<PAGE> 1
Exhibit 10.28
-------------
FIFTH AMENDMENT
FIFTH AMENDMENT (this "Amendment"), dated as of December 14, 2000,
among AEARO CORPORATION, a Delaware corporation ("Holdings"), AEARO COMPANY I
(f/k/a Cabot Safety Corporation), a Delaware corporation (the "Company"), each
Subsidiary Borrower (together with the Company, each a "Borrower" and
collectively, the "Borrowers"), the lending institutions from time to time party
to the Credit Agreement referred to below (the "Banks"), and BANKERS TRUST
COMPANY, as Administrative Agent (the "Administrative Agent"). All capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings provided such terms in the Credit Agreement.
WITNESSETH:
----------
WHEREAS, Holdings, the Borrowers, the Banks and the Administrative
Agent are parties to a Credit Agreement, dated as of July 11, 1995 and amended
and restated as of May 30, 1996 (as further amended, modified or supplemented
to, but not including, the date hereof, the "Credit Agreement");
WHEREAS, the parties hereto wish to further amend the Credit Agreement
as herein provided; and
WHEREAS, subject to the terms and conditions of this Amendment, the
parties hereto agree as follows:
NOW, THEREFORE, it is agreed:
1. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new clause (d) at the end thereof:
"(d) Subject to Section 1.15 and the other terms and conditions set
forth herein, each Bank with an Incremental B Term Loan Commitment
severally agrees:
(i) to make a term loan or term loans (each, an "Incremental B
Term Loan" and, collectively, the "Incremental B Term Loans") to the
Company, which Incremental B Term Loans shall: (w) be incurred
pursuant to a single drawing on the Incremental B Term Loan Borrowing
Date; (x) be denominated in Dollars; (y) at the option of the Company,
be Base Rate Loans or Eurodollar Loans, PROVIDED that, except as
specifically provided in Section 1.10(b), all Incremental B Term Loans
comprising the same Borrowing shall at all times be of the same Type
and (z) be made by each such Bank in that aggregate principal amount
which does not exceed the Incremental B Term Loan Commitment of such
Bank on the Incremental B Term Loan Borrowing Date (before giving
effect to the termination thereof on such date pursuant to Section
3.03(b)(ii)).
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Once repaid, Incremental B Term Loans incurred hereunder may not be
reborrowed."
2. Section 1.03 of the Credit Agreement is hereby amended by
inserting the text ", Incremental B Term Loans" immediately following the text
"B Term Loans" appearing in clause (iii) thereof.
3. Section 1.05(g) of the Credit Agreement is hereby amended by (x)
inserting the text "(or, if issued after the Restatement Effective Date, be
dated the date of issuance thereof)" immediately prior to the comma appearing at
the end of clause (ii) thereof and (y) inserting the text "(or, if issued after
the Restatement Effective Date, be in a stated principal amount of the B Term
Loans of such Bank at such time)" immediately following the text "the
Restatement Effective Date" appearing in clause (ii) thereof.
4. Section 1.07 of the Credit Agreement is hereby amended by (i)
inserting the text "Incremental B Term Loans" immediately following the text "B
Term Loans" appearing in the first sentence thereof, and (ii) inserting the text
"Incremental B Term Loan Commitments (and after the termination thereof,
Incremental B Term Loans)" immediately following the text (and after the
termination thereof, B Term Loans)" appearing in the first sentence thereof.
5. Section 1 of the Credit Agreement is hereby amended by inserting
the following new Section 1.15 at the end thereof:
"1.15 INCREMENTAL B TERM LOAN COMMITMENTS. (a) So long as no Default
or Event of Default then exists or would result therefrom, the Company
shall, in consultation with the Administrative Agent, have the right to
request on one (and, in the circumstances contemplated by clause (iv)
below, a second) occasion on and after the Fifth Amendment Effective Date
that one or more Banks (and/or one or more other Persons which would become
Banks as provided below) provide Incremental B Term Loan Commitments and,
subject to the terms and conditions contained in this Agreement, make
Incremental B Term Loans pursuant thereto, it being understood and agreed,
however, that (i) no Bank shall be obligated to provide an Incremental B
Term Loan Commitment as a result of any such request by the Company, and
until such time, if any, as such Bank has agreed in its sole discretion to
provide an Incremental B Term Loan Commitment and executed and delivered to
the Administrative Agent an Incremental Term Loan Commitment Agreement as
provided in clause (b) of this Section 1.15, such Bank shall not be
obligated to fund any Incremental B Term Loans, (ii) any Bank (or, in the
circumstances contemplated by clause (iv) below, any other Person which is
an Eligible Transferee) may so provide an Incremental B Term Loan
Commitment without the consent of any other Bank, (iii) the provision of
Incremental B Term Loan Commitments pursuant to this Section 1.15 shall be
in a minimum aggregate amount (for all Banks (including, in the
circumstances contemplated by clause (iv) below, Eligible Transferees who
would become Banks)) of at least $5,000,000, and a maximum aggregate
principal amount not to exceed $13,000,000, (iv) if, within 10 Business
Days after the Company has requested the then existing Banks (other than
Defaulting Banks) to provide Incremental B Term Loan Commitments pursuant
to this Section 1.15 the Company has not received Incremental B Term Loan
Commitments in an aggregate
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<PAGE> 3
amount equal to that amount of Incremental B Term Loan Commitments which
the Company desires to obtain pursuant to such request (as set forth in the
notice provided by the Company as provided below), then the Borrower may,
with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed), request Incremental B Term Loan
Commitments from Persons which would qualify as Eligible Transferees
hereunder in an aggregate amount equal to such deficiency (and with the
fees to be paid to such Eligible Transferee to be no greater than those to
be paid to the then existing Banks providing Incremental B Term Loan
Commitments), (v) prior to the Incremental B Term Loan Borrowing Date, the
Company shall have certified to the Administrative Agent that the aggregate
principal amount of the Incremental B Term Loan being incurred is permitted
to be incurred under, and in accordance with, the Senior Subordinated Note
Indenture (including, without limitation, by providing to the
Administrative Agent an officer's certificate of the Company's chief
financial officer or another financial officer satisfactory to the
Administrative Agent demonstrating (in reasonable detail) that the
incurrence of the Incremental B Term Loans on the Incremental B Term Loan
Borrowing Date may be incurred in accordance with, and will not violate the
provisions of, the Senior Subordinated Note Indenture), (vi) all of the
proceeds of any Incremental B Term Loans shall be used to finance the
Soundcoat Acquisition and to pay the fees and expenses incurred in
connection therewith, and (vii) all actions taken by the Company pursuant
to this Section 1.15 shall be done in coordination with the Administrative
Agent.
(b) At the time of any provision of Incremental B Term Loan
Commitments pursuant to this Section 1.15, (i) the Company, the
Administrative Agent and each such Bank or other Eligible Transferee which
agrees to provide an Incremental B Term Loan Commitment (each such Bank or
other Eligible Transferee, an "Incremental Term Loan Bank") shall execute
and deliver to the Administrative Agent an Incremental B Term Loan
Commitment Agreement substantially in the form of Exhibit K (appropriately
completed), with the effectiveness of such Incremental B Term Loan Bank's
Incremental B Term Loan Commitment to occur upon delivery of such
Incremental B Term Loan Commitment Agreement to the Administrative Agent,
the payment of any fees required in connection therewith and the
satisfaction of the other conditions in this Section 1.05 and (ii) the
Company shall deliver to the Administrative Agent an opinion or opinions,
in form and substance reasonably satisfactory to the Administrative Agent,
from counsel to the Company reasonably satisfactory to the Administrative
Agent and dated such date, covering such of the matters set forth in the
opinions of counsel delivered to the Administrative Agent on the
Restatement Effective Date pursuant to Section 5.04 as may be reasonably
requested by the Administrative Agent, and such other matters as the
Administrative Agent may reasonably request. The Administrative Agent shall
promptly notify each Bank as to the effectiveness of each Incremental B
Term Loan Commitment Agreement, and (i) at such time Schedule I shall be
deemed modified to reflect the Incremental B Term Loan Commitments of such
Incremental B Term Loan Banks and (ii) to the extent requested by such
Incremental B Term Loan Banks, B Term Notes will be issued, at the
Company's expense, to such Incremental B Term Loan Banks, to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the new Incremental B Term
Loans made by such Incremental B Term Loan Banks.
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(c) In connection with each incurrence of Incremental B Term Loans
pursuant to Section 1.01(d), the Banks and the Company hereby agree that,
notwithstanding anything to the contrary contained in this Agreement, the
Company and the Administrative Agent may take all such actions as may be
necessary to ensure that all Banks continue to participate in each
Borrowing of outstanding B Term Loans (after giving effect to the
incurrence of Incremental B Term Loans pursuant to Section (d)) on a PRO
RATA basis, including by adding the Incremental B Term Loans to be so
incurred to the then outstanding Borrowings of B Term Loans on a PRO RATA
basis even though as a result thereof such new Incremental B Term Loan (to
the extent required to be maintained as Eurodollar Loans) may effectively
have a shorter Interest Period than the then outstanding Borrowings of B
Term Loans and it is hereby agreed that (x) to the extent any then
outstanding Borrowings of B Term Loans that are maintained as Eurodollar
Loans are affected as a result thereof, any costs of the type described in
Section 1.11 incurred by such Banks in connection therewith shall be for
the account of the Company or (y) to the extent the Incremental B Term
Loans to be so incurred are added to the then outstanding Borrowings of B
Term Loans, which are maintained as Eurodollar Loans, the Banks that have
made such Incremental B Term Loans shall be entitled to receive an
effective interest rate on such Incremental B Term Loans as is equal to the
Eurodollar Rate as in effect two Business Days prior to the incurrence of
such Incremental B Term Loans plus the then Applicable Margin for B Term
Loans until the end of the respective Interest Period or Interest Periods
with respect thereto."
6. Section 3.03(b) of the Credit Agreement is hereby amended by (w)
inserting the text "(i)" immediately following the text "(b)" appearing therein,
(x) inserting the following new clause (ii) at the end thereof:
"(ii) The Total Incremental B Term Loan Commitment (and the
Incremental B Term Loan Commitment of each Bank) shall be terminated on the
Incremental B Term Loan Borrowing Date (after giving effect to the
incurrence of Incremental B Term Loans on such date)",
(y) inserting the text ", the Total Incremental B Term Loan Commitment"
immediately following the text "Total B Term Loan Commitment" appearing in
clause (f) thereof and (z) inserting the text ", Incremental B Term Loan
Commitment" immediately following the second instance the text "B Term Loan
Commitment" appears in such clause (f).
7. Section 4.02(c) of the Credit Agreement is hereby amended by
inserting the following sentence at the end thereof:
"In addition to the foregoing, in the event that any Incremental B
Term Loans are incurred, Incremental B Term Loans shall be repaid on each B
Term Loan Scheduled Repayment Date occurring after such incurrence in an
amount equal to the product of (i) the Relevant Incremental Repayment
Percentage for such B Term Loan Scheduled Repayment Date and (ii) the
Initial Incremental B Term Loan Amount."
8. Section 6.08 of the Credit Agreement is hereby amended by
inserting the clause (e) at the end thereof.
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"(e) All proceeds of Incremental B Term Loans shall be used by the
Company (i) to finance the Soundcoat Acquisition and (ii) to pay fees and
expenses related thereto."
9. Section 7.14 of the Credit Agreement is hereby amended by
deleting the text "periods covered by," appearing in clause (ii) thereof and
inserting the text "the most recently ended Test Period of the Company for which
financial statements are available" in lieu thereof.
10. Section 8.02(xiv) of the Credit Agreement is hereby amended by
deleting the reference to the amount "$15,000,000" appearing in clause (w)
thereof and inserting the amount "$33,000,000" in lieu thereof.
11. Section 8.07(a) of the Credit Agreement is hereby amended by
deleting the chart appearing therein in its entirety and inserting the following
chart in lieu thereof:
<TABLE>
<S> <C>
"Restatement Effective Date to
fiscal year ending September 30, 1996 $ 4,000,000
Fiscal year ending September 30, 1997
to fiscal year ending September 30, 2000 $10,000,000
Each fiscal year ending thereafter $13,000,000".
</TABLE>
12. Section 8.08 of the Credit Agreement is hereby amended by
deleting the chart appearing therein in its entirety and inserting the following
new chart in lieu thereof:
<TABLE>
<CAPTION>
"Date Ratio
---- -----
<S> <C>
December 31, 2000 4.00:1.00
March 31, 2001 4.00:1.00
June 30, 2001 3.75:1.00
September 30, 2001 3.75:1.00
The last day of each fiscal quarter
ended thereafter 3.50:1.00".
</TABLE>
13. Section 8.09 of the Credit Agreement is hereby amended by
deleting the chart appearing therein in its entirety and inserting the following
new chart in lieu thereof:
<TABLE>
<CAPTION>
"Date Ratio
---- -----
<S> <C>
December 31, 2000 2.10:1.00
March 31, 2001 2.20:1.00
June 30, 2001 2.30:1.00
September 30, 2001 2.40:1.00
December 31, 2001 2.50:1.00
The last day of each fiscal quarter
</TABLE>
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<TABLE>
<S> <C>
ended thereafter 2.60:1.00
</TABLE>
14. Section 8.10 of the Credit Agreement is hereby deleted in its
entirety and the following new Section 8.10 is hereby inserted in lieu thereof:
"8.10 FIXED CHARGE COVERAGE RATIO. Holdings and the Borrowers will not
permit the Fixed Charge Coverage Ratio for any Test Period ending after
Fifth Amendment Effective Date to be less than 1.00:1.00."
15. The definition "B Term Loans" appearing in Section 10 of the
Credit Agreement is hereby deleted in its entirety and the following new
definition of "B Term Loans" is inserted in lieu thereof:
"B Term Loans" shall mean each Loan maintained and/or incurred
pursuant to Section 1.01(b) and (d).
16. The definition of "Borrowing" appearing in Section 10 of the
Credit Agreement is hereby amended by (i) inserting the text "(x)" immediately
following the text "PROVIDED that" appearing therein and inserting the following
text at the end thereof:
"and (y) any Incremental B Term Loans incurred pursuant to Section 1.01(d)
shall be considered part of the Borrowing of the then outstanding B Term
Loans to which such Incremental Term Loans are added pursuant to Section
1.15(c)."
17. The definition of "Commitment" appearing in Section 10 of the
Credit Agreement is hereby amended by inserting the text ", Incremental B Term
Loan Commitment" immediately following the text "B Term Loan Commitment"
appearing therein.
18. The definition of "Permitted Acquisition" appearing in Section 10
of the Credit Agreement is hereby amended by (i) inserting the text "and, in the
case of the Soundcoat Acquisition, Incremental B Term Loans" immediately
following the text "from a Borrowing of Revolving Loans" appearing in clause
(A)(i) of the proviso contained therein and (ii) deleting the reference to the
amount "$15,000,000" appearing in such clause (A)(i) and inserting the amount
"33,000,000" in lieu thereof.
19. The definition of "Term Loan" appearing in Section 10 of the
Credit Agreement is hereby amended by (i) deleting the text "and" appearing
therein and inserting a comma in lieu thereof and (ii) inserting the text "and
each Incremental B Term Loan" at the end thereof.
20. The definition of "Tranche" appearing in Section 10 of the Credit
Agreement is hereby deleted in its entirety and the following new definition of
"Tranche" is inserted in lieu thereof.
"Tranche" shall mean the respective facility, commitments and
currencies utilized in making Loans hereunder, with there being seven
separate Tranches, I.E., (i) Company A Dollar Term Loans, (ii) Company A
Deutsche Mark Term Loans, (iii) Company A Sterling Term Loans, (iv)
Subsidiary A Canadian Dollar Term Loans, (v) Subsidiary A
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<PAGE> 7
Sterling Term Loans, (vi) B Term Loans and Incremental B Term Loans taken
together as a single Tranche and (vii) Revolving Loans.
21. Section 10 of the Credit Agreement is hereby further amended by
inserting the following new definitions in such Section 10 in proper
alphabetical order:
"Fifth Amendment" shall mean the Fifth Amendment to this Agreement,
dated as of December 14, 2000 among Holdings, the Borrowers, the Banks and
the Administrative Agent.
"Fifth Amendment Effective Date" shall mean December 14, 2000 so long
as all of the conditions to the effectiveness of the Fifth Amendment have
been met at such time.
"Incremental B Term Loan" shall have the meaning provided in Section
1.101(d).
"Incremental B Term Loan Borrowing Date" shall mean the date on which
the Company incurs Incremental B Term Loans to finance the Soundcoat
Acquisition.
"Incremental B Term Loan Commitment" shall mean, for each Incremental
B Term Loan Lender, the commitment of such Incremental B Term Loan Lender
to make Incremental B Term Loans pursuant to Section 1.01(d) on the
Incremental B Term Loan Borrowing Date, as such commitment (x) is set forth
in the respective Incremental B Term Loan Commitment Agreement delivered
pursuant to Section 1.15(b) or, (y) may be terminated pursuant to Sections
3.03 and/or 10.
"Incremental B Term Loan Commitment Agreement" shall mean an
Incremental B Term Loan Commitment Agreement substantially in the form of
Exhibit K (appropriately completed).
"Incremental B Term Loan Lender" shall have the meaning provided in
Section 1.15(b).
"Initial Incremental B Term Loan Amount" shall mean the initial
aggregate principal amount of Incremental B Term Loans incurred by the
Company on the Incremental B Term Loan Borrowing Date.
"Relevant Incremental Repayment Percentage" shall mean, for the
respective B Term Loan Scheduled Repayment Date occurring after the
incurrence of any Incremental B Term Loans, a fraction (expressed as a
percentage) (i) the numerator of which is the amount of the B Term Loans
(other than Incremental B Term Loans) required to be repaid on such B Term
Loan Scheduled Repayment Date (as set forth on Part B of Schedule IV as of
the Fifth Amendment Effective Date) and (ii) the denominator of which is
equal to the sum of all B Term Loans (other than Incremental B Term Loans)
required to be repaid on all B Term Loan Scheduled Repayment Dates
occurring after the incurrence of Incremental B Term Loans (as set forth on
Part B of Schedule IV as of the Fifth Amendment Effective Date).
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<PAGE> 8
"Soundcoat Acquisition" shall mean the purchase by the Borrower or
another Credit Party of 100% of the outstanding equity interests of The
Soundcoat Company, Inc., a New York corporation, from Recticel Foam
Corporation.
"Total Incremental B Term Loan Commitment" shall mean, at any time,
the sum of each Incremental B Term Loan Commitment of each of the Banks at
such time.
22. The Credit Agreement is hereby amended by adding Exhibit K to the
end thereof in the form of Annex A to the Fifth Amendment.
23. In order to induce the undersigned Banks to enter into this
Amendment, the Borrower hereby represents and warrants that (x) no Default or
Event of Default exists on the Fifth Amendment Effective Date (as defined below)
both before and after giving effect to this Amendment and (y) all of the
representations and warranties contained in the Credit Agreement shall be true
and correct in all material respects as of the Fifth Amendment Effective Date
(as defined below) both before and after giving effect to this Amendment, with
the same effect as though such representations and warranties had been made on
and as of the Fifth Amendment Effective Date (it being understood that any
representation or warranty made as of a specified date shall be required to be
true and correct in all material respects only as of such specific date).
24. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
25. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Company and the Administrative Agent.
26. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
27. This Amendment shall become effective on the date (the "Fifth
Amendment Effective Date") when (x) the Borrower and the Required Banks (i)
shall have signed a counterpart hereof (whether the same or different
counterparts) and (ii) shall have delivered (including by way of telecopier) the
same to the Administrative Agent at the Notice Office and (y) the Company shall
have paid to the Administrative Agent for distribution to each Bank which has
signed a counterpart of this Amendment on or prior to 5:00 P.M. (New York time)
on December 14, 2000, an amendment fee equal to 0.25% of the sum of such Bank's
outstanding Term Loans plus its Revolving Loan Commitment, in each case at such
time.
28. From and after the Fifth Amendment Effective Date all references
in the Credit Agreement and the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
* * *
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<PAGE> 9
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
AEARO CORPORATION
By
--------------------------------
Name:
Title:
AEARO COMPANY I
By
--------------------------------
Name:
Title:
AEARO CANADA LIMITED
By
--------------------------------
Name:
Title:
AEARO LIMITED
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY
Individually, and as Administrative
Agent
By /s/ Diane F. Rolfe
--------------------------------
Name: Diane F. Rolfe
Title: Vice President
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<PAGE> 10
THE CHASE MANHATTAN BANK
By /s/ Stacy L. Haimes
--------------------------------
Name: Stacy L Haimes
Title: Vice President
FLEET BANK, N.A.
By /s/ Harvey H. Thayer, Jr
--------------------------------
Name: Harvey H. Thayer, Jr
Title: Managing Director
NEW YORK LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
NEW YORK LIFE INSURANCE & ANNUITY
CORPORATION
By: NEW YORK LIFE INSURANCE COMPANY
By /s/ Anthony R. Malloy
--------------------------------
Name: Anthony Malloy
Title: Director
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By /s/ Lisa J. Yoerg
--------------------------------
Name: Lisa J. Yoerg
Title: Managing Director
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<PAGE> 11
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
Its Investment Manager
By
--------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By /s/ Wesley P. Pascavis
--------------------------------
Name: Wesley P. Pascavis
Title: Senior Vice President and
Managing Director
BANK ONE, INDIANA, N.A.
By
--------------------------------
Name:
Title:
CAPTIVA II FINANCE LTD.
By: TCW MANAGEMENT COMPANY, Its
Investment Manager
By /s/ David Dyer
--------------------------------
Name: David Dyer
Title: Director
KATONAH I, LTD
By /s/ Marc S. Diagonale
--------------------------------
Name: Marc S. Diagonale
Title:
KZH CRESCENT-2 LLC
By /s/ Kimberly Rowe
--------------------------------
Name: Kimberly Rowe
Title: Authorized Agent
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<PAGE> 12
KZH CRESCENT-3 LLC
By
--------------------------------
Name:
Title:
NATIONAL CITY BANK, INDIANA
By /s/ Thomas R. Groh
--------------------------------
Name: Thomas R. Groh
Title: Assistant Vice President
SEQUILS IV, LTD
By: TCW MANAGEMENT COMPANY, Its
Investment Manager
By
--------------------------------
Name:
Title:
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By
--------------------------------
Name:
Title:
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<PAGE> 13
ANNEX A
EXHIBIT K
FORM OF INCREMENTAL B TERM LOAN COMMITMENT AGREEMENT
[Names(s) of Bank(s)]
[Date]
AEARO COMPANY I
[Insert Address]
re Incremental B Term Loan Commitment
----------------------------------
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement, dated as of July 11, 1995
and amended and restated as of May 30, 1996 (as further amended, modified or
supplemented from time to time, the "Credit Agreement"), among Aearo
Corporation, Aearo Company I (the "Company" or "you"), each Subsidiary Borrower,
the lending institutions from time to time party thereto (the "Banks") and
Bankers Trust Company, as Administrative Agent (the "Administrative Agent").
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings set forth in the Credit Agreement.
Each Bank (each an "Incremental B Term Loan Bank") party to this letter
agreement (this "Agreement") hereby severally agrees, subject to the terms and
conditions set forth herein, in Annex I hereto and in Section 1.15 of the Credit
Agreement, to provide the Incremental B Term Loan Commitment set forth opposite
its name on Annex I attached hereto (for each such Incremental B Term Loan
Lender, its "Incremental B Term Loan Commitment").
Each Incremental Term Loan Bank party to this Agreement (i) confirms that
it has received a copy of the Credit Agreement and the other Credit Documents,
together with copies of the financial statements referred to therein and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement and, to the extent
applicable, to become a Bank under the Credit Agreement, (ii) agrees that it
will, independently and without reliance upon the Administrative Agent or any
other Bank 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 the Credit Agreement, (iii) appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent and the Collateral
Agent, as the case may be, by the terms thereof, together with such powers as
are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the
<PAGE> 14
Annex A
Page 2
terms of the Credit Agreement are required to be performed by it as a Bank, and
(v) in the case of each lending institution organized under the laws of a
jurisdiction outside the United States, attaches the applicable forms described
in Section 4.04(b) of the Credit Agreement certifying as to its entitlement to a
complete exemption from United States withholding taxes with respect to all
payments to be made under the Credit Agreement and the other Credit Documents.
Upon the execution of a counterpart of this Agreement by such Incremental B Term
Loan Bank, the Administrative Agent and the Company, the delivery to the
Administrative Agent of a fully executed copy (including by way of counterparts
and by facsimile) hereof and the payment of any fees (including, without
limitation, the upfront fees payable pursuant Annex I hereto) required in
connection herewith, each Incremental B Term Loan Bank party hereto (i) shall be
obligated to make the Incremental B Term Loans provided to be made by it as
provided in this Agreement on the terms, and subject to the conditions, set
forth in the Credit Agreement, and, to the extent applicable, shall become a
Bank pursuant to the Credit Agreement and (ii) to the extent provided in this
Agreement, shall have the rights and obligations of a Bank thereunder and under
the other Credit Documents.
The Company and each Incremental B Term Loan Bank agree that (i) the
maturity date and interest rate applicable to the Incremental B Term Loans to be
made pursuant to the Incremental B Term Loan Commitments provided hereby shall
be identical to those applicable to the B Term Loans under the Credit Agreement,
(ii) the up-front fees, if any, payable in respect of the Incremental B Term
Loan Commitments to be provided pursuant to this Agreement shall be as set forth
in Annex I to this Agreement and (iii) the provision of the Incremental B Term
Loan Commitments as contemplated hereby is subject to the terms and conditions
set forth herein, in Annex I attached hereto and in Section 1.15(b)(ii) of the
Credit Agreement.
Each Subsidiary Guarantor acknowledges and agrees that all Obligations with
respect to the Incremental B Term Loan Commitments provided hereby and any
Incremental B Term Loans made pursuant thereto shall be fully guaranteed
pursuant to the Subsidiaries Guaranty in accordance with the term and provisions
thereof.
This Agreement shall become effective as of the date (the "Agreement
Effective Date") when (i) each Borrower, each Subsidiary Guarantor, each
Incremental B Term Loan Bank and the Administrative Agent shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered (including by way of facsimile transmission) the same to the
Administrative Agent at the Notice Office and (ii) each condition set forth in
Section 1.15 of the Credit Agreement shall have been satisfied.
You may accept this Agreement by signing the enclosed copies in the space
provided below, and returning one copy of same to us before the close of
business on __________ __, _____. If you do not so accept this Agreement by such
time, our Incremental B Term Loan Commitments set forth in this Agreement shall
be deemed canceled.
After the execution and delivery to the Administrative Agent of a fully
executed copy of this Agreement (including by way of counterparts and by
facsimile) by the parties hereto, this Agreement may only be changed, modified
or varied by written instrument in accordance with the requirements for the
modification of Credit Documents pursuant to Section 13.12 of the Credit
Agreement.
<PAGE> 15
Annex A
Page 3
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
Very truly yours,
[NAME OF BANKS]
By__________________________
Name:
Title:
Agreed and Accepted
this ___ day of __________, ____:
AEARO COMPANY I
By:_____________________________
Name:
Title:
Acknowledged by:
BANKERS TRUST COMPANY,
as Administrative Agent
By:_____________________________
Name:
Title:
AEARO COMPANY I
By:_____________________________
Name:
Title:
AEARO CANADA LIMITED
By:_____________________________
Name:
Title:
<PAGE> 16
Annex A
Page 4
CABOT SAFETY INTERMEDIATE CORPORATION
By:_____________________________
Name:
Title:
CSC FSC, INC.
By:_____________________________
Name:
Title:
PELTOR AB
By:_____________________________
Name:
Title:
<PAGE> 17
ANNEX I
TERMS AND CONDITIONS FOR INCREMENTAL B TERM LOAN COMMITMENT AGREEMENT
1. Agreement Effective Date:
___________, __________ (the "Agreement Effective Date")
2. Incremental B Term Loan Commitment Amounts (as of the Agreement Effective
Date):
<TABLE>
<CAPTION>
Amount of
Incremental B Term Loan
Name of Lender Commitment Up-front Fee
-------------- ----------------------- ------------
<S> <C> <C>
Total _____________ ___________
</TABLE>
3. UP-FRONT FEE; OTHER FEES(1):
4. CONDITIONS PRECEDENT TO AGREEMENT EFFECTIVE DATE:
(i) Each Borrower and each Incremental B Term Loan Bank shall
have executed and delivered to the Administrative Agent the Incremental B
Term Loan Commitment Agreement to which this Annex I is attached;
(ii) each Incremental B Term Loan Bank shall have received the
fees set forth in paragraph 3 above;
(iii) counsel to the Company reasonably satisfactory to the
Administrative Agent shall have delivered to the Administrative Agent an
opinion, in form and substance satisfactory to the Administrative Agent and
dated the Agreement Effective Date, covering such matters referred to in
Section 1.15(b) of the Credit Agreement; and
(iv) the chief financial officer, or another officer satisfactory
to the Administrative Agent, shall deliver to the Administrative the
officer's certificate referred to in Section 1.15(a) of the Credit
Agreement.
------------------------
(1) Insert up-front fees and any other fees as may be agreed to by the Company,
the Administrative Agent and the Incremental B Term Loan Banks with respect
to the Incremental B Term Loan Commitments.
