date of
receipt by the Borrower or any of its Subsidiaries of proceeds from the initial
funding under the Receivables Purchase Documents; and (3) April 14, 2000.
Amounts repaid by Ralston or the Borrower with respect to the Term Loan may not
be reborrowed.
Bank One, NA (the "Lender") is pleased to agree to make such Term Loan to
Ralston, to be assigned to and assumed by the Borrower pursuant to the Debt
Assumption Agreement, subject to the terms and conditions of this letter.
(a) The Term Loan will be evidenced and governed by the Lender's
standard form of master note (the "Note"), a copy of which is attached hereto.
The Term Loan shall bear interest at a rate equal to the Lender's corporate base
rate of interest announced by the Lender from time to time minus 2.00%, changing
-----
when and as the corporate base rate changes, with interest payable on the
Maturity Date, and on demand thereafter.
(b) Interest and fees will be computed on the basis of actual days
elapsed on a 365-day year basis.
(c) Ralston will use the proceeds of the Term Loan for general
corporate purposes.
(d) Ralston and the Borrower will provide the Lender with each of the
following before the Term Loan is funded: (i) an appropriate corporate
resolution, (ii) an incumbency certificate, (iii) an opinion of counsel, (iv) an
officer's certificate from the Borrower certifying that the Receivables Purchase
Documents have been executed by all the parties thereto and all conditions to
effectiveness thereof and the initial purchase thereunder have been met other
than the consummation of the Spin-Off and (v) Ralston and the Borrower shall
have executed the Debt Assumption Agreement.
(e) The Lender shall have no obligation to make the Term Loan
hereunder (and the Term Loan and all accrued and unpaid interest thereon, at the
option of the Lender, may be declared immediately due and payable without
notice) if: (i) there is any failure by Ralston or the Borrower to pay any
principal, interest, fees, or other obligations when due under this letter, the
Note, or any other agreement or arrangement with the Lender, (ii) there exists
any default under the Note, or any violation or failure to comply with any
provision of this letter or the Note and such default or failure shall continue
unremedied for thirty (30) days after the earlier to occur of (a) the date on
which written notice from the Lender is received by the Borrower of such breach
and (b) the date on which a member of the Senior Management Team of the Borrower
had knowledge of the existence of such breach or should have known of the
existence of such breach, (iii) there occurs any material adverse change in the
condition or results of operations of the Borrower and its Subsidiaries, taken
as a whole, since the date of the quarterly financial statements most recently
delivered to the Lender prior to the date of this letter, (iv) any litigation is
pending or threatened against the Borrower or any Subsidiary which would
reasonably be expected to have a material adverse effect on the financial
condition or results of operations of the Borrower and its Subsidiaries, taken
as a whole, or on the ability of Ralston or the Borrower to consummate the
Transactions; (v) there is a material default under any agreement governing
indebtedness of the Borrower or any Subsidiary which individually or together
with such other indebtedness as to which any such failure or breach exists has
an aggregate outstanding principal amount equal to or greater than $30,000,00,
(vi) any petition is filed by or against Ralston, the Borrower or any Material
Subsidiary of the Borrower under the Federal Bankruptcy Code or similar state
law, (vii) Ralston, the Borrower or any Material Subsidiary of the Borrower
becomes insolvent, howsoever evidenced or (viii) other than as a result of the
consummation of the Spin-Off, Ralston shall cease to own, directly or
indirectly, all of the outstanding capital stock of the Borrower. The Lender
may require a certificate of compliance with these conditions from the
Borrower's Chief Financial Officer or Treasurer as a condition to making any
loan hereunder.
(f) From and after the Maturity Date, the Lender may make assignments
and sell participations in the Term Loan, and may disclose information pertain-
ing to the Borrower to prospective assignees and participants. Any such assign-
ment may be made only with the Borrower's consent (which consent will not
unreasonably be withheld).
(g) The Lender and any other person or entity with an interest in the
Note (a "Holder") shall hold all nonpublic information obtained in connection
With this Letter Agreement and identified as such by the Borrower in accordance
With such Holder's customary procedures for handling confidential information of
This nature and in accordance with safe and sound commercial lending or
Investment practices and in any event may make disclosure reasonably required by
a prospective Holder in connection with a contemplated participation or assign-
ment permitted by the immediately prior paragraph or as required or requested
by any governmental authority or any securities exchange or similar self-
regulatory organization or representative thereof or pursuant to a regulatory
examination or legal process and shall require any such prospective Holder
to agree (and require any of its transferees to agree) to comply with the pro-
visions hereof. In no event shall the Lender or any Holder be obligated or
required to return any materials furnished by the Borrower; provided,
however, each prospective Holder shall be required to agree that if it does
not become a participant or assignee it shall return all materials furnished
to it by or on behalf of the Borrower in connection with this Letter
Agreement.
(h) This letter agreement shall be effective as of the date of this
letter when the Borrower has signed and returned to the Lender a copy of this
letter.
<PAGE>
(i) THIS LETTER AND THE NOTE SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS. BOTH PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN THE EVENT THIS LETTER OR THE NOTE BECOMES THE SUBJECT OF A DISPUTE.
Very truly yours,
BANK ONE, NA
(Main Office Chicago)
By: /s/William J. Oleferchik
Title: Vice President
Accepted and agreed:
RALSTON PURINA COMPANY
By: /s/ James R. Elsesser
Title: Chief Financial Officer
<PAGE>
- ------
Effective as of April 1, 2000,
assigned to and assumed pursuant
to the terms of that certain Debt
Assignment, Assumption
and Release Agreement
dated as of April 1, 2000 among Ralston,
the Borrower and the Bank
ENERGIZER HOLDINGS, INC.
By:/s/Daniel E. Corbin
Title:Executive Vice President - Finance and Control
<PAGE>
MASTER NOTE
(FLOATING RATE)
$67,000,000 Date: March 30, 2000
FOR VALUE RECEIVED, RALSTON PURINA COMPANY ("Ralston") or, after consummation of
the "Debt Assumption" (as such term is defined in the 5-Year Credit Agreement
referenced in the Letter Agreement referred to below), ENERGIZER HOLDINGS, INC.
(the "Borrower") promises to pay to the order of BANK ONE, NA (the "Bank"), in
lawful money of the United States at the office of the Bank at 1 Bank One Plaza,
Chicago, Illinois, or as the Bank may otherwise direct, the lesser of
Sixty-Seven Million and NO/100ths Dollars ($67,000,000) or the aggregate
outstanding unpaid principal amount of loans evidenced hereby ("Loans"),
together with interest as provided below.
Any person authorized to borrow on behalf of Ralston (an "Authorized Person")
may request a Loan by telephone or telex. Ralston and the Borrower agree that
the Bank is authorized to honor requests which it believes, in good faith, to
emanate from an Authorized Person, whether in fact that be the case or not.
All Loans shall bear interest at a rate equal to the corporate base rate of
interest announced by the Bank from time to time minus 2.00%, changing when and
-----
as the corporate base rate changes. The Loans shall be payable on the "Maturity
Date" (as such term is defined in the Letter Agreement defined below). Interest
on the Loans shall be payable on the Maturity Date and on demand thereafter.
Any Loan which is not paid on the Maturity Date (or any earlier accelerated
maturity date or date when due) shall bear interest at a rate equal to the
corporate base rate of interest announced by the Bank from time to time,
changing when and as the corporate base rate changes.
Each payment of principal or interest hereunder shall be made in immediately
available funds in United States Dollars. If any payment shall become due and
payable on a Saturday, Sunday or legal holiday under the laws of Illinois, such
payment shall be made on the next succeeding business day in Illinois and any
such extended time of the payment of principal or interest shall be included in
computing interest. All interest hereunder shall be computed for the actual
number of days elapsed on a 365-day year basis. Ralston and the Borrower hereby
authorize the Bank to deposit the proceeds of Loans to Ralston's account at the
Bank or such other account as may be designated by Ralston. The Borrower hereby
authorizes the Bank to charge payments of principal and interest against, the
Borrower's deposit account with the Bank.
The Loans may be prepaid by Ralston or the Borrower, without premium or penalty.
Amounts prepaid or repaid may not be reborrowed.
Ralston and the Borrower hereby authorize the Bank to record Loans, interest
rates, repayments, and payment dates on the schedule attached to this Note or
otherwise in accordance with the Bank's usual practice. The obligation of
Ralston and, after the Debt Assumption, the Borrower to repay each Loan made
hereunder shall be absolute and unconditional notwithstanding any failure of the
Bank to enter such amounts on such schedule or to receive written confirmation
of the transaction from the Ralston or the Borrower. If the Bank requests a
written confirmation of a requested Loan, Ralston or the Borrower will confirm
the terms of each Loan by mailing a confirmation letter to the Bank signed by
any Authorized Person. If the Bank elects to confirm the terms of a Loan to the
Borrower, the Borrower will notify the Bank in writing within 10 business days
after the Borrower's receipt of such confirmation if it believes such
confirmation to be inaccurate, and the Borrower hereby waives any right to
contest the accuracy of such confirmation after such 10-business day period. In
the event of disagreement as to the terms of a transaction, the Bank's records
shall govern, absent manifest error.
From and after the Maturity Date, the Bank may elect to sell participations in
or assign its rights under Loans. Ralston and the Borrower agree that if it
fails to pay any Loan when due, any purchaser of an interest in such Loan shall
be entitled to seek enforcement of this note if the purchaser is permitted to do
so pursuant to the terms of the participation agreement between the Bank and
such purchaser.
This Note is the Note issued pursuant to, and is entitled to the benefits of,
the letter agreement between Ralston and the Bank dated of even date herewith
(which, as it may be amended or modified and in effect from time to time, is
herein called the "Letter Agreement"), to which Letter Agreement reference is
hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which the maturity of this Note may be
accelerated. Nothing in this Note shall constitute a commitment to make loans
to Ralston or the Borrower.
If any amount payable hereunder is not paid when due or upon demand, as
applicable, then any indebtedness from the Bank to Ralston, if the Debt
Assumption has not occurred, or the Borrower may be offset and applied toward
the payment of all unpaid principal, interest and fees payable hereunder,
whether or not such amounts, or any part thereof, shall then be due. Ralston
and the Borrower expressly waive any presentment, demand, protest or notice in
connection with this note now, or hereafter, required by applicable law and
agree to pay all costs and expenses of collection.
THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAW (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF ILLINOIS, GIVING EFFECT, HOWEVER, TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS. RALSTON, THE BORROWER AND THE BANK EACH HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS NOTE OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
RALSTON PURINA COMPANY
By:----------------------------
Title:-------------------------
Effective as of April __, 2000,
assigned to and assumed pursuant
to the terms of that certain Debt
Assignment, Assumption
and Release Agreement
dated as of April __, 2000 among Ralston,
the Borrower and the Bank
ENERGIZER HOLDINGS, INC.
By:____________________________________
Title:___________________________________
2
March 30, 2000
Ralston Purina Company
Checkerboard Square
St. Louis, MO 63164-0001
Attention: James R. Elsesser
Chief Financial Officer
Energizer Holdings, Inc.
Checkerboard Square
St. Louis, MO 63164-0001
Attention: Daniel Corbin
Executive Vice President -
Finance and Control
Gentlemen:
Reference is hereby made to the 5-Year Credit Agreement dated as of March
30, 2000 among Ralston Purina Company, a corporation organized under the laws
of the State of Missouri ("Ralston") as the initial borrower prior to the
assignment to and assumption by Energizer Holdings, Inc., a corporation
organized under the laws of the State of Missouri (the "Borrower"), the
financial institutions parties thereto as lenders, Bank One, NA, in its capacity
as administrative agent, Bank of America, N.A., in its capacity as syndication
agent, and Wachovia Bank, N.A., in its capacity as documentation agent (the
"5-Year Credit Agreement"). Capitalized terms used herein and not defined
herein shall have the meanings given to them in the 5-Year Credit Agreement.
In connection with the consummation of the Transactions, Ralston has
requested a term loan from Bank of America, N.A. (the "Lender") in the
aggregate principal amount of $175,000,000 (the "Term Loan") which would be made
in a single advance on or prior to March 31, 2000 and would mature on the date
which is the earliest of (a) if the Spin-Off and Debt Assumption have not
occurred prior thereto, April 4, 2000; (b) the date of receipt by the Borrower
or any of its Subsidiaries of proceeds from the initial funding under the
$175,000,000 senior notes of the Borrower issued in three series due April 1,
2003, April 1, 2005 and April 1, 2007, respectively (the "Senior Notes"); and
(c) April 10, 2000.
Amounts repaid by Ralston or the Borrower may not be reborrowed.
The Lender is pleased to agree to make such Term Loan to Ralston, to be
assigned to and assumed by the Borrower pursuant to the Debt Assumption
Agreement in the form of Exhibit "A" hereto (the "Debt Assumption Agreement"),
subject to the terms and conditions of this letter.
(a) The Term Loan will be evidenced and governed by the Lender's standard
form of master note (the "Note"), a copy of which is attached hereto as Exhibit
"B". The Term Loan or portions thereof ("Loans" under and as defined in the
Note) shall bear interest at a rate equal to the Lender's prime rate of interest
announced by the Lender from time to time minus 2.00%, changing when and as such
-----
prime rate changes, with interest payable on the Maturity Date, and on demand
thereafter.
(b) Interest and fees will be computed on the basis of actual days
elapsed on a 360-day year basis.
(c) Ralston will use the proceeds of the Term Loan for general
corporate purposes.
(d) Ralston and the Borrower will provide the Lender with each of the
following before the Term Loan is funded: (i) an appropriate corporate
resolution, (ii) an incumbency certificate, (iii) an opinion of counsel, (iv) an
officer's certificate from Ralston certifying that (A) each of the 5-Year Credit
Agreement and the 364-Day Credit Agreement has been executed by all parties
thereto (including Bank of America, N.A.) and all conditions to effectiveness
thereof have been met, (B) the letter agreement between Bank One, N.A. ("Bank
One") and Ralston providing for a term loan in an amount at least equal to
$60,000,000 by Bank One and all documents related thereto have been executed by
all parties thereto and all conditions to effectiveness thereof have been met,
and (C) there is at least $175,000,000 in aggregate borrowing capacity available
to Ralston under one or more committed credit facilities, and (v) Ralston and
the Borrower shall have executed the Debt Assumption Agreement.
(e) The Lender shall have no obligation to make the Term Loan hereunder
(and the Term Loan and all accrued and unpaid interest thereon, at the option of
the Lender, may be declared immediately due and payable without notice) if: (i)
there is any failure by Ralston or the Borrower to pay any principal, interest,
fees, or other obligations when due under this letter, the Note, or any other
agreement or arrangement with the Lender, (ii) there exists any default under
the Note, or any violation or failure to comply with any provision of this
letter or the Note, (iii) there occurs any material adverse change in the
condition or results of operations of the Borrower and its Subsidiaries, taken
as a whole, since the date of the quarterly financial statements most recently
delivered to the Lender prior to the date of this letter, (iv) any litigation is
pending or threatened against the Borrower or any Subsidiary which might have a
material adverse effect on the financial condition or results of operations of
the Borrower and its Subsidiaries, taken as a whole, or on the ability of
Ralston or the Borrower to consummate the Transactions; (v) there is a default
under any agreement governing indebtedness of the Borrower or any Subsidiary,
(vi) any petition is filed by or against Ralston, the Borrower or any Subsidiary
of the Borrower under the Federal Bankruptcy Code or similar state law, (vii)
Ralston, the Borrower or any Subsidiary of the Borrower becomes insolvent,
howsoever evidenced or (viii) other than as a result of the consummation of the
Spin-Off, Ralston shall cease to own, directly or indirectly, all of the
outstanding capital stock of the Borrower, (ix) prior to consummation of the
Spin-Off, there is less than $175,000,000 in aggregate borrowing capacity
available to Ralston under its committed credit facilities, (x) after
consummation of the Spin-Off, there is less than $175,000,000 in aggregate
borrowing capacity available under the 5-Year Credit Agreement and the 364-Day
Credit Agreement, or (xi) there shall have occurred an adverse change in the
market for private placement of senior debt or a disruption of, or an adverse
change in, financial, banking or capital market conditions, in each case as
determined by the Lender. "Subsidiary" means (i) any corporation of which more
than 50% of the outstanding securities having ordinary voting power is owned or
controlled, directly or indirectly, by the Borrower or by one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization of which more than 50% of the ownership interests having
ordinary voting power are so owned or controlled. The Lender may require a
certificate of compliance with these conditions from the Borrower's Chief
Financial Officer or Treasurer as a condition to making any loan hereunder.
(f) The Lender may make assignments and sell participations in the Term
Loan, and may disclose information pertaining to the Borrower to prospective
assignees and participants. Any such assignment may be made only with the
Borrower's consent (which consent will not unreasonably be withheld).
(g) This letter agreement shall be effective as of the date of this
letter when the Borrower has signed and returned to the Lender a copy of this
letter.
(h) This letter agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
(i) THIS LETTER AND THE NOTE SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF TEXAS. BOTH PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN THE EVENT THIS LETTER OR THE NOTE BECOMES THE SUBJECT OF A DISPUTE.
Very truly yours,
BANK OF AMERICA, N.A.
By: /s/Suzanne B. Smith
Title: Managing Director
Accepted and agreed:
RALSTON PURINA COMPANY
By: /s/ James R. Elsesser
Title: Vice President and Chief Financial
Officer
ENERGIZER HOLDINGS, INC.
By:/s/ Daniel E. Corbin
Title: Executive Vice President, Finance and
Control
<PAGE>
EXHIBIT "B"
MASTER NOTE
(FLOATING RATE)
$175,000,000.00 Date: March 30, 2000
FOR VALUE RECEIVED, RALSTON PURINA COMPANY ("Ralston") or, after consummation of
the "Debt Assumption" (as such term is defined in the 5-Year Credit Agreement
referenced in the Letter Agreement referred to below), ENERGIZER HOLDINGS, INC.
(the "Borrower") promises to pay to the order of BANK OF AMERICA, N.A. (the
"Bank"), in lawful money of the United States at the office of the Bank at 901
Main Street, Dallas, Texas, or as the Bank may otherwise direct, the lesser of
One Hundred and Seventy-Five Million and NO/100ths Dollars ($175,000,000.00) or
the aggregate outstanding unpaid principal amount of loans evidenced hereby
("Loans"), together with interest as provided below.
Any person authorized to borrow on behalf of Ralston (an "Authorized Person")
may request a Loan by telephone or telex. Ralston and the Borrower agree that
the Bank is authorized to honor requests which it believes, in good faith, to
emanate from an Authorized Person, whether in fact that be the case or not.
All Loans shall bear interest at a rate equal to the prime rate of interest
announced by the Bank from time to time minus 2.00%, changing when and as the
-----
prime rate changes. The Loans shall be payable on the "Maturity Date" (as such
term is defined in the Letter Agreement defined below). Interest on the Loans
shall be payable on the Maturity Date and on demand thereafter. Any Loan which
is not paid on the Maturity Date (or any earlier accelerated maturity date or
date when due) shall bear interest at a rate equal to the prime rate of interest
announced by the Bank from time to time, changing when and as the corporate base
rate changes.
Each payment of principal or interest hereunder shall be made in immediately
available funds in United States Dollars. If any payment shall become due and
payable on a Saturday, Sunday or legal holiday under the laws of Texas, such
payment shall be made on the next succeeding business day in Texas and any such
extended time of the payment of principal or interest shall be included in
computing interest. All interest hereunder shall be computed for the actual
number of days elapsed on a 360-day year basis. Ralston and the Borrower hereby
authorize the Bank to deposit the proceeds of Loans to Ralston's account at the
Bank or such other account as may be designated by Ralston. The Borrower hereby
authorizes the Bank to charge payments of principal and interest against, the
Borrower's deposit account with the Bank.
The Loans may be prepaid by Ralston or the Borrower, without premium or penalty.
Amounts prepaid or repaid may not be reborrowed.
Ralston and the Borrower hereby authorize the Bank to record Loans, interest
rates, repayments, and payment dates on the schedule attached to this Note or
otherwise in accordance with the Bank's usual practice. The obligation of
Ralston and, after the Debt Assumption, the Borrower to repay each Loan made
hereunder shall be absolute and unconditional notwithstanding any failure of the
Bank to enter such amounts on such schedule or to receive written confirmation
of the transaction from the Ralston or the Borrower. If the Bank requests a
written confirmation of a requested Loan, Ralston or the Borrower will confirm
the terms of each Loan by mailing a confirmation letter to the Bank signed by
any Authorized Person. If the Bank elects to confirm the terms of a Loan to the
Borrower, the Borrower will notify the Bank in writing within 10 days after the
Borrower's receipt of such confirmation if it believes such confirmation to be
inaccurate, and the Borrower hereby waives any right to contest the accuracy of
such confirmation after such 10-day period. In the event of disagreement as to
the terms of a transaction, the Bank's records shall govern, absent manifest
error.
The Bank may elect to sell participations in or assign its rights under Loans.
Ralston and the Borrower agree that if it fails to pay any Loan when due, any
purchaser of an interest in such Loan shall be entitled to seek enforcement of
this note if the purchaser is permitted to do so pursuant to the terms of the
participation agreement between the Bank and such purchaser.
The Borrower hereby authorizes the Bank and any other holder of an interest in
this Note (a "Holder") to disclose confidential information relating to the
financial condition or operations of the Borrower (i) to any affiliate of the
Bank or any Holder, (ii) to any purchaser or prospective purchaser of an
interest in any Loan, (iii) to legal counsel, accountants, and other
professional advisors to the Bank or any Holder, (iv) to regulatory officials,
(v) as requested or required by law, regulation, or legal process or (vi) in
connection with any legal proceeding to which the Bank or any other holder is a
party.
This Note is the Note issued pursuant to, and is entitled to the benefits of,
the letter agreement between Ralston and the Bank dated of even date herewith
(which, as it may be amended or modified and in effect from time to time, is
herein called the "Letter Agreement"), to which Letter Agreement reference is
hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which the maturity of this Note may be
accelerated. Nothing in this Note shall constitute a commitment to make loans
to Ralston or the Borrower.
If any amount payable hereunder is not paid when due or upon demand, as
applicable, then any indebtedness from the Bank to Ralston, if the Debt
Assumption has not occurred, or the Borrower may be offset and applied toward
the payment of all unpaid principal, interest and fees payable hereunder,
whether or not such amounts, or any part thereof, shall then be due. Ralston
and the Borrower expressly waive any presentment, demand, protest or notice in
connection with this note now, or hereafter, required by applicable law and
agree to pay all costs and expenses of collection.
THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAW (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF TEXAS, GIVING EFFECT, HOWEVER, TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS. RALSTON, THE BORROWER AND THE BANK EACH HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS NOTE OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
RALSTON PURINA COMPANY
By:
Title:
Assigned to and Assumed pursuant
to the terms of that certain Debt
Assumption Agreement Dated as of
March 30, 2000 among Ralston,
The Borrower and the Bank
ENERGIZER HOLDINGS, INC.
By:
Title:
To be executed upon the effectiveness of the Debt Assumption Agreement.
DEBT ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT
THIS DEBT ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT ("Agreement") is
made as of April 1, 2000, by and among RALSTON PURINA COMPANY, a Missouri
corporation ("Ralston"), ENERGIZER HOLDINGS, INC., a Missouri corporation
("Energizer") and BANK ONE, NA, individually and in its capacity as agent for
the "Lenders" (as defined below).
W I T N E S S E T H:
WHEREAS, Ralston is the borrower under that certain 5-Year Revolving Credit
Agreement dated as of March 30, 2000 by and among Ralston, the financial
institutions from time to time parties thereto as Lenders (the "5-Year
Lenders"), Bank One, N.A., as the Administrative Agent (the "Administrative
Agent"), Bank of America, N.A., as "Syndication Agent", and Wachovia Bank, N.A.,
as "Documentation Agent" (collectively, the "Agents") (such 5-Year Credit
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "5-Year Credit Agreement").
WHEREAS, Ralston is the borrower under that certain 364-Day Credit Agreement
dated as of March 30, 2000 by and among Ralston, the financial institutions
from time to time parties thereto as Lenders (the "364-Day Lenders"), the
Administrative Agent, the Syndication Agent and the Documentation Agent (such
364-Day Credit Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "364-Day Credit Agreement"; together
with the 5-Year Credit Agreement, the "Syndicated Agreements").
WHEREAS, Ralston is the borrower under that certain letter agreement dated as of
March 30, 2000 by and between Ralston and Bank One, NA (the "Bridge Lender")
(such letter agreement, as the same may be amended, restated supplemented or
otherwise modified from time to time, the "Bridge Agreement"; together with the
Syndicated Agreements, the "Credit Agreements").
WHEREAS, Energizer is a wholly owned subsidiary of Ralston.
WHEREAS, effective April 1, 2000, Ralston will distribute all of the shares of
Energizer's capital stock to Ralston's shareholders, following which all of
Energizer's shares will be held by Ralston's shareholders (the "Spin-Off
Transaction").
WHEREAS, in connection with the consummation of the Spin-Off Transaction,
Ralston desires to assign to Energizer and Energizer desires to assume all of
the indebtedness, obligations and liabilities of Ralston under the Credit
Agreements.
WHEREAS, the 5-Year Lenders, the 364-Day Lenders and the Bridge Lender
(collectively, the "Lenders") have consented to the assignment by Ralston to
Energizer under and subject to the terms and conditions contained in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto Ralston, Energizer and
Bank One, NA, on behalf of the itself, the Agents and the Lenders hereby agree
as follows:
1. Assignment of Rights. As of the "Effective Date" (as defined in Section 8
---------------------- ---------
below), Ralston hereby assigns all of its rights, duties and obligations under
the Credit Agreements to Energizer, including, without limitation, the right to
obtain Loans and Letters of Credit under the Syndicated Agreements, all on the
terms and subject to the conditions set forth in the Credit Agreements. Each of
the parties to this Agreement acknowledges and agrees that from and after the
Effective Date, Ralston shall cease to have any rights under the Credit
Agreements as the "Borrower" thereunder and shall cease to be a party to any of
the Credit Agreements or the other documents, instruments and agreements
executed in connection therewith. From and after the Effective Date, all
references in the Credit Agreements to the "Borrower" shall mean and be a
reference to Energizer.
2. Assumption of Obligations. As of the Effective Date, Energizer hereby
---------------------------
assumes, as its direct and primary obligation, all rights, duties and
obligations of Ralston under the Credit Agreements, including, without
limitation the payment and performance obligations and all other liabilities
and obligations of Ralston under the Credit Agreements consisting, among other
things, of the obligation to repay all loans made to Ralston prior to the
Effective Date under the Credit Agreements, to pay interest and fees with
respect to all such liabilities and obligations, and indemnification obligations
related thereto (collectively the "Assumed Obligations") and hereby agrees to
make all payments required under the Credit Agreements as in effect from time to
time and to discharge the Assumed Obligations as they become due or are declared
due. Each of the parties hereto acknowledges that from and after the Effective
Date, Ralston has assigned to Energizer all of the rights of Ralston under the
Credit Agreements, including, without limitation, the right to obtain Loans and
Letters of Credit and other financial accommodations, all on the terms and
subject to the conditions set forth in the Credit Agreements. From and after
the Effective Date, Energizer agrees to perform and discharge all of the Assumed
Obligations, including, without limitation, performance and observance of all of
the covenants and conditions of the Credit Agreements to be performed or
observed by Ralston thereunder or in connection therewith, and to be bound in
all respects by the terms of the Credit Agreements as they relate to Ralston as
if Energizer were an original signatory thereto.
3. Release from Duties. In consideration of the assumption by Energizer, from
--------------------
and after the Effective Date, Bank One, NA on behalf of itself, the Agents and
the other Lenders confirms that Ralston shall be discharged from all of its
duties and obligations as Borrower under the Credit Agreements and the other
documents, instruments and agreements entered into in connection therewith and
that from and after the Effective Date, Ralston shall have no further
obligations or liabilities thereunder to the Lenders or the Agents.
4. Ralston Representations and Warranties. To induce Energizer and Bank One,
----------------------------------------
NA to consent to Energizer's assumption of the Assumed Obligations and the
release of Ralston as set forth above, Ralston hereby represents and warrants to
Bank One, NA, the Lenders and the Agents that, as of the date hereof and as of
the Effective Date:
(a) Ralston (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (ii) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing will have or is reasonably likely to have a material adverse
effect on the business, condition (financial or otherwise), operations,
performance, properties or prospects of Ralston and its subsidiaries, taken as a
whole, and (iii) has all requisite corporate power and authority to enter into
the transactions contemplated by this Agreement.
(b) Ralston has the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
(c) Ralston has taken all necessary corporate action to authorize the
execution and delivery of, and the performance of its obligations under, this
Agreement.
(d) This Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of Ralston enforceable against Ralston in
accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, including concepts of
reasonableness, materiality, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief or other equitable
remedies (whether enforcement is sought in equity or at law)).
5. Energizer Representations and Warranties. To induce Bank One, NA to
-------------------------------------------
enter into this Agreement and to induce the Lenders and Agents to consent to
Energizer's assumption of the Assumed Obligations and to hereafter make and
extend Loans and other financial accommodations to or for the account of
Energizer under the Credit Agreements, Energizer hereby represents and warrants
to the Lenders and the Agents that, as of the date hereof and as of the
Effective Date:
a) Energizer (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (ii) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing will have or is reasonably likely to have a Material Adverse
Effect; and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement.
(b) Energizer has the equisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement, and to perform its
obligations under the Credit Agreements, and all other agreements, instruments
and documents executed and delivered or to be executed and delivered by it
pursuant hereto or in connection herewith.
(c) Energizer has taken all necessary corporate action to authorize the
execution and delivery of, and the performance of its obligations under, this
Agreement and all other agreements, instruments and documents executed and
delivered by Energizer pursuant hereto or in connection herewith.
(d) This Agreement and all other agreements, instruments or documents executed
and delivered by Energizer pursuant hereto or in connection herewith have been
duly executed and delivered and constitute the legal, valid and binding
obligations of Energizer enforceable against Energizer in accordance with their
terms (except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles, including concepts of reasonableness, materiality,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies (whether enforcement
is sought in equity or at law)).
(e) Set forth on Exhibit A hereto is a certified calculation of the Net Worth
---------
Condition as of the date hereof and as of the Effective Date after giving effect
to the Spin-Off Transactions.
7. Further Assurances. Energizer hereby agrees to take such further
-------------------
action as may be reasonably requested by Bank One, NA, the Agents or any of the
Lenders to effect the provisions of this Agreement, including, without
limitation, executing a supplement to each of the Credit Agreements and the
documents, instruments and agreements executed in connection therewith pursuant
to which Energizer confirms that it has become a party to such Credit Agreements
and other agreements as the "Borrower" thereunder as though it was an original
party thereto.
8. Effectiveness of this Agreement. Notwithstanding anything herein, in the
---------------------------------
Credit Agreements or any of the other documents, instruments and agreements
executed in connection therewith to the contrary, the assignment, assumption and
release set forth in Sections 1, 2 and 3 above shall not be effective until each
---------- - -
of the following have been satisfied:
(a) This Agreement shall have been executed and delivered by each of the
parties hereto;
(b) The Spin-off Transactions shall have occurred in accordance with the
terms of the Form-10;
(c) Bank One, NA has received a certificate from Energizer's chief financial
officer demonstrating that the Net Worth Condition has been satisfied as of the
effectiveness of and after taking into account all of the Spin-off Transactions
and as of the date of delivery thereof; and
(d) Bank One, NA has received a certificate from Energizer's chief financial
officer that no Default or Unmatured Default has occurred and is continuing
under the Credit Agreements and all conditions to borrowing contained therein
have been and can currently be met by Energizer.
The date upon which all of the conditions to effectiveness shall have been met
is sometimes referred to herein as the "Effective Date."
9. Section Headings. The Section headings contained in this Agreement are
----------------
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. CHOICE OF LAW. BANK ONE, NA ACCEPTS THIS AGREEMENT, ON BEHALF OF
---------------
ITSELF, THE AGENTS AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN RALSTON, ENERGIZER, BANK ONE, NA OR
ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
11. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
--------------------------------------------------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
---------------------
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. RALSTON AND ENERGIZER AGREE THAT BANK ONE, NA, ANY
--------------------
AGENT OR ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST RALSTON OR ENERGIZER
OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN
PERSONAL JURISDICTION OVER RALSTON OR ENERGIZER OR (2) IN ORDER TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF RALSTON
AND ENERGIZER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON BUT SHALL
ONLY BE PERMITTED TO BRING ANY SUCH PERMISSIVE COUNTERCLAIM IN A PROCEEDING
BROUGHT PURSUANT TO CLAUSE (A). EACH OF RALSTON AND ENERGIZER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. EACH OF RALSTON AND ENERGIZER IRREVOCABLY WAIVES ANY OBJECTION
-----
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
-----------------------
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
-------------------
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
SECTION 11 WITH ITS COUNSEL.
12. Severability. Any provision of this Agreement that is held to be
------------
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
13. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
14. Definitions. Capitalized terms not otherwise defined herein shall have
-----------
the meanings ascribed to them in each of the Syndicated Agreements.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officer as of the day
and year first set for above.
RALSTON PURINA COMPANY
By:/s/James R. Elsesser
Name: James R. Elsesser
Title: Chief Financial Officer
ENERGIZER HOLDINGS, INC.
By:/s/ Daniel E.Corbin
Name: Daniel E. Corbin
Title:Executive Vice President - Finance and
Control
BANK ONE, N.A.,
Individually and on behalf of the Agents
and the Lenders
By: /s/ William J. Oleferchik
Name: William J. Oleferchik
Title:Vice President
DEBT ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT
THIS DEBT ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT ("Agreement") is
dated effective as of April 1, 2000, by and among RALSTON PURINA COMPANY, a
Missouri corporation ("Ralston"), ENERGIZER HOLDINGS, INC., a Missouri
corporation ("Energizer") and BANK OF AMERICA, N.A. (the "Bank").
W I T N E S S E T H:
WHEREAS, Ralston is the borrower under that certain letter agreement dated
as of March 30, 2000 by and between Ralston and the Bank (such letter agreement,
as the same may be amended, restated supplemented or otherwise modified from
time to time, the "Bridge Agreement").
WHEREAS, Energizer is a wholly owned subsidiary of Ralston.
WHEREAS, effective April 1, 2000, Ralston will distribute all of the shares
of Energizer's capital stock to Ralston's shareholders, following which all of
Energizer's shares will be held by Ralston's shareholders (the "Spin-Off
Transaction").
WHEREAS, in connection with the consummation of the Spin-Off Transaction,
Ralston desires to assign to Energizer and Energizer desires to assume all of
the indebtedness, obligations and liabilities of Ralston under the Bridge
Agreement.
WHEREAS, the Bank has consented to the assignment by Ralston to Energizer
under and subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto Ralston,
Energizer and the Bank hereby agree as follows:
1. Assignment of Rights. As of the "Effective Date" (as defined in
----------------------
Section 8 below), Ralston hereby assigns all of its rights, duties and
-------
obligations under the Bridge Agreement to Energizer, all on the terms and
subject to the conditions set forth in the Bridge Agreement. Each of the
parties to this Agreement acknowledges and agrees that from and after the
Effective Date, Ralston shall cease to have any rights under the Bridge
Agreement as the "Borrower" thereunder and shall cease to be a party to the
Bridge Agreement or the other documents, instruments and agreements executed in
connection therewith. From and after the Effective Date, all references in the
Bridge Agreement to the "Borrower" shall mean and be a reference to Energizer.
2. Assumption of Obligations. As of the Effective Date, Energizer
---------------------------
hereby assumes, as its direct and primary obligation, all rights, duties and
obligations of Ralston under the Bridge Agreement, including, without limitation
the payment and performance obligations and all other liabilities and
obligations of Ralston under the Bridge Agreement consisting, among other
things, of the obligation to repay all loans made to Ralston prior to the
Effective Date under the Bridge Agreement, to pay interest and fees with respect
to all such liabilities and obligations, and indemnification obligations related
thereto (collectively the "Assumed Obligations") and hereby agrees to make all
payments required under Bridge Agreement as in effect from time to time and to
discharge the Assumed Obligations as they become due or are declared due. Each
of the parties hereto acknowledges that from and after the Effective Date,
Ralston has assigned to Energizer all of the rights of Ralston under the Bridge
Agreement, all on the terms and subject to the conditions set forth in the
Bridge Agreement. From and after the Effective Date, Energizer agrees to
perform and discharge all of the Assumed Obligations, including, without
limitation, performance and observance of all of the covenants and conditions of
the Bridge Agreement to be performed or observed by Ralston thereunder or in
connection therewith, and to be bound in all respects by the terms of the Bridge
Agreement as they relate to Ralston as if Energizer were an original signatory
thereto.
3. Release from Duties. In consideration of the assumption by
---------------------
Energizer, from and after the Effective Date, the Bank confirms that Ralston
shall be discharged from all of its duties and obligations as Borrower under the
Bridge Agreement and the other documents, instruments and agreements entered
into in connection therewith and that from and after the Effective Date, Ralston
shall have no further obligations or liabilities thereunder to the Bank.
4. Ralston Representations and Warranties. To induce Energizer and the
--------------------------------------
Bank to consent to Energizer's assumption of the Assumed Obligations and the
release of Ralston as set forth above, Ralston hereby represents and warrants to
the Bank that, as of the date hereof and as of the Effective Date:
(a) Ralston (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization; (ii) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing will have or is reasonably likely to have a material adverse
effect on the business, condition (financial or otherwise), operations,
performance, properties or prospects of Ralston and its subsidiaries, taken as a
whole, and (iii) has all requisite corporate power and authority to enter into
the transactions contemplated by this Agreement.
(b) Ralston has the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
(c) Ralston has taken all necessary corporate action to authorize the
execution and delivery of, and the performance of its obligations under, this
Agreement.
(d) This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of Ralston enforceable
against Ralston in accordance with its terms (except as enforceability may be
limited by bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles, including
concepts of reasonableness, materiality, good faith and fair dealing and the
possible unavailability of specific performance, injunctive relief or other
equitable remedies (whether enforcement is sought in equity or at law)).
5. Energizer Representations and Warranties. To induce the Bank to
-------------------------------------------
enter into this Agreement and to induce the Bank to consent to Energizer's
assumption of the Assumed Obligations, Energizer hereby represents and warrants
to the Lenders and the Agents that, as of the date hereof and as of the
Effective Date:
(a) Energizer (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization; (ii) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing will have or is reasonably likely to have a Material Adverse
Effect; and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement.
(b) Energizer has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, and to
perform its obligations under the Bridge Agreement, and all other agreements,
instruments and documents executed and delivered or to be executed and delivered
by it pursuant hereto or in connection herewith.
(c) Energizer has taken all necessary corporate action to authorize the
execution and delivery of, and the performance of its obligations under, this
Agreement and all other agreements, instruments and documents executed and
delivered by Energizer pursuant hereto or in connection herewith.
(d) This Agreement and all other agreements, instruments or documents
executed and delivered by Energizer pursuant hereto or in connection herewith
have been duly executed and delivered and constitute the legal, valid and
binding obligations of Energizer enforceable against Energizer in accordance
with their terms (except as enforceability may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, including concepts of
reasonableness, materiality, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief or other equitable
remedies (whether enforcement is sought in equity or at law)).
7. Further Assurances. Energizer hereby agrees to take such further
-------------------
action as may be reasonably requested by the Bank to effect the provisions of
this Agreement, including, without limitation, executing a supplement to the
Bridge Agreement and the documents, instruments and agreements executed in
connection therewith pursuant to which Energizer confirms that it has become a
party to the Bridge Agreement and other agreements as the "Borrower" thereunder
as though it was an original party thereto.
8. Effectiveness of this Agreement. Notwithstanding anything herein,
--------------------------------
in the Credit Agreements or any of the other documents, instruments and
agreements executed in connection therewith to the contrary, the assignment,
assumption and release set forth in Sections 1, 2 and 3 above shall not be
---------- - -
effective until each of the following have been satisfied:
This Agreement shall have been executed and delivered by each of the parties
hereto; and
The conditions precedent to the Debt Assumption Agreement (as defined in the
5-Year Credit Agreement) shall have been satisfied.
The date upon which all of the conditions to effectiveness shall have been met
is sometimes referred to herein as the "Effective Date."
9. Section Headings. The Section headings contained in this Agreement
-----------------
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. CHOICE OF LAW. THE BANK ACCEPTS THIS AGREEMENT AT DALLAS, TEXAS BY
-------------
ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN RALSTON, ENERGIZER
AND THE BANK ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF TEXAS.
11. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
--------------------------------------------------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
----------------------
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN DALLAS, TEXAS, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF DALLAS, TEXAS. EACH OF THE PARTIES HERETO WAIVES IN
ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. RALSTON AND ENERGIZER AGREE THAT THE BANK
--------------------
SHALL HAVE THE RIGHT TO PROCEED AGAINST RALSTON OR ENERGIZER OR ITS PROPERTY IN
A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER RALSTON OR ENERGIZER OR (2) IN ORDER TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF RALSTON AND
ENERGIZER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON BUT SHALL
ONLY BE PERMITTED TO BRING ANY SUCH PERMISSIVE COUNTERCLAIM IN A PROCEEDING
BROUGHT PURSUANT TO CLAUSE (A). EACH OF RALSTON AND ENERGIZER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. EACH OF RALSTON AND ENERGIZER IRREVOCABLY WAIVES ANY
-----
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
-----------------------
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
-------------------
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF SECTION 11 WITH ITS COUNSEL.
12. Severability. Any provision of this Agreement that is held to be
------------
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
13. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
14. Definitions. Capitalized terms not otherwise defined herein shall
-----------
have the meanings ascribed to them in the Bridge Agreement.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
==========================================
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officer as of
the day and year first set for above.
RALSTON PURINA COMPANY
By:/s/James R. Elsesser
Name: James R. Elsesser
Title: Chief Financial Officer
ENERGIZER HOLDINGS, INC.
By:/s/ Daniel E.Corbin
Name: Daniel E. Corbin
Title:Executive Vice President - Finance and
Control
BANK OF AMERICA, N.A.,
By: /s/Suzanne B. Smith
Name: Suzanne B. Smith
Title: Managing Director
AMENDMENT TO SHAREHOLDER AGREEMENT
This Amendment to the Shareholder Agreement, dated as of March 30, 2000
("Amendment"), is made by and among Interstate Bakeries Corporation, a Delaware
corporation ("IBC"), Ralston Purina Company, a Missouri corporation ("Ralston"),
and Tower Holding Company, Inc., a Delaware corporation and wholly owned
subsidiary of Ralston, and successor to VCS Holding Company ("VCS"), for the
purpose of amending and supplementing the Shareholder Agreement by and among
IBC, Ralston and VCS, dated July 22, 1995 (the "Shareholder Agreement"), as
supplemented and amended by the Supplement to Shareholder Agreement by and among
IBC, Ralston and VCS, dated July 25, 1995 (the "Supplement Agreement"). Defined
terms used herein without definition shall have the meanings ascribed to them in
the Shareholder Agreement.
WITNESSETH:
WHEREAS, IBC and Ralston entered into the Shareholder Agreement to provide
certain rights and restrictions with respect to the IBC Equity owned by Ralston;
and
WHEREAS, the parties have agreed to extend the term of the Shareholder
Agreement and to make certain amendments to the provisions of the Shareholder
Agreement; and
WHEREAS, the parties agree that by entering this Amendment they acknowledge
and confirm that they will continue to be bound by the terms of the Shareholder
Agreement, as previously amended and supplemented by the Supplement Agreement
and by this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, the parties agree as follows:
1. Except as specifically provided in, and as amended by, this Amendment,
the rights and restrictions with respect to the IBC Equity set forth in the
Shareholder Agreement and the Supplement Agreement shall continue during the
term hereof.
2. The recital paragraph of the Shareholder Agreement is hereby deleted and
replaced with the following:
"THIS SHAREHOLDER AGREEMENT dated July 22, 1995 (the "Agreement"), is made by
and among INTERSTATE BAKERIES CORPORATION, a Delaware corporation ("IBC"),
RALSTON PURINA COMPANY, a Missouri corporation ("Ralston") and VCS HOLDING
COMPANY, a Delaware corporation and a wholly-owned subsidiary of Ralston
("VCS")".
3. The first WHEREAS clause of the Shareholder Agreement is hereby amended
by substituting "Ralston" for "RPC" in the second line.
4. Section 1.29 of the Shareholder Agreement is hereby deleted and replaced
with the following:
"Section 1.29 RAL Stock. "RAL Stock means Ralston's $ .10 par value Common
Stock, or any other class of common stock of Ralston at any time outstanding."
5. Section 1.33 of the Shareholder Agreement is deleted.
6. The introductory sentence to Section 2.1 of the Shareholder Agreement is
hereby deleted and replaced with the following:
"Section 2.1 Standstill Covenants. Unless specifically requested or permitted
in writing in advance by the Chairman of the Board of IBC or unless otherwise
permitted in this Agreement, Ralston agrees that until August 1, 2006, neither
it nor any of its Affiliates will, directly or indirectly:"
7. The introductory language before "(i)" in Section 2.3 of the Shareholder
Agreement is hereby deleted and replaced with the following:
"Section 2.3 Voting of IBC Equity. Ralston agrees that during the term of this
Agreement, with respect to the election of directors of IBC, each class of IBC
Equity owned by Ralston and its Affiliates shall be voted"
8. Section 3.1 of the Shareholder Agreement is hereby deleted and replaced
with the following:
"Section 3.1 Restrictions of Transfer. During the term of this Agreement,
Ralston agrees that it will not, and it will cause each of its Affiliates who
have acquired IBC Equity under this Agreement, or who may acquire IBC Equity
pursuant to Section 3.2(b) of this Agreement, not to Transfer any IBC Equity
except as permitted by or in accordance with this Agreement."
9. Section 4.1(a) of the Shareholder Agreement is hereby deleted and
replaced with the following:
"(a) Except for Transfers permitted by Section 3.2(a) and (b), and Transfers to
a Person making a tender offer for outstanding IBC Equity which is recommended
to shareholders of IBC by the board of directors of IBC, during the term of this
Agreement, Ralston and its Affiliates shall not sell any shares of IBC Equity to
any Person unless it has first made an offer (the "First Offer") to sell such
shares to IBC in accordance with this Article IV and such First Offer shall have
been rejected or not accepted within the Applicable Acceptance Period (as
hereinafter defined); provided, however, that if Ralston or any of its
Affiliates propose to sell a specified number of shares of IBC Equity pursuant
to a Transfer permitted by Section 3.2(f) and the First Offer shall have been
rejected by IBC, the proposed Transfer by Ralston or its Affiliates may proceed
at any time thereafter under Rule 144 without regard to the 20 day period
referenced in Section 4.1(d)."
10. Section 4.2 of the Shareholder Agreement is hereby deleted and replaced
with the following:
"Section 4.2. Purchase of the Offered Shares. In the event IBC rejects the
First Offer or fails to deliver a Notice of Exercise within the Applicable
Acceptance Period, then Ralston may proceed with the Transfer pursuant to
Articles V, VI, VII and VIII hereof, if applicable; provided that, a Person upon
purchasing such shares from Ralston will not own more than fifteen percent (15%)
of the outstanding IBC Equity."
11. Sections 5.1(c), (d) and (e) of the Shareholder Agreement are hereby
deleted and replaced with the following:
"(c) IBC will be obligated to effect only one (1) Demand Registration under
Section 5.1 hereof; provided, however, that IBC will not be required to register
the IBC Equity pursuant to a Demand Notice under Section 5.1 hereof if at such
time (i) the shares of IBC Equity which Ralston is requesting to be registered
pursuant to Section 5.1 hereof constitutes less than five percent (5%) of such
class or series of the outstanding IBC Securities so requested to be registered
or (ii) such Demand Notice is given within six (6) months after the effective
date of any other registration of any IBC Securities under the Securities Act".
"(d) Any Demand Registration to be effective pursuant to this Article V shall
only be accomplished in an underwritten offering which is designed to cause the
widespread distribution and sale of such underwritten securities. The first
lead underwriter, and, subject to the next sentence of this Section 5.1(d), any
other underwriter that will administer the offering will be selected by Ralston;
provided, however, that such underwriter(s) shall be subject to the approval of
IBC, which approval shall not be unreasonably withheld. In the event there is
one or more co-managers, the first such co-manager shall be selected by IBC,
provided that such co-manager shall be subject to the approval of Ralston, which
approval shall not be unreasonably withheld. Ralston agrees to use reasonable
efforts in connection with any Demand Registration to assure the widespread
distribution and sale of such underwritten securities and Ralston agrees to
request that the underwriters use reasonable efforts to assure the widespread
distribution and sale of such underwritten securities."
"(e) In any such Demand Registration there may be included as many shares of IBC
Securities that IBC elects to be included on the same terms and conditions as
the IBC Equity; provided, however, that if the managing underwriter advises
Ralston and IBC that, in its judgment, the number of shares proposed to be
included in such offering should be limited, then the total number of shares to
be included in such offering will be determined by the managing underwriter and
IBC shall include in such offering (i) first, all the shares of IBC Equity that
Ralston proposes to sell and (ii) second all the shares of IBC Securities that
IBC proposes to sell. Except as otherwise provided for in this Agreement or the
First Registration Rights Agreement (as hereinafter defined), no person other
than Ralston shall be permitted to offer any IBC Securities under any Demand
Registration pursuant to this Section 5.1 without the prior written consent of
Ralston".
12. The first sentence of Section 9.1(a) of the Shareholder Agreement is
hereby deleted and replaced with the following:
"(a) At any time during the one-year period commencing on August 1, 2005, IBC
shall have the right to acquire all, but not less than all, of the IBC Equity
then owned by Ralston and its Affiliates at a purchase price equal to
one-hundred and ten percent (110%) of the IBC Market Price of the IBC Equity
then owned by Ralston and its Affiliates (such right to acquire the IBC Equity
is referred to as the "IBC Call").
13. Section 9.1(c) of the Shareholder Agreement is hereby deleted and
replaced with the following:
"(c) The IBC Call shall be exercised within one (1) year following August 1,
2005, and shall expire if not exercised by such date."
14. Section 10.2 of the Shareholder Agreement is hereby deleted.
15. Section 10.6 of the Shareholder Agreement is hereby deleted and replaced
with the following:
"Section 10.6 Maximum Allowed Ownership of IBC Securities.
"(a) Ralston agrees that if it has not sold the IBC Equity owned by Ralston and
its Affiliates prior to August 15, 2000 it shall cause the principal amount of
each Stock Appreciation Income Linked Securities ("SAILS") related to its 7%
Exchangeable Notes Due August 1, 2000 to be mandatorily exchanged into shares of
IBC Stock and not into cash or other consideration."
"(b) Ralston agrees that between the execution of this Amendment and September
30, 2000, Ralston shall sell, or Ralston shall cause its Affiliates to sell,
shares of IBC Equity equal to the amount of IBC Equity that Ralston and its
Affiliates hold in excess of twenty (20%) of the IBC Securities outstanding on
September 30, 2000, such sales being made pursuant to the terms of the
Shareholder Agreement."
"(c) Ralston covenants and agrees that by August 1, 2004, the ownership of IBC
Securities by Ralston and its Affiliates shall be not more then 15% of the then
total outstanding IBC Securities."
"(d) Ralston covenants and agrees that by August 1, 2005 the ownership of IBC
Securities by Ralston and its Affiliates shall be no more than 10% of the then
total outstanding IBC Securities."
"(e) In the event that the SAILS are not exchanged into shares of IBC Stock by
August 15, 2000 or that Ralston and its Affiliates do not accomplish the
complete sale (or exchange in the case of the SAILS) of IBC Equity provided for
in (a), (b), (c) or (d) above by the prescribed dates, IBC shall thereafter be
entitled to purchase at one time or from time to time, all or any portion of the
unsold IBC Equity owned by Ralston and its Affiliates which would otherwise be
required to be sold (or the number of shares of IBC Stock resulting from the
exchange of SAILS in the case of (a) above at a purchase price equal to the IBC
Market Price of the IBC Equity."
16. The first sentence of Section 11.15 of the Shareholder Agreement is
hereby deleted and replaced with the following:
"Section 11.15 Term; Effectiveness. The term of this Agreement will begin (and
this Agreement will become effective) upon the date hereof and will continue
until August 1, 2005; provided, however, that Article IX and Section 2.1 shall
survive until August 1, 2006."
17. A new Section 11.19 is added to the Shareholder Agreement, as follows:
"Section 11.19 Certain Matters Concerning Affiliates. For purposes of
Sections 2.3, 9.1(a) and 10.6, it is understood and agreed that the term
"Affiliates" shall only be deemed to apply to entities Controlled by Ralston."
18. In all other respects, the parties hereby agree that the Shareholder
Agreement, and the Supplement Agreement, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to Shareholder
Agreement and Supplement Agreement as of the 30th day of March, 2000.
INTERSTATE BAKERIES CORPORATION
By:/s/Ray Sandy Sutton
Vice President
RALSTON PURINA COMPANY
By:/s/James M. Neville
TOWER HOLDING COMPANY, INC.
By:/s/Nancy E. Hamilton
July 3, 1997
Mr. James R. Elsesser
Vice President and CFO
Ralston Purina Company
Checkerboard Square - Floor 15T
St. Louis, MO 63102
Dear Mr. Elsesser:
This letter amends the Shareholder Agreement dated July 22, 1995 by and among
Interstate Bakeries Corporation ("IBC"), Ralston Purina Company ("Ralston") and
VCS Holding Company (the "Shareholder Agreement").
The parties agree that if the consummation of the SAILS transaction occurs
between July 22, 1997 and August 15, 1997, then certain provisions of the
Shareholder Agreement shall be deemed amended as set forth below. If the SAILS
transaction is consummated prior to July 22, 1997 or is not consummated by
August 15, 1997, then the Shareholder Agreement shall not be deemed to be
amended as set forth below.
1. The phrase "until the sixth anniversary date of this Agreement" in Section
2.1 of the Shareholder Agreement shall be replaced with "until 24 days
after the sixth anniversary date of this Agreement."
2. The phrase "commencing on the fifth anniversary date of this Agreement" in
Section 9.1(a) of the Shareholder Agreement shall be replaced with
"commencing on the 24th day after the fifth anniversary of the date of this
Agreement."
3. The phrase "within one (1) year following the expiration of the fifth
anniversary date" in Section 9.1(c) of the Shareholder Agreement shall be
replaced with "within one (1) year and 24 days following the expiration of
the fifth anniversary date."
4. The phrase "on the fifth anniversary date of this Agreement" in Section
10.6 of the Shareholder Agreement shall be replaced with "on the 24th day
after the fifth anniversary date of this Agreement."
5. The phrase "which is five (5) years from the date hereof," in Section 11.15
of the Shareholder Agreement shall be replaced with "which is five (5)
years and 24 days from the date hereof," and the phrase "which is six (6)
years from the date hereof" in Section 11.15 shall be replaced with "which
is six (6) years and 24 days from the date hereof."
If the foregoing is acceptable to you, please indicate by signing two of the
originals of each of this letter where indicated and return them to us.
INTERSTATE BAKERIES CORPORATION
By: /s/Ray Sandy Sutton
Title: Vice President
RALSTON PURINA COMPANY
By: /s/ James R. Elsesser
Title: Vice President and CFO
cc: James M. Neville, Esq.
General Counsel
Ralston Purina Company
Checkerboard Square
St. Louis, MO 63102
Paul E. Yarick
Vice President and Treasurer
Interstate Bakeries Corporation
12 East Armour Boulevard
Kansas City, MO 64111
