EXHIBIT 10.3
EXECUTION COPY
CREDIT AND GUARANTEE AGREEMENT
dated as of June 3, 2002,
among
REEBOK INTERNATIONAL LTD.,
REEBOK INTERNATIONAL LIMITED,
REEBOK FINANCE LIMITED,
THE LENDERS NAMED HEREIN,
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent,
FLEET NATIONAL BANK,
as Syndication Agent
and
ABN AMRO BANK N.V.,
BNP PARIBAS
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents
------------------
CREDIT SUISSE FIRST BOSTON
and
FLEET SECURITIES, INC.,
as Co-Lead Arrangers
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................1
1.1 Defined Terms................................................1
1.2 Other Definitional Provisions...............................16
1.3 Exchange Rates..............................................17
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.............................17
2.1 Commitments.................................................18
2.2 Procedure for Borrowing.....................................19
2.3 Use of Proceeds of Loans....................................20
SECTION 3. AMOUNT AND TERMS OF LETTER OF CREDIT........................20
3.1 L/C Commitment..............................................21
3.2 Procedure for Issuance of Letters of Credit.................21
3.3 Fees, Commissions and Other Charges.........................21
3.4 L/C Participations..........................................22
3.5 Reimbursement Obligation of the Borrower....................23
3.6 Obligations Absolute........................................24
3.7 Letter of Credit Payments...................................24
3.8 Application.................................................25
3.9 Reporting by Issuing Banks..................................25
SECTION 4. PROVISIONS RELATING TO THE EXTENSIONS OF CREDIT; FEES
AND PAYMENTS................................................25
4.1 Repayment of Loans; Evidence of Debt........................25
4.2 Facility Fee................................................26
4.3 Optional Prepayments........................................27
4.4 Optional Termination or Reduction of Commitments............27
4.5 Conversion and Continuation Options.........................27
4.6 Minimum Amounts and Maximum Number of Borrowings............29
4.7 Interest Rates and Payment Dates............................29
4.8 Computation of Interest and Fees............................30
4.9 Inability to Determine Interest Rate........................30
4.10 Pro Rata Treatment and Payments.............................31
4.11 Illegality..................................................32
4.12 Requirements of Law.........................................34
4.13 Taxes.......................................................36
4.14 Indemnity...................................................36
4.15 Change of Lending Office....................................36
4.16 Additional Action in Certain Events.........................36
4.17 Extension of Commitments....................................37
SECTION 5. REPRESENTATIONS AND WARRANTIES..............................38
5.1 Financial Condition.........................................38
5.2 No Change...................................................39
5.3 Disclosure..................................................39
5.4 Corporate Existence; Compliance with Law....................39
5.5 Corporate Power; Authorization; Enforceable Obligations.....39
5.6 No Legal Bar................................................40
5.7 No Material Litigation......................................40
5.8 No Default..................................................40
5.9 Ownership of Property; Liens................................40
5.10 Intellectual Property.......................................41
5.11 Taxes.......................................................41
5.12 Federal Regulations.........................................41
5.13 ERISA.......................................................41
5.14 Investment Company Act; Other Regulations...................42
5.15 Subsidiaries................................................42
5.16 Environmental Matters.......................................42
SECTION 6. CONDITIONS PRECEDENT........................................43
6.1 Conditions to Initial Extension of Credit...................43
6.2 Conditions to Each Extension of Credit......................45
SECTION 7. AFFIRMATIVE COVENANTS.......................................45
7.1 Financial Statements........................................45
7.2 Certificates; Other Information.............................46
7.3 Payment of Obligations......................................47
7.4 Conduct of Business and Maintenance of Existence............47
7.5 Maintenance of Property; Insurance; Trademark License.......47
7.6 Inspection of Property; Books and Records; Discussions......47
7.7 Notices.....................................................48
7.8 Environmental Laws..........................................49
SECTION 8. NEGATIVE COVENANTS..........................................49
8.1 Financial Condition Covenants...............................49
8.2 Limitation on Liens.........................................50
8.3 Limitation on Fundamental Changes...........................51
8.4 Limitation on Sale of Assets................................52
8.5 Limitation on Transactions with Affiliates..................52
8.6 Limitation on Changes in Fiscal Year........................52
8.7 Limitation on Lines of Business.............................52
SECTION 9. GUARANTEE...................................................53
9.1 Guarantee...................................................53
9.2 Right of Setoff.............................................53
9.3 No Subrogation..............................................54
9.4 Amendments, etc.............................................55
9.5 Guarantee Absolute and Unconditional........................55
9.6 Reinstatement...............................................56
9.7 Payments....................................................56
SECTION 10 EVENTS OF DEFAULT...........................................56
SECTION 11 THE AGENTS..................................................60
11.1 Appointment.................................................60
11.2 Delegation of Duties........................................60
11.3 Exculpatory Provisions......................................60
11.4 Reliance by Administrative Agent............................61
11.5 Notice of Default...........................................61
11.6 Non-Reliance on Administrative Agent and Other Lenders......62
11.7 Indemnification.............................................62
11.8 Agents in their Individual Capacities.......................63
11.9 Successor Administrative Agent; Resignation of
Co-Documentation Agents.....................................63
SECTION 12 MISCELLANEOUS...............................................64
12.1 Amendments and Waivers......................................64
12.2 Notices.....................................................65
12.3 No Waiver; Cumulative Remedies..............................66
12.4 Survival of Representations and Warranties..................66
12.5 Payment of Expenses and Taxes...............................66
12.6 Successors and Assigns; Participations and Assignments......67
12.7 Adjustments; Setoff.........................................70
12.8 Judgment Currency...........................................71
12.9 Counterparts................................................72
12.10 Confidentiality.............................................72
12.11 Severability................................................72
12.12 Integration.................................................73
12.13 Governing Law...............................................73
12.14 Submission To Jurisdiction; Waivers.........................73
12.15 Acknowledgments.............................................73
12.16 Waivers Of Jury Trial.......................................74
SCHEDULES
Schedule I LENDERS; ADDRESSES FOR NOTICES
Schedule II COMMITMENTS AND COMMITMENT PERCENTAGES
Schedule III SUBSIDIARIES
Schedule IV LIENS
Schedule V CERTAIN AFFILIATE TRANSACTIONS
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF ASSIGNMENT AND ACCEPTANCE
Exhibit C-1 FORM OF NOTICE OF BORROWING (DRAWINGS)
Exhibit C-2 FORM OF NOTICE OF BORROWING (CONTINUATIONS)
Exhibit C-3 FORM OF NOTICE OF BORROWING (CONVERSIONS)
Exhibit D ADDITIONAL COST RATE
Exhibit E-1 OPINION OF ROPES & ▇▇▇▇
Exhibit E-2 OPINION OF MACFARLANES
Exhibit E-3 OPINION OF GENERAL COUNSEL OF REEBOK
INTERNATIONAL LTD.
Exhibit E-4 OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇
CREDIT AND GUARANTEE AGREEMENT dated as of June 3, 2002,
among:
(a) REEBOK INTERNATIONAL LTD., a Massachusetts corporation (the
"Company");
-------
(b) REEBOK INTERNATIONAL LIMITED, a United Kingdom corporation
("Reebok UK");
---------
(c) REEBOK FINANCE LIMITED, a United Kingdom private limited company
("▇▇▇▇▇" and, together with the Company and Reebok UK, the
"Borrowers");
-----
(d) the several banks and other financial institutions from time to time
parties to this Agreement (the "Lenders");
-------
(e) CREDIT SUISSE FIRST BOSTON, a Swiss banking corporation acting through
its New York branch, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders;
(f) FLEET NATIONAL BANK, as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders; and
(g) ABN AMRO BANK N.V., BNP PARIBAS and WACHOVIA BANK,
NATIONAL ASSOCIATION, as co-documentation agents (in such capacity, the
"Co-Documentation Agents") for the Lenders.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, (a) the Borrowers have requested the Lenders to
extend credit in the form of revolving Loans at any time and from time to time
prior to the Termination Date, in an aggregate principal amount at any time
outstanding not in excess of $300,000,000 (or the Dollar Equivalent thereof in
Alternative Currencies) and (b) the Account Parties have requested the Issuing
Bank to issue Letters of Credit, in an aggregate face amount at any time
outstanding not in excess of $200,000,000 (or the Dollar Equivalent thereof in
Alternative Currencies).
WHEREAS, the Lenders are willing to extend such credit to the
Borrowers and the Issuing Bank is willing to issue Letters of Credit for the
account of the Account Parties on the terms and subject to the conditions set
forth herein.
2
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR": when used in reference to any Dollar denominated Loan
-----
or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.
-------------------
"Account Parties": the Company and Reebok UK; each an
---------------
"Account Party".
---------------
"Additional Cost": in relation to any Borrowing denominated in
-----------------
Sterling for any Interest Period, the cost as calculated by the Administrative
Agent in accordance with Exhibit D imputed to each Lender of compliance with the
mandatory liquid assets requirements of the Bank of England during that Interest
Period, expressed as a percentage.
"Adjusted LIBO Rate": with respect to any Eurocurrency
--------------------
Borrowing for any Interest Period, an interest rate per annum equal to (a) if
such Eurocurrency Borrowing is denominated in Dollars or Euro, (i) the LIBO Rate
in effect for such Interest Period divided by (ii) one minus the Eurocurrency
Reserve Requirements, and (b) if such Eurocurrency Borrowing is denominated in
Sterling, the LIBO Rate in effect for such Interest Period plus Additional Cost.
"Administrative Agent": as defined in the preamble to this
--------------------
Agreement.
"Affiliate": as to any Person, any other Person (other than a
-----------
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agents": the Administrative Agent and the Syndication Agent.
------
"Agreement": this Credit Agreement, as amended, supplemented
---------
or otherwise modified from time to time.
3
"Alternate Base Rate": for any day, a rate per annum equal to
---------------------
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Alternative Currency": Sterling and Euro.
--------------------
"Applicable Facility Fee Rate": for each day, the rate per
----------------------------
annum set forth below opposite the Credit Rating then in effect:
Facility Fee Rate
Credit Rating basis points per annum
AA- or better by S&P and Aa3 or better by ▇▇▇▇▇'▇ 7.0
A or better by S&P and A2 or better by ▇▇▇▇▇'▇,
but not AA- or better by S&P and Aa3
or better by ▇▇▇▇▇'▇ 9.0
A- or better by S&P and A3 or better by ▇▇▇▇▇'▇,
but not A or better by S&P and A2 or
better by ▇▇▇▇▇'▇ 10.0
BBB+ or better by S&P and Baa1 or better by ▇▇▇▇▇'▇,
but not A- or better by S&P and A3 or
better by ▇▇▇▇▇'▇ 15.0
BBB or better by S&P and Baa2 or better by ▇▇▇▇▇'▇,
but not BBB+ or better by S&P and
Baa1 or better by ▇▇▇▇▇'▇ 20.0
BBB- or better by S&P and Baa3 or better by ▇▇▇▇▇'▇,
but not BBB or better by S&P and
Baa2 or better by ▇▇▇▇▇'▇ 25.0
Otherwise 35.0
4
"Applicable Margin": for each Type of Loan for each day,
-----------------
the rate per annum set forth below opposite the Credit Rating then in effect:
ABR Eurocurrency
Credit Rating Loans Loans
basis points per annum
Category 1 0.0 30.5
----------
AA- or better by S&P and Aa3 or better
by ▇▇▇▇▇'▇
Category 2 0.0 36.0
----------
A or better by S&P and A2 or better by
▇▇▇▇▇'▇, but not AA- or better by S&P
and Aa3 or better by ▇▇▇▇▇'▇
Category 3 0.0 52.5
----------
A- or better by S&P and A3 or better by
▇▇▇▇▇'▇, but not A or better by S&P
and A2 or better by ▇▇▇▇▇'▇
Category 4 0.0 72.5
----------
BBB+ or better by S&P and Baa1 or
better by ▇▇▇▇▇'▇, but not A- or better
by S&P and A3 or better by ▇▇▇▇▇'▇
Category 5 0.0 80.0
----------
BBB or better by S&P and Baa2 or
better by ▇▇▇▇▇'▇, but not BBB+ or
better by S&P and Baa1 or better by
▇▇▇▇▇'▇
Category 6 0.0 87.5
----------
BBB- or better by S&P and Baa3 or
better by ▇▇▇▇▇'▇, but not BBB or
better by S&P and Baa2 or better by
▇▇▇▇▇'▇
Category 7 2.5 102.5
----------
Otherwise
==================================== ======== ==============
In addition, for each day on which the Total Extensions of Credit exceed 50% of
the Total Commitments, the Applicable Margins set forth above for Eurocurrency
Loans (and, if the Credit Ratings are then in Category 7, for ABR Loans) shall
be increased by 12.5 basis points.
5
"Application": an application, in such form as the relevant
-----------
Issuing Bank may specify from time to time, requesting such Issuing Bank to open
a Letter of Credit.
"Assignee": as defined in subsection 12.6(c).
--------
"Available Commitment": as to any Lender, at any time, an
--------------------
amount equal to the excess, if any, of (a) such Lender's Commitment over (b) the
aggregate principal amount of the Extensions of Credit of such Lender then
outstanding.
"Borrowers": as defined in the preamble to this Agreement.
--------
"Borrowing": Loans of the same Type and currency, made,
---------
converted or continued on the same date and, in the case of Eurocurrency Loans,
as to which a single Interest Period is in effect.
"Borrowing Minimum": (a) in the case of a Borrowing
-----------------
denominated in Dollars, $10,000,000, (b) in the case of a Borrowing denominated
in Sterling,(pound)5,000,000, and (c) in the case of a Borrowing denominated
in Euro, (U)10,000,000.
"Borrowing Multiple": (a) in the case of a Borrowing
------------------
denominated in Dollars, $1,000,000, (b) in the case of a Borrowing denominated
in Sterling, (pound)1,000,000,and (c) in the case of a Borrowing denominated
in Euro, (U)1,000,000.
"Business Day": a day other than a Saturday, Sunday or other
------------
day on which commercial banks in New York City are authorized or required by law
to close; provided that, (a) with respect to matters relating to Eurocurrency
Loans, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in deposits in the applicable currency in the London interbank
market and (b) when used in connection with a Loan denominated in Euro, the term
"Business Day" shall also exclude any day on which the TARGET payment system is
not open for the settlement of payments in Euro.
"Calculation Date": the last Business Day of each calendar
----------------
month and the date of each Notice of Borrowing with respect to a Loan, or
request for a Letter of Credit, to be made, continued, converted or issued, as
the case may be, in any Alternative Currency.
"Capital Stock": any and all shares, interests,
-------------
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
6
"Closing Date": the date on which the conditions precedent
------------
set forth in subsection 6.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
----
time to time.
"Commercial Letter of Credit": as defined in subsection
---------------------------
3.1(b)(i)(2).
"Commitment": as to any Lender, the obligation of such Lender
----------
to extend credit to the Borrowers hereunder in an aggregate principal amount the
Dollar Equivalent of which at any one time outstanding shall not exceed the
amount set forth opposite such Lender's name on Schedule II; as to all Lenders,
collectively, the "Commitments".
"Commitment Percentage": as to any Lender at any date, the
---------------------
percentage which such Lender's Commitment then constitutes of the Total
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate Extensions of Credit of such
Lender then constitutes of the Total Extensions of Credit of all Lenders).
"Commitment Period": the period from and including the date
-----------------
hereof to but not including the Termination Date or such earlier date on which
the Commitments shall terminate as provided herein.
"Committed Currency": Dollars and Alternative Currencies.
------------------
"Commonly Controlled Entity": an entity, whether or not
--------------------------
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
"Company": as defined in the preamble to this Agreement.
-------
"Consolidated Net Income" or "Consolidated Net Loss": for any
-----------------------
fiscal period, the amount which, in conformity with GAAP, would be set forth
opposite the caption "net income" (or any like caption) or "net loss" (or any
like caption), as the case may be, on a consolidated statement of earnings of
the Company and its Subsidiaries for such fiscal period.
"Contractual Obligation": as to any Person, any provision of
----------------------
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
7
"Credit Rating": the rating publicly announced from time to
time by ▇▇▇▇▇'▇ or S&P (as the context shall require) as being in effect with
respect to the senior, unsecured (and non-credit enhanced), long-term
Indebtedness of the Company.
"Credit Suisse First Boston": Credit Suisse First Boston, a
--------------------------
Swiss banking corporation acting through its New York branch.
"Default": any of the events specified in Section 10, whether
-------
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollar Equivalent": on any date of determination, (a) with
-----------------
respect to any amount in Dollars, such amount, and (b) with respect to any
amount in any Alternative Currency, the equivalent in Dollars of such amount,
determined by the Administrative Agent pursuant to subsection 1.3(b), using the
Exchange Rate with respect to such Alternative Currency at the time in effect
under the provisions of such subsection.
"Dollars" and "$": dollars in lawful currency of the United
------- -
States of America.
"Domestic Subsidiary": any Subsidiary of the Company
-------------------
organized under the laws of any jurisdiction within the United States.
"EBITDA": for any fiscal period, the Consolidated Net Income
------
or Consolidated Net Loss, as the case may be, for such fiscal period, after
restoring thereto amounts deducted for (a) extraordinary losses (or deducting
therefrom any amounts included therein on account of extraordinary gains) and
special charges, (b) depreciation and amortization (including write-offs or
write-downs of amortizable and depreciable items), (c) the amount of interest
expense of the Company and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP, for such period on the aggregate principal amount of
their consolidated Indebtedness, (d) the amount of tax expense of the Company
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period and (e) minority interests.
"EMU Legislation": the legislative measures of the European
---------------
Union for the introduction of, changeover to or operation of the Euro in one or
more member states.
"Environmental Laws": any and all foreign, Federal, state,
------------------
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning protection
of human health or the environment, as now or may at any time hereafter be in
effect.
8
"ERISA": the Employee Retirement Income Security Act of 1974,
-----
as amended from time to time.
"Euro" or "(U)": the single currency of the European Union as
---- ---
constituted by the Treaty on European Union and as referred to in the EMU
Legislation.
"Eurocurrency": when used in reference to any Loan or
------------
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Eurocurrency Reserve Requirements": with respect to the
---------------------------------
Eurocurrency Loans of any Lender for any day, that percentage (expressed as a
decimal) that is in effect on such day, as prescribed by any Governmental
Authority for determining the reserve, liquid asset or similar requirement with
respect to such Eurocurrency Loans for such Lender that is subject to the rules
and regulations of such Governmental Authority.
"Event of Default": any of the events specified in
----------------
Section 10, provided that any requirement for the giving of notice, the lapse of
--------
time, or both, or any other condition, has been satisfied.
"Exchange Rate": on any day, with respect to any Alternative
-------------
Currency, the rate at which such Alternative Currency may be exchanged into
Dollars, as set forth at approximately 11:00 a.m., London time, on such day on
the Reuters World Currency Page for such Alternative Currency. In the event that
such rate does not appear on any Reuters World Currency Page, the Exchange Rate
shall be determined by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Administrative Agent and
the Company, or, in the absence of such agreement, such Exchange Rate shall
instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such Alternative Currency are then being conducted, at
or about 10:00 a.m., New York City time, on such date for the purchase of
Dollars for delivery two Business Days later; provided that if at the time of
any such determination, for any reason, no such spot rate is being quoted, the
Administrative Agent, after consultation with the Company, may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.
"Existing Credit Agreement": the Second Amended and Restated
-------------------------
Credit and Guarantee Agreement dated as of March 22, 2000, among the Company,
Reebok UK, the lenders named therein, the co-agents named therein,
Citibank N.A., as documentation agent and Credit Suisse First Boston,
as administrative agent.
"Extension of Credit": as to any Lender at any time, an
-------------------
amount equal to the sum of (a) the Dollar Equivalent of the aggregate principal
amount of all Loans held by
9
such Lender then outstanding and (b) such Lender's Commitment Percentage of the
L/C Obligations then outstanding.
"Extension Period": as defined in subsection 4.17(a).
----------------
"Facility Fee": as defined in subsection 4.2.
------------
"Federal Funds Effective Rate": for any day, the weighted
----------------------------
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Financing Lease": any lease of property, real or personal,
---------------
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"▇▇▇▇▇ Intercompany Payments": either (a) loans by ▇▇▇▇▇ to
---------------------------
Reebok UK or (b) repayments by ▇▇▇▇▇ of loans made to it by the Company.
"▇▇▇▇▇ Obligations": the unpaid principal of, and interest on
(including post-petition interest, whether allowed or allowable), all
obligations and liabilities of ▇▇▇▇▇ to the Administrative Agent and the
Lenders, whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement (including, without limitation, any amendment
and restatement or refinancing hereof) or any other document executed and
delivered in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or any Lender) or otherwise.
"Fireman Group": ▇▇▇▇ ▇▇▇▇▇▇▇, his spouse, his parents, his
children, his grandchildren, the ▇▇▇▇ and ▇▇▇▇▇▇▇ Fireman Trust, the PFP
Charitable Trust, any other trusts of which ▇▇▇▇ ▇▇▇▇▇▇▇ is a trustee and any
other charitable trusts created by him.
"Foreign Subsidiary": any Subsidiary of the Company organized
------------------
under the laws of any jurisdiction outside the United States of America.
"GAAP": generally accepted accounting principles in the
----
United States of America as in effect from time to time.
10
"Governmental Authority": any nation or government, any state
----------------------
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Granting Bank": as defined in subsection 12.6(h).
-------------
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person incurred for the purpose of providing
credit support, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Company in good faith.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person (e) all liabilities
secured by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof and (f) all
Indebtedness of the
11
types referred to in clauses (a) through (e) above which is guaranteed directly
or indirectly by such Person.
"Initial Termination Date": June 3, 2005.
------------------------
"Insolvency": with respect to any Multiemployer Plan, the
----------
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Interest Payment Date": (a) as to any ABR Loan, the last
---------------------
Business Day of each March, June, September and December, (b) as to any
Eurocurrency Loan having an Interest Period of three months or less, the last
day of such Interest Period, and (c) as to any Eurocurrency Loan having an
Interest Period longer than three months, the day which is three months (or a
whole multiple thereof) after the first day of such Interest Period and before
the last day of such Interest Period.
"Interest Period": (a) with respect to any Eurocurrency Loan:
---------------
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such Eurocurrency Loan and ending one,
two, three or six months thereafter, as selected by the relevant Borrower in its
Notice of Borrowing given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurocurrency Loan and ending one,
two, three or six months thereafter, as selected by the relevant Borrower in a
Notice of Borrowing delivered to the Administrative Agent by 10:00 a.m., New
York City time, not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
--------
Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurocurrency Loan would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the T
ermination Date; and
12
(3) any Interest Period pertaining to a Eurocurrency
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Issuing Bank": with respect to any Letter of Credit, (a)
------------
Credit Suisse First Boston (or any Affiliate thereof) or (b) any other Lender
(or any Affiliate thereof), acting in its capacity as such an issuer, from time
to time designated by the Company as the issuer of such Letter of Credit which
is reasonably acceptable to the Administrative Agent and agrees (in its sole
discretion) to serve in such capacity with respect to such Letter of Credit.
"L/C Commitment": $200,000,000.
--------------
"L/C Fee Payment Date": the last Business Day of each March,
--------------------
June, September and December.
"L/C Obligations": at any time, an amount equal to the sum of
---------------
(a) the Dollar Equivalent of the aggregate then undrawn and unexpired amount of
the then outstanding Letters of Credit and (b) the Dollar Equivalent of the
aggregate amount of drawings under Letters of Credit that have not then been
reimbursed pursuant to subsection 3.5.
"L/C Participants": with respect to each Letter of Credit, the
----------------
collective reference to all the Lenders, other than the Issuing Bank with
respect to such Letter of Credit.
"Letters of Credit": a Commercial Letter of Credit or a
-----------------
Standby Letter of Credit, as the context shall require; collectively, the
"Letters of Credit".
-----------------
"LIBO Rate": when used with respect to any Eurocurrency
---------
Borrowing for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m., London time, on the date which
is two Business Days prior to the beginning of such Interest Period by reference
to the British Bankers' Association Interest Settlement Rates for deposits in
the currency of such Borrowing (as set forth by any service selected by the
Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of displaying
such rates), for a period equal to such Interest Period; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the LIBO Rate shall be the interest rate per
annum at which deposits in the currency of such Borrowing are offered for such
Interest Period by major banks in the London interbank
13
market to Credit Suisse First Boston at approximately 11:00 a.m., London time,
on the date two Business Days prior to the beginning of such Interest Period.
"Lien": any mortgage, pledge, hypothecation, collateral
----
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic effect
as any of the foregoing).
"Loan": as defined in subsection 2.1.
----
"Loan Documents": this Agreement and the Notes.
--------------
"LPC Comparable Pricing": the most recent interest rate
----------------------
spreads and facility fees for broadly syndicated multi-year credit facilities
for borrowers having comparable Credit Ratings to the Company, as published by
the Loan Pricing Corporation in its "Gold Sheets" under the heading "Broadly
Syndicated Loans Grid" (or by any successor thereto or in any successor
publication). If the Loan Pricing Corporation or any successor thereto ceases to
publish such information, then the LPC Comparable Pricing shall be determined by
the Agents based upon such published information as shall be reasonably chosen
by the Agents, which determination shall be conclusive absent manifest error.
"Majority Lenders": at any time, Lenders then having
----------------
Commitments (or, if the Commitments have terminated, Extensions of Credit) which
aggregate more than 50% of the sum of the Commitments (or the Total Extensions
of Credit then outstanding, as the case may be) then in effect.
"Material Adverse Effect": a material adverse effect on (a)
-----------------------
the business, operations, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole, (b) the validity
or enforceability of this or any of the other Loan Documents or (c) the rights
or remedies of the Administrative Agent or the Lenders hereunder or under any of
the other Loan Documents.
"Material Environmental Amount": an amount payable by the
-----------------------------
Company and/or its Subsidiaries in excess of $10,000,000 for remedial costs,
non-routine compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"Material Subsidiary": each Domestic Subsidiary of the
-------------------
Company which has either (a) assets having a fair market value (as reasonably
estimated by the Company) or book value in excess of $10,000,000 in the
aggregate or (b) revenues in excess of
14
$10,000,000 per annum, other than (x) Reebok Securities Holdings Corp., during
such time as its only material asset is Capital Stock of RBK Holdings plc, and
(y) Reebok Foundation, Inc.
"Materials of Environmental Concern": any gasoline or
----------------------------------
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan": a Plan which is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in subsection 4.13(a).
------------------
"Note": as defined in subsection 4.1(f).
----
"Notes": the collective reference to the Notes.
-----
"Notice of Borrowing": (a) with respect to a request for a
-------------------
Borrowing hereunder, a request in the form of Exhibit C-1 hereto, (b) with
respect to a request for continuation of a Eurocurrency Loan hereunder, a
request in the form of Exhibit C-2 hereto and (c) with respect to a request for
conversion of or to a Eurocurrency Loan hereunder, a request in the form of
Exhibit C-3 hereto, in each case delivered by a Responsible Officer of the
applicable Borrower to the Administrative Agent hereunder.
"Participant": as defined in subsection 12.6(b).
-----------
"PBGC": the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan which
----
is covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
15
"Prime Rate": the rate of interest per annum publicly
----------
announced from time to time by the Administrative Agent as its prime rate
in effect at its principal office in New York City.
"Properties": as defined in subsection 5.16(a).
----------
"Register": as defined in subsection 12.6(d).
--------
"Regulation U": Regulation U of the Board of Governors of the
------------
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": with respect to any Letter of
------------------------
Credit issued for the account of or at the request of an Account Party, the
obligation of such Account Party to reimburse the Issuing Bank with respect
thereto pursuant to subsection 3.5(a) for amounts drawn thereunder.
"Related Parties": as to any specified Person, such Person's
---------------
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of
PBGC ▇▇▇.▇▇. 2615.
"Required Lenders": at any time, Lenders then having
Commitments (or, if the Commitments have terminated, Extensions of Credit) which
aggregate more than 662/3% of the sum of the Commitments (or the Total
Extensions of Credit then outstanding, as the case may be) then in effect.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reset Date": as defined in subsection 1.3(a).
----------
"Responsible Officer": the chief executive officer, the
-------------------
president, any executive vice president, the chief financial officer, the
treasurer and the (soley for purposes of signing Notices of Borrowing)assistant
treasurer of the Company, provided
--------
16
that the officers of Reebok UK and ▇▇▇▇▇ equivalent to the foregoing shall be
Responsible Officers solely for purposes of signing Notices of Borrowing for
Reebok UK and ▇▇▇▇▇.
"S&P": Standard and Poor's Ratings Service.
---
"SPC": as defined in subsection 12.6(h).
---
"Single Employer Plan": any Plan which is covered by Title IV
--------------------
of ERISA, but which is not a Multiemployer Plan.
"Standby Letter of Credit": as defined in subsection
------------------------
3.1(b)(i)(l).
"Sterling" or "(pound)": the lawful money of the United
--------
Kingdom.
"Subsidiary": as to any Person, a corporation, partnership or
----------
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person; provided that (during such time as common stock of the Company
constitutes its only material asset) RBK Holdings plc shall be deemed not to
constitute a Subsidiary of the Company for any purpose hereunder, other than for
purposes of (a) calculation of financial covenants and (b) presentation of
financial statements. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Company.
"Termination Date": the Initial Termination Date or, if
----------------
applicable, the last day of the Extension Period.
"Total Commitments": at any time, the aggregate amount of the
-----------------
Commitments then in effect.
"Total Extensions of Credit": at any time, the aggregate
--------------------------
amount of the Extensions of Credit of the Lenders outstanding at such time.
"Transferee": as defined in subsection 12.6(f).
----------
"Type": as to any Loan, its nature as an ABR Loan or a
----
Eurocurrency Loan in a particular Committed Currency.
17
"UK Obligations": the unpaid principal of, and interest on
(including post- petition interest, whether allowed or allowable), all
obligations and liabilities of Reebok UK to the Administrative Agent and the
Lenders, whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement (including, without limitation, any amendment
and restatement or refinancing hereof) or any other document executed and
delivered in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or any Lender) or otherwise.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP; provided, however, that if the
Company notifies the Administrative Agent that the Company wishes to amend any
covenant in Section 8 or any related definition to eliminate the effect of any
change in GAAP occurring after the date of this Agreement on the operation of
such covenant (or if the Administrative Agent notifies the Company that the
Majority Lenders wish to amend Section 8 or any related definition for such
purpose), then the Company's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Company and the Majority Lenders.
..
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each mean "to but excluding". Periods of days
referred to in this Agreement shall be counted in calendar days unless Business
Days are expressly prescribed. Any period determined hereunder by reference to a
month or months or year or years shall end on the day in the relevant calendar
month in the relevant year, if applicable, immediately preceding the date
numerically corresponding to the first day of such period, provided, that if
such period commences on the last day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month during which
such period
18
is to end), such period shall, unless otherwise expressly required by the other
provisions of this Agreement, end on the last day of the calendar month.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
1.3. Exchange Rates. (a) Not later than 1:00 p.m., New York
City time, on each Calculation Date, the Administrative Agent shall (i)
determine the Exchange Rate as of such Calculation Date with respect to each
Alternative Currency and (ii) give notice thereof to the Borrowers. The Exchange
Rates so determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a "Reset Date"), shall remain effective
until the next succeeding Reset Date, and shall for all purposes of this
Agreement (other than subsection 12.8 or any other provision expressly requiring
the use of a current Exchange Rate) be the Exchange Rates employed in converting
any amounts between Dollars and Alternative Currencies.
(b) Not later than 5:00 p.m., New York City time, on each
Reset Date (if any Loan or Letter of Credit denominated in an Alternative
Currency is to be outstanding on such Reset Date) and each date on which Loans
or Letters of Credit denominated in any Alternative Currency are made or issued,
as the case may be, the Administrative Agent shall (i) determine the aggregate
amount of the Total Extensions of Credit then outstanding (after giving effect
to any Loans or Letters of Credit denominated in Alternative Currencies to be
outstanding on such date) and (ii) notify the Lenders and the Borrowers of the
results of such determination.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans (the
"Loans") in any Committed Currency to any Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
that will not result in such Lender's Extensions of Credit exceeding the amount
of such Lender's Commitment. During the Commitment Period the Borrowers may use
the Commitments by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) Subject to subsection 4.9, (i) each Borrowing denominated
in an Alternative Currency shall be comprised entirely of Eurocurrency Loans and
(ii) each Borrowing denominated in Dollars shall be comprised entirely of ABR
Loans or Eurocurrency Loans as the applicable Borrower may request in accordance
herewith. Each Lender at its option may make any Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan, subject to Section
4.15; provided that any
19
exercise of such option shall not affect the obligation of any Borrower to repay
such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Borrowing, such Borrowing shall be in an aggregate amount that is at least equal
to the Borrowing Minimum and an integral multiple of the Borrowing Multiple;
provided that (i) if the then Available Commitments are less than $10,000,000,
then an ABR Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments and (ii) Borrowings made in respect of
Letter of Credit reimbursements under subsection 3.5(c) may be in the amount
contemplated thereby. Borrowings of more than one Type may be outstanding at the
same time; provided that there shall not at any time be more than a total of 20
Eurocurrency Borrowings outstanding.
2.2 Procedure for Borrowing. (a) Any Borrower may borrow under
the Commitments during the Commitment Period on any Business Day, provided that
(i) in the case of an ABR Borrowing, the Borrower shall deliver to the
Administrative Agent such Borrower's irrevocable Notice of Borrowing prior to
10:00 a.m., New York City time, on the Business Day of the proposed Borrowing or
(ii) in the case of a Eurocurrency Borrowing, the Borrower shall deliver to the
Administrative Agent such Borrower's irrevocable Notice of Borrowing not later
than 11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing, in each case specifying the following information:
(1) the Borrower requesting such Borrowing;
(2) the currency and aggregate principal amount of the
requested Borrowing;
(3) the date of the requested Borrowing, which shall be a
Business Day;
(4) whether the requested Borrowing is to be an ABR
Borrowing or a Eurocurrency Borrowing;
(5) in the case of a Eurocurrency Borrowing, the initial
Interest Period to be applicable thereto, which shall
be a period contemplated by the definition of the
term "Interest Period"; and
(6) the location and number of the Borrower's account to which funds are to be
disbursed.
If no currency is specified with respect to any requested Eurocurrency
Borrowing, then the Borrower shall be deemed to have selected Dollars. If no
election as to the Type of
20
Borrowing is specified, then the requested Borrowing shall be (i) in the case of
a Borrowing denominated in Dollars, an ABR Borrowing, and (ii) in the case of a
Borrowing denominated in an Alternative Currency, a Eurocurrency Borrowing. If
no Interest Period is specified with respect to any requested Eurocurrency
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month's duration.
(b) Promptly following receipt of a Notice of Borrowing in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing. Each Lender will make the amount of its pro
rata share of each Borrowing on the proposed date thereof by wire transfer of
immediately available funds by 11:00 a.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the applicable Borrower by promptly crediting the amounts so received, in
like funds, to an account of such Borrower designated by such Borrower in the
applicable Notice of Borrowing.
2.3 Use of Proceeds of Loans. (a) The proceeds of the
------------------------
Loans to ▇▇▇▇▇ shall be used by ▇▇▇▇▇ solely to make ▇▇▇▇▇ Intercompany
Payments.
(b) The proceeds of the Loans to the Company and Reebok UK,
and the proceeds of ▇▇▇▇▇ Intercompany Payments, shall be utilized by the
Company and Reebok UK solely for general corporate purposes in the ordinary
course of business, including to refinance maturing commercial paper.
SECTION 3. AMOUNT AND TERMS OF LETTER OF CREDIT SUB-
FACILITY
3.1 L/C Commitment (a) Subject to the terms and conditions
hereof, each Issuing Bank, in reliance on the agreements of the other Lenders
set forth in subsection 3.4(a), agrees to issue any Letters of Credit requested
to be issued by it for the account of either Account Party on any Business Day
during the Commitment Period in such form as may be approved from time to time
by such Issuing Bank; provided that such Issuing Bank shall not issue any Letter
of Credit if, after giving effect to such issuance, such Issuing Bank has actual
knowledge that (i) the L/C Obligations would exceed the L/C Commitment or (ii)
the Total Extensions of Credit would exceed the Total Commitments.
(b) Each Letter of Credit shall:
(i) be either (1) a standby letter of credit issued to support
obligations of an Account Party and its Subsidiaries, contingent or
otherwise, for which Loans would be available (a "Standby Letter of
Credit"), or (2) a commercial letter of
21
credit issued in respect of the purchase of goods or services by an
Account Party and its Subsidiaries in the ordinary course of business
(a "Commercial Letter of Credit");
(ii) be denominated in a Committed Currency; and
(iii) expire no later than the earlier of (1) one year
following the date of issuance thereof and (2) five days prior to the
Termination Date; provided that any Letter of Credit may provide for
renewal thereof for additional one-year periods on an "evergreen" basis
(but not, in any event, beyond the date referred to in clause (2)
above).
(c) No Issuing Bank shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. Either
Account Party may from time to time give notice to the Administrative Agent that
such Account Party or any Subsidiary desires to have a Letter of Credit issued
for its account and specifying the proposed Issuing Bank with respect to such
Letter of Credit. In the event that the proposed Issuing Bank is reasonably
acceptable to the Administrative Agent, the applicable Account Party shall
request that such Issuing Bank issue a Letter of Credit by delivering to such
Issuing Bank (with a copy of such Application to the Administrative Agent, in
the case of any Standby Letter of Credit) at its address for notices specified
herein an Application therefor, completed to the satisfaction of the Issuing
Bank, and such other certificates, documents and other papers and information as
the Issuing Bank may request. Upon receipt of any Application, the Issuing Bank
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Bank and the applicable
Account Party; provided that the Issuing Bank shall in no event be required to
issue any Letter of Credit earlier than one Business Day (or, in the case of
Standby Letters of Credit, three Business Days) after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto. In the event that the Letter of Credit to be
issued is a Standby Letter of Credit, the Issuing Bank shall furnish a copy of
such Standby Letter of Credit to each of the Administrative Agent and the
applicable Account Party promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) Each Account
Party shall pay to the Administrative Agent, for the account of each Issuing
Bank and the L/C Participants, a Letter of Credit commission with respect to
each Standby Letter of Credit issued by such Issuing Bank for the account of or
at the request of such Account Party,
22
computed for each day during the period for which payment is due at the rate per
annum equal to the Applicable Margin in effect for Eurocurrency Loans on such
date (calculated on the basis of a 365- or 366-day year, as the case may be)
times the aggregate amount available to be drawn under such Standby Letter of
Credit on such date. Such commissions shall be payable, in arrears, on each L/C
Fee Payment Date to occur after the issuance of such Standby Letter of Credit
and shall be nonrefundable.
(b) Each Account Party shall pay to the relevant Issuing Bank,
for its own account, a fronting fee calculated on the face amount of each Letter
of Credit issued by such Issuing Bank for the account of or at the request of
such Account Party at a rate per annum to be agreed upon between the applicable
Account Party and such Issuing Bank. Such fronting fees shall be calculated on
the basis of a 365- or 366-day year (as the case may be) and shall payable, in
arrears, on each L/C Fee Payment Date with respect to any such Letters of Credit
which were outstanding during the period for which payment is due.
(c) In addition to the foregoing fees and commissions, each
Account Party shall pay or reimburse each Issuing Bank for such normal and
customary costs and expenses as are incurred or charged by such Issuing Bank in
issuing, effecting payment under, amending or otherwise administering any Letter
of Credit issued by it for the account of or at the request of such Account
Party.
(d) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the relevant Issuing Bank and the L/C
Participants all fees and commissions received by the Administrative Agent for
their respective accounts pursuant to this subsection 3.3.
3.4 L/C Participations. (a) Each Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Bank, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage in the Issuing Bank's obligations and rights
under each Letter of Credit issued by it hereunder and the amount of each draft
paid by the Issuing Bank thereunder. Each L/C Participant unconditionally and
irrevocably agrees with such Issuing Bank that, if a draft is paid under any
Letter of Credit for which such Issuing Bank is not reimbursed in full by the
applicable Account Party in accordance with the terms of this Agreement, such
L/C Participant shall pay to such Issuing Bank (through the Administrative
Agent) upon demand an amount equal to such L/C Participant's Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed, in the Committed Currency of such draft.
23
(b) If any amount required to be paid by any L/C Participant
to an Issuing Bank pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit
issued by it is paid to such Issuing Bank within three Business Days after the
date such payment is due, such L/C Participant shall pay to such Issuing Bank
(through the Administrative Agent) on demand an amount equal to the product of
(i) such amount, times (ii) the daily average Federal Funds Effective Rate (or,
with respect to Letters of Credit which are not denominated in Dollars, the rate
which reasonably represents such Issuing Bank's cost of funds), as quoted by
such Issuing Bank, during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Bank, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to subsection
3.4(a) is not in fact made available to such Issuing Bank by such L/C
Participant within three Business Days after the date such payment is due, such
Issuing Bank shall be entitled to recover from such L/C Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans hereunder (or, in the case of Letters of Credit
which are not denominated in Dollars, at a rate equal to the rate which is
reasonably determined by such Issuing Bank to reflect its cost of funding in the
relevant currency plus the Applicable Margin then in effect with respect to ABR
Loans). A certificate of such Issuing Bank submitted to any L/C Participant
(through the Administrative Agent) with respect to any amounts owing under this
subsection 3.4 shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after (i) an Issuing Bank has made
payment under any Letter of Credit, (ii) such Issuing Bank has received from any
L/C Participant its pro rata share of such payment in accordance with subsection
3.4(a) and (iii) such Issuing Bank receives any payment related to such Letter
of Credit (whether directly from the applicable Account Party or otherwise,
including proceeds of collateral applied thereto by such Issuing Bank), or any
payment of interest on account thereof, such Issuing Bank will distribute to the
Administrative Agent (for the account of such L/C Participant) such L/C
Participant's pro rata share thereof; provided, however, that in the event that
any such payment received by such Issuing Bank shall be required to be returned
by such Issuing Bank, such L/C Participant shall return to such Issuing Bank
(through the Administrative Agent) the portion thereof previously distributed by
such Issuing Bank to it.
3.5 Reimbursement Obligation of the Borrower. (a) Each Account
Party agrees to reimburse each Issuing Bank on each date on which such Issuing
Bank notifies such Account Party of the date and amount of a draft presented
under any Letter of Credit issued by such Issuing Bank for the account of or at
the request of such Account Party and paid by such Issuing Bank for the amount
of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by such Issuing Bank in
24
connection with such payment. Each such payment shall be made to such Issuing
Bank at its address for notices specified herein in Dollars (or, in the case of
any Letter of Credit which is not denominated in Dollars, in the applicable
Alternative Currency in which such Letter of Credit is denominated) and in
immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the applicable Account Party under this subsection 3.5 from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding ABR Loans which were then overdue (or, in the case of Letters of
Credit which are not denominated in Dollars, at a rate equal to the rate which
is reasonably determined by the relevant Issuing Bank to reflect its cost of
funding in the relevant Alternative Currency plus 2% above the Applicable Margin
then in effect with respect to ABR Loans).
(c) Each drawing under any Letter of Credit shall (unless it
is reimbursed by the applicable Account Party on the date of drawing) constitute
a request by such Account Party to the Administrative Agent for a Borrowing
pursuant to subsection 2.2 of ABR Loans in the amount of such drawing (or, in
the case of a drawing under a Letter of Credit denominated in an Alternative
Currency, for an ABR Borrowing in the amount which is reasonably determined by
the Administrative Agent to be the Dollar Equivalent of the amount of such
drawing). The borrowing date with respect to such Borrowing shall be the date of
such drawing.
3.6 Obligations Absolute. (a) Each Account Party's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which such Account Party may have or have had against any Issuing Bank or any
beneficiary of a Letter of Credit.
(b) Each Account Party also agrees with each Issuing Bank that
such Issuing Bank shall not be responsible for, and such Account Party's
Reimbursement Obligations under subsection 3.5(a) shall not be affected by,
among other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among such Account
Party and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or (iii) any claims whatsoever of such
Account Party against any beneficiary of such Letter of Credit or any such
transferee.
(c) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit issued by
such Issuing Bank, except for errors or omissions caused by such Issuing Bank's
gross negligence or willful misconduct.
25
(d) Each Account Party agrees that any action taken or omitted
by an Issuing Bank under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence of
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on such
Account Party and shall not result in any liability of such Issuing Bank to such
Account Party.
3.7 Letter of Credit Payments. The responsibility of each
Issuing Bank to an Account Party in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
3.9 Reporting by Issuing Banks. (a) Each Issuing Bank hereby
agrees to provide to the Administrative Agent prompt notice of (i) the issuance
by it of any Letter of Credit, (ii) the amendment of any Letter of Credit issued
by it, (iii) the termination thereof, (iv) the presentation of any draft
thereunder and (v) the reimbursement by an Account Party of such draft;
provided, however, that, with respect to Commercial Letters of Credit, such
notice shall take the form of a summary report which shall be provided to the
Administrative Agent (x) on the first Business Day of each week, (y) on the last
Business Day of each calendar month and (z) at such other times (including,
without limitation, daily) as the Administrative Agent may from time to time
request.
(b) Each Issuing Bank hereby agrees to provide to the
Administrative Agent on the last Business Day of each calendar month, a summary
showing the outstanding balances of the Letters of Credit issued by such Issuing
Bank on each day during the month then ended.
SECTION 4. PROVISIONS RELATING TO THE EXTENSIONS OF
CREDIT; FEES AND PAYMENTS
4.1 Repayment of Loans; Evidence of Debt. (a) Each Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of the Loans of such
Lender made to such Borrower on the Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 10), in the currency
in which such Loan was made. Each Borrower hereby further agrees to pay interest
in such currency on the unpaid principal amount of the Loans made to such
Borrower from time to time outstanding from the date
26
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 4.7. Notwithstanding anything to the contrary contained
herein, in no event shall Reebok UK or ▇▇▇▇▇ have any liability to the Agents or
any Lender for liabilities hereunder on account of which the Company is the
primary obligor.
(b) If at any time, as a result of fluctuations in Exchange
Rates, the Total Extensions of Credit then outstanding would exceed the Total
Commitments then in effect, then each Borrower hereby unconditionally promises,
on the Business Day following notice thereof from the Administrative Agent, to
repay or prepay Borrowings in an amount sufficient to eliminate such excess.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(d) The Administrative Agent shall maintain the Register
pursuant to subsection 12.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Loan, made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from any Borrower and each Lender's share
thereof.
(e) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 4.1(d) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of any Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(f) The Borrowers agree that, upon request of any Lender
through the Administrative Agent, the Company, Reebok UK or ▇▇▇▇▇ (as the case
may be) will execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns), substantially in the form of Exhibit A with appropriate
insertions as to date and principal amount (the "Note").
4.2 Facility Fee. The Borrowers agree to pay to the
Administrative Agent for the account of each Lender a Facility Fee in Dollars,
which shall accrue at the Applicable Facility Fee Rate on the daily amount of
the Commitment of such Lender (whether used or unused) during the period from
and including the date hereof to but
27
excluding the date on which such Commitment terminates; provided that, if such
Lender continues to have any outstanding Extensions of Credit after its
Commitment terminates, then such Facility Fee shall continue to accrue on the
daily amount of such Lender's outstanding Extensions of Credit from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any outstanding Extensions of Credit.
Accrued Facility Fees shall be payable in arrears on the last Business Day of
March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any Facility Fees accruing after the date on which the
Commitments terminate shall be payable on demand.
(b) The Borrowers agree to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the applicable Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of Facility Fees, to the Lenders. Fees paid shall not be refundable
absent manifest error in payment or computation.
4.3 Optional Prepayments. Each Borrower may at any time and
from time to time prepay the Loans owing by it, in whole or in part, without
premium or penalty, upon at least three Business Days' (or, in the case of
prepayments of ABR Loans, one Business Day's) irrevocable notice to the
Administrative Agent (which notice must be received by the Administrative Agent
prior to 10:00 a.m., New York City time, on the date upon which such notice is
due), specifying the date and amount of prepayment and whether the prepayment is
of Eurocurrency Loans, ABR Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice, the Administrative Agent shall promptly notify each affected Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with any amounts
payable pursuant to subsection 4.14 and, except in the case of prepayments of
Loans which are ABR Loans, accrued interest to such date on the amount prepaid.
Partial prepayments shall be in an aggregate principal amount at least equal to
the Borrowing Minimum or a whole multiple of the Borrowing Multiple in excess
thereof. Each prepayment shall be applied ratably to the Loans included in the
prepaid Borrowing.
4.4 Optional Termination or Reduction of Commitments. The
Borrowers shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments; provided that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the Total
Extensions of Credit then outstanding would exceed the
28
Total Commitments then in effect. Any such reduction shall be in an amount equal
to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall
reduce permanently the Commitments then in effect.
4.5 Conversion and Continuation Options. (a) Each Borrower may
elect from time to time to convert Eurocurrency Loans denominated in Dollars to
ABR Loans by delivering to the Administrative Agent an irrevocable Notice of
Borrowing by 10:00 a.m., New York City time, at least one Business Day prior to
the requested date of conversion. Each Borrower may elect from time to time to
convert ABR Loans to Eurocurrency Loans denominated in Dollars by delivering to
the Administrative Agent an irrevocable Notice of Borrowing by 10:00 a.m., New
York City time, at least three Business Days' prior to the requested conversion
date. Any such Notice of Borrowing with respect to a conversion to ABR Loans or
Eurocurrency Loans shall specify:
(i) the Borrowing to which such Notice of Borrowing applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Notice of Borrowing, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
Upon receipt of any such Notice of Borrowing, the Administrative Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurocurrency
Loans and ABR Loans may be converted as provided herein, provided that (i) no
Loan may be converted into a Eurocurrency Loan when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a conversion is not appropriate and (ii) no
Loan may be converted into a Eurocurrency Loan after the date that is one month
prior to the Termination Date.
(b) Any Eurocurrency Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
relevant Borrower delivering to the Administrative Agent an irrevocable Notice
of Borrowing, in accordance with the applicable provisions of the term "Interest
Period" set forth in subsection 1.1, of the length of the next Interest Period
to be applicable to such Loans,
29
provided that (i) no Eurocurrency Loan denominated in Dollars may be continued
as such and no Eurocurrency Loan denominated in an Alternative Currency may be
continued for an Interest Period in excess of one month when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a continuation is not appropriate and
(ii) after the date that is one month prior to the Termination Date, no
Eurocurrency Loan denominated in Dollars may be continued as such and the
Interest Period with respect to any Eurocurrency Loan made, continued or
converted in an Alternative Currency shall end on the Termination Date. Upon
receipt of any such Notice of Borrowing, the Administrative Agent shall promptly
notify each Lender thereof. If the relevant Borrower fails to deliver a timely
Notice of Borrowing with respect to a Eurocurrency Loan prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing (unless such Borrowing is denominated in an
Alternative Currency, in which case such Borrowing shall become due and payable
on the last day of such Interest Period).
4.6 Minimum Amounts and Maximum Number of Borrowings. All
borrowings, conversions and continuations of Eurocurrency Loans hereunder and
all selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of each Eurocurrency Borrowing shall be equal to the
Borrowing Minimum or a whole multiple of the Borrowing Multiple in excess
thereof. In no event shall there be more than 20 Eurocurrency Borrowings
outstanding at any time.
4.7 Interest Rates and Payment Dates. (a) Each Eurocurrency
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Adjusted LIBO Rate determined for such
day plus the then Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the then Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any Facility Fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, Facility Fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) in the case of any such overdue interest, Facility Fee or other
amount, the rate described in paragraph (b) of this subsection plus 2%, in each
case from the date of such non-payment until such overdue principal, interest,
Facility Fee or other amount is paid in full (as well after as before judgment).
30
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
(e) Notwithstanding anything to the contrary contained herein,
in no event shall a Borrower be obligated to pay interest in excess of the
maximum amount which is chargeable under applicable law.
4.8 Computation of Interest and Fees. (a) Facility Fees,
interest on Borrowings denominated in Sterling and interest on Borrowings
denominated in Dollars and calculated by reference to the Prime Rate shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual number of days elapsed; and, otherwise, interest shall be calculated on
the basis of a 360-day year for the actual number of days elapsed. Any change in
the interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the relevant Borrower and the Lenders
of the effective date and the amount of each such change in interest rate. Any
change in the Applicable Margin or Applicable Facility Fee Rate resulting from a
change in the Credit Rating of the Company shall become effective on the earlier
of (x) the date upon which such change is publicly announced by the relevant
rating agency and (y) the date upon which the Company provides to the
Administrative Agent reasonably satisfactory evidence of such change.
(d) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of any Borrower,
deliver to such Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to subsection
4.7(a).
4.9 Inability to Determine Interest Rate. If prior to
------------------------------------
the first day of any Interest Period for a Eurocurrency Borrowing denominated
in any Committed Currency:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such Committed
Currency for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Lenders that the Adjusted LIBO Rate determined or to be determined
for such Committed Currency for such Interest Period will not adequately and
fairly reflect the cost
31
to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, the Administrative
Agent shall give telecopy or telephonic notice thereof to the affected Borrower
and the Lenders as soon as practicable thereafter. If such notice is given with
respect to Loans denominated or to be denominated in an Alternative Currency,
then (x) Loans requested to be made on the first day of such Interest Period in
such Alternative Currency shall not be made and (y) any outstanding Loans in
such Alternative Currency that were to be continued on the first day of such
Interest Period shall be repaid. If such notice is given with respect to Loans
denominated or to be denominated in Dollars, then (i) any Eurocurrency Loans
denominated in Dollars and requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (ii) any Loans denominated in
Dollars that were to have been converted on the first day of such Interest
Period to Eurocurrency Loans shall be continued as ABR Loans and (iii) any
outstanding Eurocurrency Loans denominated in Dollars shall be converted, on the
first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurocurrency Loans shall be
made or continued as such in the affected Committed Currency, nor shall any
Borrower have the right to convert Loans to Eurocurrency Loans in the affected
Committed Currency.
4.10 Pro Rata Treatment and Payments. (a) Each Borrowing by a
Borrower from the Lenders hereunder, each payment by a Borrower on account of
any Facility Fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by a Borrower on account of
principal of and interest on the Loans shall be made pro rata according to the
respective outstanding principal amounts of such Loans then held by the Lenders.
All payments hereunder of principal or interest in respect of any Loan shall be
made in the currency of such Loan. All payments in respect of Reimbursement
Obligations, interest thereon and Letter of Credit commissions with respect to a
Letter of Credit shall be made in the currency of such Letter of Credit. All
other payments hereunder and under each other Loan Document shall be made in
Dollars. Except as otherwise set forth herein, all payments (including
prepayments) to be made by a Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off,
deductions or counterclaim and shall be made prior to 12:00 Noon, New York City
time, on the due date thereof to the Administrative Agent, for the account of
the applicable Lenders, at the Administrative Agent's office specified in
subsection 12.2, in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders holding obligations on account of which
such amounts were paid promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
32
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a Borrowing that such Lender will not make the
amount that would constitute its relevant Commitment Percentage of such
Borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. If such amount is
not made available to the Administrative Agent by the required time on the
borrowing date therefor, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon, for each day from and including the
date such amount is made available to such Borrower to but excluding the date of
payment to the Administrative Agent, at (x) the Federal Funds Effective Rate (in
the case of a Borrowing in Dollars) and (y) the rate reasonably determined by
the Administrative Agent to be the cost to it of funding such amount (in the
case of a Borrowing in an Alternative Currency). A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection 4.10 shall be conclusive in the absence of manifest error.
If such Lender's relevant Commitment Percentage of such Borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such borrowing date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the applicable Borrower. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
4.11 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurocurrency Loans in any Committed Currency as contemplated by
this Agreement, (a) the commitment of such Lender hereunder to make Eurocurrency
Loans in such Committed Currency, continue Eurocurrency Loans in such Committed
Currency as such and, if the affected currency is Dollars, convert ABR Loans to
Eurocurrency Loans shall forthwith be canceled and (b) such Lender's Loans then
outstanding as Eurocurrency Loans, if any, shall be either (i) converted
automatically to ABR Loans (if such Eurocurrency Loans were denominated in
Dollars) or (ii) repaid on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion or repayment of a Eurocurrency Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the applicable Borrower shall pay to such Lender such amounts, if any,
as may be required pursuant to subsection 4.14.
4.12 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
33
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Note or any
Eurocurrency Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by subsection 4.13 and changes in the rate of net income
taxes or franchise taxes (imposed in lieu of net income taxes) of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Adjusted LIBO Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurocurrency Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the applicable Borrower with respect to such
Eurocurrency Loans or Letters of Credit shall promptly pay (or cause to be paid
to) such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law, if compliance
therewith is a customary banking practice) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Company (on
its own behalf or on behalf of Reebok UK and ▇▇▇▇▇) shall promptly pay (or cause
to be paid) to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection 4.12, it shall promptly notify the Company,
the Administrative Agent and (in the case of a claim under this subsection 4.12
only with respect to Loans owing by or Letters of Credit issued for the account
of Reebok UK) Reebok UK of the event by reason of which it has become so
entitled. A certificate as to any additional
34
amounts payable pursuant to this subsection 4.12 submitted by such Lender to the
Borrower owing such amounts (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. The agreements in this subsection
4.12 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
4.13 Taxes. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrowers shall not be required to
increase any such amounts payable (i) to any Lender that is not organized under
the laws of the United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this subsection or (ii) any
Lender that is entitled to an exemption from or reduction of Non-Excluded Taxes
in the United Kingdom if such Lender fails to comply with the requirements of
paragraph (c) of this subsection. Whenever any Non-Excluded Taxes are payable by
a Borrower, as promptly as possible thereafter such Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
such Borrower showing payment thereof. If a Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection 4.13 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
35
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) deliver to the Company and the Administrative Agent two
duly completed copies of United States Internal Revenue Service Form
W-8BEN or W- 8ECI, or successor applicable form, as the case may be;
(ii) deliver to the Company and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Company; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Company or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Company and the
Administrative Agent. Such Lender shall certify (i) that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) that it is entitled to an exemption
from United States backup withholding tax. Each Person that shall become a
Lender or a Participant pursuant to subsection 12.6 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms
and statements required pursuant to this subsection 4.13, provided that in the
case of a Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
(c) Each Lender that is entitled to an exemption from or
reduction of Non-Excluded Taxes in the United Kingdom shall deliver to the
Company and the Administrative Agent at the time or times prescribed by
applicable English law, such properly completed and executed documentation
prescribed by applicable English law or reasonably requested by the Company as
will permit such payments to be made without withholding or at a reduced rate,
provided that such Lender has received written notice from the Company advising
it of the availability of such exemption or reduction and supplying all
applicable documentation.
(d) If any Lender shall receive a credit or refund from a
taxing authority with respect to, and actually resulting from, an amount of
Non-Excluded Taxes actually paid to or on behalf of such Lender by a Borrower (a
"Tax Credit"), such Lender
36
shall promptly notify such Borrower of such Tax Credit. If such Tax Credit is
received by such Lender in the form of cash, such Lender shall promptly pay to
such Borrower the amount so received with respect to the Tax Credit. If such Tax
Credit is not received by such Lender in the form of cash, such Lender shall pay
the amount of such Tax Credit not later than the time prescribed by applicable
law for filing the return (including extensions of time) for such Lender's
taxable period which includes the period in which such Lender receives the
economic benefit of such Tax Credit. In any event, the amount of any Tax Credit
payable by a Lender to a Borrower pursuant to this clause (d) shall not exceed
the actual amount of cash refunded to, or credits received and usable (in
accordance with the actual practices then in use by such Lender) by, such Lender
from a taxing authority. In determining the amount of any Tax Credit, a Lender
may use such apportionment and attribution rules as such Lender customarily
employs in allocating taxes among its various operations and income sources and
such determination shall be conclusive absent manifest error. Each Borrower
further agrees promptly to return to a Lender the amount paid to such Borrower
with respect to a Tax Credit by such Lender if such Lender is required to repay,
or is determined to be ineligible for, a Tax Credit for such amount.
Notwithstanding anything to the contrary contained herein, each Borrower hereby
acknowledges and agrees that (i) neither the Administrative Agent nor any Lender
shall be obligated to provide such Borrower with details of the tax position of
the Administrative Agent or such Lender (as the case may be) and (ii) such
Borrower shall have no right to inspect any records (including tax returns) of
the Administrative Agent or such Lender (as the case may be).
4.14 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
Borrowing of, conversion into or continuation of Eurocurrency Loans after such
Borrower has given a Notice of Borrowing requesting the same in accordance with
the provisions of this Agreement, (b) default by such Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making by such Borrower of a prepayment
of Eurocurrency Loans on a day which is not the last day of an Interest Period
with respect thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
37
4.15 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under subsection 4.12 or 4.13(a), or if any
adoption or change of the type described in subsection 4.11 shall occur with
respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its good faith discretion) to
designate a different lending office if the making of such a designation would
reduce or obviate the need for a Borrower to make payments under subsection
4.12, 4.13(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 4.11.
4.16 Additional Action in Certain Events. (a) In the event
that any event or condition described in subsection 4.11, 4.12 or 4.13(a) has
occurred and is continuing that increases the cost to a Borrower of the Loans by
any Lender, the Company may (after paying any accrued amounts required to be
paid pursuant to subsection 4.11, 4.12 or 4.13(a) hereof, as the case may be,
for the period prior to the taking of such action) require any Lender so
affected by such event or condition to transfer or assign, in whole (but not in
part), without recourse, its Commitments and Loans hereunder in accordance with
the provisions of subsection 12.6(c) to one or more Assignees (which need not be
existing Lenders hereunder, but which may not request payment from such Borrower
of any such amounts on account of the same event or condition which affects the
assigning Lender) identified to it by the Company.
(b) In the event that any Lender shall fail to execute and
deliver any amendment, supplement or modification hereto requested by the
Company, the Company may (within 30 days following the requested response date
for such amendment, supplement or modification) require such Lender to transfer
or assign, in whole (but not in part), without recourse, its Commitments and
Loans hereunder in accordance with the provisions of subsection 12.6(c) to one
or more Assignees (which need not be existing Lenders hereunder, but which must
be willing to execute and deliver such amendment, supplement or modification)
identified to it by the Company.
(c) Notwithstanding the foregoing provisions of this
subsection 4.16, no Lender shall be required to assign all or any portion of its
Commitments and Loans pursuant to this subsection 4.16 unless and until such
Lender shall have received from such Assignees one or more payments which, in an
aggregate, are at least equal to the aggregate outstanding principal amount of
the Loans owing to such Lender and all accrued interest and other amounts owing
on account thereof. Any assignment made pursuant to this subsection 4.16 shall
constitute a prepayment for purposes of, and shall be subject to the provisions
of, subsection 4.14.
4.17. Extension of Commitments. (a) Upon prior written
------------------------
notice (an "Extension Notice") to the Administrative Agent delivered not less
----------------
than 60 days nor more than 90 days prior to the Initial Termination Date,
the Company may elect to extend the
38
Termination Date to a date no later than 18 months after the Initial Termination
Date, as specified in such Extension Notice (the "Extension Period"), provided,
that (i) no Default or Event of Default shall have occurred and be continuing on
the date of the Extension Notice or the Initial Termination Date, (ii) the
representations and warranties set forth in Section 5 shall be true and correct
in all material respects as if made on the date of such Extension Notice and the
Initial Termination Date and (iii) the Administrative Agent shall have received
a certificate, dated the Initial Termination Date and signed by a Responsible
Officer of each Borrower, confirming compliance with the conditions precedent
set forth in clauses (i) and (ii) of this paragraph (a).
(b) Notwithstanding the foregoing, if the Agents determine, in
their reasonable judgment after consultation with the Company, on or prior to
the date that is 30 days before the commencement of the Extension Period, that
the Applicable Margins and/or the Facility Fees are below those that would apply
to the Extensions of Credit and the Commitments hereunder if this Agreement were
then being reexecuted and the Commitments resyndicated, then the Applicable
Margins and the Facility Fees shall be deemed to be amended to be such higher
Applicable Margins and Facility Fees as the Agents shall reasonably determine;
provided, however, that such amendment shall require the consent of the Company,
which consent will not be unreasonably withheld, if it would result in the drawn
cost or the undrawn cost to the Borrowers of the credit facilities provided for
hereunder to exceed the LPC Comparable Pricing by more than 12.5 basis points or
5 basis points, respectively. Any amendment to the Applicable Margins and/or the
Facility Fees that may be made without the consent of the Company as provided
for in this paragraph shall be evidenced by a written notice thereof by the
Administrative Agent to the Borrowers and the Lenders, and such amendment and
the determinations of the Agents pursuant to this subsection 4.17 shall be
conclusive in the absence of manifest error.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make
the Loans, each of the Company and (to the extent that such representation and
warranty pertains to matters applicable to Reebok UK, ▇▇▇▇▇ or any of their
respective Subsidiaries) Reebok UK and ▇▇▇▇▇ hereby represents and warrants to
the Agents and each Lender that:
5.1 Financial Condition. (a) The consolidated balance sheet of
the Company and its consolidated Subsidiaries as at December 31, 2001 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by Ernst & Young LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly in all material respects the consolidated financial condition of the
Company and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year then ended. The unaudited consolidated balance sheet of the
39
Company and its consolidated Subsidiaries as at March 31, 2002 and the related
unaudited consolidated statements of income and of cash flows for the
three-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly in all material respects the consolidated financial
condition of the Company and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the three-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes).
(b) All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither any Borrower nor any of their consolidated Subsidiaries had,
at the date of the most recent balance sheet referred to above with respect to
such Borrower, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto. Except to the extent permitted under this Agreement or
separately disclosed to the Lenders in writing prior to the date hereof, there
has been no sale, transfer or other disposition by any Borrower or any of their
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
Capital Stock of any other Person) material in relation to the consolidated
financial condition of such Borrower and its consolidated Subsidiaries at
December 31, 2001 during the period from December 31, 2001 to and including the
date hereof.
5.2 No Change. Since December 31, 2001, there has been
---------
no development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
5.3 Disclosure. No information, schedule, exhibit or report or
other document furnished by any Borrower or any of their respective Subsidiaries
to the Agents or any Lender in connection with the negotiation of this Agreement
or any other Loan Document (or pursuant to the terms hereof or thereof), as such
information, schedule, exhibit or report or other document has been amended,
supplemented or superseded by any other information, schedule, exhibit or report
or other document later delivered to the same parties receiving such
information, schedule, exhibit or report or other document, contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein, in light of the
circumstances when made, not materially misleading.
40
5.4. Corporate Existence; Compliance with Law. Each of the
Borrowers and their respective Subsidiaries (a) is duly organized, validly
existing and (in the case of the Company and its Material Subsidiaries) in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) in the case of the Company and
its Material Subsidiaries, is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that all failures to be so qualified could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
all failures to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.5 Corporate Power; Authorization; Enforceable Obligations.
Each Borrower has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and to
borrow hereunder and, in the case of the Account Parties, to request the
issuance of Letters of Credit hereunder, and has taken all necessary corporate
action to authorize the Borrowings on the terms and conditions of this Agreement
and any Notes and to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and with respect to the Letters of Credit
issued for its account. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or any other Person
is required in connection with the Borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
such Borrower is a party and with respect to the Letters of Credit issued for
its account. This Agreement has been, and each other Loan Document to which it
is a party will be, duly executed and delivered on behalf of such Borrower. This
Agreement constitutes, and each other Loan Document to which it is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Borrower enforceable against such Borrower in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
5.6 No Legal Bar. The execution, delivery and performance of
the Loan Documents to which each Borrower is a party, the issuance of Letters of
Credit, the Borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or Contractual Obligation of such Borrower or of
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
41
5.7 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of any Borrower, threatened by or against such Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.8 No Default. None of the Borrowers or any of its respective
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.9 Ownership of Property; Liens. Each of the Company, each of
its Material Subsidiaries, Reebok UK and ▇▇▇▇▇ has good record and marketable
title in fee simple to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other property, and
none of such property is subject to any Lien except as permitted by subsection
8.2.
5.10 Intellectual Property. Each Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted, except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property which, if accurate, could
reasonably be expected to have a Material Adverse Effect, nor does any Borrower
know of any valid basis for any such claim. To the best knowledge of each
Borrower, the use of such Intellectual Property by such Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.11 Taxes. Each of the Company, each of its Material
Subsidiaries, Reebok UK and ▇▇▇▇▇ has filed or caused to be filed all tax
returns which, to the knowledge of each Borrower are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Company or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of each Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
42
5.12 Federal Regulations. No part of the proceeds of any
Loans, and no other extensions of credit hereunder, will be used in any manner
which would violate, or result in the violation of, Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. If requested by any Lender or the Administrative Agent, each Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred to
in said Regulation U.
5.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Company nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Company or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Company and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits by an amount in excess of $10,000,000.
5.14 Investment Company Act; Other Regulations. None of the
Borrowers is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. None of the Borrowers is subject to regulation under any Federal or
State statute or regulation (other than Regulation X of the Board of Governors
of the Federal Reserve System) which limits its ability to incur Indebtedness.
5.15 Subsidiaries. Schedule III hereto sets forth all of
------------
the Subsidiaries of the Company at the date hereof.
43
5.16 Environmental Matters. (a) The facilities and properties
owned, leased or operated by the Company or any of its Material Subsidiaries or
any of its first- tier Foreign Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern in
amounts or concentrations which (i) constitute or constituted a violation of, or
(ii) could reasonably be expected to give rise to liability under, any
Environmental Law, except in either case insofar as such violation or liability,
or any aggregation thereof, is not reasonably likely to result in the payment of
a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last 3 years been in compliance, in all material
respects with all applicable Environmental Laws, and there is no contamination
at or under (or, to the knowledge of any Borrower, about) the Properties or
violation of any Environmental Law with respect to the Properties or the
business operated by the Company or any of its Material Subsidiaries or any of
its first-tier Foreign Subsidiaries (the "Business"), except insofar as such
violation or failure to be in compliance or contamination, or any aggregation
thereof, is not reasonably likely to result in the payment of a Material
Environmental Amount.
(c) None of the Borrowers nor any of their respective
Subsidiaries has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does any Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened, except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to result in the payment of a
Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law, except insofar
as any such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of any Borrower, threatened, under any
Environmental Law to which the Company or any of its Material Subsidiaries or
any of its first-tier Foreign Subsidiaries is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
44
Environmental Law with respect to the Properties or the Business, except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of any Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably give rise to liability under
Environmental Laws, except insofar as any such violation or liability referred
to in this paragraph, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial Extension of Credit requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Credit Agreement. The Administrative Agent (or its
counsel) shall have received from each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) Legal Opinions. The Administrative Agent shall have
received, on behalf of itself, the Lenders and the Issuing Bank, a favorable
written opinion of each of (i) Ropes & ▇▇▇▇, counsel of the Company,
substantially to the effect set forth in Exhibit E-1, (ii) Macfarlanes, counsel
for Reebok UK and ▇▇▇▇▇, substantially to the effect set forth in Exhibit E-2,
and (iii) ▇▇▇▇▇ ▇. ▇▇▇▇, General Counsel of the Company, substantially to the
effect set forth in Exhibit E-3, (A) dated the Closing Date, (B) addressed to
the Issuing Bank, the Administrative Agent and the Lenders, and (C) covering
such other matters relating to this Agreement and the transactions contemplated
hereby as the Administrative Agent shall reasonably request, and the Borrowers
hereby request such counsel to deliver such opinions. The Administrative Agent
shall have received, on behalf of itself, the Lenders and the Issuing Bank, the
written opinion of Cravath, Swaine & ▇▇▇▇▇, special counsel for the
Administrative Agent, substantially to the effect set forth in Exhibit E-4,
dated the Closing Date and addressed to the Issuing Bank, the Administrative
Agent and the Lenders.
(c) Corporate Documents. The Administrative Agent shall
-------------------
have received (i) a copy of the certificate of incorporation or memorandum and
articles of association, as the case may be, including all amendments thereto,
of each Borrower,
45
certified as of a recent date by (A) the Secretary of the Commonwealth of
Massachusetts (in the case of the Company), and (B) by the Assistant Registrar
of Companies, in the case of Reebok UK and ▇▇▇▇▇, and a certificate as to the
good standing of the Company as of a recent date by the Secretary of the
Commonwealth of Massachusetts; (ii) a certificate of the Secretary or Assistant
Secretary of each Borrower dated the Closing Date and certifying (w) in the case
of the Company, that attached thereto is a true and complete copy of the by-laws
of the Company as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (x) below, (x) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors (or the Executive Committee thereof) of such Borrower,
authorizing the execution, delivery and performance of this Agreement and the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (y) that the certificate
of incorporation or memorandum and articles of association of such Borrower have
not been amended since the date of the last amendment thereto shown on the
certificate furnished pursuant to clause (i) above, and (z) as to the incumbency
and specimen signature of each officer executing this Agreement or any other
document delivered in connection herewith on behalf of such Borrower; (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents relating to the Borrowers, this Agreement
or the transactions contemplated hereby as the Lenders, the Issuing Bank or the
Administrative Agent may reasonably request.
(d) Officers' Certificates. The Administrative Agent shall
have received a certificate, dated the Closing Date and signed by a Responsible
Officer of each Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (a) and (b) of subsection 6.2.
(e) Fees. The Administrative Agent shall have received all
fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder.
(f) Existing Credit Agreement. All principal, interest, fees
and other amounts outstanding or due under the Existing Credit Agreement shall
have been paid in full, the commitments thereunder terminated and all guarantees
thereof released and discharged, and the Administrative Agent shall have
received satisfactory evidence thereof.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any Extension of Credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
46
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrowers in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall
----------
have occurred and be continuing on such date or after giving effect to the
Extensions of Credit requested to be made on such date.
Each Borrowing by and issuance of a Letter of Credit for the account of the
Borrowers hereunder shall constitute a representation and warranty by the
Borrowers as of the date thereof that the conditions contained in this
subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any amount is
owing to any Lender or an Agent hereunder or under any other Loan Document, the
Company shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender and the
--------------------
Administrative Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Company, the unaudited consolidated balance sheet of the Company and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Company and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year- end audit adjustments);
47
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to each
-------------------------------
Lender and the Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a Responsible
Officer (i) stating that, to the best knowledge of such Responsible Officer,
each Borrower has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) setting forth the computations used by
the Company in determining (as of the end of such fiscal period) compliance with
the covenants contained in subsection 8.1;
(c) within five days after the same are sent, copies of all
financial statements and reports which the Company sends to its stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Company may make to, or file with, the
Securities and Exchange Commission or any successor or analogous Governmental
Authority; and
(d) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity in accordance with customary terms or before they
become delinquent, as the case may be, all of its material obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
its Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence.
------------------------------------------------
Continue to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to
48
maintain all rights, privileges and franchises necessary or (in the reasonable
judgment of the Company) desirable in the normal conduct of its business except
as otherwise permitted pursuant to subsection 8.3; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.
7.5 Maintenance of Property; Insurance; Trademark License. (a)
Keep all property useful and necessary in its business in good working order and
condition; maintain with financially sound and reputable insurance companies
insurance on all its material property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to each Lender,
upon written request, full information as to the insurance carried.
(b) Keep in full force and effect, and comply in all material
respects with the terms of, a license agreement between the Company and any
wholly-owned Subsidiary of the Company or of Reebok UK which is substantially
similar in form and substance to the License Agreement, dated as of August 6,
1979, between the Company (as successor to Reebok U.S.A. Limited, Inc.) and
Reebok UK, as the same may be amended, supplemented or otherwise modified in a
manner which could not reasonably be expected to have a Material Adverse Effect.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time (upon reasonable advance notice, when no Default or Event of Default has
occurred and is continuing) and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Company and its Subsidiaries with officers and employees of the Company
and its Subsidiaries and with its independent certified public accountants.
7.7 Notices. Promptly give notice to the Administrative
-------
Agent (which shall give prompt notice thereof to the Lenders) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
49
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $10,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought which
could have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Company or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan;
(e) any change in the Credit Rating of the Company
promptly upon the effectiveness thereof; and
(f) the occurrence of (i) any material adverse change in the
business, operations, property, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole or (ii) any development or
event which could reasonably be expected to have a material adverse effect on
the rights or remedies of the Administrative Agent or the Lenders hereunder or
under any of the other Loan Documents.
Each notice pursuant to this subsection 7.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company proposes to take with respect
thereto.
7.8 Environmental Laws. (a) Comply with, and use reasonable
efforts to ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and use
reasonable efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws, except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
50
SECTION 8. NEGATIVE COVENANTS
The Borrowers hereby agree that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any amount is
owing to any Lender or an Agent hereunder or under any other Loan Document, the
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Financial Condition Covenants.
-----------------------------
(a) Indebtedness to EBITDA. Permit the ratio of (i) total
Indebtedness of the Company and its Subsidiaries on a consolidated basis at any
date minus cash and cash equivalents then held by the Company and its
Subsidiaries to the extent that such cash and cash equivalents are in excess of
$50,000,000 to (ii) EBITDA of the Company and its Subsidiaries on a consolidated
basis for the period of four consecutive fiscal quarters most recently ended
prior to such date for which the Company has delivered the financial statements
contemplated by subsection 7.1(a) or (b), as the case may be, to be greater than
3.00 to 1.00.
(b) Interest Coverage. Permit, for any period of four
consecutive fiscal quarters most recently ended, the ratio of (i) EBITDA of the
Company and its Subsidiaries on a consolidated basis for such period to (ii) the
amount of interest expense, both expensed and capitalized, of the Company and
its Subsidiaries, determined on a consolidated basis in accordance with GAAP,
for such period on the aggregate principal amount of their consolidated
Indebtedness, to be less than 3.00 to 1.00.
8.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP (or, in the case of Foreign
Subsidiaries, generally accepted accounting principles in effect from time to
time in their respective jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 90 days or which are being contested
in good faith by appropriate proceedings;
51
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Company or any Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
IV, provided that no such Lien is spread to cover any additional property after
the date hereof and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries incurred to finance or refinance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets (or, in the
case of any refinancing, secured the Indebtedness being refinanced) or within 90
days following such acquisition, (ii) such Liens do not at any time encumber any
property other than the property originally financed by such Indebtedness and
(iii) the amount of Indebtedness secured thereby is not increased;
(h) Liens on assets of any Foreign Subsidiary securing
Indebtedness or Guarantee Obligations of such Foreign Subsidiary; provided that
the aggregate maximum amount of Indebtedness and Guarantee Obligations which may
be secured by Liens incurred in reliance upon this subsection 8.2(h) (other than
Liens on cash or cash equivalents of Foreign Subsidiaries securing Indebtedness
for borrowed money of such Foreign Subsidiaries, the proceeds of which are
onlent to the Company, Reebok UK or a Domestic Subsidiary) shall be $25,000,000
at any one time outstanding;
(i) Liens securing Indebtedness in the nature of reimbursement
obligations on account of commercial letters of credit which encumber only the
assets acquired or shipped with the support of such commercial letter of credit;
(j) Liens on the property or assets of a Person which becomes
a Subsidiary after the date hereof securing Indebtedness of such Subsidiary
which existed at the date of acquisition and was not incurred in anticipation
thereof; provided that (i) such Liens existed at the time such Person became a
Subsidiary and were not created in
52
anticipation thereof, (ii) any such Lien is not spread to cover any additional
property or assets of such Person (or the property or assets of the Company or
any other Subsidiary) after the time such Person becomes a Subsidiary, and (iii)
the amount of Indebtedness secured thereby is not increased;
(k) Liens on accounts receivable (and related records and
rights) that are sold by the Company or any of its Subsidiaries to a special
purpose entity (an "SPE") pursuant to a "true sale" securitization program, the
proceeds of which are made available, directly or indirectly, to the Company or
any of its Subsidiaries; provided that no related Indebtedness is recourse to
the Company or any of its Subsidiaries (other than the SPE to which such
receivables are sold); and
(l) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries) $25,000,000
in aggregate amount at any time outstanding.
8.3 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation to which it is not the continuing or surviving
corporation, or liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution), except that any Subsidiary of a Borrower may be merged or
consolidated with or liquidated into such Borrower (provided that (a) such
Borrower shall be the continuing or surviving corporation and (b) in the case of
a merger or consolidation of Reebok UK or ▇▇▇▇▇ with or liquidation into the
Company, the Company shall be the continuing or surviving corporation) or with
or into any one or more wholly owned Subsidiaries of the Company (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing or surviving
corporation).
8.4 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of all or substantially all of the property,
business or assets (including, without limitation, receivables and leasehold
interests) of the Company and its Subsidiaries taken as a whole, whether now
owned or hereafter acquired, in any single transaction or any series of related
transactions. Notwithstanding the foregoing provisions of this subsection 8.4,
the trademark "Reebok" shall at all times be subject to a valid license
agreement in favor of the Company having terms substantially similar to the
License Agreement described in subsection 7.5(b).
8.5 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's-length transaction with
a Person which is not an Affiliate (it being understood that
53
(i) such fairness and reasonableness shall, in the case of arrangements with
joint ventures with unaffiliated third parties, be determined in the context of
all arrangements between the Company and its Subsidiaries, on the one hand, and
such joint venture, on the other hand and (ii) this subsection 8.5 shall not
prohibit the transactions with Onfield Apparel Group LLC described on Schedule
V).
8.6 Limitation on Changes in Fiscal Year. Permit the
------------------------------------
fiscal year of the Company to end on a day other than the Saturday nearest to
December 31st or December 31st.
8.7 Limitation on Lines of Business. (a) Enter into any
business, either directly or through any Subsidiary, except for (i) the design
and marketing of sports, leisure and fitness products and services, including
footwear, apparel, accessories, equipment and videos, (ii) the design and
marketing of footwear, apparel and accessories for non-athletic use, (iii) the
businesses in which the Company and its Subsidiaries are engaged on the date
hereof and businesses of a similar type and (iv) other activities relating
thereto.
(b) In the case of ▇▇▇▇▇, (i) engage in any business or
conduct any operations other than those related to its acting as a special
purpose finance Subsidiary of the Company or (ii) have any material liabilities
other than its liabilities under the Loan Documents.
SECTION 9. GUARANTEE
9.1 Guarantee. In order to induce the Lenders, the Issuing
Bank, and the Agents to execute and deliver this Agreement and to make the Loans
hereunder, and in consideration thereof:
(a) The Company hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Lenders
and the Issuing Bank, the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the UK
Obligations and the ▇▇▇▇▇ Obligations. The Company further agrees to pay any and
all expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by the Agents or by the
Lenders in enforcing, or obtaining advice of counsel in respect of, any of their
rights under this Section 9. Without limiting the generality of the foregoing,
the Company's liability shall extend to all amounts that constitute part of the
UK Obligations or the ▇▇▇▇▇ Obligations and would be owed by Reebok UK or ▇▇▇▇▇,
respectively, but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
Reebok UK or ▇▇▇▇▇, respectively. This Guarantee shall remain in full force and
effect until all the UK Obligations and the ▇▇▇▇▇ Obligations have been paid in
full, notwithstanding that from time to time prior thereto
54
Reebok UK or ▇▇▇▇▇ may be free from any UK Obligations or ▇▇▇▇▇ Obligations,
respectively.
(b) The Company agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability under this Section 9, it will notify the
Administrative Agent or such Lender in writing that such payment is made under
this Section 9 for such purpose. No payment or payments made by Reebok UK, ▇▇▇▇▇
or any other Person or received or collected by the Administrative Agent or any
Lender from Reebok UK, ▇▇▇▇▇ or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application, at any time or from
time to time, in reduction of or in payment of the UK Obligations or the ▇▇▇▇▇
Obligations, as the case may be, shall be deemed to modify, reduce, release or
otherwise affect the liability of the Company hereunder which shall remain
obligated hereunder, notwithstanding any such payment or payments (other than
payments made by or received or collected from the Company in respect of the UK
Obligations or the ▇▇▇▇▇ Obligations) until the date upon which the UK
Obligations and the ▇▇▇▇▇ Obligations have been paid in full and the Commitments
have been terminated.
9.2 Right of Setoff. Upon the occurrence and continuance of
any Event of Default, the Administrative Agent and each Lender are hereby
irrevocably authorized by the Company at any time and from time to time without
notice to the Company, any such notice being hereby waived by the Company, to
set off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of the Company, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, on account of the liabilities of
the Company hereunder and claims of every nature and description of the
Administrative Agent or such Lender against the Company, in any currency,
whether arising hereunder or any other Loan Document or otherwise, as the
Administrative Agent or such Lender may elect, whether or not the Administrative
Agent or such Lender has made any demand for payment and although such
liabilities and claims may be contingent or unmatured. The Administrative Agent
and each Lender shall notify the Company promptly of any such setoff made by it
and the application made by it of the proceeds thereof; provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Administrative Agent and each Lender under this
subsection are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Administrative Agent or such
Lender may have.
9.3 No Subrogation. Notwithstanding any payment or
--------------
payments made by the Company hereunder, or any setoff or application of funds
of the Company by the Administrative Agent or any Lender, the Company shall not
be entitled to be subrogated
55
to any of the rights of the Administrative Agent or any Lender against Reebok
UK, ▇▇▇▇▇ or against any collateral security or guarantee or right of offset
held by the Administrative Agent or any Lender for the payment of the UK
Obligations or the ▇▇▇▇▇ Obligations, nor shall the Company seek or be entitled
to seek any contribution or reimbursement from Reebok UK or ▇▇▇▇▇ in respect of
payments made by the Company hereunder, until the UK Obligations and the ▇▇▇▇▇
Obligations, respectively, have been paid in full. If any amount shall be paid
to the Company on account of such subrogation rights at any time when all of the
UK Obligations and the ▇▇▇▇▇ Obligations shall not have been paid in full, such
amount shall be held by the Company in trust for the Administrative Agent and
the Lenders, segregated from other funds of the Company, and shall, forthwith
upon receipt by the Company, be turned over to the Administrative Agent in the
exact form received by the Company (duly indorsed by the Company to the
Administrative Agent, if required), to be applied against the UK Obligations or
the ▇▇▇▇▇ Obligations, as the case may be, whether matured or unmatured, in such
order as the Administrative Agent may determine.
9.4 Amendments, etc. The Company shall remain obligated
hereunder notwithstanding that, without any reservation of rights against the
Company, and without notice to or further assent by the Company, any demand for
payment of any of the UK Obligations or the ▇▇▇▇▇ Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the UK Obligations or the ▇▇▇▇▇ Obligations
continued, and the UK Obligations, the ▇▇▇▇▇ Obligations or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement, any other Loan Document and any other documents
executed and delivered in connection herewith or therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lenders may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the UK Obligations or the ▇▇▇▇▇ Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent nor
any Lender shall have any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the UK Obligations or the ▇▇▇▇▇
Obligations, as the case may be, or pursuant to this Section 9 or any property
subject thereto.
9.5 Guarantee Absolute and Unconditional. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
UK Obligations or the ▇▇▇▇▇ Obligations and notice of or proof of reliance by
the Administrative Agent or any Lender upon the guarantee contained in this
Section 9 or acceptance of the guarantee provisions of this Section 9; the UK
Obligations, the ▇▇▇▇▇ Obligations and any of them, shall conclusively be deemed
to have been created, contracted or incurred in reliance upon the guarantee
contained in this Section 9; and all dealings between Reebok UK, ▇▇▇▇▇ or the
Company, on the one hand, and the Administrative Agent and the Lenders, on the
56
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon the guarantee contained in this Section 9. The Company waives
(to the extent permitted by law) diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon Reebok UK, ▇▇▇▇▇ or the
Company with respect to the UK Obligations and the ▇▇▇▇▇ Obligations. The
guarantee contained in this Section 9 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement, any other Loan Document or any of
the documents executed in connection herewith or therewith, any of the UK
Obligations, the ▇▇▇▇▇ Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense (including,
without limitation, any statute of limitations), setoff or counterclaim (other
than a defense of payment or performance) which may at any time be available to
or be asserted by Reebok UK or ▇▇▇▇▇ against the Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of Reebok UK, ▇▇▇▇▇ or the Company) which constitutes, or might be
construed to constitute, an equitable or legal discharge of Reebok UK for the UK
Obligations, of ▇▇▇▇▇ for the ▇▇▇▇▇ Obligations, or of the Company under the
guarantee contained in this Section 9, in bankruptcy or in any other instance.
When the Administrative Agent or any Lender is pursuing its rights and remedies
hereunder against the Company, the Administrative Agent or any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may have
against Reebok UK, ▇▇▇▇▇ or any other Person or against any collateral security,
guarantee for the UK Obligations, guarantee for the ▇▇▇▇▇ Obligations or any
right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from Reebok UK, ▇▇▇▇▇ or any such other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of Reebok UK, ▇▇▇▇▇ or any such other Person or of any such
collateral security, guarantee or right of offset, shall not relieve the Company
of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent and the Lenders against the Company.
9.6 Reinstatement. The guarantee contained in this Section 9
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the UK Obligations or the ▇▇▇▇▇
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Reebok UK or ▇▇▇▇▇, respectively, or upon or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, Reebok UK or ▇▇▇▇▇ or any substantial part of
its property, or otherwise, all as though such payments had not been made.
9.7 Payments. The Company hereby agrees that the amounts
--------
payable by the Company hereunder will be paid to the Administrative Agent
without setoff
57
or counterclaim in immediately available funds in the same currency as the
underlying UK Obligation or ▇▇▇▇▇ Obligation in respect of which payment is
being made at the office of the Administrative Agent listed in subsection 12.2
or at such other office as the Administrative Agent shall designate in writing
to the Company.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms thereof or hereof; or any Borrower shall
fail to pay any interest on any Loan, or any other amount payable hereunder,
within five Business Days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Borrower herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Company shall default in the observance or
performance of any agreement contained in Section 8; or
(d) Any Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section
10, and such default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which an executive officer of any Borrower has
actual knowledge thereof and (ii) the date upon which the Administrative Agent
or any Lender gives notice to the Company thereof; or
(e) The Company or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation or in any net payment under
any interest rate protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest rate or currency exchange
or commodity price arrangement (collectively "Hedging Obligations"), beyond the
period of grace (not to exceed 60 days), if any, provided in the instrument or
agreement under which such Indebtedness, Guarantee Obligation or Hedging
Obligation was created; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness, Guarantee
Obligation or Hedging Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist,
58
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or Hedging Obligation or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice or the passage of time if required, such Indebtedness
or Hedging Obligation to become due prior to its stated maturity or such
Guarantee Obligation to become payable; provided, however, that no Default or
Event of Default shall exist under this paragraph unless the aggregate amount of
Indebtedness, Guarantee Obligations and/or Hedging Obligations in respect of
which any default or other event or condition referred to in this paragraph
shall have occurred shall be equal to at least $10,000,000; or
(f) (i) Any Borrower or any Material Subsidiary shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
Borrower or any Material Subsidiary shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any Borrower
or any Material Subsidiary any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Borrower or any Material Subsidiary any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) any Borrower or any Material Subsidiary shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) any Borrower or any Material Subsidiary shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the
59
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company
or any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other adverse event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to involve an aggregate amount of liability to the
Company or any Material Subsidiary in excess of $10,000,000; or
(h) One or more judgments or decrees shall be entered against
one or more Borrowers or Material Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $10,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) the guarantee set forth in Section 9 shall cease, for
any reason, to be in full force and effect or the Company shall so assert; or
(j) (i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, but other
than the Fireman Group) (A) shall have acquired beneficial ownership of 20% or
more of any outstanding class of Capital Stock having ordinary voting power in
the election of directors of the Company or (B) shall obtain the power (whether
or not exercised) to elect a majority of the Company's directors or (ii) the
Board of Directors of the Company shall not consist of a majority of Continuing
Directors; "Continuing Directors" shall mean the directors of the Company on the
date hereof and each other director, if such other director's nomination for
election to the Board of Directors of the Company is recommended by a majority
of the then Continuing Directors; or
(k) the Company shall not own, directly or indirectly, (i) all
of the issued and outstanding Capital Stock (other than directors' qualifying
shares and one share of such Capital Stock which is owned of record by Credit
Suisse First Boston Corporation) of Reebok UK or (ii) all the issued and
outstanding Capital Stock (other than directors' qualifying shares) of ▇▇▇▇▇;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section 10 with respect to a
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other
60
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrowers declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the applicable Account Party shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. The Account Parties hereby grant to the Administrative Agent,
for the benefit of the Issuing Banks and the L/C Participants, a security
interest in such cash collateral to secure all obligations under this Agreement
and the other Loan Documents. Amounts held in such cash collateral account shall
be applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrowers hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrowers hereunder and under the other Loan Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Account Parties (or such other Person as may be
lawfully entitled thereto). Except as expressly provided above in this Section
10, presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 11. THE AGENTS
11.1 Appointment. (a) Each Lender hereby irrevocably
designates and appoints Credit Suisse First Boston as the Administrative Agent
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with
61
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto hereby agree that (i) the Co-Documentation Agents
shall have no rights, duties, responsibilities or liabilities in its capacity as
such and that the Co- Documentation Agents shall not have the authority to take
any action hereunder in its capacity as such, and (ii) the only rights, duties
and responsibilities of the Syndication Agent in its capacity as such hereunder
are described in subsection 4.17, and in acting thereunder, the Syndication
Agent shall be entitled to be indemnified, held harmless and exculpated by the
Borrowers and the Lenders to the same extent as if the Syndication Agent were
the Administrative Agent hereunder.
11.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through any one or more sub-agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any sub-agent or attorneys-in-fact selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, sub-agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of a Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Borrower.
11.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon
62
advice and statements of legal counsel (including, without limitation, counsel
to any Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, sub-agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrowers, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and
63
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrowers. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrowers which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, sub-agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent, the Syndication Agent and the Co-Documentation Agents in
their respective capacities as such (to the extent not reimbursed by the
Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent, the
Syndication Agent or the Co-Documentation Agents (as the case may be) in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent, the Syndication Agent or the
Co-Documentation Agents (as the case may be) under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the gross negligence or willful misconduct of the Administrative Agent, the
Syndication Agent or the Co-Documentation Agents (as the case may be). The
agreements in this subsection 11.7 shall survive the payment of the Loans and
all other amounts payable hereunder.
11.8 Agents in their Individual Capacities. The Administrative
Agent, the Syndication Agent, the Co-Documentation Agents, and each of their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with each Borrower as though the Administrative
Agent, the Syndication Agent or the Co-Documentation Agents (as the case may be)
were not the Administrative Agent, the Syndication Agent or the Co-Documentation
Agents (as the case may be) hereunder and under the other Loan Documents. With
respect to its Loans made or renewed by it, any Note issued to it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative Agent, the Syndication Agent and the Co-Documentation Agents
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, the Syndication Agent or the Co-Documentation Agents (as
the
64
case may be), and the terms "Lender" and "Lenders" shall include the
Administrative Agent, the Syndication Agent, and the Co-Documentation Agents in
its respective individual capacity.
11.9 Successor Administrative Agent; Resignation of
Co-Documentation Agents. Each of the Agents may resign as an Agent upon 10 days'
notice to the Lenders. If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint from among the Lenders a successor Administrative
Agent for the Lenders, which successor Administrative Agent (provided that it
shall have been approved by the Company), shall succeed to the rights, powers
and duties of the Administrative Agent hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean such
successor Administrative Agent, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.
(b) The Syndication Agent and any Documentation Agent may
resign as such upon 10 days' notice to the Lenders. Upon any such resignation of
the Syndication Agent or any Documentation Agent no successor Syndication Agent
or Documentation Agent shall be appointed hereunder, and in case the Syndication
Agent resigns, the duties and responsibilities of the Syndication Agent provided
for in subsection 4.17 shall be carried out by the Administrative Agent.
(c) After any retiring Administrative Agent's, Syndication
Agent's or Documentation Agent's resignation as Administrative Agent,
Syndication Agent or Documentation Agent (as the case may be), the provisions of
this Section 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent, Syndication Agent or
Documentation Agent (as the case may be) under this Agreement and the other Loan
Documents.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Except as expressly provided in
subsection 4.17, neither this Agreement nor any other Loan Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this subsection 12.1. The Majority Lenders
may, or, with the written consent of the Majority Lenders, the Administrative
Agent may, from time to time, (a) enter into with the Borrowers written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the
Borrowers hereunder or thereunder or (b) waive, on such terms and conditions as
the Majority Lenders or the Agents, as the case may be, may specify in such
65
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall:
(i) reduce the amount or extend the scheduled date of maturity
of any Loan or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's
Commitments, in each case without the consent of each Lender directly
affected thereby;
(ii) amend, modify or waive any provision of this subsection
12.1, or reduce the percentage specified in the definition of Required
Lenders or Majority Lenders, or consent to the assignment or transfer
by a Borrower of any of its rights and obligations under this Agreement
and the other Loan Documents, or release the guarantee provided for in
Section 9, in each case without the written consent of all the Lenders;
(iii) amend, modify or waive any provision of Section 11
without the written consent of the then Administrative Agent and (to
the extent that such amendment, modification or waiver directly affects
the rights or obligations of the Syndication Agent or the
Co-Documentation Agents) the Syndication Agent or the Co-Documentation
Agents, as the case may be; or
(iv) amend, modify or waive any provision of Section 3 without
the written consent of each Issuing Bank directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Borrowers, the Lenders and the Agents shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
12.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile or electronic mail transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) in the case
of delivery by hand, when delivered, (b) in the case of delivery by mail, three
days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile or electronic mail transmission, when sent and receipt has
been confirmed, addressed as follows in the case of the
66
Borrowers and the Administrative Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto:
The Company: Reebok International Ltd.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 781/▇▇▇-▇▇▇▇
with a copy to: Attention: General Counsel
Fax: 781/▇▇▇-▇▇▇▇
Reebok UK: Reebok International Limited
c/o Stephens & Associates
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Company Secretary
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Reebok International Ltd.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 781/▇▇▇-▇▇▇▇
▇▇▇▇▇: Reebok Finance Limited
c/o Stephens & Associates
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Company Secretary
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Reebok International Ltd.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 781/▇▇▇-▇▇▇▇
The Administrative
Agent: Credit Suisse First Boston
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Group
Fax: 212/▇▇▇-▇▇▇▇
67
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 2.2, 3.2, 4.3, 4.4, 4.5, 4.12 or 4.17
shall not be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
12.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
12.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender, the Syndication Agent, the Co-Documentation Agents
and the Administrative Agent and each Related Party of any of the foregoing
(each such Person being called an "Indemnitee") for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of one
counsel to the Lenders (in addition to counsel to the Administrative Agent and
any local counsel), (c) to pay, indemnify, and hold each Indemnitee harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Indemnitee harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and disbursements of counsel) with respect to the
execution, delivery, enforcement, performance and administration of
68
this Agreement, the other Loan Documents or the use of the proceeds of the Loans
and any such other documents, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the Company, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided that the Company shall
have no obligation hereunder to any Indemnitee with respect to indemnified
liabilities to the extent determined by a final judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee's Related Parties. The agreements in this
subsection 12.5 shall survive repayment of the Loans and all other amounts
payable hereunder.
12.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Agents and their respective successors and assigns,
except that none of the Borrowers may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other financial institutions ("Participants") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents;
provided that any Lender which sells such participating interests to a
Participant which is not a commercial bank, savings bank or finance company
shall give notice to the Company, identifying such Participant, promptly
following the consummation of such sale. In the event of any such sale by a
Lender of a participating interest to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Loan for all purposes
under this Agreement and the other Loan Documents, and the Borrowers and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. No Lender shall be entitled to create in favor of any
Participant, in the participation agreement pursuant to which such Participant's
participating interest shall be created or otherwise, any right to vote on,
consent to or approve any matter relating to this Agreement or any other Loan
Document except for those specified in clauses (i) and (ii) of the proviso to
subsection 12.1. The Borrowers agree that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to
69
share with the Lenders the proceeds thereof as provided in subsection 12.6(a) as
fully as if it were a Lender hereunder. The Borrowers also agree that each
Participant shall be entitled to the benefits of subsections 4.12, 4.13 and 4.14
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 4.13, such Participant shall have complied with the requirements of
said subsection and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Company and the Administrative Agent (which in each case shall not be
unreasonably withheld), to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit B, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Company and the Administrative Agent) and delivered
to the Administrative Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an additional bank or
financial institution, (x) the aggregate amount of the Commitment being assigned
is not less than $10,000,000 (or such lesser amount as may be agreed to by the
Company and the Administrative Agent) and (y) if such assignment is of less than
all of the rights and obligations of the assigning Lender, the aggregate amount
of the Commitment remaining with the assigning Lender is not less than
$10,000,000 (or such lesser amount as may be agreed to by the Company and the
Administrative Agent). Upon such execution, delivery, acceptance and recording
(and the payment of the registration and processing fee described in clause (e)
below), from and after the effective date determined pursuant to such Assignment
and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this subsection, the
consent of the Company shall not be required for any assignment which occurs at
any time when any of the events described in Section 10 shall have occurred and
be continuing.
(d) The Administrative Agent, on behalf of the Borrowers,
shall maintain at the address of the Administrative Agent referred to in
subsection 12.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the
70
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amounts of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may (and, in the
case of any Loan or other obligation hereunder not evidenced by a Note, shall)
treat each Person whose name is recorded in the Register as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder not evidenced
by a Note shall be effective only upon appropriate entries with respect thereto
being made in the Register. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Company and the Administrative
Agent), together with payment to the Administrative Agent of a registration and
processing fee of $3,500 and delivery to the Administrative Agent of any forms
or statements required pursuant to subsection 4.13(b) and such administrative
information as the Administrative Agent may reasonably request, the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Company; provided that (x) no such fee
shall be payable with respect to any assignment from an assigning Lender to an
affiliate thereof and (y) such fee shall be payable by the Company with respect
to any assignment effected at the request of the Company pursuant to subsection
4.15.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning such
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of such Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of such Borrower in connection with such Lender's
credit evaluation of the Borrowers and their respective Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection 12.6 concerning assignments
of Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
71
(h) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Administrative Agent and any Borrower, the option to provide to such
Borrower all or any part of any Loan that such Granting Bank would otherwise be
obligated to make to such Borrower pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Bank shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan were made by such Granting Bank. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Bank). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this subsection 12.6 any SPC may (i) with
notice to, but without the prior written consent of, any Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Bank or to any
financial institutions (consented to by any Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This subsection may not be amended without
the written consent of each SPC to which a grant has been made pursuant to this
subsection.
12.7 Adjustments; Setoff. (a) If any Lender (a "Benefitted
Lender") at any time shall receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or proceedings of
the nature referred to in subsection 10(f), or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders such portion of
each such other Lender's Loans, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; and if after taking
into account such sharing the Benefitted Lender continues to have access to
additional funds of or collateral granted by a Borrower for application on
account of its debt, then the Benefitted Lender shall use such funds or
72
collateral to reduce indebtedness of such Borrower held by it and share such
payments and the benefits of such collateral with the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of setoff) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to any
Borrower, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by a
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch, agency or (to
the extent permitted by applicable law) banking affiliate thereof to or for the
credit or the account of such Borrower. Each Lender agrees promptly to notify
such Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
12.8 Judgment Currency. The obligations of each Borrower to
any party in respect of any Loan or Reimbursement Obligation and amounts owing
on account thereof shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such Loan or Letter of
Credit is denominated (the "Denomination Currency"), be discharged only to the
extent that on the Business Day following receipt by such party of any sum
adjudged to be so due in the Judgment Currency such party may in accordance with
normal banking procedures purchase the Denomination Currency with the Judgment
Currency; if the amount of the Denomination Currency so purchased is less than
the sum originally due to such party in the Denomination Currency, the relevant
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify such party against such loss, and if the amount of the Denomination
Currency so purchased exceeds the sum originally due to any party to this
Agreement, such party agrees to remit to the applicable Borrower such excess.
12.9 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Company and the Administrative Agent.
73
12.10 Confidentiality. (a) Each Lender hereby agrees to
maintain the confidentiality of all Confidential Information and agrees that it
shall not disclose such Confidential Information to third parties without the
prior consent of the Company, other than disclosure (i) on a confidential basis
to directors, officers, employees, legal counsel, accountants and other
professional advisors of such Lender, (ii) to other Lenders and any Participant
of such Lender, (iii) to regulatory officials having jurisdiction over such
Lender, (iv) as required by law or legal process or in connection with any legal
proceeding to which such Lender is a party or is otherwise subject, (v) to any
Transferee or prospective Transferee of such Lender (provided that such
Transferee or prospective Transferee shall have agreed, in writing, to be
subject to the provisions of this subsection 12.10) or (vi) on a confidential
basis to affiliates of such Lender who reasonably could be expected to have a
need to know such information in connection with the administration by such
Lender of this Agreement and its extensions of credit hereunder.
(b) For purposes of this subsection 12.10, the term
"Confidential Information" shall mean all material, non-public information which
is received by such Lender from the Company or any of its Subsidiaries and is
conspicuously identified as being "Confidential", other than (i) any such
information which, at the time of delivery or thereafter, becomes generally
available to the public other than as a result of a disclosure by such Lender,
(ii) any such information which was available to such Lender prior to its
disclosure to such Lender by the Company and its Subsidiaries and (iii) any such
information which becomes available to such Lender from a source other than the
Company and its Subsidiaries (provided that such source is not known to such
Lender to be (x) bound by a confidentiality agreement with the Company and its
Subsidiaries or (y) otherwise prohibited from transmitting the information to
such Lender by a contractual, legal or fiduciary obligation).
12.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.12 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Agents and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agents or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
12.13 GOVERNING LAW. THIS AGREEMENT AND THE
-------------
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
74
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
12.14 Submission To Jurisdiction; Waivers. Each Borrower
-----------------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Company (on its own behalf or as process agent for Reebok UK and ▇▇▇▇▇) at its
address set forth in subsection 12.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, except in the case of extreme bad faith (and
otherwise to the maximum extent not prohibited by law), any right it may have to
claim or recover in any legal action or proceeding referred to in this
subsection 12.14 any special, exemplary, punitive or consequential damages.
12.15 Acknowledgments. Each Borrower hereby acknowledges
---------------
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agents nor any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agents and the Lenders, on the one hand, and the Borrowers, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and
75
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrowers and the Lenders.
12.16 WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, THE BORROWERS, THE AGENTS, THE LENDERS AND THE ISSUING BANK
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
REEBOK INTERNATIONAL LTD.,
/s/ ▇▇▇▇▇▇▇ Watchmaker
By:______________________________________
Name:
Title: Executive Vice President and
Chief Financial Officer
REEBOK INTERNATIONAL LIMITED,
/s/ ▇▇▇▇▇▇▇ Watchmaker
By:______________________________________
Name: ▇▇▇▇▇▇▇ Watchmaker
Title: Director
REEBOK FINANCE LIMITED,
/s/ ▇▇▇▇▇▇▇ Watchmaker
By:______________________________________
Name: ▇▇▇▇▇▇▇ Watchmaker
Title: Attorney-in-Fact and Authorized Signatory
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent,
/s/ ▇▇▇▇▇▇ ▇▇▇▇
By:______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By:______________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
as a Lender,
/s/ ▇▇▇▇▇▇ ▇▇▇▇
By:______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Director
/s/ ▇▇▇ ▇▇▇▇▇▇
By:______________________________________
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Associate
FLEET NATIONAL BANK,
as Syndication Agent and as a Lender,
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director