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Transaction Valuation
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Amount Of Filing Fee*
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Not Applicable*
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Not Applicable*
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*
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A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before the commencement of a tender offer.
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¨
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Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:Not applicable.
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Filing Party: Not applicable.
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Form or Registration No.:Not applicable.
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Date Filed: Not applicable.
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ý
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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Genomma Lab Internacional, S.A.B. de C.V.
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Óscar Villalobos Torres
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Vice President and Chief Financial Officer
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Tel: 011 (5255) 5081-0083
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ovillalobos@genommalab.com
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BANK OF AMERICA, N.A.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
One Bryant Park
New York, New York 10036
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JEFFERIES FINANCE LLC
520 Madison Avenue
New York, NY 10022
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1 We expect to be in a position to remove this condition prior to the execution of the Merger Agreement.
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| Very truly yours, BANK OF AMERICA, N.A. |
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By:
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/s/ Adam Cady | |
| Name: Adam Cady | |||
| Title: Managing Director | |||
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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
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By:
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/s/ Adam Cady | |
| Name: Adam Cady | |||
| Title: Managing Director | |||
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JEFFERIES FINANCE LLC
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By:
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/s/ E.J. Hess | |
| Name: E.J. Hess | |||
| Title: Managing Director | |||
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GENOMMA LAB INTERNACIONAL, S.A.B. DE C.V.
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By:
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/s/ Oscar Villalobos Torres | |
| Name: Oscar Villalobos Torres | |||
| Title: Vice President and Chief Financial Officer | |||
| By: | /s/ Patricia Faci Villalobos | ||
| Name: Patricia Faci Villalobos | |||
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Title: Executive Vice President and Chief Operating Officer
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1.
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MergerSub may commence or maintain a cash tender offer (the “Tender Offer”) for all of the issued and outstanding shares of capital stock of the Target (the “Shares”) not owned directly or indirectly by GLI at the time of the commencement of the Tender Offer at a price of $16.60 per share in cash (the “Share Price”). The Tender Offer shall be conditioned upon, inter alia, (x) Target shareholders having validly tendered and not withdrawn prior to the expiration date of the Tender Offer (as the same may be extended in accordance with the terms of the Tender Offer) at least that number of Shares that, together with the Shares of the Target owned directly or indirectly by GLI at the time of the commencement of the Tender Offer, shall constitute not less than fifty-one percent (51%) of the then-outstanding Shares on a fully-diluted basis and (y) the entering into a definitive merger agreement (the “Merger Agreement”; the date of entry into the Merger Agreement, the “Merger Agreement Date”) among GLI, MergerSub and the Target. MergerSub shall be a direct wholly-owned subsidiary of Genomma Lab America Holdings, Inc. (“Superholdco”), a newly-formed, wholly-owned, direct or indirect Delaware-domiciled subsidiary of GLI.
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2.
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The following terms shall have the following meanings:
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§
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“Closing Date” means the date on which shares are initially accepted for payment under the Tender Offer.
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§
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“Equity Consideration” means consideration paid to acquire the Shares.
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§
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“Merger Condition” shall mean that MergerSub shall own a sufficient amount of Shares such that a merger with the Target may be effected under Delaware law and without any approval by the shareholders of the Target other than MergerSub.
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§
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The term “Target” shall include, after the consummation of the Acquisition, the Target as the surviving corporation thereof.
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3.
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MergerSub shall, pursuant to the Merger Agreement, as soon as practicable (but no later than two business days) thereafter, merge with and into the Target in accordance with Delaware law (the “Merger”), with the Target surviving such Merger as an indirect wholly-owned subsidiary of GLI.
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4.
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5.
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Either (i) an amendment and waiver (the “Credit Agreement Consent”) to the Credit Agreement, dated as of January 31, 2012 (providing for credit extensions in an aggregate principal amount not to exceed $710 million, as amended prior to the date hereof and without giving effect to any amendments thereto after the date hereof that would increase the amount borrowed or outstanding thereunder, the “Existing Credit Agreement”), among the Target, Prestige Brands, Inc. (“Opco”), as borrower, the subsidiaries of Opco party thereto, Citibank, N.A., as administrative agent, and the lenders and other agents party thereto, in form and substance satisfactory to the Lead Arrangers (determined in consultation with GLI) shall have become effective, which amendment and waiver (A) shall include without limitation (x) a waiver of any “Default” or “Event of Default” (each, for purposes of this paragraph, as defined in the Existing Credit Agreement) which, but for such waiver or amendment, would result from the Transactions or otherwise amends the definition of “Change of Control” under the Existing Credit Agreement in accordance with the Existing Credit Agreement as a result of which the Transactions will not constitute a “Change of Control” thereunder, (y) an amendment that permits the incurrence of up to $250 million of additional term loans thereunder (which incremental term loans may, in the discretion of the Lead Arrangers, have some or all of the economic and other terms contemplated for the Term Loans (as defined below) pursuant to Exhibit B, as such terms are permitted to be modified pursuant to the "Market Flex" provisions of the Fee Letter) solely to the extent necessary to finance the Secured Notes Change of Control Payment (if any) described in paragraph 6 and (z) conditions to effectiveness thereof satisfactory to the Lead Arrangers and (B) may include, at the request of the Lead Arrangers, any other amendments the effect of which would be to provide for economic and other terms consistent with those set forth in Exhibit B (including any modifications to such terms as are permitted pursuant to the “Market Flex” section of the Fee Letter) or (ii) on the Closing Date, Opco will borrow up to $660 million of senior secured term loans (“Term Loans”) under the senior secured credit facilities (which include a $50 million revolving credit facility) described in Exhibit B to the Commitment Letter (the “Target Senior Secured Facilities”) (which Term Loans shall, for the avoidance of doubt, be in addition to (and as part of the same term loan facility as) the Term Loans referred to in paragraph 6) to refinance in full all term loans outstanding under the Existing Credit Agreement.
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6.
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Either (i) the holders of the $250 million of 8.25% Senior Notes due 2018 of Opco (in such amount, without giving effect to any amendments thereto after the date hereof, the “Existing Secured Notes”) shall have consented to a modification of the definition of “Change of Control” (as defined in the Indenture, dated as of March 24, 2010, among Opco, the guarantors party thereto and U.S. Bank National Association, as trustee (the “Secured Notes Indenture”)) in accordance with the Secured Notes Indenture as a result of which the Transactions will not constitute a “Change of Control” thereunder, and any additional amendments, waivers or consents re-
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7.
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Either (i) the holders of the $250 million of 8.125% Senior Notes due 2020 of Opco (in such amount, without giving effect to any amendments thereto after the date hereof, the “Existing Unsecured Notes”) shall have consented to a modification of the definition of “Change of Control” (as defined in the Indenture, dated as of January 31, 2012, among Opco, the guarantors party thereto and U.S. Bank National Association, as trustee (the “Unsecured Notes Indenture”)) in accordance with the Unsecured Notes Indenture as a result of which the Transactions will not constitute a “Change of Control” thereunder, and any additional amendments, waivers or consents requested by the Lead Arrangers (in consultation with GLI), in each case in form and substance, including without limitation conditions to effectiveness, reasonably satisfactory to the Lead Arrangers in their sole discretion shall have become effective (the “Unsecured Notes Consent” and, together with the Secured Notes Consent and the Credit Agreement Consent, the “Consents”) at least 15 business days prior to the beginning of a Qualifying Marketing Period or (ii) (1) on a date acceptable to the Lead Arrangers (in consultation with GLI), no later than 15 business days prior to the beginning of a Qualifying Marketing Period, (x) a “Change of Control Offer” (as defined in the Unsecured Notes Indenture) with respect to the Existing Unsecured Notes, which will expire on the business day preceding the Closing Date, shall be made in accordance with the terms of the Unsecured Notes Indenture (the “Unsecured Notes Change of Control Offer”) and (y) if requested by the Lead Arrangers (such request made in consultation with GLI), Opco shall launch an offer to purchase all of the outstanding Existing Unsecured Notes, such offer to expire on or prior to the business day preceding the Closing Date (with customary provisions for early tender prior to the commencement of a Qualifying Marketing Period with no right of withdrawal thereafter) (the “Unsecured Notes Tender” and, together with the Secured Notes Tender, the “Notes Tenders”) and (2) either (A) if the aggregate principal amount of Existing Unsecured Notes that is tendered in the Unsecured Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender is at least $150 million, Opco shall obtain either (a) up to $250 million (reduced by the aggregate principal amount of Existing Unsecured Notes not tendered in the Unsecured Notes Change of Control Offer and, if applicable, Unsecured Notes Tender, but to not less than $150 million) of senior unsecured notes (the “Opco
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8.
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If (x) any of the Consents shall become effective, Superholdco shall obtain either (a) up to $220 million of Superholdco Notes (which notes shall, for the avoidance of doubt, be in addition to the Superholdco Notes referred to in paragraph 7) in a Rule 144A or other private placement or (b) to the extent all or any portion of such Superholdco Notes have not been placed on or prior to the Closing Date, up to $220 million (less the principal amount of any Superholdco Notes or other Superholdco Permanent Securities issued on or prior to such date) of Superholdco Bridge Loans (which Superholdco Bridge Loans shall, for the avoidance of doubt, be in addition to the Superholdco Bridge Loans referred to in paragraph 7) under the Superholdco Bridge Facility, which shall be available on the Closing Date to finance a portion of the Equity Consideration or (y) otherwise, Opco shall obtain either (a) up to $220 million of Opco Notes in a Rule 144A or other private placement (which Opco Notes shall, for the avoidance of doubt, be in addition to the Opco Notes referred to in paragraph 7) or (b) to the extent all or any portion of such Opco Notes have not been placed on or prior to the Closing Date, up to $220 million of Opco Bridge Loans less the principal amount of any Opco Notes or other Opco Permanent Securities issued on or prior to such date (which Opco Bridge Loans shall, for the avoidance of doubt, be in addition to the Opco Bridge Loans referred to in paragraph 7) under the Opco Bridge Facility, which shall be available on the Closing Date to finance a portion of the Equity Consideration.
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9.
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All third party indebtedness for borrowed money of the Target and its subsidiaries, other than
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10.
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The proceeds of the Equity Contribution, the Opco Notes, the Superholdco Notes and the Target Facilities shall be used (i) to pay the Equity Consideration, (ii) to pay for the Refinancing (if and to the extent applicable) and (iii) to pay the fees and expenses incurred in connection with the Transactions (including any fees and expenses associated with the Consents).
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Borrower:
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Prestige Brands, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Target.
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Guarantors:
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The obligations of the Borrower and its subsidiaries under the Target Senior Secured Facilities and under any treasury management, interest protection or other hedging arrangements entered into with a Target Secured Credit Facilities Lender (or an affiliate thereof) will be guaranteed by the Target and each of the existing and future wholly-owned direct and indirect restricted subsidiaries of the Borrower (the “Guarantors”), other than any subsidiary that is a “controlled foreign corporation” (a “CFC”) under Section 957 of the Internal Revenue Code to the extent such guarantee would result in a material tax liability. All guarantees will be guarantees of payment and not of collection.
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Administrative Agent
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and Collateral Agent:
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BOA will act as sole and exclusive administrative agent and collateral agent for the Target Secured Credit Facilities Lenders (the “Target Senior Secured Facilities Administrative Agent”).
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Joint Lead Arrangers
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and Joint Bookrunning
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Managers:
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Bank of America Merrill Lynch and Jefferies Finance will act as joint lead arrangers and joint bookrunning managers for the Target Senior Secured Facilities (the “Target Senior Secured Facilities Lead Arrangers”).
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Syndication Agent:
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Jefferies Finance
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Lenders:
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Each of the Initial Lenders (or an affiliate thereof) and other banks, financial institutions and institutional lenders selected by the Target Senior Secured Facilities Lead Arrangers (the “Target Secured Credit Facilities Lenders”).
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Senior Credit Facilities:
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Subject to adjustment as provided below, an aggregate principal amount of up to $960 million will be available through the following facilities:
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Purpose:
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If the Credit Agreement Consent has not been obtained, up to $660 million of Term Loans will be available to the Borrower on the Closing Date to refinance in full all term loans outstanding under the Existing Credit Agreement. In addition, up to $250 million of Term Loans will be available to the Borrower on the Closing Date to finance the Secured Notes Change of Control Payment (if any) and/or payments in respect of the Secured Notes Tender (if any).2
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The letters of credit and proceeds of borrowings under the Revolving Credit Facility will be used by the Borrower and its subsidiaries for working capital and other general corporate purposes; provided that, so long as after giving effect thereto the available unused commitments under the Revolving Credit Facility would be at least $25 million, the Borrower may borrow under the Revolving Credit Facility on the Closing Date in an aggregate amount not to exceed $10 million to pay fees or expenses in connection with the Transactions, including any premi
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2
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It is understood and agreed that if the Credit Agreement Consent has been obtained but the Secured Notes Consent has not been obtained, the Term Loans used to finance the Secured Notes Change of Control Payment shall be borrowed under the Existing Credit Agreement pursuant to an amendment thereto (to the extent such amendment is necessary to permit such incurrence).
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Interest Rates:
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The interest rates per annum (calculated on a 360-day basis) applicable to the Target Senior Secured Facilities will be, at the option of the Borrower (i) LIBOR plus the Applicable Margin (as hereinafter defined) or (ii) the Base Rate plus the Applicable Margin. The Applicable Margin means 4.50% per annum, in the case of LIBOR advances, and 3.50% per annum, in the case of Base Rate advances.
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Commitment Fee:
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Commencing on the Target Senior Secured Facilities Closing Date, a commitment fee of 0.50% per annum (calculated on a 360-day basis) shall be payable on the average daily unused portions of the Revolving Credit Facility, such fee to be payable quarterly in arrears and on the date of termination or expiration of the commitments.
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Calculation of Interest
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and Fees:
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Other than calculations in respect of interest at the Base Rate (which shall be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of interest and fees shall be made on the basis of actual number of days elapsed in a 360-day year.
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Cost and Yield Protection:
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Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes. Customary protection in respect of The Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III will also be included.
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Letter of Credit Fees:
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Letter of Credit fees equal to the Applicable Margin from time to time on LIBOR advances under the Revolving Credit Facility on a per annum basis will be payable quarterly in arrears and shared proportionately by the Target Secured Credit Facilities Lenders under the Revolving Credit Facility. In addition, a fronting fee of 0.25% per annum upon the aggregate face amount of outstanding letters of credit will be payable to the Issuing Bank for its own account payable in arrears at the end of each quarter, as well as customary issuance and documentary fees. Both the Letter of Credit fees and the fronting fees will be calculated on the amount available to be drawn under each outstanding Letter of Credit.
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Maturity:
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Term Facility: Seven (7) years after the Target Senior Secured Facilities Closing Date; provided that the Target Senior Secured Facilities Credit Documentation shall provide the right of individual Lenders to agree to extend the maturity of their Term Loans upon the request of the Borrower and without the consent of any other Lender (it being understood that the “Amendments” section of the Target Senior Secured Facilities Credit Documentation shall permit such extensions with the consent of the Borrower and the applicable Lenders (without requiring the consent of any other Lenders)).
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Scheduled Amortization:
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Term Facility: The Term Facility will be subject to quarterly amortization of principal equal to 0.25% of the aggregate principal amount of the loans borrowed under the Term Facility, with the balance payable at final maturity.
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Mandatory Prepayments
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and Commitment
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Reductions:
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In addition to the amortization set forth above, (a) 100% of the net cash proceeds from sales of property and assets of the Target or any of its restricted subsidiaries in excess of an amount to be agreed upon, but excluding sales of inventory in the ordinary course of business and other exceptions to be agreed in the Credit Documentation in respect of the Target Senior Secured Facilities (the “Target Senior Secured Credit Documentation”)), subject to reinvestment rights to be agreed, (b) 100% of the net cash proceeds from the issuance or incurrence after the Target Senior Secured Facilities Closing Date of additional debt of Borrower or any of its restricted subsidiaries other than debt permitted
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Optional Prepayments and
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Commitment Reductions:
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The Target Senior Secured Facilities may be prepaid at any time in whole or in part without premium or penalty, upon written notice, at the option of the Borrower, except that (a) upon any prepayment of or amendment to the Term Facility on or prior to the first anniversary of the Closing Date in connection with a Repricing Transaction (as defined below), an amount equal to 1.00% of the principal amount prepaid or subject to such Repricing Transaction shall be payable and (b) any prepayment of LIBOR advances other than at the end of the applicable interest periods therefor shall be made with reimbursement for any funding losses and redeployment costs of the Target Secured Credit Facilities Lenders resulting therefrom. Each optional prepayment of the Term Facility shall be applied to the scheduled amortization payments of the Term Facility as directed by the Borrower. The unutilized portion of any commitment under the Target Senior Secured Facilities may be reduced permanently or terminated by the Borrower at any time without penalty. As used herein “Repricing Transaction” means (x) the prepayment or refinancing of all or any portion of the Term Facility with the proceeds of any indebtedness having an all-in yield (deter-
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Security:
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The Borrower and each of the Guarantors shall grant the Target Senior Secured Facilities Administrative Agent (for its benefit and for the benefit of the Target Secured Credit Facilities Lenders) valid and perfected first priority (subject to the Limited Conditionality Provisions and certain exceptions to be set forth in the Target Senior Secured Credit Documentation) liens and security interests in all of the following (collectively, the “Collateral”):
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(a)
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all present and future shares of capital stock of (or other ownership or profit interests in) each of the Target’s present and future direct and indirect restricted subsidiaries (limited, (i) in the case of voting stock of any entity that is a CFC, to 65% of such voting stock to the extent that security over a greater percentage would result in a material tax liability and (ii) in the case of any non-wholly owned subsidiaries, to the extent a third party consent is required or there are provisions restricting the ability to pledge such interests pursuant to the applicable operating or formation documents and such provisions are not rendered ineffective by the Uniform Commercial Code or other applicable law), held by the Borrower or a Guarantor, including, without limitation, all of the equity interests in the Borrower;
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(b)
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all present and future debt owed to the Borrower or any Guarantor;
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(c)
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all of the present and future property and assets, real and personal, of the Borrower and each Guarantor, including, but not limited to, machinery and equipment, inventory and other goods, accounts receivable, fee-owned real estate with a minimum value to be agreed, fixtures, bank accounts (provided that control agreements shall not be required), general intangibles, financial assets, investment property, license rights, patents, trademarks, trade names, copyrights, other intellectual property and other general intangibles, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnification rights, tax refunds and cash, in each case subject to customary exceptions to be agreed; and
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(d)
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all proceeds and products of the property and assets described in clauses (a), (b) and (c) above.
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Conditions Precedent
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to Initial Funding on the
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Target Senior Secured
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Facilities Closing Date:
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Limited to (i) the conditions specified in Section 7 of the Commitment Letter and (ii) the conditions specified in Exhibit E to the Commitment Letter, subject in each case to the Limited Conditionality Provisions.
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Conditions Precedent to
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Each Subsequent Borrowing
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Under the Target Senior
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Secured Facilities:
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Each subsequent borrowing or issuance or renewal of a Letter of Credit under the Target Senior Secured Facilities will be subject to satisfaction of the following conditions precedent: (i) all of the representations and warranties in the Target Senior Secured Credit Documentation shall be true and correct as of the date of such extension of credit (subject to a materiality qualification); and (ii) no default or event of default under
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Representations and
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Warranties:
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Representations and warranties limited to the following: (i) corporate status, corporate power and authority; (ii) due authorization, execution, delivery and enforceability of the Target Senior Secured Credit Documentation; (iii) no violation of law, contracts or organizational documents; (iv) no material litigation or investigations; (v) accuracy and completeness of financial statements and other information; (vi) no material adverse change; (vii) no required material governmental or third party approvals or consents; (viii) use of proceeds; (ix) compliance with laws (including the U.S.A. Patriot Act and margin regulations); (x) valid title to property and assets (including, intellectual property and licenses), free and clear of liens (other than permitted liens), charges and other encumbrances; (xi) status under Investment Company Act; (xii) ERISA matters; (xiii) environmental matters; (xiv) validity, priority and perfection of security interests; (xv) solvency; (xvi) tax status and payment of taxes; (xvii) insurance matters; (xiii) labor matters and (xix) status as senior debt; in each of the foregoing cases, with such exceptions, thresholds and limitations for materiality as may be agreed upon in the Target Senior Secured Credit Documentation.
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Affirmative and Negative
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Covenants:
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Limited to the following affirmative and negative covenants (applicable to the Target and its restricted subsidiaries):
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(a)
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Affirmative Covenants: (i) Compliance with laws and regulations (including, without limitation, ERISA and environmental laws); (ii) payment of taxes and other obligations; (iii) maintenance of insurance; (iv) preservation of corporate existence, rights (charter and statutory), permits, licenses and approvals; (v) visitation and inspection rights; (vi) keeping of proper books in accordance with generally accepted accounting principles; (vii) maintenance of properties; (viii) further assurances as to perfection and priority of security interests; (ix) additional guarantors and additional collateral; (x) customary financial and other reporting requirements (including, without limitation, audited annual financial statements and quarterly unaudited financial statements, notices of defaults, compliance certificates, annual budget, notices of material litigation and proceedings, material environmental actions and liabilities and material ERISA and tax events and liabilities; (xii) maintenance of ratings (but no minimum ratings); (xiii) quarterly lender calls; and (xiv) hedging arrangements satisfactory to the Target Senior Secured Facilities Administrative Agent; in each of the foregoing cases, with such exceptions, thresholds and qualifications as may be agreed upon in the Target Senior Secured Credit Documentation.
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(b)
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Negative Covenants: Limited to restrictions on (i) liens; (ii) debt (other than the Opco Notes or the Opco Bridge Loans, as
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the case may be, and, in the case of the Opco Bridge Loans, Opco Permanent Securities in an initial principal amount sufficient to refinance the outstanding Opco Bridge Loans), guarantees or other contingent obligations (including, without limitation, the subordination of all intercompany indebtedness on terms satisfactory to the Target Secured Credit Facilities Lenders); (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property and assets (other than sales of inventory in the ordinary course of business); (v) loans, acquisitions, joint ventures and other investments; (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) prepaying, redeeming or repurchasing certain debt; (viii) capital expenditures (with levels that have at least a 25% cushion to the projected amounts set forth in the Model (as defined below)); (ix) granting negative pledges; (x) transactions with affiliates; (xi) changes in the nature of business; (xii) amending organizational documents or certain material agreements; (xiii) changes in accounting policies or reporting practices; (xiv) changes in fiscal year; and (xv) passive holding company; in each of the foregoing cases, with such exceptions, thresholds, qualifications and baskets as may be agreed upon in the Target Senior Secured Credit Documentation.
In addition, Superholdco and its subsidiaries (collectively, the “PBH Group”) shall not be permitted to (i) make investments in GLI or any subsidiary of GLI that is not a member of the PBH Group (GLI, together with such subsidiaries, the “GLI Group”), subject to exceptions to be agreed or (ii) transfer assets to any member of the GLI Group, except in the ordinary course upon the receipt of consideration at least equal to fair market value in an arm’s-length transactions.
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Financial Covenants:
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Limited to:
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·
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Maintenance of a minimum Cash Interest Coverage Ratio (EBITDA (definition to be mutually agreed)/cash interest expense); and
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·
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Maintenance of a maximum Total Net Leverage Ratio (total debt (comprised of debt for borrowed money, purchase money debt, capital leases, indebtedness evidenced by promissory notes or instruments and unreimbursed amounts under drawn letters of credit) net of domestic unrestricted cash (with a cap on such netted cash to be agreed)/EBITDA).
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Unrestricted Subsidiaries:
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The Target Senior Secured Credit Documentation shall contain provisions pursuant to which, subject to customary limitations and conditions to be agreed (including individual and aggregate caps based on EBITDA and tangible asset value), the Borrower will be permitted to designate any existing or subsequently acquired or organized subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such unrestricted subsidiary as a “restricted subsidiary”.
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Events of Default:
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The Events of Default shall be limited to the following (subject, where appropriate, to customary thresholds, notice and grace periods): (i) nonpayment of principal, interest, fees or other amounts; (ii) any representation or warranty proving to have been inaccurate in any material respect when made or confirmed; (iii) failure to perform or observe covenants set forth in the Target Senior Secured Credit Documentation; (iv) cross-defaults to other material indebtedness in an amount to be agreed; (v) bankruptcy and insolvency defaults; (vi) monetary judgment defaults in an amount to be agreed and material non-monetary judgment defaults; (vii) actual or asserted (by a Loan Party) impairment of Target Senior Secured Credit Documentation or security; (viii) Change of Control (to be defined); and (ix) customary ERISA defaults subject to materiality.
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Assignments and
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Participations:
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Each Target Secured Credit Facilities Lender will be permitted to assign, in minimum amounts to be agreed, (a) Term Loans and (b) loans and commitments under the Revolving Credit Facility, in each case with the consent of the Borrower (not to be unreasonably withheld or delayed; provided, that the Borrower’s consent shall be deemed to have been given if the Borrower has not responded within seven business days of a request for such consent); provided that no consent of the Borrower shall be required (i) after the occurrence or during the continuance of a payment or bankruptcy event of default, (ii) under the Revolving Credit Facility to other Target Secured Credit Facilities Lenders under the Revolving Credit Facility or (iii) with respect to any Term
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Waivers and Amendments:
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Amendments and waivers of the provisions of the Target Senior Secured Credit Documentation will require the approval of Target Secured Credit Facilities Lenders holding advances and commitments representing more than 50% of the aggregate advances and commitments under the Target Senior Secured Facilities (with certain amendments and waivers also requiring class votes), except that, in addition, the consent of each adversely affected Target Secured Credit Facilities Lender will be required with respect to, among other things, (i) increases in commitment amounts, (ii) reductions of principal, interest, or fees, (iii) extensions of scheduled maturities or times for payment and (iv) releases of all or substantially all of the collateral or value of the guarantees.
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The Target Senior Secured Credit Documentation shall contain customary “yank-a-bank” provisions permitting the replacement of non-consenting lenders.
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Indemnification:
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The Borrower will indemnify and hold harmless the Target Senior Secured Facilities Administrative Agent, the Target Senior Secured Facilities Lead Arrangers, each Target Secured Credit Facilities Lender and each of their affiliates and their officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) from and against all losses, liabilities, claims, damages or expenses arising out of or relating to the Transactions, the Target Senior Secured Facilities, the Borrower’s use of loan proceeds or the commitments, including, reasonable and documented out-of-pocket legal fees, disbursements and other charges of one primary counsel and one local counsel to the Indemnified Parties in each relevant jurisdiction (and, in
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Governing Law:
|
New York.
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Expenses:
|
The Borrower will pay all reasonable and documented out-of-pocket costs and expenses associated with the preparation, due diligence, administration, syndication and enforcement of all Target Senior Secured Credit Documentation, including, without limitation, the legal fees and expenses of one primary counsel and one local counsel to the Target Senior Secured Facilities Administrative Agent in each relevant jurisdiction, regardless of whether or not the Target Senior Secured Facilities are closed. The Borrower will also pay the expenses of each Target Secured Credit Facilities Lender in connection with the enforcement of any of the Target Senior Secured Credit Documentation.
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Counsel to the Target Senior
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Secured Credit Facilities
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Administrative Agent:
|
Davis Polk & Wardwell LLP
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Miscellaneous:
|
Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction. In addition, the Target Senior Secured Credit Documentation shall contain customary “Defaulting Lender” provisions.
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Borrower:
|
Same as the Target Senior Secured Facilities.
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Guarantors:
|
Same as the Target Senior Secured Facilities.
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Administrative Agent:
|
BOA or an affiliate thereof will act as sole and exclusive administrative agent for the Opco Bridge Facility Lenders (the “Opco Bridge Administrative Agent”).
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|
Joint Lead Arrangers and
Joint Bookrunning Managers: |
Bank of America Merrill Lynch and Jefferies Finance will act as joint lead arrangers and joint bookrunning managers for the Opco Bridge Loans (in such capacity, the “Opco Bridge Facility Lead Arrangers”).
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Opco Bridge Facility Lenders:
|
Each of the Initial Lenders (or an affiliate thereof) (the “Initial Opco Bridge Facility Lenders”) and other financial institutions and institutional lenders selected by the Opco Bridge Facility Lead Arrangers (the “Opco Bridge Facility Lenders").
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|
Opco Bridge Facility:
|
Subject to adjustment as provided below, a $250 million senior unsecured bridge facility (the “Opco Bridge Facility”, the loans thereunder the “Opco Bridge Loans”), less the aggregate gross proceeds of Opco Notes or any other debt or equity securities of the Companies (other than the Superholdco Notes and other than securities issued to any direct or indirect parent company of Opco) (collectively, “Opco Permanent Securities”) issued on or prior to the Closing Date. The Opco Bridge Loans will be available to the Borrower on the Closing Date.
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The commitments in respect of the Opco Bridge Facility shall be automatically increased by $220 million if each of (i) the Credit Agreement Consent, (ii) the Secured Notes Consent and (iii) the Unsecured Notes Consent shall have failed and been terminated or otherwise been permanently abandoned (an “Opco Bridge Facility Increase”).
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The commitments in respect of the Opco Bridge Facility shall be automatically reduced by $250 million if: (x) the Unsecured Notes Consent shall have been obtained; or (y) (i) the Unsecured Notes Consent shall have failed and been terminated or otherwise been permanently abandoned but either the Credit Agreement Consent and/or the Secured Notes Consent has been obtained and (ii) the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender shall be less than $150 million (the event described in this clause (y), an “Unsecured Notes Offer Shortfall”).
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If (x) the Unsecured Notes Consent shall have failed and been terminated or otherwise been permanently abandoned but either the Credit Agreement Consent and/or the Secured Notes Consent is obtained and (y) the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured Notes Change of Control Offer shall equal or exceed $150 million, the commitments in respect of the Opco Bridge Facility shall be reduced by the excess of (i) $250 million over (ii) the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender (an “Opco Bridge Facility Decrease”).
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Ranking:
|
The Opco Bridge Loans will be senior unsecured obligations of the Borrower and rank pari passu in right of payment with or senior to all other unsecured obligations of the Borrower. The guarantees will be senior unsecured obligations of each Guarantor, ranking pari passu in right of payment with or senior to all other unsecured obligations of such Guarantor.
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Security:
|
None.
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Purpose:
|
The proceeds of the Opco Bridge Loans shall be used to finance the Unsecured Notes Change of Control Offer, the Unsecured Notes Tender and/or the Equity Consideration, as contemplated by Exhibit A.
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Interest Rate:
|
Interest shall be payable quarterly in arrears at a rate per annum equal to three-month LIBOR plus the Applicable Margin.
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|
“Applicable Margin” shall initially be 7.50% on the Closing Date, and will increase by an additional 50 basis points at the end of each subsequent three-month period for as long as the Opco Bridge Loans are outstanding; provided that the interest rate shall not exceed the Opco Rate Cap (as defined in the Fee Letter).
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“LIBOR” shall be deemed to be not less than 1.25% per annum.
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During the continuance of a payment or bankruptcy default, interest will accrue on all principal, interest and other amounts at a rate of 200 basis points in excess of the rate otherwise applicable to the Opco Bridge Loans (except that following the Opco Rollover Date (as defined below), interest will accrue on all principal, interest and other amounts at a per annum rate equal to 200 basis points in excess of the Opco Rate Cap), and will be payable on demand.
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Notwithstanding the foregoing, the Opco Bridge Loans will accrue interest at a per annum rate equal to the Opco Rate Cap upon the occurrence of an Opco Demand Failure Event (as defined in the Fee Letter).
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All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
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Cost and Yield Protection:
|
Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes.
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Amortization:
|
None.
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|
Optional Prepayments:
|
The Opco Bridge Loans may be prepaid prior to the first anniversary of the Closing Date (the “Opco Rollover Date”), in whole or in part, upon written notice, at the option of the Borrower, at any time, together with accrued interest to the prepayment date, without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings; provided, that if an Opco Demand Failure Event (as defined in the Fee Letter) shall have occurred, the Opco Bridge Loans shall be subject to the call protection applicable to the Opco Exchange Notes.
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Mandatory Prepayments:
|
The Borrower shall prepay the Opco Bridge Loans without premium or penalty, with (a) all net cash proceeds from sales of property and assets of the Target or any of its subsidiaries in excess of amounts to be agreed (including sales or issuances of equity interests by subsidiaries of the Target but excluding sales of inventory in the ordinary course of business and other exceptions to be agreed in the Credit Documentation in respect of the Opco Bridge Facility (the “Opco Bridge Credit Documentation”)), subject to reinvestment rights to be agreed, (b) all net cash proceeds from the issuance or incurrence after the Closing Date of additional debt of the Target or any of its subsidiaries other than certain debt permitted under the Opco Bridge Credit Documentation, and (c) net cash proceeds from any issuance of equity interest by, or equity contribution to, the Target, subject to exceptions to be agreed. The Borrower’s obligation to prepay Opco Bridge Loans and purchase Opco Exchange Notes shall be deemed to be satisfied with respect to clause (a) above on a dollar-for-dollar basis to the extent of amounts applied to repay loans under the Target Senior Secured Facilities (in the case of the revolving credit facility, to the extent accompanied by a permanent reduction in commitments thereunder).
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Change of Control:
|
In the event of a Change of Control (to be defined), each Opco Bridge Facility Lender will have the right to require the Borrower, and the Borrower must offer, to prepay the outstanding principal amount of the Opco Bridge Loans at a premium equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment. Prior to making any such offer, the Borrower will, within 30 days of the Change of Control, repay all obligations under the Target Senior Secured Facilities or obtain any required consent of the Target Secured Credit Facilities Lenders under the Target Senior Secured Facilities to make such prepayment of the Opco Bridge Loans.
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Conversion into Rollover
Loans: |
If the Opco Bridge Loans have not been previously prepaid in full for cash on or prior to the Opco Rollover Date, the principal amount of the Opco Bridge Loans outstanding on the Opco Rollover Date may, subject to the conditions precedent set forth in Exhibit C-II, be converted into unsecured, senior rollover loans with a maturity of eight (8) years from the Closing Date and otherwise having the terms set forth in Exhibit C-II (the “Opco Rollover Loans”). Any Opco Bridge Loans not converted into Opco Rollover Loans shall be repaid in full on the Opco Rollover Date.
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Exchange into
Exchange Notes: |
Each Opco Bridge Facility Lender that is (or will immediately transfer its Opco Exchange Notes to) an Eligible Holder (as defined in Exhibit C-III) will have the right, at any time on or after the Opco Rollover Date, to exchange Opco Rollover Loans held by it for unsecured senior exchange notes of the Borrower having the terms set forth in Exhibit C-III (the “Opco Exchange Notes”). Notwithstanding the foregoing, the Borrower will not be required to exchange Opco Rollover Loans for Opco Exchange Notes unless at least $25 million of Opco Exchange Notes would be outstanding immediately after such exchange. In connection with each such exchange, or at any time prior thereto if requested by the Initial Opco Bridge Facility Lenders, the Borrower shall (i) deliver to the Opco Bridge Facility Lender that is receiving Opco Exchange Notes, and to such other Opco Bridge Facility Lenders as the Initial Opco Bridge Facility Lender requests, an offering memorandum of the type customarily utilized in a Rule 144A offering of high yield securities covering the resale of such Opco Exchange Notes or Opco Bridge Loans by such Opco Bridge Facility Lenders, in such form and substance as reasonably acceptable to the Borrower and the Initial Opco Bridge Facility Lenders, and keep such offering memorandum updated in a manner as would be required pursuant to a customary Rule 144A securities purchase agreement, (ii) execute an exchange agreement containing provisions customary in Rule 144A transactions (including indemnification provisions) and a registration rights agreement customary in Rule 144A offerings, in each case, if requested by the Initial Opco Bridge Facility Lenders, (iii) deliver or cause to be delivered such opinions and accountants’ comfort letters addressed to the Initial Opco Bridge Facility Lenders and such certificates as the Initial Opco Bridge Facility Lenders may reasonably request as would be customary in Rule 144A offerings and otherwise in form and substance reasonably satisfactory to the Initial Opco Bridge Facility Lenders and (iv) take such other actions, and cause its advisors, auditors and counsel to take such actions, as reasonably requested by the Initial Opco Bridge Facility Lenders in connection with issuances or resales of Opco Exchange Notes or Opco Bridge Loans, including providing such information regarding the business and operations of the Target and its subsidiaries as is reasonably requested by any prospective holder of Opco Exchange Notes or Opco Bridge Loans and customarily provided in due diligence investigations in connection with purchases or resales of securities.
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Conditions Precedent
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to the Opco Bridge Facility
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Closing Date and to
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Initial Funding:
|
Limited to (i) the conditions specified in Section 7 of the Commitment Letter and (ii) the conditions specified in Exhibit E to the Commitment Letter, subject to the Limited Conditionality Provisions.
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Covenants:
|
Customary for high yield debt securities of issuers of similar size and credit quality, as determined by the Opco Bridge Facility Lead Arrangers (in consultation with the Borrower) in light of prevailing market conditions and other circumstances; provided that prior to the Opco Rollover Date, the limitation on restricted payments and the limitation on debt will be more restrictive than customary high yield covenants. In addition the Borrower will be required to comply with the Commitment Letter and the Fee Letter, and to use commercially reasonable efforts to refinance the Opco Bridge Loans as promptly as practicable following the Closing Date, including by taking the actions specified in paragraph 14 of Exhibit E.
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Representations and
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Warranties, Events of
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Default, Waivers and
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Consents:
|
Usual and customary for a transaction of this type substantially identical to those in the Target Senior Secured Facilities with necessary modifications to reflect differences in documentation for the Opco Bridge Facility and in no event more restrictive taken as whole than the Target Senior Secured Facilities. For the avoidance of doubt, a failure to comply with the “Opco Bridge Take-out Demand” section of the Fee Letter shall constitute an event of default under the Opco Bridge Facility.
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Assignments and
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Participations:
|
Each Opco Bridge Facility Lender will be permitted to make assignments in minimum amounts to be agreed. Borrower consent to assignments shall not be required; provided, however, that prior to the Opco Rollover Date, so long as no payment or bankruptcy event of default exists, the consent of the Borrower (which shall not be unreasonably withheld or delayed) shall be required with respect to any assignment if subsequent thereto, the Initial Opco Bridge Facility Lenders would hold, in the aggregate, less than 50.1% of the outstanding Opco Bridge Loans; provided, further that Borrower’s consent shall be deemed to have been given if the Borrower has not responded within five business days of a request for such consent. Each Opco Bridge Facility Lender will also have the right, without any consent, to assign as security all or part of its rights under the Opco Bridge Credit Documentation to any Federal Reserve Bank. Each Opco Bridge Facility Lender will be permitted to sell participations, without any consent, with voting rights limited to significant matters such as changes in amount, rate and ma-
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|
Governing Law:
|
New York.
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|
Indemnification and
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|
Expenses:
|
Same as the Target Senior Secured Facilities.
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|
Counsel to Opco Bridge Lead
Arrangers: |
Davis Polk & Wardwell LLP. |
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Borrower:
|
Same as the Borrower of the Opco Bridge Loans.
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|
Guarantors:
|
Same as the Opco Bridge Loans.
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|
Opco Rollover Loans:
|
Opco Rollover Loans in an initial principal amount equal to 100% of the outstanding principal amount of the Opco Bridge Loans on the Opco Rollover Date. Subject to the conditions precedent set forth below, the Opco Rollover Loans will be available to the Borrower to refinance the Opco Bridge Loans on the Opco Rollover Date. The Opco Rollover Loans will be governed by the Opco Bridge Credit Documentation and, except as set forth below, shall have the same terms as the Opco Bridge Loans.
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Ranking:
|
Same as Opco Bridge Loans.
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|
Interest Rate:
|
Interest shall be payable quarterly in arrears at a rate per annum equal to the Opco Rate Cap.
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|
During the continuance of a payment or bankruptcy default, interest will accrue on all principal, interest and other amounts at a rate of 200 basis points in excess of the rate otherwise applicable to the Rollover Loans, and will be payable on demand.
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All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
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|
Maturity:
|
Eight (8) years after the Closing Date.
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|
Optional Prepayments:
|
For so long as the Opco Rollover Loans have not been exchanged for Opco Exchange Notes of the Borrower as provided in Exhibit C-III, they may be prepaid at the option of the Borrower, in whole or in part, at any time, together with accrued and unpaid interest to the prepayment date (but without premium or penalty); provided, that if an Opco Demand Failure Event (as defined in the Fee Letter) shall have occurred, the Opco Rollover Loans shall be subject to the call protection applicable to the Opco Exchange Notes.
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Conditions Precedent to
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|
Rollover:
|
The ability of the Borrower to convert any Opco Bridge Loans into Opco Rollover Loans is subject to the following conditions being satisfied:
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(i)
|
at the time of any such refinancing, there shall exist no event of default or event that, with notice and/or lapse of time, could
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(ii)
|
all fees due and payable to the Opco Bridge Facility Lead Arrangers and the Initial Opco Bridge Facility Lenders shall have been paid in full;
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(iii)
|
the Opco Bridge Facility Lenders shall have received promissory notes evidencing the Opco Rollover Loans (if requested) and such other documentation as shall be set forth in the Opco Bridge Credit Documentation; and
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(iv)
|
no order, decree, injunction or judgment enjoining any such refinancing shall be in effect.
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|
Covenants:
|
From and after the Opco Rollover Date, the covenants applicable to the Opco Rollover Loans will conform to those applicable to the Opco Exchange Notes, except for covenants relating to the obligation of the Borrower to refinance the Opco Rollover Loans.
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Assignments and
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|
Participations:
|
Same as the Opco Bridge Loans.
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|
Governing Law:
|
New York.
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|
Indemnification and
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|
Expenses:
|
Same as the Opco Bridge Loans.
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|
Issuer:
|
Same as the Borrower of the Opco Bridge Loans.
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|
Guarantors:
|
Same as the Opco Bridge Loans.
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|
Opco Exchange Notes:
|
The Borrower will issue the Opco Exchange Notes under an indenture that complies with the Trust Indenture Act of 1939, as amended (the “Indenture”). The Borrower will appoint a trustee reasonably acceptable to the holders of the Opco Exchange Notes. The Indenture will be in substantially the form attached as an exhibit to the Opco Bridge Credit Documentation. The Indenture will include provisions customary for an indenture governing publicly traded high yield debt securities. Except as expressly set forth above, the Opco Exchange Notes shall have the same terms as the Opco Rollover Loans.
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Ranking:
|
Same as the Opco Bridge Loans.
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|
Security:
|
None.
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|
Interest Rate:
|
Interest shall be payable semi-annually in arrears at a rate per annum equal to the Opco Rate Cap.
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Interest on overdue amounts will accrue at a rate of 200 basis points in excess of the rate otherwise applicable to the Opco Exchange Notes, and will be payable on demand.
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Maturity:
|
Same as the Rollover Loans.
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Amortization:
|
None.
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|
Optional Redemption:
|
The Opco Exchange Notes shall not be redeemable until the fourth anniversary of the Closing Date, after which the Opco Exchange Notes will be redeemable at the option of the Issuer at a premium equal to 50% of the coupon on the Opco Exchange Notes, declining ratably to par on the date which is two years prior to the maturity date.
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In addition, Opco Exchange Notes will be redeemable at the option of the Issuer prior to the third anniversary of the Closing Date with the net cash proceeds of qualified equity offerings of any direct or indirect parent of the Issuer that are contributed to the Issuer at a premium equal to the coupon on the Opco Exchange Notes; provided that after giving effect to such redemption at least 65% of the aggregate principal amount of Opco Exchange Notes originally issued shall remain outstanding.
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|
Prior to the fourth anniversary of the Closing Date, the Issuer may redeem the Opco Exchange Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the fourth anniversary of the Closing Date plus 50 basis points (plus accrued interest).
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|
Mandatory
|
|
|
Offer to Purchase:
|
The Issuer will be required to offer to purchase the Opco Exchange Notes upon a Change of Control (to be defined in the Indenture) at 101% of the principal amount thereof plus accrued interest to the date of purchase unless the Borrower shall have delivered previously or concurrently an irrevocable notice to redeem such Opco Exchange Notes pursuant to “Optional Redemption” above.
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|
In addition, the Issuer will be required to make a customary offer to purchase in connection with asset sales, subject to customary thresholds, covenants and exclusions.
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|
Exchange Notes:
|
Each holder of Opco Exchange Notes shall have the right to transfer its Opco Exchange Notes in whole or in part, at any time to an Eligible Holder and, after the Opco Exchange Notes are registered pursuant to the provisions described under “Registration Rights”, to any person or entity; provided that if the Issuer or any of its affiliates holds Opco Exchange Notes, such Opco Exchange Notes shall be disregarded in any voting. “Eligible Holder” will mean (a) an institutional “accredited investor” within the meaning of Rule 501 under the Securities Act, (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (c) a person acquiring the Opco Exchange Notes pursuant to an offer and sale occurring outside of the United States within the meaning of Regulation S under the Securities Act or (d) a person acquiring the Opco Exchange Notes in a transaction that is, in the opinion of counsel reasonably acceptable to the Issuer, exempt from the registration requirements of the Securities Act; provided that in each case such Eligible Holder represents that it is acquiring the Opco Exchange Notes for its own account and that it is not acquiring such Opco Exchange Notes with a view to, or for offer or sale in connection with, any distribution thereof (within the meaning of the Securities Act) that would be in violation of the securities laws of the United States or any state thereof.
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|
Registration Rights:
|
The Issuer will be required to:
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|
·
|
within 60 days after the Opco Rollover Date, file a registration statement for an offer to exchange the Opco Exchange Notes for publicly registered notes with identical terms;
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|
·
|
use its reasonable best efforts to cause the registration statement to become effective under the Securities Act within 120 days after the Opco Rollover Date;
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|
·
|
complete the exchange offer within 150 days after the Opco Rollover Date; and
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|
·
|
file and use its reasonable best efforts to a shelf registration statement for the resale of the Opco Exchange Notes if it cannot complete an exchange offer by such 150th day and in certain other circumstances, and keep such shelf registration statement effective, with respect to resales of the Opco Exchange Notes, for as long as it is required by the holders of the Opco Exchange Notes to resell the Opco Exchange Notes.
Upon failure to comply with the requirements of the registration rights agreement (a “Registration Default”), the Issuer shall pay liquidated damages to each holder of Opco Exchange Notes with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to 0.50% per annum on the principal amount of Opco Exchange Notes held by such holder. The amount of the liquidated damages will increase by an additional 0.50% per annum on the principal amount of Opco Exchange Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of 2.00% per annum.
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|
Governing Law:
|
New York.
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Indemnification and
|
|
|
Expenses:
|
Same as the Opco Bridge Loans.
|
|
Borrower:
|
Superholdco
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|
Guarantors:
|
None.
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|
Administrative Agent:
|
BOA or an affiliate thereof will act as sole and exclusive administrative agent for the Superholdco Bridge Facility Lenders (the “Superholdco Bridge Administrative Agent”).
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|
Joint Lead Arrangers and
Joint Bookrunning Managers: |
Bank of America Merrill Lynch and Jefferies Finance will act as joint lead arrangers and joint bookrunning managers for the Opco Bridge Loans (in such capacity, the “Superholdco Bridge Facility Lead Arrangers”).
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|
Superholdco Bridge Facility
Lenders: |
Each of the Initial Lenders (or an affiliate thereof) (each an “Initial Superholdco Bridge Facility Lender”) and other financial institutions and institutional lenders selected by the Superholdco Bridge Facility Lead Arrangers (the “Superholdco Bridge Facility Lenders”).
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|
Superholdco Bridge Facility:
|
Subject to adjustment as provided below, up to $220 million senior unsecured PIK toggle bridge facility (the “Superholdco Bridge Facility” and together with the Opco Bridge Facility, the “Bridge Facilities”; the loans under the Superholdco Bridge Facility, the “Superholdco Bridge Loans” and together with the Opco Bridge Loans, the “Bridge Loans”), less the aggregate gross proceeds of Superholdco Notes or any other debt or equity securities of the Companies (other than the Opco Notes and other than securities issued to any direct or indirect parent company of Superholdco) (collectively, “Superholdco Permanent Securities”) issued on or prior to the Closing Date. The Superholdco Bridge Loans will be available to the Borrower on the Closing Date.
The commitments in respect of the Superholdco Bridge Facility shall be automatically reduced by $220 million upon the occurrence of an Opco Bridge Facility Increase (any such reduction a “Superholdco Bridge Reduction Event”).
If an Unsecured Notes Offer Shortfall exists and the Superholdco Bridge Facility has not been terminated pursuant to the immediately preceding paragraph, the commitments in respect of the Superholdco Bridge Facility shall be automatically increased by the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured
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Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender (a “Superholdco Bridge Facility Increase”).
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|
Ranking:
|
The Superholdco Bridge Loans will be senior unsecured obligations of the Borrower and rank pari passu in right of payment with or senior to all other unsecured or subordinated obligations of the Borrower.
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|
Security:
|
None.
|
|
Purpose:
|
The proceeds of the Superholdco Bridge Loans shall be used to finance the Equity Consideration, the Unsecured Notes Tender and/or the Unsecured Notes Change of Control Offer, as contemplated by Exhibit A.
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|
Interest Rate:
|
Interest shall be payable in cash (subject to the immediately following paragraph) quarterly in arrears at a rate per annum equal to three-month LIBOR plus the Applicable Cash Margin.
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|
|
If the maximum amount of dividends and other distributions permitted to be paid in cash (in a manner that does not restrict the use of such cash for paying interest in cash on the Superholdco Bridge Loans) by the Target to Superholdco under the terms of the Target Senior Secured Facilities, the Existing Secured Notes, the Existing Unsecured Notes, the Opco Bridge Facility (or any outstanding Opco Exchange Notes) or the Opco Notes or any other Opco Permanent Securities on any interest payment date plus the amount of available cash at the Borrower is less than the amount of interest that would be payable in cash, the Borrower shall pay the amount of such shortfall (subject to certain rounding mechanics to be agreed) in kind (“PIK Interest”), by increasing the principal amount of the Superholdco Bridge Loans. PIK Interest shall accrue at a rate per annum equal to three-month LIBOR plus the Applicable Cash Margin plus 0.75%. Notwithstanding the foregoing, Superholdco shall be permitted to use dividends and other distributions from its subsidiaries to pay taxes and certain other operating expenses to be agreed, and cash reserved for a period to be agreed for such purposes shall not constitute “available cash”.
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|
“Applicable Cash Margin” shall initially be 9.25% (or, if the aggregate principal amount of Superholdco Bridge Loans outstanding shall equal or exceed $275 million, 9.75%), and will, in each case, increase by an additional 50 basis points at the end of each subsequent three-month period for as long as the Superholdco Bridge Loans are outstanding; provided that the interest rate (determined for this purpose assuming that interest is paid completely in cash) shall not exceed the Superholdco Rate Cap (as defined in the Fee Letter).
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|
“LIBOR” shall be deemed to be not less than 1.25% per annum.
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|
|
During the continuance of a payment or bankruptcy default, interest will accrue on all principal, interest and other amounts at a rate of 200 basis points in excess of the rate otherwise applicable to the Superholdco Bridge Loans (except that following the Superholdco Rollover Date
|
|
|
(as defined below), interest will accrue on all principal, interest and other amounts at a per annum rate equal to 200 basis points in excess of the Superholdco Rate Cap), and will be payable on demand.
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|
|
Notwithstanding the foregoing, the Superholdco Bridge Loans will accrue cash interest at a per annum rate equal to the Superholdco Rate Cap (with PIK Interest accruing at rate equal to the Superholdco Rate Cap plus 0.75%) upon the occurrence of a Superholdco Demand Failure Event (as defined in the Fee Letter).
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|
|
All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
|
|
Cost and Yield Protection:
|
Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes. |
|
Amortization:
|
None.
|
|
Optional Prepayments:
|
The Superholdco Bridge Loans may be prepaid prior to the first anniversary of the Closing Date (the “Superholdco Rollover Date”), in whole or in part, upon written notice, at the option of the Borrower, at any time, together with accrued interest to the prepayment date, without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings; provided, that if a Superholdco Demand Failure Event (as defined in the Fee Letter) shall have occurred, the Superholdco Bridge Loans shall be subject to the call protection applicable to the Superholdco Exchange Notes.
|
|
Mandatory Prepayments:
|
The Borrower shall prepay the Superholdco Bridge Loans without premium or penalty, with (a) all net cash proceeds from sales of property and assets of Superholdco or any of its subsidiaries in excess of amounts to be agreed (including sales or issuances of equity interests by subsidiaries of Superholdco but excluding sales of inventory in the ordinary course of business and other exceptions to be agreed in the Credit Documentation in respect of the Superholdco Bridge Facility (the “Superholdco Bridge Credit Documentation”), subject to reinvestment rights to be agreed, (b) all net cash proceeds from the issuance or incurrence after the Superholdco Closing Date of additional debt of Superholdco or any of its subsidiaries other than certain debt permitted under the Superholdco Bridge Credit Documentation, and (c) net cash proceeds from any issuance of equity interest by, or equity contribution to, Superholdco, subject to exceptions to be agreed. The Borrower’s obligation to prepay Superholdco Bridge Loans and purchase Superholdco Exchange Notes shall be deemed to be satisfied with respect to clause (a) above on a dollar-for-dollar basis to the extent of amounts applied to repay loans under (i) the Target Senior Secured Facilities (in
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the case of the revolving credit facility, to the extent accompanied by a permanent reduction in commitments thereunder) or (ii) the Opco Bridge Facility.
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Change of Control:
|
In the event of a Change of Control (to be defined), each Superholdco Bridge Facility Lender will have the right to require the Borrower, and the Borrower must offer, to prepay the outstanding principal amount of the Superholdco Bridge Loans at a premium equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment. Prior to making any such offer, the Borrower will, within 30 days of the Change of Control, repay all obligations under the Target Senior Secured Facilities and the Opco Bridge Facility, or obtain any required consent of the Target Secured Credit Facilities Lenders under the Target Senior Secured Facilities and the Opco Bridge Facility Lenders under the Opco Bridge Facility to make such prepayment of the Superholdco Bridge Loans.
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Conversion into Rollover
Loans: |
If the Superholdco Bridge Loans have not been previously prepaid in full for cash on or prior to the Superholdco Rollover Date, the principal amount of the Superholdco Bridge Loans outstanding on the Superholdco Rollover Date may, subject to the conditions precedent set forth in Exhibit D-II, be converted into unsecured, senior PIK-toggle rollover loans with a maturity of eight (8) years from the Closing Date and otherwise having the terms set forth in Exhibit D-II (the “Superholdco Rollover Loans”). Any Superholdco Bridge Loans not converted into Rollover Loans shall be repaid in full on the Superholdco Rollover Date.
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Exchange into
Exchange Notes: |
Each Superholdco Bridge Facility Lender that is (or will immediately transfer its Superholdco Exchange Notes to) an Eligible Holder (as defined in Exhibit D-III) will have the right, at any time on or after the Superholdco Rollover Date, to exchange Superholdco Rollover Loans held by it for unsecured senior exchange notes of the Borrower having the terms set forth in Exhibit D-III (the “Superholdco Exchange Notes”). Notwithstanding the foregoing, the Borrower will not be required to exchange Superholdco Rollover Loans for Superholdco Exchange Notes unless at least $25 million of Superholdco Exchange Notes would be outstanding immediately after such exchange. In connection with each such exchange, or at any time prior thereto if requested by the Initial Superholdco Bridge Facility Lenders, the Borrower shall (i) deliver to the Superholdco Bridge Facility Lender that is receiving Exchange Notes, and to such other Superholdco Bridge Facility Lenders as the Initial Superholdco Bridge Facility Lender requests, an offering memorandum of the type customarily utilized in a Rule 144A offering of high yield securities covering the resale of such Superholdco Exchange Notes or Superholdco Bridge Loans by such Superholdco Bridge Facility Lenders, in such form and substance as reasonably acceptable to the Borrower and the Initial Superholdco Bridge Facility Lenders, and keep such offering memorandum updated in a
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manner as would be required pursuant to a customary Rule 144A securities purchase agreement, (ii) execute an exchange agreement containing provisions customary in Rule 144A transactions (including indemnification provisions) and a registration rights agreement customary in Rule 144A offerings, in each case, if requested by the Initial Superholdco Bridge Facility Lenders, (iii) deliver or cause to be delivered such opinions and accountants’ comfort letters addressed to the Initial Superholdco Bridge Facility Lenders and such certificates as the Initial Superholdco Bridge Facility Lenders may reasonably request as would be customary in Rule 144A offerings and otherwise in form and substance reasonably satisfactory to the Initial Superholdco Bridge Facility Lenders and (iv) take such other actions, and cause its advisors, auditors and counsel to take such actions, as reasonably requested by the Initial Superholdco Bridge Facility Lenders in connection with issuances or resales of Exchange Notes or Superholdco Bridge Loans, including providing such information regarding the business and operations of Superholdco and its subsidiaries as is reasonably requested by any prospective holder of Superholdco Exchange Notes or Superholdco Bridge Loans and customarily provided in due diligence investigations in connection with purchases or resales of securities.
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Conditions Precedent
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to the Superholdco Bridge
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Facility Closing Date and to
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Initial Funding:
|
Limited to (i) the conditions specified in Section 7 of the Commitment Letter and (ii) the conditions specified in Exhibit E to the Commitment Letter, subject to the Limited Conditionality Provisions.
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Covenants:
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Customary for high yield debt securities of issuers of similar size and credit quality, as reasonably determined by the Superholdco Bridge Facility Lead Arrangers in consultation with the Borrower in light of prevailing market conditions and other circumstances; provided that prior to the Superholdco Rollover Date, the limitation on restricted payments and the limitation on debt will be more restrictive than customary high yield covenants. In addition the Borrower will be required to comply with the Commitment Letter and the Fee Letter, and to use commercially reasonable efforts to refinance the Superholdco Bridge Loans as promptly as practicable following the Closing Date, including by taking the actions specified in paragraph 14 of Exhibit E.
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Representations and
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Warranties, Events of
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Default, Waivers and
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Consents:
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Usual and customary for a transaction of this type substantially identical to those in the Target Senior Secured Facilities (but also applicable to Superholdco) with necessary modifications to reflect differences in documentation for the Superholdco Bridge Facility and in no event more restrictive taken as whole than the Target Senior Secured Facili
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ties. For the avoidance of doubt, a failure to comply with the “Superholdco Bridge Take-out Demand” section of the Fee Letter shall constitute an event of default under the Superholdco Bridge Facility.
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Assignments and
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Participations:
|
Each Superholdco Bridge Facility Lender will be permitted to make assignments in minimum amounts to be agreed. Borrower consent to assignments shall not be required; provided, however, that prior to the Superholdco Rollover Date, so long as no payment or bankruptcy event of default exists, the consent of the Borrower (which shall not be unreasonably withheld or delayed) shall be required with respect to any assignment if subsequent thereto, the Initial Superholdco Bridge Facility Lenders would hold, in the aggregate, less than 50.1% of the outstanding Superholdco Bridge Loans; provided, further that Borrower’s consent shall be deemed to have been given if the Borrower has not responded within five business days of a request for such consent. Each Superholdco Bridge Facility Lender will also have the right, without any consent, to assign as security all or part of its rights under the Superholdco Bridge Credit Documentation to any Federal Reserve Bank. Each Superholdco Bridge Facility Lender will be permitted to sell participations, without any need of consent, with voting rights limited to significant matters such as changes in amount, rate and maturity date. An assignment fee in the amount of $3,500 will be charged with respect to each assignment unless waived by the Superholdco Bridge Administrative Agent in its sole discretion.
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Governing Law:
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New York.
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Indemnification and
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Expenses:
|
Same as the Target Senior Secured Facilities.
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Counsel to Superholdco
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Bridge Lead Arrangers:
|
Davis Polk & Wardwell LLP.
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Borrower:
|
Same as the Borrower of the Superholdco Bridge Loans.
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Guarantors:
|
None.
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Superholdco Rollover Loans:
|
Superholdco Rollover Loans in an initial principal amount equal to 100% of the outstanding principal amount of the Superholdco Bridge Loans on the Superholdco Rollover Date. Subject to the conditions precedent set forth below, the Superholdco Rollover Loans will be available to the Borrower to refinance the Superholdco Bridge Loans on the Superholdco Rollover Date. The Superholdco Rollover Loans will be governed by the Superholdco Bridge Credit Documentation for the Superholdco Bridge Loans and, except as set forth below, shall have the same terms as the Superholdco Bridge Loans.
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Ranking:
|
Same as Superholdco Bridge Loans.
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Interest Rate:
|
Interest shall be payable in cash (subject to the immediately following paragraph) quarterly in arrears at a rate per annum equal to the Superholdco Rate Cap.
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If the maximum amount of dividends and other distributions permitted to be paid in cash (in a manner that does not restrict the use of such cash for paying interest in cash on the Superholdco Rollover Loans) by the Target to Superholdco under the terms of the Target Senior Secured Facilities, the Existing Secured Notes, the Existing Unsecured Notes, the Opco Bridge Facility (or any outstanding Opco Exchange Notes) or the Opco Notes or any other Opco Permanent Securities on any interest payment date plus the amount of available cash at the Borrower is less than the amount of interest that would be payable in cash, the Borrower shall have the option to pay the amount of such shortfall (subject to certain rounding mechanics to be agreed) in kind (“PIK Interest”), by increasing the principal amount of the Superholdco Bridge Loans. PIK Interest shall accrue at a rate per annum equal to the Superholdco Rate Cap plus 0.75%. Notwithstanding the foregoing, Superholdco shall be permitted to use dividends and other distributions from its subsidiaries to pay taxes and certain other operating expenses to be agreed, and cash reserved for a period to be agreed for such purposes shall not constitute “available cash”.
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During the continuance of a payment or bankruptcy default, interest will accrue on all principal, interest and other amounts at a rate of 200 basis points in excess of the rate otherwise applicable to the Rollover Loans, and will be payable on demand.
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All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
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Maturity:
|
Eight (8) years after the Closing Date.
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Optional Prepayments:
|
For so long as the Superholdco Rollover Loans have not been exchanged for Superholdco Exchange Notes of the Borrower as provided in Exhibit D-III, they may be prepaid at the option of the Borrower, in whole or in part, at any time, together with accrued and unpaid interest to the prepayment date (but without premium or penalty); provided, that if a Superholdco Demand Failure Event (as defined in the Fee Letter) shall have occurred, the Superholdco Rollover Loans shall be subject to the call protection applicable to the Superholdco Exchange Notes.
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Conditions Precedent to
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|
Rollover:
|
The ability of the Borrower to convert any Superholdco Bridge Loans into Superholdco Rollover Loans is subject to the following conditions being satisfied:
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(i)
|
at the time of any such refinancing, there shall exist no event of default or event that, with notice and/or lapse of time, could become an event of default, and there shall be no failure to comply with the Take-out Demand (as defined in the Fee Letter);
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(ii)
|
all fees due and payable to the Superholdco Bridge Facility Lead Arrangers and the Initial Superholdco Bridge Facility Lenders shall have been paid in full;
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(iii)
|
the Superholdco Bridge Facility Lenders shall have received promissory notes evidencing the Superholdco Rollover Loans (if requested) and such other documentation as shall be set forth in the Superholdco Bridge Credit Documentation; and
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(iv)
|
no order, decree, injunction or judgment enjoining any such refinancing shall be in effect.
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Covenants:
|
From and after the Superholdco Rollover Date, the covenants applicable to the Superholdco Rollover Loans will conform to those applicable to the Superholdco Exchange Notes, except for covenants relating to the obligation of the Borrower to refinance the Superholdco Rollover Loans and others to be agreed.
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Financial Maintenance
Covenants: |
None.
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Assignments and
Participations: |
Same as the Superholdco Bridge Loans.
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Governing Law:
|
New York.
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Indemnification and
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|
Expenses:
|
Same as the Superholdco Bridge Loans.
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Issuer:
|
Same as the Borrower of the Superholdco Bridge Loans.
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Superholdco Exchange Notes:
|
The Borrower will issue the Superholdco Exchange Notes under an indenture that complies with the Trust Indenture Act of 1939, as amended (the “Indenture”). The Borrower will appoint a trustee reasonably acceptable to the holders of the Superholdco Exchange Notes. The Indenture will be in substantially the form attached as an exhibit to the Superholdco Bridge Credit Documentation. The Indenture will include provisions customary for an indenture governing publicly traded high yield debt securities, but with covenants that are more restrictive in certain respects. Except as expressly set forth above, the Superholdco Exchange Notes shall have the same terms as the Superholdco Rollover Loans.
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Ranking:
|
Same as the Superholdco Bridge Loans.
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Security:
|
None.
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Interest Rate:
|
Interest shall be payable in cash (subject to the immediately following paragraph) semi-annually in arrears at a rate per annum equal to the Superholdco Rate Cap.
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If the maximum amount of dividends and other distributions permitted to be paid in cash (in a manner that does not restrict the use of such cash for paying interest in cash on the Superholdco Exchange Notes) by the Target to Superholdco under the terms of the Target Senior Secured Facilities and the Opco Bridge Facility (or any outstanding Opco Exchange Notes) on any interest payment date plus the amount of available cash at the Borrower is less than the amount of interest that would be payable in cash, the Borrower shall have the option to pay the amount of such shortfall (subject to certain rounding mechanics to be agreed) in kind (“PIK Interest”), by increasing the principal amount of the Superholdco Exchange Notes or by issuing additional Superholdco Exchange Notes. PIK Interest shall accrue at a rate per annum equal to the Superholdco Rate Cap plus 0.75%. Notwithstanding the foregoing, Superholdco shall be permitted to use dividends and other distributions from its subsidiaries to pay taxes and certain other operating expenses to be agreed, and cash reserved for a period to be agreed for such purposes shall not constitute “available cash”.
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Interest on overdue amounts will accrue at a rate of 200 basis points in excess of the rate otherwise applicable to the Superholdco Exchange Notes, and will be payable on demand.
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Maturity:
|
Same as the Rollover Loans.
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Amortization:
|
None.
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Optional Redemption:
|
The Superholdco Exchange Notes shall not be redeemable until the fourth anniversary of the Closing Date, after which the Superholdco Exchange Notes will be redeemable at the option of the Issuer at a premium equal to 50% of the coupon on the Superholdco Exchange Notes, declining ratably to par on the date which is two years prior to the maturity date.
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Mandatory
|
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|
Offer to Purchase:
|
The Issuer will be required to offer to purchase the Superholdco Exchange Notes upon a Change of Control (to be defined in the Indenture) at 101% of the principal amount thereof plus accrued interest to the date of purchase, unless the Borrower shall have delivered previously or concurrently an irrevocable notice to redeem such Superholdco Exchange Notes pursuant to “Optional Redemption” above.
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In addition, the Issuer will be required to make a customary offer to purchase in connection with asset sales, subject to customary thresholds, covenants and exclusions.
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Exchange Notes:
|
Each holder of Superholdco Exchange Notes shall have the right to transfer its Superholdco Exchange Notes in whole or in part, at any time to an Eligible Holder and, after the Superholdco Exchange Notes are registered pursuant to the provisions described under “Registration Rights”, to any person or entity; provided that if the Issuer or any of its affiliates holds Superholdco Exchange Notes, such Superholdco Exchange Notes shall be disregarded in any voting. “Eligible Holder” will mean (a) an institutional “accredited investor” within the meaning of Rule 501 under the Securities Act, (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (c) a person acquiring the Superholdco Exchange Notes pursuant to an offer and sale occurring outside of the United States within the meaning of Regulation S under the Securities Act or (d) a person acquiring the Su-
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perholdco Exchange Notes in a transaction that is, in the opinion of counsel reasonably acceptable to the Issuer, exempt from the registration requirements of the Securities Act; provided that in each case such Eligible Holder represents that it is acquiring the Superholdco Exchange Notes for its own account and that it is not acquiring such Superholdco Exchange Notes with a view to, or for offer or sale in connection with, any distribution thereof (within the meaning of the Securities Act) that would be in violation of the securities laws of the United States or any state thereof.
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Registration Rights:
|
The Issuer will be required to:
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·
|
within 60 days after the Superholdco Rollover Date, file a registration statement for an offer to exchange the Superholdco Exchange Notes for publicly registered notes with identical terms;
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·
|
use its reasonable best efforts to cause the registration statement to become effective under the Securities Act within 120 days after the Superholdco Rollover Date;
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·
|
complete the exchange offer within 150 days after the Superholdco Rollover Date; and
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|
·
|
file and use its reasonable best efforts to a shelf registration statement for the resale of the Superholdco Exchange Notes if it cannot complete an exchange offer by such 150th day and in certain other circumstances, and keep such shelf registration statement effective, with respect to resales of the Superholdco Exchange Notes, for as long as it is required by the holders of the Superholdco Exchange Notes to resell the Superholdco Exchange Notes.
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|
Governing Law:
|
New York.
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Indemnification and
|
|
|
Expenses:
|
Same as the Superholdco Bridge Loans.
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1.
|
The Board of Directors of the Target shall have redeemed the rights issued pursuant to the Target’s shareholder rights plan (or such rights shall have been invalidated or shall have become inapplicable to the Acquisition) (the “Redemption Date”).
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2.
|
GLI, MergerSub and the Target shall have entered into the Merger Agreement. The Merger Agreement when executed shall be reasonably satisfactory to the Lead Arrangers and shall not thereafter have been amended, waived or otherwise modified, and no consent thereunder shall have been given, in each case that is materially adverse to the interests of the Lenders under the Target Facilities, unless consented to by the Lead Arrangers; provided, that any change in the Equity Consideration or Share Price and any amendment to any provision of the Merger Agreement of which the Lead Arrangers or the lenders in respect of the Target Facilities are specifically identified as third party beneficiaries shall be deemed to be materially adverse to the interests of the Lenders.
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3.
|
The Equity Contribution shall have been made (or shall be made simultaneously with the initial borrowing under the Target Facilities) and the Refinancing shall have been consummated.
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4.
|
The Merger Condition shall be satisfied, and the Closing Date and the Merger shall occur concurrently with the initial funding of the Target Facilities, in compliance with applicable law and in accordance with the documentation relating thereto (the “Tender Offer Documents”) (which Tender Offer Documents shall be in substantially the same form as the latest draft received by the Lead Arrangers prior to the date of the Commitment Letter), as amended, waived or otherwise modified from time to time but without any modifications, waivers (including of any conditions to MergerSub’s obligations to consummate the Tender Offer, determined without regard to standards such as “unless otherwise satisfactory to, or determined or agreed by MergerSub”) or amendments thereof or any consents thereunder (except as expressly provided in the Merger Agreement) that are materially adverse to the interests of the Lenders under the Target Facilities (including, without limitation, any of the foregoing that results in an increase in the Equity Consideration or Share Price, unless consented to by the Lead Arrangers).
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5.
|
GLI shall have engaged one or more investment banks reasonably satisfactory to the Lead Arrangers, on terms reasonably satisfactory to the Lead Arrangers, as consent solicitation agents with respect to the Secured Notes Consent and the Unsecured Notes Consent. Each of the Consents shall have been launched promptly after the earlier of the Merger Agreement Date and the Redemption Date and the Target shall have used commercially reasonable efforts to obtain each of the Consents on the terms described in the Commitment Letter (including the timing set forth in Exhibit A) and the Fee Letter at least 15 business days prior to the beginning of a Qualifying Marketing Period (as defined below)
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3
|
Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Exhibit E is attached.
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6.
|
With respect to the Target Senior Secured Facilities:
|
|
(i)
|
(x) the requisite consents required to make the Credit Agreement Consent effective shall not have been received (a “Credit Agreement Consent Failure Event”) or (y) the requisite consents required to make the Secured Notes Consent effective shall not have been received (a “Secured Notes Consent Failure Event”);
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(ii)
|
if a Secured Notes Consent Failure Event shall exist, the Secured Notes Change of Control Offer (and, if requested by the Lead Arrangers, the Secured Notes Tender) shall have been launched in consultation with the Lead Arrangers and in accordance with the timing set forth in Exhibit A;
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(iii)
|
unless (x) the Unsecured Notes Consent shall have been obtained or (y) either the Credit Agreement Consent and/or the Secured Notes Consent has been obtained and an Unsecured Notes Change of Control Shortfall shall exist, the Opco Bridge Facility shall have become effective; and
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|
(iv)
|
unless none of the Credit Agreement Consent, the Secured Notes Consent and the Unsecured Notes Consent shall have been obtained, the Superholdco Bridge Facility shall have become effective.
|
|
7.
|
With respect to the Opco Bridge Facility:
|
|
(i)
|
if either a Credit Agreement Consent Failure Event or a Secured Notes Consent Failure Event (or both) shall exist, the Target Senior Secured Facilities shall have been obtained and become effective;
|
|
(ii)
|
(x) the requisite consents required to make the Unsecured Notes Consent effective shall not have been received and (y) the Unsecured Notes Change of Control Offer (and, if requested by the Lead Arrangers, the Unsecured Notes Tender) shall have been launched in consultation with the Lead Arrangers and in accordance with the timing set forth in Exhibit A; and
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|
(iii)
|
unless none of the Credit Agreement Consent, the Secured Notes Consent and the Unsecured Notes Consent shall have been obtained, the Superholdco Bridge Facility shall have become effective.
|
|
8.
|
With respect to the Superholdco Bridge Facility:
|
|
(i)
|
at least one of (x) the Credit Agreement Consent, (y) the Secured Notes Consent and (z) the Unsecured Notes Consent shall have become effective,
|
|
(ii)
|
if either a Credit Agreement Consent Failure Event or a Secured Notes Consent Failure Event (or both) shall exist, the Target Senior Secured Facilities shall have been obtained; and
|
|
(iii)
|
unless (x) the Unsecured Notes Consent shall have been obtained or (y) either the Credit Agreement Consent and/or the Secured Notes Consent has been obtained and an Unsecured Notes Change of Control Shortfall shall exist, the Opco Bridge Facility shall have become effective.
|
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9.
|
Absence of a “Target MAC” (or equivalent defined term) (as defined in the Merger Agreement; provided, that such definition and all related definitions used in such defined term shall be reasonably satisfactory to the Lead Arrangers).
|
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10.
|
The Lead Arrangers shall have received (a) U.S. GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Target for the 2009, 2010 and 2011 fiscal years (and, to the extent the Closing Date occurs after the date that is 90 days after the end of the Target’s 2012 fiscal year, the 2012 fiscal year), (b) U.S. GAAP unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Target for each subsequent fiscal quarter ended at least 45 days before the Closing Date, and (c) the Information Memorandum ((a), (b) and (c), together with the pro forma financial statements described in the immediately following condition, collectively, the “Required Bank Information”).
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11.
|
The Lead Arrangers shall have received a pro forma consolidated balance sheet and related pro forma consolidated statements of income and cash flows of the Target as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements have been delivered pursuant to paragraph 10 above, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements), which shall be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended (subject to exceptions customary for offerings conducted under Rule 144A or otherwise mutually agreed), including preliminary adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).
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12.
|
The Lead Arrangers shall have received a certificate from the chief financial officer of Superholdco and the Target in form and substance reasonably satisfactory to the Lead Arrangers certifying that the Superholdco, Target and their respective subsidiaries, on a consolidated basis after giving effect to the Transactions and the other transactions contemplated hereby, are solvent.
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13.
|
All requisite governmental authorities and third parties shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required (other than any such approvals or consents that are not material), all applicable appeal periods shall have expired and there shall be no litigation, governmental, administrative or judicial action, actual or threatened, that could reasonably be expected to restrain, prevent or impose burdensome conditions on the Transactions.
|
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14.
|
With respect to each of the Bridge Facilities, the Investment Banks (as defined in the Fee Letter) shall have been retained and shall have received (x) a customary preliminary offering memorandum suitable for use in a customary “high yield road show” relating to offering of the Opco Notes (in the case of the Opco Bridge Facility) or the Superholdco Notes (in the case of the Superholdco Bridge Facility) in a form customary for preliminary offering memoranda used in private placements of non-
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15.
|
With respect to the Target Facilities, the Lead Arrangers shall have been afforded a Qualifying Marketing Period to seek to syndicate the Target Facilities following the first date upon which (i) the Required Bank Information has been delivered to the Lead Arrangers, (ii) the Secured Notes Consent shall have been obtained or the Secured Notes Change of Control Offer (and, if requested by the Lead Arrangers, the Secured Notes Tender) has been launched, (iii) the Unsecured Notes Consent shall have been obtained or the Unsecured Notes Change of Control Offer (and, if requested by the Lead Arrangers, the Unsecured Notes Tender) has been launched and (iv) MergerSub shall have notified the Lead Arrangers in writing that either or both of the Credit Agreement Consent and the Secured Notes Consent have failed and been terminated or otherwise been permanently abandoned.
|
|
16.
|
None of the Existing Credit Agreement nor any other debt instrument of the Borrower and its subsidiaries shall have been amended in any manner except as contemplated by paragraphs 5, 6 and 7 of the Transaction Description, and no default or event of default under any of the foregoing shall exist after giving effect to the Transactions.
|
|
17.
|
The execution and delivery of (i) the definitive credit documentation in respect of the Target Senior Secured Facilities (in the case of the Target Senior Secured Facilities), the definitive credit documentation in respect of the Opco Bridge Facility (in the case of the Opco Bridge Facility), the definitive credit documentation in respect of the Superholdco Bridge Facility (in the case of the Superholdco Bridge Facility) (collectively, the “Credit Documentation”) which shall, in each case, be consistent with the Commitment Letter and the Term Sheets, subject to the Limited Conditionality Provisions set forth in the Commitment Letter (and your negotiation in good faith for distribu
|
|
18.
|
With respect to the Target Senior Secured Facilities, subject in all respects to the Limited Conditionality Provisions, all documents and instruments required to create and perfect the security interest in the Collateral (as defined in Exhibit B) shall have been executed and delivered and, if applicable, be in proper form for filing.
|
|
19.
|
The Specified Merger Agreement Representations shall be true and correct to the extent described in the Limited Conditionality Provisions and the Specified Representations shall be true and correct in all material respects (or, to the extent limited by materiality therein, in all respects).
|
|
20.
|
GLI, Superholdco and MergerSub shall have complied in all material respects with their obligations under the Fee Letter.
|
|
21.
|
The Lead Arrangers shall have received, at least five business days prior to the initial funding of the Target Facilities, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act, to the extent requested at least 10 days prior to the initial funding of the Target Facilities.
|
|
BANK OF AMERICA, N.A.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
One Bryant Park
New York, New York 10036
|
JEFFERIES FINANCE LLC
520 Madison Avenue
New York, NY 10022
|
|
|
1 We expect to be in a position to remove this condition prior to the execution of the Merger Agreement.
|
| Very truly yours, BANK OF AMERICA, N.A. |
|||
|
|
By:
|
/s/ Adam Cady | |
| Name: Adam Cady | |||
| Title: Managing Director | |||
|
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
|
|||
|
|
By:
|
/s/ Gonzalo Isaacs | |
| Name: Gonzalo Isaacs | |||
| Title: Managing Director | |||
|
JEFFERIES FINANCE LLC
|
|||
|
|
By:
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/s/ E.J. Hess | |
| Name: E.J. Hess | |||
| Title: Managing Director | |||
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GENOMMA LAB INTERNACIONAL, S.A.B. DE C.V.
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By:
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/s/ Oscar Villalobos Torres | |
| Name: Oscar Villalobos Torres | |||
| Title: Vice President and Chief Financial Officer | |||
| By: | /s/ Patricia Faci Villalobos | ||
| Name: Patricia Faci Villalobos | |||
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Title: Executive Vice President and Chief Operating Officer
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1.
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MergerSub may commence or maintain a cash tender offer (the “Tender Offer”) for all of the issued and outstanding shares of capital stock of the Target (the “Shares”) not owned directly or indirectly by GLI at the time of the commencement of the Tender Offer at a price of $16.60 per share in cash (the “Share Price”). The Tender Offer shall be conditioned upon, inter alia, (x) Target shareholders having validly tendered and not withdrawn prior to the expiration date of the Tender Offer (as the same may be extended in accordance with the terms of the Tender Offer) at least that number of Shares that, together with the Shares of the Target owned directly or indirectly by GLI at the time of the commencement of the Tender Offer, shall constitute not less than fifty-one percent (51%) of the then-outstanding Shares on a fully-diluted basis and (y) the entering into a definitive merger agreement (the “Merger Agreement”; the date of entry into the Merger Agreement, the “Merger Agreement Date”) among GLI, MergerSub and the Target. MergerSub shall be a direct wholly-owned subsidiary of Genomma Lab America Holdings, Inc. (“Superholdco”), a newly-formed, wholly-owned, direct or indirect Delaware-domiciled subsidiary of GLI.
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2.
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The following terms shall have the following meanings:
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§
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“Closing Date” means the date on which shares are initially accepted for payment under the Tender Offer.
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“Equity Consideration” means consideration paid to acquire the Shares.
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“Merger Condition” shall mean that MergerSub shall own a sufficient amount of Shares such that a merger with the Target may be effected under Delaware law and without any approval by the shareholders of the Target other than MergerSub.
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The term “Target” shall include, after the consummation of the Acquisition, the Target as the surviving corporation thereof.
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3.
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MergerSub shall, pursuant to the Merger Agreement, as soon as practicable (but no later than two business days) thereafter, merge with and into the Target in accordance with Delaware law (the “Merger”), with the Target surviving such Merger as an indirect wholly-owned subsidiary of GLI.
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4.
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GLI shall obtain (a) either up to $750 million of senior secured notes (the “Notes”) in a Rule 144A or other private placement or (b) to the extent all or any portion of such Notes have not been placed on or prior to the Closing Date, up to $750 million (less the principal amount of any
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5.
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Either (i) an amendment and waiver (the “Credit Agreement Consent”) to the Credit Agreement, dated as of January 31, 2012 (providing for credit extensions in an aggregate principal amount not to exceed $710 million, as amended prior to the date hereof and without giving effect to any amendments thereto after the date hereof that would increase the amount borrowed or outstanding thereunder, the “Existing Credit Agreement”), among the Target, Prestige Brands, Inc. (“Opco”), as borrower, the subsidiaries of Opco party thereto, Citibank, N.A., as administrative agent, and the lenders and other agents party thereto, in form and substance satisfactory to the Lead Arrangers (determined in consultation with GLI) in respect of the Target Facilities (as defined below) (the “Target Facilities Lead Arrangers”) shall have become effective, which amendment and waiver (A) shall include without limitation (x) a waiver of any “Default” or “Event of Default” (each, for purposes of this paragraph, as defined in the Existing Credit Agreement) which, but for such waiver or amendment, would result from the Transactions or otherwise amends the definition of “Change of Control” under the Existing Credit Agreement in accordance with the Existing Credit Agreement as a result of which the Transactions will not constitute a “Change of Control” thereunder, (y) an amendment that permits the incurrence of up to $250 million of additional term loans thereunder (which incremental term loans may, in the discretion of the Target Facilities Lead Arrangers, have some or all of the economic and other terms contemplated for the Term Loans (as defined below) pursuant to Exhibit B of the Target Commitment Letter, as such terms are permitted to be modified pursuant to the “Market Flex” provisions of that certain fee letter (the “Target Facilities Fee Letter”) dated the date hereof and executed in connection with the Target Facilities (as defined below)) solely to the extent necessary to finance the Secured Notes Change of Control Payment (if any) described in paragraph 6 and (z) conditions to effectiveness thereof satisfactory to the Lead Arrangers and (B) may include, at the request of the Target Facili-
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6.
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Either (i) the holders of the $250 million of 8.25% Senior Notes due 2018 of Opco (in such amount, without giving effect to any amendments thereto after the date hereof, the “Existing Secured Notes”) shall have consented to a modification of the definition of “Change of Control” (as defined in the Indenture, dated as of March 24, 2010, among Opco, the guarantors party thereto and U.S. Bank National Association, as trustee (the “Secured Notes Indenture”)) in accordance with the Secured Notes Indenture as a result of which the Transactions will not constitute a “Change of Control” thereunder, and any additional amendments, waivers or consents requested by the Lead Arrangers in consultation with GLI, in each case in form and substance, including without limitation conditions to effectiveness, reasonably satisfactory to the Lead Arrangers in their sole discretion shall have become effective (the “Secured Notes Consent”) at least 15 business days prior to the beginning of a Qualifying Marketing Period (as defined in Exhibit C) or (ii) (1) on a date acceptable to the Lead Arrangers (in consultation with GLI), but in any event no later than 15 business days prior to the beginning of a Qualifying Marketing Period, (x) a “Change of Control Offer” (as defined in the Secured Notes Indenture) with respect to the Existing Secured Notes, which will expire on the business day preceding the Closing Date, shall be made in accordance with the terms of the Secured Notes Indenture (the “Secured Notes Change of Control Offer”) and (y) if requested by the Lead Arrangers (such request made in consultation with GLI), Opco shall launch an offer to purchase all of the outstanding Existing Secured Notes, such offer to expire on or prior to the business day preceding the Closing Date (with customary provisions for early tender prior to the commencement of a Qualifying Marketing Period with no right of withdrawal thereafter) (the “Secured Notes Tender”) and (2) Opco shall obtain up to $250 million of Term Loans (reduced on a dollar-for-dollar basis by the aggregate principal amount of Existing Secured Notes that remains outstanding after giving effect to the Secured Notes Change of Control Offer and, if applicable, the Secured Notes Tender) (which Term Loans shall, for the avoidance of doubt, be in addition to (and as part of the same term loan facility as) the Term Loans referred to in paragraph 5) under the Target Senior Secured Facilities, which shall be available on the Closing Date to finance the redemption of any Existing Secured Notes tendered pursuant to the Secured Notes Change of Control Offer (the “Secured Notes Change of Control Payment”).
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7.
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Either (i) the holders of the $250 million of 8.125% Senior Notes due 2020 of Opco (in such amount, without giving effect to any amendments thereto after the date hereof, the “Existing Unsecured Notes”) shall have consented to a modification of the definition of “Change of Control” (as defined in the Indenture, dated as of January 31, 2012, among Opco, the guarantors party thereto and U.S. Bank National Association, as trustee (the “Unsecured Notes Indenture”)) in accordance with the Unsecured Notes Indenture as a result of which the Transactions will not constitute a “Change of Control” thereunder, and any additional amendments, waivers or con-
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sents requested by the Lead Arrangers (in consultation with GLI), in each case in form and substance, including without limitation conditions to effectiveness, reasonably satisfactory to the Lead Arrangers in their sole discretion shall have become effective (the “Unsecured Notes Consent” and, together with the Secured Notes Consent and the Credit Agreement Consent, the “Consents”) at least 15 business days prior to the beginning of a Qualifying Marketing Period or (ii) (1) on a date acceptable to the Lead Arrangers (in consultation with GLI), no later than 15 business days prior to the beginning of a Qualifying Marketing Period, (x) a “Change of Control Offer” (as defined in the Unsecured Notes Indenture) with respect to the Existing Unsecured Notes, which will expire on the business day preceding the Closing Date, shall be made in accordance with the terms of the Unsecured Notes Indenture (the “Unsecured Notes Change of Control Offer”) and (y) if requested by the Lead Arrangers (such request made in consultation with GLI), Opco shall launch an offer to purchase all of the outstanding Existing Unsecured Notes, such offer to expire on or prior to the business day preceding the Closing Date (with customary provisions for early tender prior to the commencement of a Qualifying Marketing Period with no right of withdrawal thereafter) (the “Unsecured Notes Tender” and, together with the Secured Notes Tender, the “Notes Tenders”) and (2) either (A) if the aggregate principal amount of Existing Unsecured Notes that is tendered in the Unsecured Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender is at least $150 million, Opco shall obtain either (a) up to $250 million (reduced by the aggregate principal amount of Existing Unsecured Notes not tendered in the Unsecured Notes Change of Control Offer and, if applicable, Unsecured Notes Tender, but to not less than $150 million) of senior unsecured notes (the “Opco Notes”) in a Rule 144A or other private placement (which Opco Notes shall, for the avoidance of doubt, be in addition to the Opco Notes referred to in paragraph 8) or (b) to the extent all or any portion of such Opco Notes have not been placed on or prior to the Closing Date, up to $250 million (reduced by the aggregate principal amount of Existing Unsecured Notes not tendered in the Unsecured Notes Change of Control Offer and, if applicable, Unsecured Notes Tender, but to not less than $150 million) (less the principal amount of any Opco Notes or other Opco Permanent Securities issued on or prior to such date) of senior unsecured increasing rate bridge loans (“Opco Bridge Loans”) (which Opco Bridge Loans shall, for the avoidance of doubt, be in addition to the Opco Bridge Loans referred to in paragraph 8) under the Opco Bridge Facility described in Exhibit C-I to the Target Commitment Letter, which shall be available on the Closing Date to finance the redemption of any Existing Unsecured Notes tendered to Opco pursuant to the Unsecured Notes Change of Control Offer (the “Unsecured Notes Change of Control Payment”) or (B) if the aggregate principal amount of Existing Unsecured Notes that is tendered in the Unsecured Notes Change of Control Offer and, if applicable, the Unsecured Notes Tender is less than $150 million, Superholdco shall obtain either (a) up to $150 million of senior unsecured PIK toggle notes (in an amount equal to the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured Notes Change of Control Offer and, if applicable, Unsecured Notes Tender) (“Superholdco Notes” and together with the Opco Notes, the “Notes”) (which Superholdco Notes shall, for the avoidance of doubt, be in addition to the Superholdco Notes referred to in paragraph 8) in a Rule 144A or other private placement or (b) to the extent all or any portion of such Superholdco Notes have not been placed on or prior to the Closing Date, up to $150 million (in an amount equal to the aggregate principal amount of Existing Unsecured Notes tendered in the Unsecured Notes Change of Control Offer and, if applicable, Unsecured Notes Tender less the principal amount of any Superholdco Notes or other Superholdco Permanent Securities issued on or prior to such date) of senior unsecured increasing-rate PIK toggle bridge loans (the “Superholdco Bridge Loans”) (which Superholdco Bridge Loans shall, for the avoidance of doubt, be in addition to the Superholdco Bridge Loans referred to in paragraph 8) under the Superholdco Bridge Facility described in Exhibit D-I to the Target Commitment Letter (together with the Opco Bridge Facility, the “Bridge Facilities”; the Bridge Facilities together with the Target Senior Secured Facilities, the “Target Facilities”’), which shall be available on the Closing Date to finance the Unsecured Notes Change of Control Payment.
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8.
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If (x) any of the Consents shall become effective, Superholdco shall obtain either (a) up to $220
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9.
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All third party indebtedness for borrowed money of the Borrower and its subsidiaries and the Target and its subsidiaries, other than (A) in the case of the Borrower, any financing pursuant to the Replacement Commitments and continuation of limited working capital facilities in amounts to be agreed, but not in excess of recent historical levels of the Borrower and (B) in the case of the Target and its subsidiaries, (i) indebtedness permitted to be incurred prior to the Closing Date under the Merger Agreement, (ii) the Existing Credit Agreement (only in the event that the Credit Agreement Consent is obtained), (iii) the Existing Secured Notes (in the event that the Secured Notes Consent is obtained or to the extent not tendered pursuant to the Secured Notes Change of Control Offer or, if applicable, the Secured Notes Tender), (iv) the Existing Unsecured Notes (in the event that the Unsecured Notes Consent is obtained or to the extent not tendered pursuant to the Unsecured Notes Change of Control Offer or, if applicable, the Unsecured Notes Tender) and (v) certain other limited indebtedness that the Lead Arrangers and the Borrower reasonably agree may remain outstanding after the Closing Date, will be refinanced or otherwise repaid in full and any security interests or guarantees in connection therewith shall have been terminated or released (collectively, the “Refinancing”).
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10.
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The proceeds of the Equity Contribution, the Opco Notes, the Superholdco Notes and the Target Facilities shall be used (i) to pay the Equity Consideration, (ii) to pay for the Refinancing (if and to the extent applicable) and (iii) to pay the fees and expenses incurred in connection with the Transactions (including any fees and expenses associated with the Consents).
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Borrower:
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Genomma Lab Internacional, S.A.B. de C.V. (the “Borrower”).
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Guarantors:
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The obligations of the Borrower and its subsidiaries under the GLI Bridge Facility and under any interest protection or other hedging arrangements entered into with a Lender (or an affiliate thereof) will be unconditionally and irrevocably guaranteed (including an aval contained in the promissory notes) by each of the existing and future wholly-owned direct and indirect subsidiaries of the Borrower, excluding Superholdco, Target and its direct and indirect subsidiaries (Superholdco, Target and such subsidiaries, collectively, the “Target Companies”) (such non-excluded subsidiaries collectively, the “Guarantors”). All guarantees will be guarantees of payment and not of collection and will incorporate any waivers necessary under the laws of Mexico.
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Administrative Agent
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and Collateral Agent:
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BOA will act as exclusive administrative agent for the GLI Bridge Facility Lenders (the “Administrative Agent”).
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BOA or its designee will act as exclusive collateral agent for the GLI Bridge Facility (the “Collateral Agent”).
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Joint Lead Arrangers
Joint Bookrunning Managers: |
Bank of America Merrill Lynch and Jefferies Finance will act as joint lead arrangers and joint bookrunning managers for the GLI Bridge Loans (in such capacity, the “Lead Arrangers”).
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Lenders:
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Each of the Initial Lenders (or an affiliate thereof) (the “Initial Lenders”) and other financial institutions and institutional lenders selected by the Lead Arrangers (the “Lenders”).
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GLI Bridge Facility:
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Subject to adjustment as provided below, a $750 million senior secured bridge facility denominated in U.S. dollars (the “GLI Bridge Facility”, the loans thereunder the “GLI Bridge Loans”), less the aggregate gross proceeds of the Notes or any other debt or equity securities of GLI (collectively, “GLI Permanent Securities”) issued on or prior to the Closing Date. The GLI Bridge Loans will be available to the Borrower on the Closing Date.
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The commitments in respect of the GLI Bridge Facility shall be automatically and irrevocably reduced by the dollar or dollar-equivalent amount (in the case of peso-denominated commitments, as determined by the Lead Arrangers using the spot rate for the exchange of Mexican pesos for United States dollars at 11:00 a.m. (New York City time) on
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such date) of the Replacement Commitments at the date such Replacement Commitments are entered into (a “GLI Bridge Facility Decrease”).
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Ranking:
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The GLI Bridge Loans will be senior secured obligations of the Borrower and rank pari passu in right of payment with, and senior with respect to the Collateral (except for permitted liens) to, all other obligations of the Borrower. The guarantees will be senior secured obligations of each Guarantor, ranking pari passu in right of payment with, and senior with respect to the Collateral (except for permitted liens) to, all other obligations of such Guarantor.
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Security:
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The Borrower and each of the Guarantors shall grant the Collateral Agent (for its benefit and for the benefit of the Lenders) valid and perfected first priority (subject to the Limited Conditionality Provisions and certain exceptions to be set forth in the Credit Documentation) liens and security interests in all of the following (collectively, the “Collateral”):
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(a)
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all present and future shares of capital stock of (or other ownership interests in) each of the Borrower’s and each Guarantor’s present and future direct and indirect restricted subsidiaries including Superholdco but excluding Target and its subsidiaries (limited, in the case of any non-wholly owned subsidiaries, to the extent a third party consent is required or there are provisions restricting the ability to pledge such interests pursuant to the applicable operating or formation documents and such provisions are not rendered ineffective by applicable law);
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(b)
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all present and future debt owed to the Borrower and each Guarantor;
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(c)
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all of the present and future property and assets, real and personal, of the Borrower and each Guarantor, including, but not limited to, machinery and equipment, inventory and other goods, accounts receivable, fee-owned real estate with a minimum value to be agreed, fixtures, bank accounts (provided that control agreements shall not be required), general intangibles, financial assets, investment property, license rights, patents, trademarks, trade names, copyrights, other intellectual property and other general intangibles, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnification rights, tax refunds and cash, in each case subject to customary exceptions to be agreed; and
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(d)
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all proceeds and products of the property and assets described in clauses (a), (b) and (c) above.
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Purpose:
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The proceeds of the GLI Bridge Loans shall be used by the Borrower on the Closing Date (i) to make a capital contribution to MergerSub to pay a portion of the Equity Consideration and fees and expenses incurred in connection with the consummation of the Transactions, and (ii) to refinance in full any and all outstanding indebtedness of the Borrower and its subsidiaries (other than indebtedness contemplated by the Transactions and indebtedness of the Target Companies).
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Interest Rate:
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Interest shall be payable quarterly in arrears at a rate per annum equal to three-month LIBOR plus the Applicable Margin.
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Cost and Yield Protection:
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Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes.
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Amortization:
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None.
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Optional Prepayments:
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The GLI Bridge Loans may be prepaid prior to the first anniversary of the Closing Date (the “Rollover Date”), in whole or in part, upon written notice, at the option of the Borrower, at any time, together with accrued interest to the prepayment date, without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings; provided that if a Demand Failure Event (as defined in the Fee Letter) shall have occurred, the GLI Bridge Loans shall be subject to the call protection applicable to the Exchange Notes.
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Mandatory Prepayments:
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The Borrower shall prepay the GLI Bridge Loans without premium or penalty with (a) all net cash proceeds from sales of property and assets of the Borrower or any of its subsidiaries (other than the Target Companies) in excess of amounts to be agreed (including sales or issuances of equity interests by Superholdco but excluding sales of inventory in the ordinary course of business and other exceptions to be agreed in the definitive credit documentation in respect of the GLI Bridge Facility (the “Credit Documentation”)), subject to reinvestment rights to be agreed, (b) all net cash proceeds from the issuance or incurrence after the Closing Date of additional debt of the Borrower or any of its subsidiaries (other than the Target Companies) other than certain debt permitted under the Credit Documentation, and (c) net cash proceeds from any issuance of equity interest by, or equity contribution to, the Borrower, subject to exceptions to be agreed.
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Change of Control:
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In the event of a Change of Control (to be defined), each Lender will have the right to require the Borrower, and the Borrower must offer, to prepay the outstanding principal amount of the GLI Bridge Loans at a premium equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment.
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Conversion into Rollover
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Loans:
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If the GLI Bridge Loans have not been previously prepaid in full for cash on or prior to the Rollover Date, the principal amount of the GLI Bridge Loans outstanding on the Rollover Date may, subject to the conditions precedent set forth in Exhibit B-II, be converted into secured, senior rollover loans having the terms set forth in Exhibit B-II (the “Rollover Loans”). Any GLI Bridge Loans not converted into Rollover Loans shall be repaid in full on the Rollover Date.
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Exchange into
Exchange Notes: |
Each Lender that is (or will immediately transfer its Exchange Notes to) an Eligible Holder (as defined in Exhibit B-III) will have the right, at any time on or after the earlier to occur of (i) the Rollover Date or (ii) a Demand Failure Event, to exchange Rollover Loans held by it for senior secured exchange notes of the Borrower having the terms set forth in Exhibit B-III (the “Exchange Notes”). Notwithstanding the foregoing, the Borrower will not be required to exchange Rollover Loans for Exchange Notes unless at least $25 million of Exchange Notes would be outstanding immediately after such exchange. In connection with each such exchange, or at any time prior thereto if requested by the Initial Lenders, the Borrower shall (i) deliver to the Lender that is receiving Exchange Notes, and to such other Lenders as the Initial Lender requests, an offering memorandum of the type customarily utilized in a Rule 144A offering of high yield securities covering the resale of such Exchange Notes or Bridge Loans by such Lenders, in such form and substance as reasonably acceptable to the Borrower and the Initial Lenders, and keep such offering memorandum updated in a manner as would be required pursuant to a customary Rule 144A securities purchase agreement, (ii) execute an exchange agreement containing provisions customary in Rule 144A transactions (including indemnification provisions), if requested by the Initial Lenders, (iii) deliver or cause to be delivered such opinions and accountants’ comfort letters addressed to the Initial Lenders and such certificates as the Initial Lenders may reasonably request as would be customary in Rule 144A offerings and otherwise in form and substance reasonably satisfactory to the Initial Lenders and (iv) take such other actions, and cause its advisors, auditors and counsel to take such actions, as reasonably requested by the Initial Lenders in connection with issuances or resales of Exchange Notes or GLI Bridge Loans, including providing such information regarding the business and operations of the Target Companies as is reasonably requested by any prospective holder of Exchange Notes or GLI Bridge Loans and customarily provided in due diligence investigations in connection with purchases or resales of securities.
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Conditions Precedent
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to the GLI Bridge Facility
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Closing Date and to
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Initial Funding:
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Limited to (i) the conditions specified in Section 7 of the Commitment Letter and (ii) the conditions specified in Exhibit C to the Commitment Letter, subject to the Limited Conditionality Provisions.
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Covenants:
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Applicable to the Borrower and its Subsidiaries other than the Target Companies (the Borrower, together with such non-excluded direct and indirect subsidiaries collectively, the “GLI Group”) and customary for high yield debt securities of issuers of similar size and credit quality, as determined by the Lead Arrangers (in consultation with the Borrower) in light of prevailing market conditions and other circumstances; provided that prior to the Rollover Date, the limitation on restricted payments and the limitation on debt will be more restrictive than customary high yield covenants. In addition the Borrower will be required to comply with the Commitment Letter and the Fee Letter, and to use commercially
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reasonable efforts to refinance the GLI Bridge Loans as promptly as practicable following the Closing Date, including by taking the actions specified in paragraph 15 of Exhibit C.
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Financial Maintenance
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Covenants:
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Total Leverage Ratio (to be defined) not to exceed 4.5 to 1.0, applicable to the GLI Group.
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Representations and
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Warranties, Events of
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Default, Waivers and
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Consents:
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Usual and customary for a transaction of this type. For the avoidance of doubt, a failure to comply with the “Take-out Demand” section of the Fee Letter shall constitute an event of default under the GLI Bridge Facility.
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FX Protection:
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On the Closing Date, the Borrower shall enter into currency exchange swap contracts with terms and conditions and with a counterparty reasonably satisfactory to the Borrower and the Lead Arrangers and with respect to such exposures as are reasonably agreed by the Borrower and the Lead Arrangers, and the Borrower shall cause such hedging arrangements to remain in effect at all times thereafter.
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Assignments and
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Participations:
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Each Lender will be permitted to make assignments in minimum amounts to be agreed. Borrower consent to assignments shall not be required. No consent of the Administrative Agent shall be required in connection with assignments (x) under the Bridge Facility to other GLI Bridge Lenders or any of their affiliates or (y) following the occurrence of any Event of Default. Each Lender will also have the right, without any consent, to assign as security all or part of its rights under the Credit Documentation to any Federal Reserve Bank. Each Lender will be permitted to sell participations without need of consent, with voting rights limited to significant matters such as changes in amount, rate and maturity date. An assignment fee in the amount of $3,500 will be charged with respect to each assignment unless waived by the Administrative Agent in its sole discretion. The Borrower will only be required to gross-up amounts for Mexican withholding taxes, equal to those attributable to Mexican withholding taxes applicable to payments of interest or interest-like amounts made to a commercial bank or other financial institution that is registered with the Mexican Tax Administration Service for purposes of Article 195-I of the Mexican Income Tax Law (or any successor provision) and which is resident (or, if such commercial bank or financial institution is lending through a branch or an agency, the principal office
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of which is resident) for tax purposes of a jurisdiction with which Mexico has in effect a treaty for the avoidance of double taxation.
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Governing Law:
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New York, provided that promissory notes shall have a dual governing law provision (Mexico and New York) and security documentation shall be governed by the laws of the jurisdiction where Collateral is located as reasonably required by the Lead Arrangers.
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Waivers and Amendments:
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Amendments and waivers of the provisions of the Credit Documentation will require the approval of Lenders holding advances and commitments representing more than 50% of the aggregate advances and commitments under the GLI Bridge Facility, except that the consent of each adversely affected Lender will be required with respect to, among other things, (i) increases in commitment amounts, (ii) reductions of principal, interest, make-whole price or fees, (iii) extensions of scheduled maturities or times for payment, (iv) releases of all or a substantial portion of the collateral or value of the guarantees and (v) changes that impose any restriction on the ability of any Lender to assign any of its rights or obligations.
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The Credit Documentation shall contain customary “yank-a-bank” provisions permitting the replacement of non-consenting lenders.
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Indemnification:
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The Borrower will indemnify and hold harmless the Administrative Agent, the Collateral Agent, the Lead Arrangers, each Lender and each of their affiliates and their officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) from and against all losses, liabilities, claims, damages and expenses arising out of or relating to the Transactions, the GLI Bridge Facility, the Borrower’s use of loan proceeds or the commitments, including, but not limited to, reasonable and documented out-of-pocket legal fees, disbursements and other charges of one primary counsel and one local counsel to the Indemnified Parties in each relevant jurisdiction (and, in the case of a conflict of interest, additional counsel to all affected Indemnified Parties similarly situated in each relevant jurisdiction); provided that the foregoing indemnity will not, as to any Indemnified Party, apply to claims, damages, losses, liabilities or related expenses to the extent they arise from (i) the gross negligence or willful misconduct of, or material breach of the obligations under the GLI Bridge Facility by, such Indemnified Party, in each case, as determined by a final, non-appealable judgment of a court of competent jurisdiction or (ii) any disputes solely among Indemnified Parties and not arising out of any act or omission of the Borrower or any of its affiliates (other than any claims against any Indemnified Party in its capacity or in fulfilling its role as an Administrative Agent or Lead Arranger or any similar role under the GLI Bridge Facility). This indemnification shall survive and continue for the benefit of all such persons or entities, notwithstanding any failure of the GLI Bridge Facility to close.
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Expenses:
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The Borrower will pay all reasonable and documented out-of-pocket costs and expenses associated with the preparation, due diligence, admin-
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istration, syndication and enforcement of all Credit Documentation, including, without limitation, the legal fees and expenses of one primary counsel and one local counsel to the Lead Arrangers, the Administrative Agent and the Collateral Agent in each relevant jurisdiction, regardless of whether or not the GLI Bridge Facility is closed. The Borrower will also pay the expenses of each Lender in connection with the enforcement of any of the Credit Documentation, including counsel fees and expenses.
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Counsel to Lead
Arrangers, Administrative Agent and Collateral Agent: |
Davis Polk & Wardwell LLP (as to matters of New York law) and Ritch Mueller, S.C. (as to matters of Mexican law).
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Miscellaneous:
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Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction. Promissory notes shall include a dual choice of forum (New York and Mexican courts). In addition, the Credit Documentation shall contain customary “Defaulting Lender” provisions.
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Borrower:
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Same as the Borrower.
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Guarantors:
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Same as the GLI Bridge Loans.
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Rollover Loans:
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Rollover Loans in an initial principal amount equal to 100% of the outstanding principal amount of the GLI Bridge Loans on the Rollover Date. Subject to the conditions precedent set forth below, the Rollover Loans will be available to the Borrower to refinance the GLI Bridge Loans on the Rollover Date. The Rollover Loans will be governed by the Credit Documentation and, except as set forth below, shall have the same terms as the GLI Bridge Loans.
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Ranking:
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Same as the GLI Bridge Loans.
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Security:
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Same as the GLI Bridge Loans.
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Interest Rate:
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Interest shall be payable quarterly in arrears at a rate per annum equal to the Rate Cap.
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Maturity:
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Seven (7) years after the Closing Date; provided, that at any time prior to the Rollover Date (as defined in Exhibit B-I), the Lead Arrangers may, in consultation with the Borrower, modify the maturity date to a term that is not less than five years nor more than 10 years, if the Lead Arrangers determine that such modification is advisable in connection with the sale or making of the Rollover Loans.
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Optional Prepayments:
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For so long as the Rollover Loans have not been exchanged for Exchange Notes of the Borrower as provided in Exhibit B-III, they may be prepaid at the option of the Borrower, in whole or in part, at any time, together with accrued and unpaid interest to the prepayment date (but without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings); provided that if a Demand Failure Event (as defined in the Fee Letter) shall have occurred, the Rollover Loans shall be subject to the call protection applicable to the Exchange Notes.
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Conditions Precedent to
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Rollover:
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The ability of the Borrower to convert any GLI Bridge Loans into Rollover Loans is subject to the following conditions being satisfied:
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(i)
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at the time of any such refinancing, there shall exist no event of default or event that, with notice and/or lapse of time, could become an event of default, and there shall be no failure to comply with the Take-out Demand (as defined in the Fee Letter);
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(ii)
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all fees due and payable to the Lead Arrangers and the Initial Lenders shall have been paid in full;
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(iii)
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the Lenders shall have received promissory notes evidencing the Rollover Loans (if requested) and such other documentation as shall be set forth in the Credit Documentation; and
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(iv)
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no order, decree, injunction or judgment enjoining any such refinancing shall be in effect.
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Covenants:
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From and after the Rollover Date, the covenants applicable to the Rollover Loans will conform to those applicable to the Exchange Notes, except for covenants relating to the obligation of the Borrower to refinance the Rollover Loans; provided, that the financial maintenance covenant shall continue to apply to the Rollover Loans.
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Assignments and
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Participations:
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Same as the GLI Bridge Loans.
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Governing Law:
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New York.
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Indemnification and
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Expenses:
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Same as the GLI Bridge Loans.
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Issuer:
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Same as the Borrower.
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Guarantors:
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Same as the GLI Bridge Loans.
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Exchange Notes:
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The Borrower will issue the Exchange Notes under an indenture that complies with the Trust Indenture Act of 1939, as amended (the “Indenture”). The Borrower will appoint a trustee reasonably acceptable to the holders of the Exchange Notes. The Indenture will be in substantially the form attached as an exhibit to the Credit Documentation. The Indenture will include provisions customary for an indenture governing publicly traded high yield debt securities. Except as expressly set forth above, the Exchange Notes shall have the same terms as the Rollover Loans.
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Ranking:
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Same as the GLI Bridge Loans.
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Security:
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Same as the GLI Bridge Loans.
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Interest Rate:
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Interest shall be payable semi-annually in arrears at a rate per annum equal to the Rate Cap.
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Maturity:
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As provided in Exhibit B-II with respect to the Rollover Loans, including the proviso in the “Maturity” section thereof.
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Amortization:
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None.
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Optional Redemption:
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The Exchange Notes shall not be redeemable until the fourth anniversary of the Closing Date, after which the Exchange Notes will be redeemable at the option of the Issuer at a premium equal to 50% of the coupon on the Exchange Notes, declining ratably to par on the date that is one year prior to the maturity date.
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Prior to the fourth anniversary of the Closing Date, the Issuer may redeem the Exchange Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the fourth anniversary of the Closing Date plus 50 basis points (plus accrued interest).
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Mandatory
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Offer to Purchase:
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The Issuer will be required to offer to purchase the Exchange Notes upon a Change of Control (to be defined in the Indenture) at 101% of the principal amount thereof plus accrued interest to the date of purchase unless the Borrower shall have delivered previously or concurrently an irrevocable notice to redeem such Exchange Notes pursuant to “Optional Redemption” above.
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In addition, the Issuer will be required to make a customary offer to purchase in connection with asset sales, subject to customary thresholds, covenants and exclusions.
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Right to Transfer
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Exchange Notes:
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Each holder of Exchange Notes shall have the right to transfer its Exchange Notes in whole or in part, at any time to an Eligible Holder; provided that if the Issuer or any of its affiliates holds Exchange Notes, such Exchange Notes shall be disregarded in any voting. “Eligible Holder” will mean (a) an institutional “accredited investor” within the meaning of Rule 501 under the Securities Act, (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (c) a person acquiring the Exchange Notes pursuant to an offer and sale occurring outside of the United States within the meaning of Regulation S under the Securities Act or (d) a person acquiring the Exchange Notes in a transaction that is, in the opinion of counsel reasonably acceptable to the Issuer, exempt from the registration requirements of the Securities Act; provided that in each case such Eligible Holder represents that it is acquiring the Exchange Notes for its own account and that it is not acquiring such Exchange Notes with a view to, or for offer or sale in connection with, any distribution thereof (within the meaning of the Securities Act) that would be in violation of the securities laws of the United States or any state thereof.
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Governing Law:
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New York.
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Indemnification and
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Expenses:
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Same as the GLI Bridge Loans.
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1.
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The Board of Directors of the Target shall have redeemed the rights issued pursuant to the Target’s shareholder rights plan (or such rights shall have been invalidated or shall have become inapplicable to the Acquisition) (the “Redemption Date”).
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2.
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The Borrower, MergerSub and the Target shall have entered into the Merger Agreement. The Merger Agreement when executed shall be reasonably satisfactory to the Lead Arrangers and shall not thereafter have been amended, waived or otherwise modified, and no consent thereunder shall have been given, in each case that is materially adverse to the interests of the Lenders under the GLI Bridge Facility, unless consented to by the Lead Arrangers; provided that any change in the Equity Consideration or Share Price and any amendment to any provision of the Merger Agreement of which the Lead Arrangers or the Lenders are specifically identified as third party beneficiaries shall be deemed to be materially adverse to the interests of the Lenders.
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3.
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Prior to, or simultaneously with, the funding of the GLI Bridge Facility, the Borrower shall have borrowed not less than the full amount of the Replacement Commitments available.
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4.
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The Equity Contribution shall have been made (or shall be made simultaneously with the funding of the GLI Bridge Facility) and the Refinancing shall have been consummated.
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5.
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The Merger Condition shall be satisfied, and the Closing Date and the Merger shall occur concurrently with the funding of the GLI Bridge Facility, in compliance with applicable law and in accordance with the documentation relating thereto (the “Tender Offer Documents”) (which Tender Offer Documents shall be in substantially the same form as the latest draft received by the Lead Arrangers prior to the date of the Commitment Letter), as amended, waived or otherwise modified from time to time but without any modifications, waivers (including of any conditions to MergerSub’s obligations to consummate the Tender Offer, determined without regard to standards such as “unless otherwise satisfactory to, or determined or agreed by MergerSub”) or amendments thereof or any consents thereunder (except as expressly provided in the Merger Agreement) that are materially adverse to the interests of the Lenders under the GLI Bridge Facility (including, without limitation, any of the foregoing that results in an increase in the Equity Consideration or Share Price, unless consented to by the Lead Arrangers).
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6.
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GLI shall have engaged one or more investment banks reasonably satisfactory to the Lead Arrangers, on terms reasonably satisfactory to the Lead Arrangers, as consent solicitation agents with respect to the Secured Notes Consent and the Unsecured Notes Consent. Each of the Consents shall have been launched promptly after the earlier of the Merger Agreement Date and the Redemption Date and the Target shall have used commercially reasonable efforts to obtain each of the Consents on the terms
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2
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Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Exhibit C is attached.
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7.
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The initial extension of credit under the Target Senior Secured Facilities shall occur substantially concurrently therewith, provided that:
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(i)
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(x) the requisite consents required to make the Credit Agreement Consent effective shall not have been received (a “Credit Agreement Consent Failure Event”) or (y) the requisite consents required to make the Secured Notes Consent effective shall not have been received (a “Secured Notes Consent Failure Event”);
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(ii)
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if a Secured Notes Consent Failure Event shall exist, the Secured Notes Change of Control Offer (and, if requested by the Target Facilities Lead Arrangers, the Secured Notes Tender) shall have been launched in consultation with the Lead Arrangers and in accordance with the timing set forth in Exhibit A;
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(iii)
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unless (x) the Unsecured Notes Consent shall have been obtained or (y) either the Credit Agreement Consent and/or the Secured Notes Consent has been obtained and an Unsecured Notes Change of Control Shortfall shall exist, the Opco Bridge Facility shall have become effective; and
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(iv)
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unless none of the Credit Agreement Consent, the Secured Notes Consent and the Unsecured Notes Consent shall have been obtained, the Superholdco Bridge Facility shall have become effective.
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8.
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The funding of the loans under the Opco Bridge Facility shall occur substantially concurrently therewith, provided that:
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(i)
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if either a Credit Agreement Consent Failure Event or a Secured Notes Consent Failure Event (or both) shall exist, the Target Senior Secured Facilities shall have been obtained and become effective;
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(ii)
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(x) the requisite consents required to make the Unsecured Notes Consent effective shall not have been received and (y) the Unsecured Notes Change of Control Offer (and, if requested by the Target Facilities Lead Arrangers, the Unsecured Notes Tender) shall have been launched in consultation with the Lead Arrangers and in accordance with the timing set forth in Exhibit A; and
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(iii)
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unless none of the Credit Agreement Consent, the Secured Notes Consent and the Unsecured Notes Consent shall have been obtained, the Superholdco Bridge Facility shall have become effective.
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9.
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The funding of the loans under the Superholdco Bridge Facility shall occur substantially concurrently
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(i)
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at least one of (x) the Credit Agreement Consent, (y) the Secured Notes Consent and (z) the Unsecured Notes Consent shall have become effective,
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(ii)
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if either a Credit Agreement Consent Failure Event or a Secured Notes Consent Failure Event (or both) shall exist, the Target Senior Secured Facilities shall have been obtained; and
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(iii)
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unless (x) the Unsecured Notes Consent shall have been obtained or (y) either the Credit Agreement Consent and/or the Secured Notes Consent has been obtained and an Unsecured Notes Change of Control Shortfall shall exist, the Opco Bridge Facility shall have become effective.
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10.
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Absence of a “Target MAC” (or equivalent defined term) (as defined in the Merger Agreement; provided that such definition and all related definitions used in such defined term shall be reasonably satisfactory to the Lead Arrangers).
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11.
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The Lead Arrangers shall have received (a) the existing Mexican GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its subsidiaries (other than the Target and its subsidiaries), on a consolidated basis, for the 2009, 2010 and 2011 fiscal years and, with respect to the 2010 and 2011 fiscal years, with customary reconciliation to IFRS, (b) IFRS unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its subsidiaries (other than the Target and its subsidiaries), on a consolidated basis for each subsequent fiscal quarter ended at least 45 days before the Closing Date, (c) U.S. GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Target for the 2009, 2010 and 2011 fiscal years (and, to the extent the Closing Date occurs after the date that is 90 days after the end of the Target’s 2012 fiscal year, the 2012 fiscal year), (d) U.S. GAAP unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Target for each subsequent fiscal quarter ended at least 45 days before the Closing Date, and (e) the Information Memorandum ((a), (b), (c), (d) and (e), together with the pro forma financial statements described in the immediately following condition, collectively, the “Required Bank Information”).
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12.
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The Lead Arrangers shall have received a pro forma consolidated balance sheet and related pro forma consolidated statements of income and cash flows of (a) the Borrower and its subsidiaries (including the Target and its subsidiaries) on a consolidated basis, (b) the Borrower and its subsidiaries (other than the Target and its subsidiaries) on a consolidated basis and (c) the Target, each as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements have been delivered pursuant to paragraph 11 above, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements); provided that the pro forma financial statements described in clause (c) shall be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended (subject to exceptions customary for offerings conducted under Rule 144A or otherwise mutually agreed), including preliminary adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).
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13.
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The Lead Arrangers shall have received a certificate from the chief financial officer of Borrower in form and substance reasonably satisfactory to the Lead Arrangers certifying that the Borrower and
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14.
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All requisite governmental authorities and third parties shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required (other than any such approvals or consents that are not material), all applicable appeal periods shall have expired and there shall be no litigation, governmental, administrative or judicial action, actual or threatened, that could reasonably be expected to restrain, prevent or impose burdensome conditions on the Transactions.
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15.
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The Investment Banks (as defined in the Fee Letter) shall have been retained and shall have received (x) a customary preliminary offering memorandum suitable for use in a customary “high yield road show” relating to offering of the Notes in a form customary for preliminary offering memoranda used in private placements of non-convertible debt securities, including a business discussion, financial statements (it being understood and agreed that the most recent financial statements shall not be more than 135 days old), pro forma financial statements and other customary financial data, in each case of the Borrower, of the type and form customarily included in offering memoranda, private placement memoranda and similar documents customarily used in Rule 144A offerings, to consummate an offering of the Notes (which, for the avoidance of doubt, shall not include financial statements or information required by Rules 3-10 or 3-16 of Regulation S-X or Compensation Discussion and Analysis required by Regulation S-K Item 402(b), but shall include customary disclosure of certain guarantor and non-guarantor information) and all other data that would be necessary for the Investment Banks to receive a customary (for high yield debt securities) “comfort” letter (which shall also provide “negative assurance” comfort that is customary in the context of a transaction where the most recent financial statements are not more than 135 days old) from independent accountants in connection with the offering of the Notes, (y) drafts of customary comfort letters from auditors of the Target (including “negative assurances” comfort that is customary in the context of a transaction where the most recent financial statements are not more than 135 days old), which such auditors are prepared to issue upon completion of customary procedures (including, to the extent required, the limited review of quarterly financial statements) and (z) drafts of a customary “10b-5” disclosure letter from counsel to the Borrower and to the Investment Banks, each in form and substance customary for high yield debt securities offerings. The Investment Banks shall have been afforded a Qualifying Marketing Period following the first date upon which the conditions set forth in the immediately preceding sentence shall have been satisfied to seek to offer and sell or privately place the Notes with qualified purchasers thereof. As used herein, “Qualifying Marketing Period” means a period of at least 15 consecutive business days ending prior to the Closing Date which period shall not include any days during or continue over the periods (i) commencing on July 1, 2012 and ending on July 8, 2012 or (ii) commencing on August 17, 2012 and ending on September 3, 2012; provided, that a Qualifying Marketing Period shall not commence until at least 21 consecutive days following the date on which the Borrower shall have provided each of S&P and Moody’s (the “Agencies”) with all information reasonably requested by the Agencies or by the Lead Arrangers in connection with procuring the Ratings.
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16.
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With respect to the GLI Bridge Facility, the Lead Arrangers shall have been afforded a Qualifying Marketing Period to seek to syndicate the GLI Bridge Facility following the first date upon which (i) the Required Bank Information has been delivered to the Lead Arrangers, (ii) the Secured Notes Consent shall have been obtained or the Secured Notes Change of Control Offer (and, if requested by the Target Facilities Lead Arrangers, the Secured Notes Tender) has been launched, (iii) the Unsecured Notes Consent shall have been obtained or the Unsecured Notes Change of Control Offer (and, if requested by the Target Facilities Lead Arrangers, the Unsecured Notes Tender) has been launched and (iv) MergerSub shall have notified the Lead Arrangers in writing that either or both
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17.
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None of the Existing Credit Agreement nor any other debt instrument of the Target and its subsidiaries shall have been amended in any manner except as contemplated by paragraphs 5, 6 and 7 of the Transaction Description, and no default or event of default under any of the foregoing shall exist after giving effect to the Transactions.
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18.
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The execution and delivery of (i) the definitive credit documentation in respect of the GLI Bridge Facility, including promissory notes guaranteed (por aval) by each Guarantor (collectively, the “Credit Documentation”), which shall, in each case, be consistent with the Commitment Letter and the Term Sheets, subject to the Limited Conditionality Provisions set forth in the Commitment Letter (and your negotiation in good faith for distribution to Lenders of substantially complete drafts thereof no later than two business days prior to the Closing Date), and (ii) customary legal opinions, customary evidence of authorization, customary officer’s certificates, corporate records, good standing certificates (to the extent applicable).
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19.
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Subject in all respects to the Limited Conditionality Provisions, all documents and instruments required to create and perfect the security interest in the Collateral (as defined in Exhibit B) shall have been executed and delivered and, if applicable, be in proper form for filing.
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20.
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The Specified Merger Agreement Representations shall be true and correct to the extent described in the Limited Conditionality Provisions and the Specified Representations shall be true and correct in all material respects (or, to the extent limited by materiality therein, in all respects).
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21.
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The Borrower shall have complied in all material respects with its obligations under the Fee Letter.
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22.
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The Lead Arrangers shall have received, at least five business days prior to the initial funding of the GLI Bridge Facility, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act, to the extent requested at least 10 days prior to the initial funding of the GLI Bridge Facility.
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