================================================================================
[Published CUSIP Number: ____________]
CREDIT AGREEMENT
Dated as of October 20, 2004
among
KELLWOOD COMPANY
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and an L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
================================================================================
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.........................................................1
1.02 Other Interpretive Provisions........................................26
1.03 Accounting Terms.....................................................27
1.04 Exchange Rates; Currency Equivalents.................................28
1.05 Additional Alternative Currencies....................................29
1.06 Change of Currency...................................................29
1.07 Times of Day.........................................................30
1.08 Letter of Credit Amounts.............................................30
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans......................................................30
2.02 Borrowings, Conversions and Continuations of Committed Loans.........31
2.03 Letters of Credit....................................................33
2.04 Prepayments..........................................................43
2.05 Termination or Reduction of Commitments..............................44
2.06 Repayment of Loans...................................................44
2.07 Interest.............................................................44
2.08 Fees.................................................................45
2.09 Computation of Interest and Fees.....................................45
2.10 Evidence of Debt.....................................................46
2.11 Payments Generally; Administrative Agent's Clawback..................46
2.12 Sharing of Payments by Lenders.......................................48
2.13 Increase in Commitments..............................................49
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes................................................................50
3.02 Illegality...........................................................53
3.03 Inability to Determine Rates.........................................53
3.04 Increased Costs; Reserves on Eurocurrency Rate Loans.................54
3.05 Compensation for Losses..............................................55
3.06 Mitigation Obligations; Replacement of Lenders.......................56
3.07 Survival.............................................................57
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension...............................57
4.02 Conditions to all Credit Extensions..................................59
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws.............60
5.02 Authorization; No Contravention......................................60
5.03 Governmental Authorization; Other Consents...........................60
5.04 Binding Effect.......................................................60
5.05 Financial Statements; No Material Adverse Effect.....................60
5.06 Litigation...........................................................61
5.07 No Default...........................................................61
5.08 Ownership of Property; Liens.........................................61
5.09 Environmental Compliance.............................................61
5.10 Insurance............................................................62
5.11 Taxes................................................................62
5.12 ERISA Compliance.....................................................62
5.13 Subsidiaries; Equity Interests.......................................62
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act..................................................63
5.15 Disclosure...........................................................63
5.16 Intellectual Property; Licenses, Etc.................................63
5.17 Compliance with Laws.................................................64
ARTICLE VI.
AFFIRMATIVE COVENANTS
6.01 Financial Statements.................................................64
6.02 Certificates; Other Information......................................64
6.03 Notices..............................................................66
6.04 Payment of Obligations...............................................67
6.05 Preservation of Existence, Etc.......................................67
6.06 Maintenance of Properties............................................67
6.07 Maintenance of Insurance.............................................67
6.08 Compliance with Laws and Contractual Obligations.....................67
6.09 Books and Records....................................................68
6.10 Inspection Rights....................................................68
6.11 Compliance with ERISA................................................68
6.12 Environmental Compliance.............................................68
6.13 Use of Proceeds......................................................68
6.14 Subsidiary Subordination Agreement...................................69
6.15 Additional Subsidiary Guarantors.....................................69
6.16 Indenture Guaranty and Convertible Debenture Guaranty................69
ARTICLE VII.
NEGATIVE COVENANTS
7.01 Liens................................................................69
7.02 Investments..........................................................71
7.03 Indebtedness.........................................................71
7.04 Fundamental Changes..................................................73
7.05 Dispositions.........................................................73
7.06 Lease Obligations....................................................74
7.07 Restricted Payments..................................................75
7.08 ERISA................................................................75
7.09 Change in Nature of Business.........................................75
7.10 Transactions with Affiliates.........................................75
7.11 Burdensome Agreements................................................75
7.12 Use of Proceeds......................................................75
7.13 Financial Covenants..................................................76
7.14 Acquisitions.........................................................76
7.15 Capital Expenditures.................................................76
7.16 Issuance or Sale of Stock by Subsidiaries............................76
7.17 Sale of Stock in Subsidiaries........................................76
7.18 Amendment of Documents...............................................77
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default....................................................77
8.02 Remedies Upon Event of Default.......................................79
8.03 Application of Funds.................................................80
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authority............................................81
9.02 Rights as a Lender...................................................81
9.03 Exculpatory Provisions...............................................81
9.04 Reliance by Administrative Agent.....................................82
9.05 Delegation of Duties.................................................82
9.06 Resignation of Administrative Agent..................................82
9.07 Non-Reliance on Administrative Agent and Other Lenders...............83
9.08 No Other Duties, Etc.................................................84
9.09 Administrative Agent May File Proofs of Claim........................84
9.10 Guaranty Matters.....................................................84
ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc......................................................85
10.02 Notices; Effectiveness; Electronic Communication.....................86
10.03 No Waiver; Cumulative Remedies.......................................88
10.04 Expenses; Indemnity; Damage Waiver...................................88
10.05 Payments Set Aside...................................................90
10.06 Successors and Assigns...............................................90
10.07 Treatment of Certain Information; Confidentiality....................93
10.08 Right of Setoff......................................................94
10.09 Interest Rate Limitation.............................................94
10.10 Counterparts; Integration; Effectiveness.............................94
10.11 Survival of Representations and Warranties...........................94
10.12 Severability.........................................................95
10.13 Replacement of Lenders...............................................95
10.14 Governing Law; Jurisdiction; Etc.....................................96
10.15 Waiver of Jury Trial.................................................96
10.16 USA PATRIOT Act Notice...............................................97
10.17 Judgment Currency....................................................97
10.18 Waiver by Lenders of Negative Pledge Contained in Other Agreements...97
SIGNATURES...................................................................S-1
SCHEDULES
1.01 Mandatory Cost Formulae
1.01(A)Designated Subsidiary
1.01(B)Existing Letters of Credit
2.01 Commitments and Applicable Percentages
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
5.16 Intellectual Property Matters
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
7.06 Material Leases
10.02 Administrative Agent's Office; Certain Addresses for Notices
EXHIBITS
FORM OF
A Committed Loan Notice
C Note
D Compliance Certificate
E Assignment and Assumption
F Subsidiary Guaranty
G Opinion Matters
H Subordination Agreement
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of October 20, 2004,
among KELLWOOD COMPANY, a Delaware corporation (the "Borrower"), each lender
from time to time party hereto (collectively, the "Lenders" and individually, a
"Lender"), and BANK OF AMERICA, N.A., as Administrative Agent and an L/C Issuer.
The Borrower entered into that certain Credit Agreement dated as of April
30, 2002, by and among the Borrower, the Administrative Agent, and the lenders
party thereto from time to time (as amended, modified, supplemented or amended
and restated prior to the date hereof, the "Existing Credit Agreement");
The Borrower wishes to replace and refinance the Existing Credit Agreement,
and has requested that the Lenders provide a revolving credit facility to
facilitate such replacement and refinancing and for other lawful purposes;
The Lenders are willing to do so on the terms and conditions set forth
herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Accounts" means all of the Borrower's or a Subsidiary's now owned or
hereafter acquired or arising accounts, as defined in the UCC, including any
rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or in connection
with an Account, chattel paper or general intangibles (including a payment
intangible).
"Acquisition" means the acquisition of (i) a controlling equity interest in
another Person (including the purchase of an option, warrant or convertible or
similar type security to acquire such a controlling interest at the time it
becomes exercisable by the holder thereof), whether by purchase of such equity
interest or upon exercise of an option or warrant for, or conversion of
securities into, such equity interest, or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by such Person.
"Acquisition Adjustments" means the adjustments to certain financial terms
and computations more particularly described in Section 1.03(c).
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means, with respect to any currency, the
Administrative Agent's address and, as appropriate, account as set forth on
Schedule 10.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders in the
maximum aggregate principal amount at any time outstanding of $400,000,000, as
reduced or increased from time to time pursuant to the terms of this Agreement,
including pursuant to Section 2.13.
"Agreement" means this Credit Agreement.
"Alternative Currency" means each of Euro, Yen, Hong Kong Dollars and each
other currency (other than Dollars) that is approved in accordance with Section
1.05. With respect to Letters of Credit only Alternative Currency shall also
include Canadian Dollars and Pesos.
"Alternative Currency Equivalent" means, at any time, with respect to any
amount denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent or an L/C Issuer,
as applicable, at such time on the basis of the Spot Rate (determined in respect
of the most recent Revaluation Date) for the purchase of such Alternative
Currency with Dollars.
"Alternative Currency Sublimit" means an amount equal to the lesser of the
Aggregate Commitments and $50,000,000. The Alternative Currency Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Applicable Percentage" means, from time to time, with respect to any
Lender at any time, the percentage (carried out to the ninth decimal place) of
the Aggregate Commitments represented by such Lender's Commitment at such time.
If the commitment of each Lender to make Loans and the obligation of the L/C
Issuers to make L/C Credit Extensions have been terminated pursuant to Section
8.02 or if the Aggregate Commitments have expired, then the Applicable
Percentage of each Lender shall be determined based on the Applicable Percentage
of such Lender most recently in effect, giving effect to any subsequent
assignments. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Applicable Rate" means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):
2
APPLICABLE RATE
EUROCURRENCY
RATE +
PRICING CONSOLIDATED FACILITY STANDBY LETTERS OF COMMERCIAL LETTERS
LEVEL LEVERAGE RATIO FEE CREDIT OF CREDIT +
---------------------------- ------------------- --------------------------------- ---------------------
1 Less than or equal to .150% .600% .250%
1.25:1
2 Less than or equal to .175% .825% .250%
1.75:1 but greater than
1.25:1
3 Less than or equal to .200% 1.05% .300%
2.50:1 but greater than
1.75:1
4 Greater than 2.50:1 .250% 1.25% .350%
Any increase or decrease in the Applicable Rate resulting from a change in
the Consolidated Leverage Ratio shall become effective as of the first Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate
is not delivered when due in accordance with such Section, then Pricing Level 4
shall apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered. Subject to the preceding
sentence, the Applicable Rate in effect from the Closing Date through the date
of delivery of the Compliance Certificate required by Section 6.02 for the
fiscal year ending January 29, 2005 shall be determined based upon Pricing Level
2.
"Applicable Time" means, with respect to any borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Administrative Agent or any L/C
Issuer, as the case may be, to be necessary for timely settlement on the
relevant date in accordance with normal banking procedures in the place of
payment.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Asset Securitization" means any transaction or series of transactions
pursuant to which the Borrower or any of its Subsidiaries may sell, convey or
otherwise transfer to a Securitization Entity (in the case of a transfer by the
Borrower or any of its Subsidiaries) or any other Person (in case of a transfer
by a Securitization Entity), or may grant a security interest in, any accounts
receivable (whether now existing or arising or acquired in the future) of the
Borrower or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and contract rights and all guarantees or other obligations in respect
of such accounts receivable, proceeds of such accounts receivable and other
assets (including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in connection with
3
asset securitization transactions involving accounts receivable, all of the
foregoing for the purpose of providing working capital financing.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease were accounted for as a capital lease, and (c) in respect of any Asset
Securitization, the aggregate amount of obligations owed to (including the
amount of investment in transferred assets by) Persons other than the Borrower
or its Subsidiaries.
"Audited Financial Statements" means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended January 31, 2004,
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.
"Availability Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuers to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
All Base Rate Loans shall be denominated in Dollars.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrowing" means a Committed Borrowing.
4
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office with respect to
Obligations denominated in Dollars is located and:
(a) if such day relates to any interest rate settings as to a
Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements,
settlements and payments in Dollars in respect of any such Eurocurrency
Rate Loan, or any other dealings in Dollars to be carried out pursuant to
this Agreement in respect of any such Eurocurrency Rate Loan, means any
such day on which dealings in deposits in Dollars are conducted by and
between banks in the London interbank eurodollar market;
(b) if such day relates to any interest rate settings as to a
Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements,
settlements and payments in Euro in respect of any such Eurocurrency Rate
Loan, or any other dealings in Euro to be carried out pursuant to this
Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET
Day;
(c) if such day relates to any interest rate settings as to a
Eurocurrency Rate Loan denominated in a currency other than Dollars or
Euro, means any such day on which dealings in deposits in the relevant
currency are conducted by and between banks in the London or other
applicable offshore interbank market for such currency; and
(d) if such day relates to any fundings, disbursements, settlements
and payments in a currency other than Dollars or Euro in respect of a
Eurocurrency Rate Loan denominated in a currency other than Dollars or
Euro, or any other dealings in any currency other than Dollars or Euro to
be carried out pursuant to this Agreement in respect of any such
Eurocurrency Rate Loan (other than any interest rate settings), means any
such day on which banks are open for foreign exchange business in the
principal financial center of the country of such currency.
"Canadian Dollar" means the lawful currency of Canada.
"Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of an L/C Issuer and the Lenders, as
collateral for the L/C Obligations plus all fees accrued or to be incurred in
connection therewith, cash, deposit accounts and all balances therein, in an
amount not less than the sum of such L/C Obligations and fees and in the Dollar
Equivalent of the applicable currency in which such L/C Obligations are
outstanding, and all proceeds of the foregoing pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the applicable L/C
Issuer, but otherwise in substantially the form of Exhibit I, and to take all
such other action as shall be necessary for the Administrative Agent to have
"control" thereof within the meaning of the UCC applicable thereto. Derivatives
of such term shall have corresponding meanings. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of America
or other institutions satisfactory to it.
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
5
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) (i) becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have "beneficial
ownership" of all securities that such person or group has the right to
acquire (such right, an "option right"), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
30% or more of the equity securities of the Borrower entitled to vote for
members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to
any option right) or (ii) otherwise has the ability, directly or
indirectly, to elect a majority of the Board of Directors of the Borrower;
(b) during any period of 24 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body.
"Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.
"Code" means the Internal Revenue Code of 1986.
"Commercial L/C Sublimit" means an amount equal to the lesser of (i) the
Dollar Equivalent amount of Aggregate Commitments and (ii) $175,000,000. The
Commercial L/C Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Commitment" means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrower pursuant to Section 2.01, and (b) purchase participations
in L/C Obligations, in an aggregate principal Dollar Equivalent amount at any
one time outstanding not to exceed the Dollar amount set forth opposite such
Lender's name on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
6
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type, in the same currency and, in the case of
Eurocurrency Rate Loans, having the same Interest Period made by each of the
Lenders pursuant to Section 2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit D.
"Consolidated EBIT" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, and (c) the amount
of taxes, based on or measured by income, used or included in determining such
Consolidated Net Income, in each case subject to Acquisition Adjustments.
"Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of
taxes, based on or measured by income, used or included in determining such
Consolidated Net Income, and (d) the amount of depreciation and amortization
expense deducted in determining such Consolidated Net Income, in each case
subject to Acquisition Adjustments.
"Consolidated Funded Indebtedness" means, as of any date of determination,
for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a)
the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) Attributable Indebtedness in respect of capital leases,
Synthetic Lease Obligations, and Assets Securitizations and (c) without
duplication, all Contingent Obligations with respect to Indebtedness of the
types specified in subsections (a) and (b) above of Persons other than the
Borrower or any Subsidiary. For all purposes hereof, the Consolidated Funded
Indebtedness of the Borrower or any Subsidiary shall include the foregoing
Indebtedness in (a), (b) and (c) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or a limited liability
company) in which the Borrower or any Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary.
"Consolidated Interest Charges" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the sum of (a) all interest, debt
discount, premium payments, commissions, fees, charges and related expenses of
the Borrower and its Subsidiaries in connection with Indebtedness (including
capitalized interest) or in connection with the deferred purchase price of
assets or incurred with respect to any Permitted Securitization Transaction, in
each case to the extent treated as interest in accordance with GAAP, (b) the
portion of rent expense of the Borrower and its Subsidiaries with respect to
such period under capital leases that is treated as interest in accordance with
GAAP and (c) the amount of payments in respect of Synthetic Lease Obligations
7
and Asset Securitizations that are in the nature of interest (including, with
respect to Asset Securitizations, the aggregate discount (net of reserves) from
the face value of assets transferred), subject to Acquisition Adjustments.
"Consolidated Interest Coverage Ratio" means, as at the end of each fiscal
quarter, the ratio of (a) Consolidated EBIT for the period of the four prior
fiscal quarters ending on such date to (b) Consolidated Interest Charges for
such period.
"Consolidated Leverage Ratio" means, as of any date of determination, the
ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended.
"Consolidated Net Income" means, for any period of computation thereof, the
gross revenues from operations of the Borrower and its Subsidiaries (including
payments received by the Borrower and its Subsidiaries of (i) interest income,
and (ii) dividends and distributions made in the ordinary course of their
businesses by Persons in which investment is permitted pursuant to this
Agreement and not related to an extraordinary event), less all operating and
non-operating expenses of the Borrower and its Subsidiaries including taxes on
income, all determined on a consolidated basis in accordance with GAAP and
subject to Acquisition Adjustments; but excluding (for all purposes other than
compliance with Section 7.13(a) hereof ) as income: (i) net gains and net losses
on the sale, conversion or other disposition of capital assets, (ii) net gains
and net losses on the acquisition, retirement, sale or other disposition of
capital stock and other securities of the Borrower or its Subsidiaries, (iii)
net gains on the collection of proceeds of life insurance policies, (iv) any
write-up of any asset, and (v) any other net gain or credit of an extraordinary
nature as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, Shareholders' Equity of
the Borrower and its Subsidiaries on that date.
"Contingent Obligation" means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring or holding harmless in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
8
which such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guarantying Person in good faith.
"Contractual Obligation" means, 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.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Convertible Debentures" means those certain $200,000,000 3.50% Convertible
Senior Debentures maturing June 15, 2034, issued pursuant to that certain
Indenture dated as of June 22, 2004 by and between the Borrower and Union Bank
of California, N.A., as trustee (as amended or supplemented from time to time,
the "Convertible Debenture Agreement").
"Convertible Debenture Guaranty" means that certain Guaranty Agreement (and
including any guaranty joinder agreement excluded pursuant to the terms thereof)
dated as of October 20, 2004 by and among the Guarantors and Union Bank of
California, N.A., as trustee for the holders of the Convertible Debentures, as
amended or supplemented from time to time.
"Cost of Acquisition" means, with respect to any Acquisition, as at the
date of entering into any agreement therefor or, with respect to clause (iv)
below, as at the time of GAAP recognition of such amounts, the sum of the
following (without duplication): (i) the value of the capital stock, warrants or
options to acquire capital stock of the Borrower or any Subsidiary to be
transferred in connection therewith, (ii) the amount of any cash and fair market
value of other property (excluding property described in clause (i) and the
unpaid principal amount of any debt instrument) given as consideration, (iii)
the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of any Indebtedness incurred, assumed or
acquired by the Borrower or any Subsidiary in connection with such Acquisition,
(iv) all additional purchase price amounts in the form of earnouts and other
guaranteed or contingent obligations that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with GAAP, such
amounts to be Costs of Acquisition for the period in which they should be
recorded, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on financial statements of the
Borrower and its Subsidiaries in accordance with GAAP, and other affiliated
contracts in connection with such Acquisition, (vi) the aggregate fair market
value of all other consideration given by the Borrower or any Subsidiary in
connection with such Acquisition, and (vii) out-of-pocket transaction costs for
the services and expenses of attorneys, accountants and other consultants
incurred in effecting such transaction, and other similar transaction costs so
incurred and capitalized in accordance with GAAP.
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
9
"Debt Rating" means, as of any date of determination, the rating as
determined by either S&P or ▇▇▇▇▇'▇ (collectively, the "Debt Ratings") of the
Borrower's non-credit-enhanced, senior unsecured long-term debt.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) 2%
per annum; provided, however, that with respect to a Eurocurrency Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate and any Mandatory Cost) otherwise applicable to such Loan plus
2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate
equal to the Applicable Rate plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.
"Designated Subsidiary" means any of the Subsidiaries set forth on Schedule
1.01(A) hereto and any additional Subsidiaries which the Borrower may hereafter
designate in writing to the Administrative Agent and the Lenders.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Dollar Equivalent" means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent, at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of Dollars with such Alternative Currency.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, (ii) each L/C Issuer, and (iii) unless
an Event of Default has occurred and is continuing, the Borrower (each such
10
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries; and provided
further, however, that an Eligible Assignee shall include only a Lender, an
Affiliate of a Lender or another Person, which, through its Lending Offices, is
capable of lending the applicable Alternative Currencies to the Borrower without
the imposition of any Taxes or additional Taxes, as the case may be.
"EMU" means the economic and monetary union in accordance with the Treaty
of Rome 1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, the Maastricht Treaty
of 1992 and the Amsterdam Treaty of 1998.
"EMU Legislation" means the legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
11
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
"Euro" and "EUR" mean the lawful currency of the Participating Member
States introduced in accordance with the EMU Legislation.
"Eurocurrency Rate" means, for any Interest Period with respect to a
Eurocurrency Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
deposits in the relevant currency (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate is
not available at such time for any reason, then the "Eurocurrency Rate" for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in the relevant currency for delivery on
the first day of such Interest Period in Same Day Funds in the approximate
amount of the Eurocurrency Rate Loan being made, continued or converted by Bank
of America and with a term equivalent to such Interest Period would be offered
by Bank of America's London Branch (or other Bank of America branch or
Affiliate) to major banks in the London or other offshore interbank market for
such currency at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.
"Eurocurrency Rate Loan" means a Committed Loan that bears interest at a
rate based on the Eurocurrency Rate. Eurocurrency Rate Loans may be denominated
in Dollars or in an Alternative Currency. All Committed Loans denominated in an
Alternative Currency must be Eurocurrency Rate Loans.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, each L/C Issuer or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
12
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) except as provided
in the following sentence, in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the applicable Borrower with respect to such withholding
tax pursuant to Section 3.01(a).
"Existing Credit Agreement" has the meaning given such term in the recitals
hereto.
"Existing Letter[s] of Credit" means those letters of credit issued and
outstanding as of the Closing Date under the Existing Credit Agreement and
individually described on Schedule 1.01(B) .
"Factoring Program" collectively means: (i) the purchase of accounts
receivable from time to time by KFR from the Borrower and/or certain of its
Subsidiaries pursuant to various Receivables Purchase and Sale Agreements dated
as of January 31, 2000 or subsequent thereto, as amended or modified from time
to time, (ii) the performance of collection and other services by Kellwood
Shared Services Inc., for the benefit of KFR pursuant to various Receivables
Collection and Administrative Services Agreements dated as of January 31, 2000,
or subsequent thereto, as amended or modified from time to time and (iii) each
Third Party Factoring Program.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means, collectively, (i) the letter agreement, dated August
25, 2004, among the Borrower, the Administrative Agent and the Arranger, and
(ii) each other agreement entered into among the Borrower and any L/C Issuer in
addition to Bank of America with respect to fronting fees payable under Section
2.03(j).
"Foreign Lender" means, with respect to the Borrower, any Lender that is
organized under the laws of a jurisdiction other than that in which the Borrower
is resident for tax purposes. For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
13
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States, a State thereof or the District
of Columbia.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Guarantors" means, collectively, each Material Domestic Subsidiary of the
Borrower, but excluding any Material Domestic Subsidiary which is a
Securitization Entity, provided, however, that if any such Material Domestic
Subsidiary shall, at any time, not constitute a Securitization Entity, such
Material Domestic Subsidiary shall execute a Guaranty Joinder Agreement in
accordance with Section 6.15. It is understood that the Obligations shall not be
guaranteed by any existing or future Foreign Subsidiary, including any Foreign
Subsidiary of any Guarantor.
"Guaranty" means (i) that certain Guaranty Agreement executed on the
Closing Date by the Guarantors in favor of the Administrative Agent and the
Lenders, substantially in the form of Exhibit F, as supplemented from time to
time by execution and delivery of each Guaranty Joinder Agreement pursuant to
Section 6.15 or otherwise and (ii) each other Guaranty Agreement subsequently
executed by the Guarantors in favor of the Administrative Agent and the Lender
in accordance with Section 10.01, substantially in the form of Exhibit F, as
supplemented from time to time by execution and delivery of each Guaranty
Joinder Agreement pursuant to Section 6.15 or otherwise.
"Guaranty Joinder Agreement" means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Guaranty, executed and
delivered by a Material Domestic Subsidiary to the Administrative Agent pursuant
to Section 6.15.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
14
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hong Kong Dollar" means the lawful currency used in Hong Kong.
"Increase Effective Date" has the meaning given to such term in Section
2.13.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or Contingent Obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract in an
amount equal to the Swap Termination Value thereof;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) Attributable Indebtedness related to capital leases, Synthetic
Lease Obligations and Asset Securitizations;
(g) all Contingent Obligations of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.04(b).
15
"Indenture" means that certain Indenture dated September 30, 1997 by and
between The Chase Manhattan Bank, as trustee, or any successor trustee and the
Borrower, as amended, supplemented or restated from time to time, pursuant to
which certain debt securities have been issued by the Borrower.
"Indenture Guaranty" means those certain Guaranty Agreement(s) (and
including any guaranty joinder agreement executed pursuant to the terms thereof)
dated as of October 20, 2004 by and among the Guarantors and JPMorganChase Bank,
as trustee or any successor trustee, for the holders of those certain debt
securities issued pursuant to the Indenture, as amended or supplemented from
time to time.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurocurrency
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of April,
July, October and January and the Maturity Date.
"Interest Period" means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the Borrower in its Committed Loan
Notice; provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period 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 the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Inventory" means all of the Borrower's and its Subsidiaries' now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, work-in-process, finished goods (including embedded
software), other materials and supplies of any kind, nature or description which
are used or consumed in the Borrower's and its Subsidiaries' business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other documents representing
them.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, guaranty or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
16
guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment, but including, when actually invested, subsequent amounts of
Investments in the same Person, whether pursuant to earnouts or other
contractual obligations, or otherwise.
"IP Rights" has the meaning specified in Section 5.16.
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
"Issuer Documents" means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by any L/C Issuer and the Borrower (or any Subsidiary) or in favor of such
L/C Issuer and relating to any such Letter of Credit.
"KFR" means Kellwood Financial Resources, Inc., a Tennessee corporation and
wholly-owned Subsidiary of the Borrower.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage. All L/C Advances shall be denominated in Dollars.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in
Dollars.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means (i) Bank of America in its capacity as issuer of Letters
of Credit hereunder, (ii) such other Lender designated as an L/C Issuer pursuant
to Section 2.03(m), or any successor issuer of Letters of Credit hereunder. All
singular references to the L/C Issuer shall mean any L/C Issuer, the L/C Issuer
that has issued the applicable Letter of Credit, or all L/C Issuers, as the
context may require.
17
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.08. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder and shall
include the Existing Letter[s] of Credit. A Letter of Credit may be a commercial
letter of credit or a standby letter of credit. Letters of Credit may be issued
in Dollars or in an Alternative Currency.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by an L/C Issuer and any electronic application for a letter of credit made
through an electronic letter of credit system established by an applicable L/C
Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to a Borrower under Article
II in the form of a Committed Loan.
"Loan Documents" means this Agreement, each Note, each Issuer Document,
each Fee Letter, each Guaranty (including any Guaranty Joinder Agreement), each
Subordination Agreement, each Compliance Certificate, and all other instruments
and documents heretofore or hereafter executed or delivered to or in favor of
any Lender or the Administrative Agent in connection with the Loans made and the
transactions contemplated by this Agreement.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
18
"Mandatory Cost" means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.01.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, assets, properties,
condition (financial or otherwise), liabilities (actual or contingent) or
prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Borrower to pay or perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document.
"Material Lease" means any lease providing for aggregate payments
thereunder in any year in excess of $250,000.
"Material Domestic Subsidiary" means any Material Subsidiary that is
organized under the laws of any political subdivision of the United States.
"Material Subsidiary" means: (a) each Subsidiary which meets any of the
conditions set forth in clause (i) and (ii) below, which shall be listed on
Schedule 5.13 hereto and designated therein as a "Material Subsidiary"; (b) any
Subsidiary which meets any of the conditions set forth in clause (i) and (ii)
which the Borrower will designate as a "Material Subsidiary" by updating
Schedule 5.13 hereto in a written notice delivered (which may be by facsimile
transmission) to the Administrative Agent from time to time; and (c) any
Subsidiary which is acquired or created or party to a merger or some other
corporate reorganization or otherwise acquires all or substantially all of the
assets of another Person following the Closing Date and meets any of the
following conditions:
(i) the assets of such Subsidiary (valued at the greater of book or
fair market) as at the end of the immediately preceding fiscal year exceed
$15,000,000, or
(ii) the portion of Consolidated Net Income of the Borrower and its
Subsidiaries which were contributed by such Subsidiary during the
immediately preceding fiscal year exceeds $1,000,000.
"Maturity Date" means (a) October 20, 2009, or (b) such earlier date upon
which the Aggregate Commitments may be terminated in accordance with the terms
hereof.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding three plan
years, has made or been obligated to make contributions.
"Non-Equity Consideration" means all consideration paid in connection with
an Acquisition other than capital stock, warrants or options to acquire capital
stock of the Borrower or any Subsidiary to be transferred in connection with an
Acquisition.
19
"Note" means a promissory note made by a Borrower in favor of a Lender
evidencing Loans made by such Lender to the Borrower, substantially in the form
of Exhibit C.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Committed Loans on any date,
the Dollar Equivalent amount of the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of
such Committed Loans occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the Dollar Equivalent amount of the aggregate
outstanding amount of such L/C Obligations on such date after giving effect to
any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements by the Borrower of Unreimbursed Amounts.
"Overnight Rate" means, for any day, (a) with respect to any amount
denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an
overnight rate determined by the Administrative Agent, in accordance with
banking industry rules on interbank compensation, and (b) with respect to any
amount denominated in an Alternative Currency, the rate of interest per annum at
which overnight deposits in the applicable Alternative Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by a branch or Affiliate of Bank of
America in the applicable offshore interbank market for such currency to major
banks in such interbank market.
"Participant" has the meaning specified in Section 10.06(d).
20
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan (as described in Section 4064(a) of ERISA) has made contributions at
any time during the immediately preceding five plan years.
"Permitted Acquisition" means (a) any Acquisition effected with the consent
and approval of the board of directors or other applicable governing body of the
Person being acquired, and with the duly obtained approval of such shareholders
or other holders of equity or other ownership interest as such Person may be
required to obtain, so long as (i) immediately prior to and immediately after
the consummation of such Acquisition, no Default or Event of Default has
occurred and is continuing, (ii) substantially all of the sales and operating
profits generated by such Person (or assets) so acquired or invested are derived
from a line or lines of business that are part of, or complementary, to the
business as then conducted by the Borrower and its Subsidiaries, (iii) if the
Cost of Acquisition for such Acquisition exceeds $35,000,000, pro forma
consolidated historical financial statements of the Borrower and its
Subsidiaries as of the end of the most recent fiscal quarter for the four fiscal
quarters most recently ended giving effect to such Acquisition are delivered to
the Administrative Agent not less than five (5) Business Days prior to the
consummation of such Acquisition, together with a certificate of a Responsible
Officer demonstrating pro forma compliance with Section 7.13 after giving effect
to such Acquisition and (iv) if any part of the Cost of Acquisition is paid in
Non-Equity Consideration, the total Non-Equity Consideration (including any
earn-out payments) paid in connection with such Acquisition when aggregated with
the Non-Equity Consideration component of all consideration paid in connection
with all other Permitted Acquisitions consummated during the fiscal year in
which such Acquisition is consummated shall not exceed, during any fiscal year,
the sum of $150,000,000 plus 25% of the Permitted Carryover Amount for the
immediately prior fiscal year; provided, however, that for purposes of
subsection (iv) above, in any fiscal year in which either of the Closing Date or
the Maturity Date occur, such amount shall not exceed the sum of $150,000,000
plus 25% of the Permitted Carryover Amount for the immediately prior fiscal year
multiplied by a fraction in which the number of days remaining in such fiscal
year after the Closing Date, or elapsing in such fiscal year prior to the
Maturity Date, respectively, is the numerator, and 365 is the denominator and
(b) any Acquisition permitted under Section 7.02(i).
"Permitted Carryover Amount" means, for any fiscal year, an amount, if
positive, equal to $150,000,000 less the aggregate amount of all cash paid as
Costs of Acquisition in connection with Permitted Acquisitions consummated
during such fiscal year (without giving effect to any amounts previously carried
over into such fiscal year from the fiscal year prior thereto), provided,
however, that for any fiscal year in which either of the Closing Date or the
Maturity Date occur, such amount shall not exceed $150,000,000 less the
aggregate amount of all cash paid as Costs of Acquisition in connection with
Permitted Acquisitions consummated during such fiscal year multiplied by a
fraction in which the number of days remaining in such fiscal year after the
21
Closing Date, or elapsing in such fiscal year prior to the Maturity Date,
respectively, is the numerator, and 365 is the denominator.
"Permitted Securitization Transaction" means any Asset Securitization
pursuant to Standard Securitization Undertakings providing working capital
financing on terms that are more favorable to the Borrower and its Subsidiaries
than would otherwise be available at that time; provided, (i) the Borrower
and/or its Subsidiaries enters into such transaction or series of transactions
with a Lender or an Affiliate thereof or a conduit administered thereby, and
(ii) the obligations owed to third parties (including the net investment of such
third parties in the assets transferred) with respect to such transaction shall
not exceed $75,000,000 at any one time.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Pesos" means the lawful currency of the United States of Mexico.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
"Register" has the meaning specified in Section 10.06(c).
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuers to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations
being deemed "held" by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"Responsible Officer" means, with respect to all certificates and financial
matters hereunder, President, Chief Executive Officer, and Chief Financial
Officer of the Borrower (the "Principal Responsible Officers") and, with respect
to all notices (including Requests for Credit Extensions) and other matters
hereunder, any Principal Responsible Officer, the Vice President, Controller,
Vice President, Treasurer or General Counsel of the Borrower or any other
officer expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) or a Principal Responsible Officer as a
22
Responsible Officer of the Borrower. Any document delivered hereunder that is
signed by a Responsible Officer of the Borrower shall be conclusively presumed
to have been authorized by all necessary corporate and/or other action on the
part of the Borrower and each other Loan Party on whose behalf it is delivered
and such Responsible Officer shall be conclusively presumed to have acted on
behalf of the Borrower and each such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest.
"Revaluation Date" means (a) with respect to any Loan, each of the
following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated
in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency
Rate Loan denominated in an Alternative Currency pursuant to Section 2.02, and
(iii) such additional dates as the Administrative Agent shall determine or the
Required Lenders shall require; and (b) with respect to any Letter of Credit,
each of the following: (i) each date of issuance of a Letter of Credit
denominated in an Alternative Currency, (ii) each date of an amendment of any
such Letter of Credit having the effect of increasing the amount thereof (solely
with respect to the increased amount), (iii) each date of any payment by an L/C
Issuer under any Letter of Credit denominated in an Alternative Currency, (iv)
in the case of the Existing Letters of Credit denominated in an Alternative
Currency, the Closing Date, (v) each date of any Committed Loan Notice for a
Base Rate Loan under Section 2.03(c)(i) and (vi) such additional dates as the
Administrative Agent or an L/C Issuer with respect to Alternative Currencies in
which it has L/C Obligations outstanding shall determine or the Required Lenders
shall require.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Same Day Funds" means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or an L/C Issuer, as the case may be, to
be customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Alternative Currency.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Securitization Entity" means a wholly-owned Subsidiary (or another Person
in which the Borrower or any Subsidiary of the Borrower makes an Investment and
to which the Borrower or any Subsidiary of the Borrower transfers accounts
receivable and related assets) that engages in no activities other than in
connection with the financing of accounts receivable and that is designated by
23
the Board of Directors of the Borrower (as provided below) as a Securitization
Entity, (i) no portion of the Indebtedness (contingent or otherwise) of which
(a) is guaranteed by the Borrower or any Subsidiary of the Borrower other than
pursuant to Standard Securitization Undertakings, (b) is recourse to or
obligates the Borrower or any Subsidiary of the Borrower in any way other than
pursuant to Standard Securitization Undertakings or (c) subjects any property or
asset of the Borrower or any Subsidiary of the Borrower, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings, (ii) with which neither the Borrower nor
any Subsidiary of the Borrower has any material contract, agreement, arrangement
or understanding other than on terms no less favorable to the Borrower or such
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Borrower, other than fees payable in the ordinary course
of business in connection with servicing receivables of such entity, and (iii)
to which neither the Borrower nor any Subsidiary of the Borrower has any
obligation to maintain or preserve such entity's financial condition or cause
such entity to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Borrower shall be evidenced to the
Administrative Agent by filing with the Administrative Agent a certified copy of
the resolution of the Board of Directors of the Borrower giving effect to such
designation and a certificate of a Responsible Officer certifying that such
designation complied with the foregoing conditions.
"Shareholders' Equity" means, as of any date of determination for the
Borrower and its Subsidiaries on a consolidated basis, shareholders' equity as
of that date determined in accordance with GAAP.
"Special Notice Currency" means at any time an Alternative Currency, other
than the currency of a country that is a member of the Organization for Economic
Cooperation and Development at such time located in North America or Europe.
"Spot Rate" for a currency means the rate determined by the Administrative
Agent or an L/C Issuer, as applicable, to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of such
currency with another currency through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two Business Days prior to the
date as of which the foreign exchange computation is made; provided that the
Administrative Agent or an L/C Issuer, as applicable, may obtain such spot rate
from another financial institution of recognized standing designated by the
Administrative Agent if the Person acting in such capacity does not have as of
the date of determination a spot buying rate for any such currency; and provided
further that an L/C Issuer may use such spot rate quoted on the date as of which
the foreign exchange computation is made in the case of any Letter of Credit
denominated in an Alternative Currency.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Borrower or any Subsidiary of the
Borrower that are reasonably customary in accounts receivable securitization
transactions.
"Standby L/C Sublimit" means an amount equal to the lesser of (i) the
Dollar Equivalent Amount of Aggregate Commitments and (ii) $50,000,000. The
Standby L/C Sublimit is part of, and not in addition to, the Aggregate
Commitments.
24
"Subordination Agreement" means the Subordination Agreement delivered by
the Borrower and each of its Subsidiaries (other than any Securitization Entity)
on the Closing Date in the form of Exhibit H, as from time to time amended,
supplemented or replaced.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"TARGET Day" means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) payment system (or, if such payment
system ceases to be operative, such other payment system (if any) determined by
25
the Administrative Agent to be a suitable replacement) is open for the
settlement of payments in Euro.
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Third Party Factoring Program" means those certain accounts receivable
sale and purchase programs of a Person acquired by the Borrower or a Subsidiary
in connection with a Permitted Acquisition in which (i) the receivables are sold
to a Person who is not a Loan Party, Subsidiary or Affiliate of the Borrower,
(ii) the Borrower or any Loan Party receives the proceeds of the sale of such
receivables, and (iii) the Person (whether directly or indirectly) acquired by
the Borrower or any other Subsidiary in connection with such Permitted
Acquisition is, at all times while such program is in existence, the sole seller
of such receivables to such Person.
"Threshold Amount" means $20,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Type" means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurocurrency Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York, and, if the context requires, as in effect in another jurisdiction.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
"Yen" and "(Y)" mean the lawful currency of Japan.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise, (i) any definition of or reference
to any agreement, instrument or other document (including any Organization
Document) shall be construed as referring to such agreement, instrument or
26
other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (iii) the words "herein," "hereof" and "hereunder,"
and words of similar import when used in any Loan Document, shall be
construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document
in which such references appear, (v) any reference to any law shall include
all statutory and regulatory provisions consolidating, amending replacing
or interpreting such law and any reference to any law or regulation shall,
unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words "asset" and
"property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means
"to and including."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) Generally. All accounting terms not specifically
or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
(c) With respect to any Acquisition consummated whether before or after the
Closing Date, the following shall apply:
27
(i) For each period of four fiscal quarters of the Borrower ending
next following the date of any Acquisition, Consolidated EBITDA shall
include the results of operations of the Person or assets so acquired on a
historical pro forma basis, and which amounts may include such adjustments
as are permitted under Regulation S-X of the SEC and reasonably
satisfactory to the Administrative Agent;
(ii) For each period of four fiscal quarters of the Borrower ending
next following the date of any Acquisition, Consolidated EBIT shall include
the results of operations of the Person or assets so acquired on a
historical pro forma basis, and which amounts may include such adjustments
as are permitted under Regulation S-X of the SEC and reasonably
satisfactory to the Administrative Agent;
(iii) For each period of four fiscal quarters of the Borrower ending
next following the date of each Acquisition, Consolidated Interest Charges
as a component of Consolidated EBITDA or Consolidated EBIT shall be
adjusted on a historical pro forma basis to (i) eliminate interest expense
accrued during such period on any Indebtedness repaid in connection with
such Acquisition and (ii) include interest expense on any Indebtedness
(including Indebtedness hereunder) incurred, acquired or assumed in
connection with such Acquisition ("Incremental Debt") calculated (A) as if
all such Incremental Debt had been incurred as of the first day of such
four quarter period and (B) at the following interest rates: (I) for all
periods subsequent to the date of the Acquisition and for Incremental Debt
assumed or acquired in the Acquisition and in effect prior to the date of
Acquisition, at the actual rates of interest applicable thereto, and (II)
for all periods prior to the actual incurrence of such Incremental Debt,
equal to the rate of interest actually applicable to such Incremental Debt
hereunder or under other financing documents applicable thereto as at the
end of each affected period of such four fiscal quarters, as the case may
be.
1.04 EXCHANGE RATES; CURRENCY EQUIVALENTS. (a) The Administrative Agent or
an L/C Issuer (as to Alternative Currencies in which it has L/C Obligations then
outstanding) shall determine the Spot Rates as of each Revaluation Date to be
used for calculating Dollar Equivalent amounts of Credit Extensions and
Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall
become effective as of such Revaluation Date and shall be the Spot Rates
employed in converting any amounts between the applicable currencies until the
next Revaluation Date to occur. Except for purposes of financial statements
delivered by Loan Parties hereunder or calculating financial covenants hereunder
or except as otherwise provided herein, the applicable amount of any currency
(other than Dollars) for purposes of the Loan Documents shall be such Dollar
Equivalent amount as so determined by the Administrative Agent.
(b) Wherever in this Agreement in connection with a Committed Borrowing,
conversion, continuation or prepayment of a Eurocurrency Rate Loan or the
issuance, amendment or extension of a Letter of Credit, an amount, such as a
required minimum or multiple amount, is expressed in Dollars, but such Committed
Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an
Alternative Currency, such amount shall be the relevant Alternative Currency
Equivalent of such Dollar amount (rounded to the nearest unit of such
28
Alternative Currency, with 0.5 of a unit being rounded upward), as determined by
the Administrative Agent.
1.05 ADDITIONAL ALTERNATIVE CURRENCIES. (a) The Borrower may from time to
time request that Eurocurrency Rate Loans be made and/or Letters of Credit be
issued in a currency other than those specifically listed in the definition of
"Alternative Currency;" provided that such requested currency is a lawful
currency (other than Dollars) that is readily available and freely transferable
and convertible into Dollars. In the case of any such request with respect to
the making of Eurocurrency Rate Loans, such request shall be subject to the
approval of the Administrative Agent and the Lenders; and in the case of any
such request with respect to the issuance of Letters of Credit, such request
shall be subject to the approval of the Administrative Agent and each L/C
Issuer.
(b) Any such request shall be made to the Administrative Agent not later
than 11:00 a.m., 20 Business Days prior to the date of the desired Credit
Extension (or such other time or date as may be agreed by the Administrative
Agent and, in the case of any such request pertaining to a Letter of Credit, the
applicable L/C Issuer, in its or their sole discretion). In the case of any such
request pertaining to Eurocurrency Rate Loans, the Administrative Agent shall
promptly notify each Lender thereof; and in the case of any such request
pertaining to Letters of Credit, the Administrative Agent shall promptly notify
each L/C Issuer thereof. Each Lender (in the case of any such request pertaining
to Eurocurrency Rate Loans) or each L/C Issuer (in the case of a request
pertaining to Letters of Credit) shall notify the Administrative Agent, not
later than 11:00 a.m., ten Business Days after receipt of such request whether
it consents, in its sole discretion, to the making of Eurocurrency Rate Loans or
the issuance of Letters of Credit, as the case may be, in such requested
currency.
(c) Any failure by a Lender or any L/C Issuer, as the case may be, to
respond to such request within the time period specified in the preceding
sentence shall be deemed to be a refusal by such Lender or such L/C Issuer, as
the case may be, to permit Eurocurrency Rate Loans to be made or Letters of
Credit to be issued in such requested currency. If the Administrative Agent and
all the Lenders consent to making Eurocurrency Rate Loans in such requested
currency, the Administrative Agent shall so notify the Borrower and such
currency shall thereupon be deemed for all purposes to be an Alternative
Currency hereunder for purposes of any Committed Borrowings of Eurocurrency Rate
Loans; and if the Administrative Agent and each L/C Issuer consent to the
issuance of Letters of Credit in such requested currency, the Administrative
Agent shall so notify the Borrower and such currency shall thereupon be deemed
for all purposes to be an Alternative Currency hereunder for purposes of any
Letter of Credit issuances. If the Administrative Agent shall fail to obtain
consent to any request for an additional currency under this Section 1.05, the
Administrative Agent shall promptly so notify the Borrower.
1.06 CHANGE OF CURRENCY. (a) Each obligation of the Borrower to make a
payment denominated in the national currency unit of any member state of the
European Union that adopts the Euro as its lawful currency after the date hereof
shall be redenominated into Euro at the time of such adoption (in accordance
with the EMU Legislation). If, in relation to the currency of any such member
state, the basis of accrual of interest expressed in this Agreement in respect
of that currency shall be inconsistent with any convention or practice in the
London interbank market for the basis of accrual of interest in respect of the
Euro, such expressed basis shall be replaced by such convention or practice with
29
effect from the date on which such member state adopts the Euro as its lawful
currency; provided that if any Committed Borrowing in the currency of such
member state is outstanding immediately prior to such date, such replacement
shall take effect, with respect to such Committed Borrowing, at the end of the
then current Interest Period.
(b) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro.
(c) Each provision of this Agreement also shall be subject to such
reasonable changes of construction as the Administrative Agent may from time to
time specify to be appropriate to reflect a change in currency of any other
country and any relevant market conventions or practices relating to the change
in currency.
1.07 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.08 LETTER OF CREDIT AMOUNTS. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the Dollar
Equivalent of the stated amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
or the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the Dollar Equivalent of the maximum amount
outstanding of such Letter of Credit after giving effect to all such increases.
Notwithstanding the foregoing, all fees with respect to all Letters of Credit
shall be based on the actual amount then available to be drawn under such
Letters of Credit for the period for which such fees are computed, it being
understood that such fees shall not take into account any increase in the
available or stated amount of such Letters of Credit which becomes effective
after the period for which such fees are computed.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 COMMITTED LOANS. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a "Committed Loan")
to the Borrower in Dollars or in one or more Alternative Currencies from time to
time, on any Business Day during the Availability Period, in an aggregate amount
not to exceed at any time outstanding the amount of such Lender's Commitment;
provided, however, that after giving effect to any Committed Borrowing, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, (ii) the
aggregate Outstanding Amount of the Committed Loans of any Lender, plus such
Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations
shall not exceed such Lender's Commitment, and (iii) the aggregate Outstanding
Amount of all Committed Loans and of all L/C Obligations denominated in
Alternative Currencies shall not exceed the Alternative Currency Sublimit.
Within the limits of each Lender's Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
30
under Section 2.04, and reborrow under this Section 2.01. Committed Loans may be
Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Each Committed Borrowing, each conversion of Committed Loans from one
Type to the other, and each continuation of Eurocurrency Rate Loans shall be
made upon the Borrower's irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurocurrency Rate Loans denominated in Dollars or of any conversion of
Eurocurrency Rate Loans denominated in Dollars to Base Rate Committed Loans,
(ii) four Business Days (or five Business Days in the case of a Special Notice
Currency) prior to the requested date of any Borrowing or continuation of
Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) on the
requested date of any Borrowing of Base Rate Committed Loans. Each telephonic
notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Committed Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurocurrency Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(c), each Committed Borrowing of or conversion to Base Rate Committed Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, (v) if applicable, the duration of the Interest Period with
respect thereto, and (vi) the currency of the Committed Loans to be borrowed. If
the Borrower fails to specify a currency in a Committed Loan Notice requesting a
Borrowing, then the Committed Loans so requested shall be made in Dollars. If
the Borrower fails to specify a Type of Committed Loan in a Committed Loan
Notice or if the Borrower fails to give a timely notice requesting a conversion
or continuation, then the applicable Committed Loans shall be made as, or
converted to, Base Rate Loans; provided, however, that in the case of a failure
to timely request a continuation of Committed Loans denominated in an
Alternative Currency, such Loans shall be continued as Eurocurrency Rate Loans
in their original currency with an Interest Period of one month. Any automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurocurrency Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month. No Committed Loan may be converted into or continued as a
Committed Loan denominated in a different currency, but instead must be prepaid
in the original currency of such Committed Loan and reborrowed in the other
currency.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount (and currency) of its Applicable
Percentage of the applicable Committed Loans, and if no timely notice of a
31
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans or continuation of Committed Loans denominated in a currency other than
Dollars, in each case as described in the preceding subsection. In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in Same Day Funds at the Administrative
Agent's Office for the applicable currency not later than 1:00 p.m., in the case
of any Committed Loan denominated in Dollars, and not later than the Applicable
Time specified by the Administrative Agent in the case of any Committed Loan in
an Alternative Currency, in each case on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower or the other applicable Borrower in like
funds as received by the Administrative Agent either by (i) crediting the
account of the Borrower on the books of Bank of America with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date the Committed Loan
Notice with respect to such Borrowing denominated in Dollars is given by the
Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any such L/C
Borrowings, and, second, shall be made available to the applicable Borrower as
provided above.
(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurocurrency Rate Loans (whether in
Dollars or any Alternative Currency) without the consent of the Required
Lenders, and the Required Lenders may demand that any or all of the then
outstanding Eurocurrency Rate Loans denominated in an Alternative Currency be
prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent
thereof, on the last day of the then current Interest Period with respect
thereto.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period, and with respect
to Alternative Currency Loans, the Dollar Equivalent amount thereof as of the
first day of such Interest Period and the Spot Rate used in determination
thereof, for Eurocurrency Rate Loans upon determination of such interest rate
and Spot Rate. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
Bank of America's prime rate used in determining the Base Rate promptly
following the public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than twelve (12) Interest
Periods in effect with respect to Committed Loans.
32
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in
this Section 2.03, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit denominated in Dollars or in one or more
Alternative Currencies for the account of the Borrower or jointly for the
account of the Borrower and a Designated Subsidiary, and to amend or extend
Letters of Credit previously issued by it, in accordance with subsection
(b) below, and (2) to honor drawings under the Letters of Credit; and (B)
the Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower or jointly for the account of the Borrower and
a Designated Subsidiary and any drawings thereunder; provided that after
giving effect to any L/C Credit Extension with respect to any Letter of
Credit, (v) the Total -------- Outstandings shall not exceed the Aggregate
Commitments, (w) the aggregate Outstanding Amount of all Committed Loans
and of all L/C Obligations denominated in Alternative Currencies shall not
exceed the Alternative Currency Sublimit, (x) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender's Applicable
Percentage of the ---- Outstanding Amount of all L/C Obligations shall not
exceed such Lender's Commitment, (y) the Outstanding Amount of the L/C
Obligations with respect to standby Letters of Credit shall not exceed the
Standby L/C Sublimit, and (z) the Outstanding Amount of the L/C Obligations
with respect to commercial Letters of Credit shall not exceed the
Commercial L/C Sublimit. Each request by the Borrower for the issuance or
amendment of a Letter of Credit shall be deemed to be a representation by
the Borrower that the L/C Credit Extension so requested complies with the
conditions set forth in the proviso to the preceding sentence. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. All Existing Letters of Credit shall
be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.
(ii) No L/C Issuer shall issue any Letter of Credit, if:
(A) Subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance, unless the Required Lenders have approved such
expiry date; or
(B) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.
33
(iii) No L/C Issuer shall be under any obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good ▇▇▇▇▇
▇▇▇▇▇ material to it;
(B) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is in an initial stated amount
less than $100,000, in the case of a commercial Letter of Credit, or
$100,000, in the case of a standby Letter of Credit;
(D) except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is to be denominated in a
currency other than Dollars or an Alternative Currency;
(E) the L/C Issuer does not as of the issuance date of such
requested Letter of Credit issue Letters of Credit in the requested
currency;
(F) such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder or for
the issuance of bankers' acceptances or for the issuance of any
deferred payment obligation; or
(G) a default of any Lender's obligations to fund under Section
2.03(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate the L/C
Issuer's risk with respect to such Lender.
(iv) No L/C Issuer shall amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B)
34
the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated
therewith, and each L/C Issuer shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article IX with
respect to any acts taken or omissions suffered by such L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by
it and Issuer Documents pertaining to such Letters of Credit as fully as if
the term "Administrative Agent" as used in Article IX included such L/C
Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuers.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower or conforming with the electronic letter of credit system of
the applicable L/C Issuer, as applicable. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent (A) not
later than 11:00 a.m. at least two (2) Business Days (or such later date
and time as the applicable L/C Issuer may agree in a particular instance in
its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be, of any Letter of Credit denominated in
Dollars; provided, however, that if a request is received via the
applicable L/C Issuer's electronic letter of credit system on any Business
Day, such Letter of Credit shall be issued on or prior to 5:00 p.m., the
next succeeding Business Day (or at such later date and time as the
applicable L/C Issuer may agree in a particular instance in its sole
discretion), and (B) not later than 12 noon, London time or Tokyo time, as
applicable depending on the applicable currency, at least four (4) Business
Days prior to the proposed issuance date or date of amendment, as the case
may be, of any Letter of Credit denominated in an Alternative Currency (or
at such later date and time as the applicable L/C Issuer may agree in a
particular instance in its sole discretion). In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) whether the Letter of Credit is being requested for the
Borrower or jointly for the account of the Borrower and a Designated
Subsidiary and, if the latter, the name of such Designated Subsidiary, (B)
the proposed issuance date of the requested Letter of Credit (which shall
be a Business Day); (C) the amount and currency thereof; (D) the expiry
date thereof; (E) the name and address of the beneficiary thereof; (F) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (G) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (H) such other matters
as the L/C Issuer may reasonably require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
35
amendment; and (D) such other matters as the L/C Issuer may reasonably
require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Unless the L/C Issuer
has received written notice from any Lender, the Administrative Agent or
any Loan Party, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower (or the applicable Designated Subsidiary) or enter into the
applicable amendment, as the case may be, in each case in accordance with
the L/C Issuer's usual and customary business practices. Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal to
the product of such Lender's Applicable Percentage times the amount of such
Letter of Credit. The Administrative Agent shall deliver to each Lender on
a quarterly basis a notice specifying the then outstanding Letters of
Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the applicable L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic extension
provisions (each, an "Auto-Extension Letter of Credit"); provided that any
such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent
any such extension at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving prior notice
to the beneficiary thereof not later than a day (the "Non-Extension Notice
Date") in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
the Borrower shall not be required to make a specific request to the L/C
Issuer for any such extension. Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that no L/C Issuer shall permit any such extension
if (A) such L/C Issuer has determined that it would not be permitted, or
would have no obligation, at such time to issue such Letter of Credit in
its revised form (as extended) under the terms hereof (by reason of the
provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B)
it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice
Date (1) from the Administrative Agent that the Required Lenders have
elected not to permit such extension or (2) from the Administrative Agent,
any Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case
directing such L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
36
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. In the case of a
Letter of Credit denominated in an Alternative Currency, the Borrower shall
reimburse the L/C Issuer in such Alternative Currency, unless (A) the L/C
Issuer (at its option) shall have specified in such notice that it will
require reimbursement in Dollars, or (B) in the absence of any such
requirement for reimbursement in Dollars, the Borrower shall have notified
the L/C Issuer promptly following receipt of the notice of drawing that the
Borrower will reimburse the L/C Issuer in Dollars. In the case of any such
reimbursement in Dollars of a drawing under a Letter of Credit denominated
in an Alternative Currency, the L/C Issuer shall notify the Borrower of the
Dollar Equivalent of the amount of the drawing promptly following the
determination thereof by the Administrative Agent. Not later than 11:00
a.m. on the date of any payment by the L/C Issuer under a Letter of Credit
to be reimbursed in Dollars, or the Applicable Time on the date of any
payment by the L/C Issuer under a Letter of Credit to be reimbursed in an
Alternative Currency (each such date, an "Honor Date"), the Borrower shall
reimburse the applicable L/C Issuer in an amount equal to the amount of
such drawing and in the applicable currency. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall
promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (expressed in Dollars in the amount of the Dollar
Equivalent thereof in the case of a Letter of Credit denominated in an
Alternative Currency) (the "Unreimbursed Amount"), and the amount of such
Lender's Applicable Percentage thereof. In such event, the Borrower shall
be deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02 for
the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to
this Section 2.03(c)(i) may be given by telephone if immediately confirmed
in writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer, in Dollars, at the Administrative Agent's Office for
Dollar-denominated payments in an amount equal to its Applicable Percentage
of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer in Dollars.
37
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's
Applicable Percentage of such amount shall be solely for the account of the
L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower, any Subsidiary or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; provided, however, that each Lender's obligation to
make Committed Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrower
of a Committed Loan Notice). No such making of an L/C Advance shall relieve
or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the
time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the applicable
Overnight Rate from time to time in effect. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to
any amounts owing under this clause (vi) shall be conclusive absent
manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
38
directly from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Applicable Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's L/C Advance was outstanding) in
Dollars and in the same funds as those received by the Administrative
Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Applicable Percentage thereof on demand of
the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per
annum equal to the applicable Overnight Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the payment
in full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower or any Subsidiary may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit
or any agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law;
39
(v) any adverse change in the relevant exchange rates or in the
availability of the relevant Alternative Currency to the Borrower or any
Subsidiary or in the relevant currency markets generally; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or any Subsidiary.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will as soon as possible but in any event within three (3) Business
Days' of receipt thereof, notify the L/C Issuer of such noncompliance or other
irregularity. The Borrower shall be conclusively deemed to have waived any such
claim against the L/C Issuer and its correspondents unless such notice is given
as aforesaid.
(f) Role of L/C Issuer. Each Lender, the Borrower and each Designated
Subsidiary agree that, in paying any drawing under a Letter of Credit, the L/C
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the L/C Issuers, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the L/C Issuer shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(e); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against an L/C Issuer, and an L/C Issuer may be liable to the Borrower,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such L/C Issuer's willful misconduct or gross negligence
or such L/C Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
40
Each L/C Issuer shall send a report to the Administrative Agent on each Business
Day detailing each outstanding Letter of Credit and any changes thereto.
(g) Cash Collateral. (i) Upon the request of the Administrative Agent, (A)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Borrower shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations.
(ii) In addition, if the Administrative Agent notifies the Borrower at
any time that the Outstanding Amount of all L/C Obligations attributable to
standby Letters of Credit at such time exceeds 102.5% of the Standby L/C
Sublimit then in effect, then, within two Business Days after receipt of
such notice, the Borrower shall Cash Collateralize the L/C Obligations in
an amount equal to the amount by which the Outstanding Amount of all L/C
Obligations attributable to standby Letters of Credit exceeds the Standby
L/C Sublimit.
(iii) Also in addition, if the Administrative Agent notifies the
Borrower at any time that the Outstanding Amount of all L/C Obligations
attributable to commercial Letters of Credit at such time exceeds 102.5% of
the Commercial L/C Sublimit then in effect, then, within two Business Days
after receipt of such notice, the Borrower shall Cash Collateralize the L/C
Obligations in an amount equal to the amount by which the Outstanding
Amount of all L/C Obligations attributable to commercial Letters of Credit
exceeds the Commercial L/C Sublimit.
(iv) The Administrative Agent may, at any time and from time to time
after the initial deposit of Cash Collateral, request that additional Cash
Collateral be provided in order to protect against the results of exchange
rate fluctuations.
(v) Sections 2.05 and 8.02(c) set forth certain additional
requirements to deliver Cash Collateral hereunder.
(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), (i) the rules of the
ISP shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage, in Dollars, a Letter of Credit fee (the "Letter of Credit Fee") (i)
for each commercial Letter of Credit equal to the Applicable Rate for commercial
Letters of Credit times the Dollar Equivalent of the daily amount available to
be drawn under such Letter of Credit, and (ii) for each standby Letter of Credit
equal to the Applicable Rate for standby Letters of Credit times the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit. For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined in
41
accordance with Section 1.08. Letter of Credit Fees shall be (i) computed on a
quarterly basis in arrears and (ii) due and payable on the tenth Business Day
after the end of each April, July, October and January, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. If there is any
change in the Applicable Rate during any quarter, the daily amount available to
be drawn under each standby Letter of Credit shall be computed and multiplied by
the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, while any Event of Default exists, upon the request of the
Required Lenders all Letter of Credit Fees shall accrue at the Default Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to each L/C Issuer for its own account,
in Dollars, a fronting fee with respect to each Letter of Credit, such rate or
rates and payable as shall be mutually agreed upon between the applicable L/C
Issuer and the Borrower. For purposes of computing the daily amount available to
be drawn under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.08. In addition, the Borrower shall
pay directly to the L/C Issuer for its own account, in Dollars, the negotiated
processing fees of the L/C Issuer relating to letters of credit as from time to
time in effect. Such fees and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
(l) Letters of Credit Issued for Designated Subsidiaries. Notwithstanding
that a Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Designated Subsidiary, the Borrower
shall be obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. The Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Designated Subsidiaries inures
to the benefit of the Borrower, and that the Borrower's business derives
substantial benefits from the businesses of such Designated Subsidiaries.
(m) Designation of Additional L/C Issuers. By written notice from the
Borrower delivered to the Administrative Agent, the Borrower may from time to
time, so long as no Default or Event of Default shall have occurred and be
continuing, designate additional Lenders to act as L/C Issuers hereunder,
provided that (i) each Lender so designated shall have delivered to the
Administrative Agent written notice of its acceptance (which acceptance may be a
part of or delivered separate from the notice of designation), (ii) such notice
of designation and related acceptance shall be delivered not later than fifteen
(15) Business Days prior to the initial issuance of any Letter of Credit by such
designated L/C Issuer (except that any designation and acceptance delivered on
the Closing Date shall be effective immediately), and (iii) there shall at no
time be more than six (6) L/C Issuers (including Bank of America or any
successor Administrative Agent, in its capacity as L/C Issuer). Without limiting
the provisions of Section 10.07(h), each L/C Issuer so designated hereunder
shall continue in such capacity until it shall, by written notice delivered to
the Administrative Agent and the Borrower, terminate its status as L/C Issuer
(which notice shall be effective thirty (30) Business Days following receipt by
the Administrative Agent of such notice and consent or such later date as may be
specified in such notice); provided that no such termination shall be permitted
42
or effective until all Letters of Credit issued by such L/C Issuer shall have
expired or otherwise terminated and all other L/C Obligations with respect to
Letters of Credit issued by such L/C Issuer shall have been paid and satisfied
in full.
2.04 PREPAYMENTS. (a) The Borrower may, upon notice from the Borrower to
the Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than
12:00 p.m. (A) three Business Days prior to any date of prepayment of
Eurocurrency Rate Loans denominated in Dollars, (B) four Business Days (or five,
in the case of prepayment of Loans denominated in Special Notice Currencies)
prior to any date of prepayment of Eurocurrency Rate Loans denominated in
Alternative Currencies, and (C) on the date of prepayment of Base Rate Committed
Loans; (ii) any prepayment of Eurocurrency Rate Loans denominated in Dollars
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; (iii) any prepayment of Eurocurrency Rate Loans denominated
in Alternative Currencies shall be in a minimum principal amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof; and (iv) any prepayment of
Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid and, if Eurocurrency Loans are to be prepaid, the Interest Period(s) of
such Loans. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender's Applicable
Percentage of such prepayment. If such notice is given by the Borrower, the
applicable Borrower shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein. Any
prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Applicable Percentages.
(b) If the Administrative Agent notifies the Borrower at any time that the
Total Outstandings at such time exceed an amount equal to the Aggregate
Commitments then in effect, then, within two Business Days after receipt of such
notice, the Borrower shall prepay Loans and/or the Borrower shall Cash
Collateralize the L/C Obligations in an aggregate amount sufficient to reduce
such Outstanding Amount as of such date of payment to an amount not to exceed
100% of the Aggregate Commitments then in effect; provided, however, that,
subject to the provisions of Section 2.03(g)(ii), the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.05(c) unless after the prepayment in full of the Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.
(c) If the Administrative Agent notifies the Borrower at any time that the
Outstanding Amount of all Loans and all L/C Obligations denominated in
Alternative Currencies at such time exceeds an amount equal to 102.5% of the
Alternative Currency Sublimit then in effect, then, within two Business Days
after receipt of such notice, the Borrower shall prepay Loans or Cash
Collateralize such L/C Obligations in an aggregate amount sufficient to reduce
such Outstanding Amount as of such date of payment to an amount not to exceed
100% of the Alternative Currency Sublimit then in effect, or to Cash
Collateralize the amount of such excess.
43
2.05 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Commitments, or from time
to time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Alternative Currency Sublimit, the Commercial L/C
Sublimit or the Standby L/C Sublimit exceeds the amount of the Aggregate
Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Commitments. The amount of
any such Aggregate Commitment reduction shall not be applied to the Alternative
Currency Sublimit, the Standby L/C Sublimit or the Commercial L/C Sublimit
unless otherwise specified by the Borrower. Any reduction of the Aggregate
Commitments shall be applied to the Commitment of each Lender according to its
Applicable Percentage. All fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of
such termination.
2.06 REPAYMENT OF LOANS. The Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of Committed Loans made to the
Borrower outstanding on such date.
2.07 INTEREST. (a) Subject to the provisions of subsection (b) below, (i)
each Eurocurrency Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurocurrency Rate for such Interest Period plus the Applicable Rate plus (in the
case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending
Office in the United Kingdom or a Participating Member State) the Mandatory
Cost; and (ii) each Base Rate Committed Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate.
(b) (i) If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws until such
Event of Default is waived or cured to the satisfaction of the
Administrative Agent and the Lenders.
(ii) If any amount (other than principal of any Loan) payable by the
Borrower under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration
or otherwise, then upon the request of the Required Lenders, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws until such Event of Default is waived or cured to the
satisfaction of the Administrative Agent and the Lenders.
44
(iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.08 FEES. In addition to certain fees described in subsections (i) and (j)
of Section 2.03:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
facility fee in Dollars equal to the Applicable Rate times the actual daily
amount of the Aggregate Commitments (or, if the Aggregate Commitments have
terminated, on the Outstanding Amount of all Committed Loans and L/C
Obligations), regardless of usage. The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Committed Loans or
L/C Obligations remain outstanding), including at any time during which one or
more of the conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each April, July, October and
January, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date (and, if applicable, thereafter on demand). The
facility fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.
(b) Other Fees. (i)The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts, in Dollars, fees in the
amounts and at the times specified in the Fee Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders, in Dollars, such fees as shall
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.09 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year), or, in the case of interest in respect of Committed Loans
denominated in Alternative Currencies as to which market practice differs from
the foregoing, in accordance with such market practice. Interest shall accrue on
45
each Loan for the day on which the Loan is made, and shall not accrue on a Loan,
or any portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made shall,
subject to Section 2.11(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
2.10 EVIDENCE OF DEBT. (a) The Credit Extensions made by each Lender shall
be evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrower and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender to a Borrower made through the Administrative Agent, the
Borrower shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender's Loans to the Borrower in
addition to such accounts or records. Each Lender may attach schedules to a Note
and endorse thereon the date, Type (if applicable), amount, currency and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
2.11 PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK. (a) General. All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein and except with respect to principal of and interest
on Loans denominated in an Alternative Currency, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the applicable
Administrative Agent's Office in Dollars and in Same Day Funds not later than
2:00 p.m. on the date specified herein. Except as otherwise expressly provided
herein, all payments by the Borrower hereunder with respect to principal and
interest on Loans denominated in an Alternative Currency shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the applicable Administrative Agent's Office in such
Alternative Currency and in Same Day Funds not later than the Applicable Time
specified by the Administrative Agent on the dates specified herein. Without
limiting the generality of the foregoing, the Administrative Agent may require
that any payments due under this Agreement be made in the United States. If, for
any reason, the Borrower is prohibited by any Law from making any required
payment hereunder in an Alternative Currency, the Borrower shall make such
payment in Dollars in the Dollar Equivalent of the Alternative Currency payment
46
amount. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent (i) after 2:00 p.m.,
in the case of payments in Dollars, or (ii) after the Applicable Time specified
by the Administrative Agent in the case of payments in an Alternative Currency,
shall in each case be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be
made by the Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Committed
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Committed Borrowing available to the Administrative Agent,
then the applicable Lender and the applicable Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount in Same
Day Funds with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the Overnight Rate and (B) in the case of a payment to be made by the
Borrower, the interest rate applicable to Base Rate Loans (the "Delinquent
Amount"). Upon receipt by the Administrative Agent of the amounts so paid (the
"Paid Amounts") by both the Borrower and such Lender in respect of the
Delinquent Amount, the Administrative Agent shall promptly pay to the Borrower
the amount, if any, by which the Paid Amounts exceed the Delinquent Amounts. If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender's
Committed Loan included in such Committed Borrowing. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or an L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the
amount due. In such event, if the Borrower has not in fact made such payment,
then each of the Lenders or the L/C Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in Same Day Funds with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
Overnight Rate.
47
A notice of the Administrative Agent to any Lender or Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the Administrative Agent funds for any Loan to be made by such Lender to the
Borrower as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Committed Loans, to fund participations in Letters of Credit
and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Committed Loan, to fund any such participation
or to make any payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Committed Loan, to purchase its participation or to make
its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
2.12 SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Committed Loans made by it, or the
participations in L/C Obligations held by it resulting in such Lender's
receiving payment of a proportion of the aggregate amount of such Committed
Loans or participations and accrued interest thereon greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and (b)
purchase (for cash at face value) participations in the Committed Loans and
subparticipations in L/C Obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Committed Loans and
other amounts owing them, provided that:
(i) if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to
(x) any payment made by a Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of
its Committed Loans or subparticipations in L/C Obligations to any assignee
48
or participant, other than to the Borrower or any Subsidiary thereof (as to
which the provisions of this Section shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
2.13 INCREASE IN COMMITMENTS.
(a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), the Borrower
may from time to time, request an increase in the Aggregate Commitments by an
amount (for all such requests) not exceeding $25,000,000; provided that (i) any
such request for an increase shall be in a minimum amount of $10,000,000, and
(ii) the Borrower has not, at any time prior to such request, elected to reduce
the Aggregate Commitments pursuant to Section 2.05. At the time of sending such
notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
the L/C Issuer (which approvals shall not be unreasonably withheld), the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel, provided however, that the Borrower may
only invite such additional Eligible Assignees after each Lender has notified
the Administrative Agent of its decision in accordance with clause (b) above and
only with respect to amounts not offered to be accepted only by such Lenders.
The Aggregate Commitments shall not be increased unless the Lenders and such
additional Eligible Assignees agree to increase their Commitments in an amount
equal to the requested amount of the increase.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the "Increase Effective Date") and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase and
the Increase Effective Date. Any increase in the Aggregate Commitments pursuant
to this Section 2.13 shall not result in any increase in the Alternative
Currency Sublimit, the Standby L/C Sublimit or the Commercial L/C Sublimit.
49
(e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.13, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01, and (B) no Default exists. The Borrower
shall prepay any Committed Loans outstanding on the Increase Effective Date (and
pay any additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Committed Loans ratable with any revised
Applicable Percentages arising from any nonratable increase in the Commitments
under this Section.
(f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.12 or 10.01 to the contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
L/C Issuer, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and each L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
resulting from any payment made by or on account of any obligation of the
Borrower or any Loan Party hereunder or under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
50
paid by the Administrative Agent, such Lender or such L/C Issuer, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority,
provided, however, that the indemnities contained in this Section shall not
apply to any penalties, interest or expenses which are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of the Administrative Agent, any
Lender or the L/C Issuer. A certificate as to the amount of such payment or
liability delivered to a Borrower by a Lender or an L/C Issuer (with a copy to
the Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN (or
any applicable successor forms) claiming eligibility for benefits of an
income tax treaty to which the United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI (or
any applicable successor forms),
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
51
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the applicable Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
described in section 881(c)(3)(C) of the Code and (y) duly completed copies
of Internal Revenue Service Form W-8BEN (or any applicable successor
forms), or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.
Without limiting the obligations of the Lenders set forth above regarding
delivery of certain forms and documents to establish each Lender's status for
U.S. withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or the Borrower, as the Administrative Agent or the
Borrower shall reasonably request, on or prior to the Closing Date, and in a
timely fashion thereafter, such other documents and forms required by any
relevant taxing authorities under the Laws of any other jurisdiction, duly
executed and completed by such Lender, as are required under such Laws to
confirm such Lender's entitlement to any available exemption from, or reduction
of, applicable withholding taxes in respect of all payments to be made to such
Lender outside of the U.S. by the Borrower pursuant to this Agreement or
otherwise to establish such Lender's status for withholding tax purposes in such
other jurisdiction. Each Lender shall promptly (i) notify the Administrative
Agent of any change in circumstances which would modify or render invalid any
such claimed exemption or reduction, and (ii) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws of any such jurisdiction
that the Borrower make any deduction or withholding for taxes from amounts
payable to such Lender. Additionally, each of the Borrower shall promptly
deliver to the Administrative Agent or any Lender, as the Administrative Agent
or such Lender shall reasonably request, on or prior to the Closing Date, and in
a timely fashion thereafter, such documents and forms required by any relevant
taxing authorities under the Laws of any jurisdiction, duly executed and
completed by the Borrower, as are required to be furnished by such Lender or the
Administrative Agent under such Laws in connection with any payment by the
Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in
connection with the Loan Documents, with respect to such jurisdiction.
(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or any L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by the Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or such L/C Issuer, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent, such Lender or the L/C Issuer, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
52
Administrative Agent, such Lender or such L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent, any Lender or any L/C Issuer to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurocurrency Rate Loans (whether denominated in Dollars or an Alternative
Currency), or to determine or charge interest rates based upon the Eurocurrency
Rate, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars or
any Alternative Currency in the applicable interbank market, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue Eurocurrency Rate Loans in the
affected currency or currencies or, in the case of Eurocurrency Rate Loans in
Dollars, to convert Base Rate Committed Loans to Eurocurrency Rate Loans, shall
be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable and
such Loans are denominated in Dollars, convert all such Eurocurrency Rate Loans
of such Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurocurrency
Rate Loans to such day, or immediately, if such Lender may not lawfully continue
to maintain such Eurocurrency Rate Loans. Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine that
for any reason in connection with any request for a Eurocurrency Rate Loan or a
conversion to or continuation thereof that (a) deposits (whether in Dollars or
an Alternative Currency) are not being offered to banks in the applicable
offshore interbank market for such currency for the applicable amount and
Interest Period of such Eurocurrency Rate Loan, (b) adequate and reasonable
means do not exist for determining the Eurocurrency Rate for any requested
Interest Period with respect to a proposed Eurocurrency Rate Loan (whether
denominated in Dollars or an Alternative Currency), or (c) the Eurocurrency Rate
for any requested Interest Period with respect to a proposed Eurocurrency Rate
Loan does not adequately and fairly reflect the cost to such Lenders of funding
such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender. Thereafter, the obligation of the Lenders to make
or maintain Eurocurrency Rate Loans in the affected currency or currencies shall
be suspended until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower
may revoke any pending request for a Borrowing of, conversion to or continuation
of Eurocurrency Rate Loans in the affected currency or currencies or, failing
that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.
53
3.04 INCREASED COSTS; RESERVES ON EUROCURRENCY RATE LOANS.
(a) Increased Costs Generally. If any Change in Law shall:
(i) (i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except (A) any reserve requirement
contemplated by Section 3.04(e) and (B) the requirements of the Bank of
England and the Financial Services Authority or the European Central Bank
reflected in the Mandatory Cost, other than as set forth below) or any L/C
Issuer;
(ii) subject any Lender or any L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurocurrency Loan made by it, or
change the basis of taxation of payments to such Lender or such L/C Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the L/C Issuer);
(iii) the Mandatory Cost, as calculated hereunder, does not represent
the cost to any Lender of complying with the requirements of the Bank of
England and/or the Financial Services Authority or the European Central
Bank in relation to its making, funding or maintaining Eurocurrency Rate
Loans; or
(iv) impose on any Lender or any L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurocurrency Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or
such L/C Issuer of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or such L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrower will
pay to such Lender or such L/C Issuer, as the case may be, such additional
amount or amounts as will compensate such Lender or such L/C Issuer, as the case
may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or any L/C Issuer determines that
any Change in Law affecting such Lender or such L/C Issuer or any Lending Office
of such Lender or such Lender's or such L/C Issuer's holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or such L/C Issuer's capital or on the capital of
such Lender's or such L/C Issuer's holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender's or such L/C Issuer's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
such L/C Issuer's policies and the policies of such Lender's or such L/C
54
Issuer's holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or such L/C Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or the L/C
Issuer or such Lender's or the L/C Issuer's holding company for any such
reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or an L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or such L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error. The Borrower shall pay such Lender or such L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or any
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender's or such L/C Issuer's
right to demand such compensation, provided that no Borrower shall be required
to compensate a Lender or an L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or such L/C Issuer, as the case
may be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or such L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
(e) ADDITIONAL RESERVE REQUIREMENTS. The Borrower shall pay to each Lender,
(i) as long as such Lender shall be required to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as "Eurocurrency liabilities"), additional interest on
the unpaid principal amount of each Eurocurrency Rate Loan equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), and (ii) as
long as such Lender shall be required to comply with any reserve ratio
requirement or analogous requirement of any other central banking or financial
regulatory authority imposed in respect of the maintenance of the Commitments or
the funding of the Eurocurrency Rate Loans, such additional costs (expressed as
a percentage per annum and rounded upwards, if necessary, to the nearest five
decimal places) equal to the actual costs allocated to such Commitment or Loan
by such Lender (as determined by such Lender in good faith, which determination
shall be conclusive, which in each case shall be due and payable on each date on
which interest is payable on such Loan, provided the Borrower shall have
received at least 10 days' prior notice (with a copy to the Administrative
Agent) of such additional interest or costs from such Lender. If a Lender fails
to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest or costs shall be due and payable 10 days from receipt of
such NOTICE.
3.05 COMPENSATION FOR LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
55
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
(c) any failure by the Borrower to make payment of any Loan or drawing
under any Letter of Credit (or interest due thereon) denominated in an
Alternative Currency on its scheduled due date or any payment thereof in a
different currency; or
(d) any assignment of a Eurocurrency Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.13;
including any loss of anticipated profits, any foreign exchange losses and any
loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Loan, from fees payable to terminate the deposits from
which such funds were obtained or from the performance of any foreign exchange
contract. The Borrower shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency
Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching
deposit or other borrowing in the offshore interbank market for such currency
for a comparable amount and for a comparable period, whether or not such
Eurocurrency Rate Loan was in fact so funded.
3.06 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with Section
10.13 but replacement does not relieve the Borrower's obligation to pay such
compensation or other amounts.
56
3.07 SURVIVAL. All of the Borrower' obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:
(a) Unless, with respect to immaterial matters or immaterial items
specified in clause (iii) or (iv) below with respect to which the Borrower has
given assurances satisfactory to the Administrative Agent that such items shall
be delivered promptly following the Closing Date, waived by the Administrative
Agent, the Administrative Agent's receipt of the following, each of which shall
be originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;
(ii) Notes executed by the Borrower in favor of each Lender requesting
Notes;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or
formed, and that each Loan Party is validly existing and in good standing
in its jurisdiction of organization, including certified copies of its
Organization Documents and certificates of good standing;
(v) a favorable opinion or opinions of ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇, counsel
to the Loan Parties and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to KFR, addressed to
the Administrative Agent and each Lender, as to the matters set forth in
Exhibit G and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party
of the Loan Documents and the validity against such Loan Party of the Loan
Documents to which it is a party, and such consents, licenses and approvals
57
shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there is no event, circumstance, action,
suit, investigation or proceeding pending or threatened in any court or
before any arbitrator or Governmental Authority since the date of the
Audited Financial Statements which has or could reasonably be expect to
have a Material Adverse Effect, and (C) as to the matters described in
Section 4.01(d);
(viii) the consolidated financial statements of the Borrower and its
Subsidiaries for fiscal years 2001, 2002 and 2003, including balance
sheets, income and cash flow statements, all audited and opined on by
independent certified public accountants of recognized national standing
and prepared in conformity with GAAP, and such other financial information
as the Administrative Agent may request;
(ix) a duly completed Compliance Certificate as of the last day of the
fiscal quarter of the Borrower most recently ended prior to the Closing
Date, signed by a Responsible Officer of the Borrower;
(x) evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect;
(xi) notice of appointment of initial Responsible Officer(s);
(xii) evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated, all indebtedness
and obligations of the Borrower incurred thereunder (other than Existing
Letters of Credit) have been, or with the initial Credit Extension
hereunder on the Closing Date will be, repaid and the Borrower released
from all liability thereunder except such as by their express terms survive
such repayment and termination, and all Liens securing obligations under
the Existing Credit Agreement have been or concurrently with the Closing
Date are being released; and
(xiii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer or the Required
Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all fees, charges and disbursements of counsel to the Administrative Agent to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
(d) In the good faith judgment of the Administrative Agent and the Lenders,
there shall not have occurred or become known to the Administrative Agent or the
Lenders any event, condition, situation or status since the date of the Audited
Financial Statements or since the date of the information contained in the
58
financial and business projections, budgets, pro forma data and forecasts
concerning the Borrower and its Subsidiaries delivered to the Administrative
Agent prior to the Closing Date that has had or could reasonably be expected to
result in a Material Adverse Effect or which has or could reasonably be expected
to adversely affect the transactions contemplated under the Loan Documents.
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to
honor any Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurocurrency Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of (i) the Borrower contained in
Article V and (ii) each Loan Party contained in each other Loan Document or in
any document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Credit Extension, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date, and except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension or the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit Extension in accordance with the requirements
hereof.
(d) In the case of a Credit Extension to be denominated in an Alternative
Currency, there shall not have occurred any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which in the reasonable opinion of the Administrative Agent,
the Required Lenders (in the case of any Loans to be denominated in an
Alternative Currency) or the L/C Issuer (in the case of any Letter of Credit to
be denominated in an Alternative Currency) would make it impracticable for such
Credit Extension to be denominated in the relevant Alternative Currency.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurocurrency Rate Loans) submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.
59
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. The Borrower
and each Subsidiary (a) is a corporation or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all governmental licenses, authorizations, consents and
approvals to own its assets, carry on its business and to execute and deliver,
and perform its obligations under, the Loan Documents, (c) is duly qualified and
is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license, and (d) is in compliance with all Laws,
except in each case referred to in clause (c) or this clause (d), to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party, has
been duly authorized by all necessary corporate or other organizational action,
and do not and will not (a) contravene the terms of any of any Loan Party's
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any Contractual Obligation
to which any Loan Party is a party or any order, injunction, writ or decree of
any Governmental Authority or arbitral award to which any Loan Party or their
property is subject; or (c) violate any Law.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document that is a
party thereto.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
50
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated July 31, 2004, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.05
sets forth all material indebtedness and other liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the date of
such financial statements, including liabilities for taxes, material commitments
and Indebtedness.
(c) Since the date of the Audited Financial Statements, there has been no
event or circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.
5.06 LITIGATION. Except as specifically disclosed in Schedule 5.06, there
are no actions, suits, proceedings, claims, disputes or investigations pending
or, to the knowledge of the Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, the property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
61
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or its
Subsidiaries operate.
5.11 TAXES. The Borrower and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed, and have paid
all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) Except for the termination of the Kellwood Company Pension Plan, which
occurred on December 7, 2000, no ERISA Event has occurred or is reasonably
expected to occur; (ii) to the knowledge of the Borrower, no Pension Plan has
any Unfunded Pension Liability in excess of the Threshold Amount; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.
5.13 SUBSIDIARIES; EQUITY INTERESTS. As of the date hereof, the Borrower
has no Subsidiaries other than those specifically disclosed in Part (a) of
62
Schedule 5.13 and has no equity investments in any other corporation or entity
other than those specifically disclosed in Part (b) of Schedule 5.13.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) Neither the Borrower nor any Subsidiary is engaged nor will it engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock;
provided, however, the Borrower or its Subsidiaries may own margin stock in
connection with Permitted Acquisitions consummated through the purchase of stock
for such limited period as shall be necessary to consummate such Permitted
Acquisition, but no violation of Regulation U results therefrom. Following the
application of the proceeds of each Borrowing or drawing under each Letter of
Credit, not more than 25% of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a consolidated basis) subject to
the provisions of Section 7.01 or Section 7.05 or subject to any restriction
contained in any agreement or instrument between the Borrower and any Lender or
any Affiliate of any Lender relating to Indebtedness and within the scope of
Section 8.01(e) will be margin stock.
(b) None of the Borrower, any Person controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15 DISCLOSURE. No statement, information, report, representation, or
warranty made by the Borrower or any Loan Party in any Loan Document to which it
is a party or furnished to the Administrative Agent or any Lender by or on
behalf of the Borrower or any Subsidiary in connection with the preparation of
any Loan Document contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
5.16 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person. Except as specifically disclosed in Schedule 5.16, no claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or,
to the knowledge of the Borrower, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
63
5.17 COMPLIANCE WITH LAWS. The Borrower and each of its Subsidiaries is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 100 days after the end of
each fiscal year of the Borrower or within ten (10) Business Days after the
filing thereof with the SEC, if earlier, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
GAAP and shall not be subject to any qualifications or exceptions as to the
scope of the audit or the going concern status of the Borrower nor to any
qualifications and exceptions not reasonably acceptable to the Required Lenders;
and
(b) as soon as available, but in any event within 50 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower or
within ten (10) Business Days after the filing thereof with the SEC, if earlier,
a consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the related consolidated statements of income or
operations and cash flows for such fiscal quarter and for the portion of the
Borrower's fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified by a Responsible Officer as fairly presenting
the financial condition, results of operations and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP, subject only to normal, recurring
year end audit adjustments and the absence of footnotes.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
64
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default under the financial covenants set forth herein or, if any such
Default or Event of Default shall exist, stating the nature and status of such
event;
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer;
(c) promptly after any request by the Administrative Agent, copies of any
detailed audit reports (other than the audited financial statements referred to
in Section 6.01(a) above), management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants (collectively, "Accounting Information") in
connection with the accounts or books of the Borrower or any Subsidiary;
provided, however, the Administrative Agent and the Lenders agree that none of
them shall be entitled to rely on such Accounting Information with respect to
any such independent accountants and such independent accountants shall have no
liability to the Administrative Agent or any Lender as a consequence of their
receipt of such Accounting Information;
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto; and
(e) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary as the Administrative
Agent, at the request of any Lender, may from time to time request.
Each document required to be delivered pursuant to Section 6.01(a) or (b)
shall be deemed to have been delivered on the date on which the Borrower posts
such document on the Borrower's website on the Internet at the website address
listed on Schedule 10.02 hereof, or when such document is posted on the
Securities and Exchange Commission's website at ▇▇▇.▇▇▇.▇▇▇ (the "SEC Website")
or on an Internet website established by the Administrative Agent with
Intralinks, Inc. or other similarly available electronic media (each of the
foregoing an "Informational Website"); provided that (i) the Borrower shall
deliver paper copies of all such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies (without
impairment of the effectiveness of any document previously delivered in
electronic media form) until a request to cease delivering paper copies is given
by the Administrative Agent or such Lender and (ii) the Administrative Agent and
each Lender shall be notified by electronic mail of the applicable Informational
Website and of the posting of each such document. The Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above in this paragraph, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to
65
it or maintaining its copies of such documents. The Borrower shall be
responsible for (other than with respect to the SEC Website) and shall incur all
risks associated with (including with respect to the SEC Website) the security
and confidentiality of the Informational Websites and its information posted
thereon.
Notwithstanding any other provision contained herein, the Borrower hereby
acknowledges that (a) the Administrative Agent and/or the Arranger will make
available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, "Borrower
Materials") by posting the Borrower Materials on IntraLinks or another similar
electronic system (the "Platform") and (b) certain of the Lenders may be
"public-side" Lenders (i.e., Lenders that do not with to receive material
non-public information with respect to the Borrower or its securities) (each, a
"Public Lender"). The Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page thereof; (x) by marking
Borrower Materials "PUBLIC", the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat the
Borrower Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Borrower or its securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked "PUBLIC" are permitted to be
made available through a portion of the Platform designated "Public Investor";
and (z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked "PUBLIC" as being suitable only for
posting on a portion of the Platform not designated "Public Investor".
6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(c) of any litigation, investigation or proceeding affecting the Borrower
in which the amount involved (excluding amounts covered by applicable insurance
as to which no reservation of rights is in effect) exceeds the Threshold Amount,
or in which injunctive relief or similar relief is sought, which relief, if
granted, could reasonably be expected to have a Material Adverse Effect;
(d) of the occurrence of any ERISA Event which could reasonably be expected
to have a Material Adverse Effect; and
66
(e) of any change in accounting policies or financial reporting practices
by the Borrower or any Subsidiary.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower has taken and proposes to take with
respect thereto. Each notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement or other Loan Document
that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. Except in a transaction permitted by
Section 7.04 or 7.05, preserve, renew and maintain in full force and effect its
legal existence and good standing under the Laws of the jurisdiction of its
organization; take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, and preserve or renew all of its registered IP Rights, except in
each case where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; and (b)
make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts (after giving effect to any self-insurance
compatible with the following standards) as are customarily carried under
similar circumstances by such other Persons and providing for not less than 30
days prior notice to the Administrative Agent of termination, lapse or
cancellation of such insurance.
6.08 COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS. Comply in all
material respects with the requirements of all Laws and Contractual Obligations
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law or Contractual Obligation is being contested
in good faith by appropriate proceedings diligently conducted or a bona fide
dispute exists with respect thereto; or (ii) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.
67
6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that when an Event of Default
has occurred and is continuing the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
6.11 COMPLIANCE WITH ERISA. Do, and cause each of its ERISA Affiliates to
do, each of the following: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.12 ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that any Borrower or any Subsidiary has violated any Environmental Law,
has released any Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, the
Borrower shall, within the time period permitted and to the extent required by
the applicable Environmental law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability unless (a) the failure to remove or remedy such violation or release
or to satisfy such liability would not reasonably be expected to have a Material
Adverse Effect, in which case the Borrower shall notify the Administrative Agent
of any decision not to remove or remedy such violation or release or satisfy
such liability and the basis for any such decision, and at the Administrative
Agent's option and at its request, the Borrower shall provide written
documentation of such decision, or (b) such violation or liability is being
contested in good faith by appropriate proceedings and appropriate reserves
therefor are being maintained in accordance with GAAP.
6.13 USE OF PROCEEDS. Use the proceeds of the Credit Extensions solely (i)
for working capital, capital expenditures, Permitted Acquisitions and other
general corporate purposes not in contravention of any Law or of any Loan
Document or (ii) to refinance all indebtedness outstanding under the Existing
Credit Agreement.
68
6.14 SUBSIDIARY SUBORDINATION AGREEMENT. Cause each now existing or
hereafter acquired or created Subsidiary (other than any Securitization Entity)
to execute and deliver to the Administrative Agent a Subordination Agreement.
6.15 ADDITIONAL SUBSIDIARY GUARANTORS. Notify the Administrative Agent at
the time that any Person becomes a Material Domestic Subsidiary (excluding any
Securitization Entity), and promptly thereafter (and in any event within 30
days), cause such Person to (a) become a Subsidiary Guarantor by executing and
delivering to the Administrative Agent a Guaranty Joinder Agreement, and (b)
deliver to the Administrative Agent documents of the types referred to in
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(a)), all in form, content and scope reasonably satisfactory to the
Administrative Agent. In addition, and notwithstanding anything contained above,
in the event that any Person becomes party to the Indenture Guaranty or to the
Convertible Debenture Guaranty and such Person has not at such date executed a
Guaranty Joinder Agreement, the Borrower shall immediately notify the
Administrative Agent thereof and cause such Person to immediately deliver to the
Administrative Agent all documents required by subsections (a) and (b) above.
6.16 INDENTURE GUARANTY AND CONVERTIBLE DEBENTURE GUARANTY. If any time the
Lenders consent to release the Guarantors from liability with respect to the
Guaranty in accordance with Section 10.01(h) or the proviso immediately
following thereafter, cause the Indenture Guaranty and the Convertible Debenture
Guaranty to be immediately terminated.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens created or arising pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby does not increase the maximum outstanding principal amount of
such obligations;
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) 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 30 days or which are being contested in good
69
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property 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 applicable Person;
(h) Liens securing judgments for the payment of money in an aggregate
amount not in excess of the Threshold Amount (except to the extent covered by
independent third-party insurance as to which the insurer has acknowledged in
writing its obligation to cover), unless any such judgment remains undischarged
for a period of more than 10 consecutive days during which execution is not
effectively stayed;
(i) Liens securing Indebtedness in respect of capital leases, Synthetic
Lease Obligations and purchase money obligations for fixed or capital assets;
provided that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition;
(j) Liens on fixed assets acquired in connection with a Permitted
Acquisition so long as such Liens were existing at the time of such Acquisition
by the Borrower or a Subsidiary and were not incurred, extended or renewed in
contemplation of such Acquisition; provided that (i) the Lien shall attach
solely to the property acquired, and (ii) at the time of acquisition of such
fixed assets, the aggregate amount remaining unpaid on all Indebtedness secured
by Liens on such fixed assets whether or not assumed by the Borrower or a
Subsidiary shall not exceed an amount equal to the lesser of the total purchase
price or fair market value at the time of acquisition of such fixed assets;
(k) Liens on notes or accounts receivable or any rights and claims
associated therewith that are granted pursuant to Permitted Securitization
Transactions or the Factoring Program;
(l) Liens on margin stock (as defined in Regulation U), but only to the
extent that the value of such margin stock would exceed 25% of the consolidated
assets of the Borrower; and
(m) other Liens securing Indebtedness in an aggregate amount of up to
$20,000,000 at any time.
70
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments other than those permitted by subsections (b) through (g)
that are existing on the date hereof and listed on Schedule 7.02;
(b) Investments held by the Borrower or such Subsidiary in the form of cash
equivalents or short-term marketable securities;
(c) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $2,500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of (i) any Subsidiary in the Borrower or (ii) of the
Borrower or any Loan Party in another Loan Party or (iii) of any Subsidiary
which is not a Loan Party in another Subsidiary which is not a Loan Party;
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;
(f) Investments permitted by Section 7.04;
(g) with respect to any Loan Party, Permitted Acquisitions;
(h) other Investments (including Investments consisting of financial
support or a Contingent Obligation or direct or contingent liability incurred in
connection with Investments by a Subsidiary which is not a Loan Party)
consummated by any Loan Party after the Closing Date not exceeding $75,000,000
in the aggregate; and
(i) other Investments and Acquisitions consummated after the Closing Date
by any Subsidiary which is not a Loan Party which Investments or Acquisitions do
not contain any Contingent Obligations, or any direct or contingent liabilities,
of any Loan Party and which have not been financed in whole or in part by any
Loan Party unless permitted by subsection (h).
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) guaranty obligations of the Borrower or any Subsidiary in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any wholly-owned
Subsidiary;
71
(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person and not
for purposes of speculation or taking a "market view;" and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i);
(f) Attributable Indebtedness under any Permitted Securitization
Transaction;
(g) the endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;
(h) unsecured intercompany Indebtedness for loans and advances made by the
Borrower or any wholly owned Subsidiary other than a Securitization Entity to
(i) the Borrower, (ii) any Loan Party or (iii) if such wholly owned Subsidiary
making such Loan or advance is not a Loan Party, any other wholly owned
Subsidiary, provided that such intercompany Indebtedness of any Loan Party is
subordinated to obligations, liabilities and undertakings of the holder or owner
thereof pursuant to the Subordination Agreement;
(i) guaranty obligations of any Loan Party pursuant to the Indenture
Guaranty and the Convertible Debenture Guaranty provided that at all times such
Loan Party shall also be a Guarantor party to the Guaranty Agreement;
(j) Indebtedness consisting of unsecured lines of credit with a single
financial institution, pursuant to which such financial institution is not
committed or obligated at any time to extend such credit;
(k) other unsecured Indebtedness of any Subsidiary which is not a Loan
Party provided that, in connection with such Indebtedness, no Loan Party has
incurred a Contingent Obligation or any direct or contingent liability with
respect thereto;
(l) other unsecured Indebtedness of any Loan Party provided that (A) such
Indebtedness does not contain terms or conditions that are more restrictive than
this Agreement or any other Loan Document, (B) no Default or Event of Default
had occurred or was continuing at the time such Indebtedness was incurred, (C)
such Indebtedness is pari passu both structurally and contractually with the
Indebtedness under the Loan Documents, (D) such Indebtedness does not have a
maturity date which occurs earlier than six (6) months following the Maturity
Date, (E) such Indebtedness does not contain any amortization provisions which
are more rapid or occur more quickly than is customary in the marketplace, as
reasonably determined by the Administrative Agent and the Borrower, and (F)
notice of the incurrence of such Indebtedness has been given to the
Administrative Agent not less than ten (10) Business Days prior to such
72
incurrence, and such notice includes calculations demonstrating compliance with
the financial covenants in Section 7.13, substantially in the form of a
Compliance Certificate; and
(m) Indebtedness secured by a Lien on property or assets of the Borrower or
any Subsidiary in an aggregate amount not to exceed $20,000,000 at any time
outstanding.
7.04 FUNDAMENTAL CHANGES. Merge, consolidate with or into, or convey,
transfer, lease or otherwise Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default or Event of Default exists or would result therefrom:
(a) any Subsidiary may merge (i) with the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) with any one or
more Subsidiaries, provided that when any wholly-owned Subsidiary or Guarantor
is merging with another Subsidiary, the wholly-owned Subsidiary or Guarantor
shall be the continuing or surviving Person, or (iii) with any other Person in
connection with any Permitted Acquisition, provided that the continuing or
surviving Person shall be a wholly-owned Subsidiary and, if such Subsidiary was
a Guarantor, also a Guarantor; and
(b) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise), to the Borrower or to another Subsidiary;
provided that if the seller in such a transaction is a wholly-owned Subsidiary
or a Guarantor, then the purchaser must also be a wholly-owned Subsidiary or
Guarantor, respectively.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to make
any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business and having an aggregate
book value less than $15,000,000 in any fiscal year;
(b) Dispositions of inventory (including by Subsidiaries to the Borrower
and other Subsidiaries) in the ordinary course of business;
(c) Dispositions of equipment or real property during any fiscal year of
the Borrower, having a net book value, as determined in accordance with GAAP,
less than $35,000,000 in any fiscal year;
(d) other Dispositions of equipment to the extent such equipment is
replaced with equipment of like kind, function and value, provided the
replacement equipment shall be acquired prior to or substantially
contemporaneously with any such disposition and the replacement equipment shall
be free and clear of Liens other than Permitted Liens.
(e) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary, provided that if such Subsidiary is a Guarantor, such
Disposition must be to the Borrower or to another Guarantor;
73
(f) Dispositions by the Borrower and its Subsidiaries of property pursuant
to sale-leaseback transactions, provided that the book value of all property so
Disposed of shall not exceed $25,000,000;
(g) Dispositions permitted by Section 7.04;
(h) non-exclusive licenses of IP Rights in the ordinary course of business
and substantially consistent with past practice for terms not exceeding five
years;
(i) Disposition of Investments permitted under Section 7.02(b) in the
ordinary course of management of the investment portfolio of the Borrower and
its Subsidiaries;
(j) Dispositions by any Subsidiary of all or any substantial part of its
assets to the Borrower or to a wholly owned Subsidiary, provided that if such
Subsidiary is a Guarantor, such Disposition must be to another Guarantor;
(k) Dispositions of notes or accounts receivable or any rights and claims
associated therewith that are sold pursuant to Permitted Securitization
Transactions or the Factoring Program;
(l) Dispositions of margin stock (as defined in Regulation U) at fair
market value, but only to the extent that the value of such margin stock would
exceed 25% of the consolidated assets of the Borrower;
(m) Disposition of Accounts owing from a single Account Debtor in an
aggregate amount of up to $15,000,000; and
(n) Disposition of any Subsidiary which is not a Material Subsidiary.
7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except:
(a) Material Leases in existence on the date hereof, all of which are
listed on Schedule 7.06, and any renewal, extension or refinancing thereof,
provided that the terms of any such renewal, extension or refinancing do not
result in a reduction of the maturity of such lease, an increase in lease
payments above that available in the applicable market generally for similar
properties, or otherwise be materially disadvantageous to the Borrower or to the
Lenders;
(b) operating leases (other than those constituting Synthetic Lease
Obligations) entered into or assumed by the Borrower or any Subsidiary after the
date hereof in the ordinary course of business;
(c) leases in connection with any sale-leaseback arrangement permitted by
Section 7.05(f); and
(d) capital leases and Synthetic Lease Obligations provided that the
aggregate amount of Attributable Indebtedness in respect thereof at any one time
outstanding does not result in a violation of the Consolidated Leverage Ratio in
Section 7.13(c).
74
7.07 RESTRICTED PAYMENTS. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
if immediately after giving effect to such proposed action, a Default or Event
of Default would exist.
7.08 ERISA. At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Plan to (a) engage in any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code);
(b) fail to comply with ERISA or any other applicable Laws; or (c) incur any
material "accumulated funding deficiency" (as defined in Section 302 of ERISA),
which, with respect to each event listed above, could reasonably be expected to
have a Material Adverse Effect.
7.09 CHANGE IN NATURE OF BUSINESS. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any kind
with any Affiliate of the Borrower, other than (a) the Factoring Program, (b) a
Permitted Securitization Transaction or (c) other transactions for compensation
and upon fair and reasonable terms with Affiliates that are otherwise permitted
hereunder and upon terms no less favorable to the Borrower or Subsidiary than
would be obtained in a comparable arm's-length transaction with a Person other
than an Affiliate.
7.11 BURDENSOME AGREEMENTS. Enter into or maintain any Contractual
Obligation that limits the ability (a) of any Subsidiary to make Restricted
Payments, loans or advances to the Borrower or to otherwise transfer property to
the Borrower, or (b) of the Borrower or any Subsidiary to create, incur, assume
or suffer to exist Liens on Accounts or Inventory of such Person, other than (i)
negative pledge provisions in any Loan Document, (ii) negative pledge provisions
in any Permitted Securitization Transaction, (iii) as are contained in the
Indenture and the Convertible Debenture Agreement, (iv) negative pledge
provisions subject to Section 10.18 and contained in any line of credit or other
financial arrangement between any Lender and the Borrower or its Subsidiaries,
(v) negative pledge provisions affecting Accounts or Inventory with an aggregate
value of less than $1,000,000, (vi) negative pledge provisions applicable to
Accounts transferred pursuant to the Factoring Program, and (vii) any negative
pledge provision relating to any Indebtedness of any Person acquired by the
Borrower or any Subsidiary pursuant to a Permitted Acquisition, all of which
such Indebtedness shall not exceed, in the aggregate, $35,000,000 for ninety
(90) days following the consummation of any such Permitted Acquisition pursuant
to which such Indebtedness is acquired, or $20,000,000 at any time thereafter,
or (c) of any Subsidiary to guaranty payment or, otherwise incur a Contingent
Obligation with respect to, the Obligations, other than (i) limitations thereon
contained in any Loan Document, (ii) limitation thereon contained in any
documentation creating a Permitted Securitization Transaction, (iii) as are
contained in the Indenture and the Convertible Debenture Agreement, and (iv)
limitations thereon subject to Section 10.18 which are contained in any line of
credit or other financial arrangement between any Lender and the Borrower or its
Subsidiaries.
7.12 USE OF PROCEEDS. Use the proceeds of any Credit Extension in any
manner that would violate the provisions of Regulation U.
75
7.13 FINANCIAL COVENANTS.
(a) CONSOLIDATED NET WORTH. Permit Consolidated Net Worth at any time to be
less than the sum of (i) $546,500,000.00, (ii) an amount equal to 50% of the
Consolidated Net Income earned in each full fiscal quarter ending after January
31, 2004 (with no deduction for a net loss in any such fiscal quarter) and (iii)
an amount equal to 50% of the aggregate increases in Shareholders' Equity of the
Borrower and its Subsidiaries after the date hereof by reason of the issuance
and sale of Equity Interests of the Borrower or any Subsidiary (other than
issuances to the Borrower or a wholly-owned Subsidiary), including upon any
conversion of debt securities of the Borrower into such Equity Interests and any
exercise of outstanding options or warrants, less (iv) any reduction of
intangible assets resulting from any impairment charge pursuant to FAS 142,
which reduction shall not exceed, in the aggregate, $100,000,000.
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated Interest
Coverage Ratio at the end of each fiscal quarter of the Borrower to be less 3.00
to 1.00.
(c) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage Ratio at
any time to be greater than 3.25 to 1.00.
7.14 ACQUISITIONS. Enter into any agreement, contract, binding commitment
or other arrangement providing for any Acquisition, or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition, other than Permitted Acquisitions.
7.15 CAPITAL EXPENDITURES. Make or become legally obligated to make
expenditures in respect of the purchase or other acquisition of fixed or capital
assets (excluding normal replacements and maintenance which are properly charged
to current operations), except for capital expenditures in the ordinary course
of business not exceeding $50,000,000 in the aggregate for the Borrower and it
Subsidiaries during any fiscal year; provided, however, that so long as no
Default or Event of Default has occurred and is continuing or would result from
such expenditure, 50% of any portion of the $50,000,000 amount not expended in
the fiscal year for which it is permitted above may be carried over for
expenditure in the next following fiscal year.
7.16 ISSUANCE OR SALE OF STOCK BY SUBSIDIARIES. The Borrower will not
permit any Subsidiary to issue or sell any shares of capital stock of any class
(including as "capital stock" for the purposes of this Section 7.16, any
warrants, rights or options to purchase or otherwise acquire capital stock or
other securities exchangeable for or convertible into capital stock) of such
Subsidiary to any Person other than the Borrower or a wholly-owned Subsidiary,
except for the purpose of qualifying directors, or except in satisfaction of the
validly pre-existing preemptive rights of minority shareholders in connection
with the simultaneous issuance of capital stock to the Borrower and/or a
wholly-owned Subsidiary whereby the Borrower and/or such wholly-owned Subsidiary
maintain their same proportionate interests in such Subsidiary.
7.17 SALE OF STOCK IN SUBSIDIARIES. The Borrower will not sell, transfer or
otherwise dispose of any shares of capital stock in any Subsidiary (except to
qualify directors) or any Indebtedness of any Subsidiary, and will not permit
any Subsidiary to sell, transfer or otherwise dispose of (except to the Borrower
or a wholly-owned Subsidiary) any shares of capital stock or any Indebtedness of
any other Subsidiary, unless:
76
(a) there shall not exist any violation of Sections 7.04 or 7.05
either immediately prior to, or immediately after giving effect to, such
sale, transfer or disposition;
(b) simultaneously with such sale, transfer, or disposition, all
shares of capital stock and all Indebtedness of such Subsidiary at the time
owned by the Borrower and by every other Subsidiary shall be sold,
transferred or disposed of as an entirety;
(c) the Board of Directors of the Borrower shall have determined, as
evidenced by a resolution thereof, that the retention of such capital stock
and Indebtedness is no longer in the best interests of the Borrower;
(d) such capital stock and Indebtedness is sold, transferred or
otherwise disposed of to a Person, for fair value and on terms reasonably
deemed by the Board of Directors to be adequate and satisfactory; and
(e) the Subsidiary being disposed of shall not have any continuing
investment in the Borrower or any other Subsidiary not being simultaneously
disposed of.
7.18 AMENDMENT OF DOCUMENTS. Amend or supplement, or permit to be amended
or supplemented, (a) the Indenture, (b) any Convertible Debenture or the
Convertible Debenture Agreement, or (c) the Indenture Guaranty or the
Convertible Debenture Guaranty, in each case in a manner that directly or
indirectly accelerates the time of payment, increases the principal amount of or
interest rate applicable to indebtedness issued, provides for more restrictive
terms or otherwise is adverse to the Administrative Agent or the Lenders.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan, or any L/C Obligation, or (ii)
within three Business Days after the same becomes due interest on any Loan or on
any L/C Obligation, or any facility, utilization or other fee due hereunder, or
(iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.03, 6.05, 6.10, 6.13, 6.15
or 6.16 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
77
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Material Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Contingent
Obligation (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount and
such failure shall continue beyond any period of grace applicable thereto, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased
or redeemed (automatically or otherwise) prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded, and such failure shall continue beyond any period of grace
applicable thereto; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Borrower or such Subsidiary as a
result thereof is greater than the Threshold Amount and such occurrence shall
continue beyond any period of grace applicable thereto; or
(f) Insolvency Proceedings, Etc. The Borrower or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Material
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 60 days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or any Material
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
78
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any non-monetary final judgment that has, or could reasonably
be expected to have, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than the agreement of all the
Lenders or satisfaction in full of all the Obligations, ceases to be in full
force and effect, or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect; or the Borrower denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
79
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent) payable to the
Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders and the L/C Issuers (including amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably
among the Lenders and the L/C Issuers in proportion to the respective amounts
described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuers in proportion to the respective amounts described in this clause Fourth
held by them;
Fifth, to the Administrative Agent for the ratable account of each L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit;
Sixth, to payment of Obligations consisting of liabilities under any
Related Swap Contract with any Lender or any Affiliate of a Lender party to a
Related Swap Contract and as to which the Administrative Agent has received
notice of the amounts owed thereunder from the applicable Lender or any
Affiliate of a Lender party to a Related Swap Contract, such payments under this
clause Sixth to be allocated on a pro rata basis according to such amounts owed
as to which the Administrative Agent has received such notice;
Seventh, to payment of that portion of the Obligations constituting fees,
charges and disbursements of counsel to the respective Lenders and L/C Issuers
and fees and time charges for attorneys who may be employees of any Lender or
any L/C Issuer ratably among them in proportion to the amounts described in this
clause Seventh payable to them; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
80
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders and the L/C Issuers
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuers, and the Borrower shall
not have rights as a third party beneficiary of any of such provisions.
9.02 RIGHTS AS A LENDER. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
9.03 EXCULPATORY PROVISIONS. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any of the Borrower or any of their
81
respective Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or an L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or such L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or such L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
9.05 DELEGATION OF DUTIES. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
82
9.06 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may at
any time give notice of its resignation to the Lenders, the L/C Issuers and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with the consent of the Borrower at all times other than
during the existence of an Event of Default (which consent of the Borrower shall
not be unreasonably withheld or delayed), to appoint a successor, which shall be
a commercial bank organized under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least $500,000,000 and
that has (or is a subsidiary of a bank holding company that has) an investment
grade rating category by Standard & Poor's Rating Services and ▇▇▇▇▇'▇
Investment Service, Inc. If no such successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may on behalf of the Lenders and the L/C
Issuers, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
each L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent's resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer, (b) the retiring L/C Issuer
shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangement
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit.
9.07 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender
and each L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
83
Agreement. Each Lender and each L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
9.08 NO OTHER DUTIES, ETC. Anything herein to the contrary notwithstanding,
none of the Bookrunners, Arrangers or [other titles as necessary] listed on the
cover page hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
9.09 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuers and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuers and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuers and the Administrative Agent
under Sections 2.03(i) and (j), 2.08 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and each L/C Issuer to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the L/C Issuers, to pay to
the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.08 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
an L/C Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
84
9.10 Guaranty Matters. The Lenders and the L/C Issuers irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Material Domestic Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iv) of the third proviso to
this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate;
(e) change Section 2.12 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) amend Section 1.05 or 1.06 or the definition of "Alternative Currency"
without the written consent of each Lender;
(g) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
85
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(h) unless otherwise provided herein, release all or substantially all of
the Guarantors from the Guaranty without the written consent of each Lender;
provided, however, that any request from the Borrower either that the Lenders
release the Guarantors from liability under the Guaranty as permitted by the
terms of the Guaranty or that the Borrower and any Material Domestic Subsidiary
which is not a Guarantor do not have to comply with Section 6.15 (including at
any time after such Guaranty has been released and a new Guaranty has been
executed and delivered and is effective pursuant to the terms of the Guaranty
and this Section 10.01), shall in either event require the consent of Lenders
having at least 66 2/3% of the Aggregate Commitments or, if the commitment of
each Lender to make Loans and the obligation of the L/C Issuers to make L/C
Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding
in the aggregate of at least 66 2/3% of the Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded participation in
L/C Obligations being deemed "held" by such Lender for purposes of this
proviso), and in any event such consent shall be conditioned on the receipt by
the Administrative Agent of an undated replacement Guaranty in substantially the
form of Exhibit F attached hereto, executed by the Guarantors, which by its
terms shall not be effective or be deemed to be delivered unless the Borrower
shall have a Debt Rating of less than BBB or Baa3, it being understood that at
any time the Borrower shall have such a Debt Rating of less than BBB or Baa3,
such Guaranty shall automatically be deemed to be effective and delivered (and
the Administrative Agent shall be authorized to date such Guaranty) as of the
effective date of such Debt Rating;
provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer directly affected thereby in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit issued or
to be issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (iii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
10.02 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
86
(i) if to the Borrower, the Administrative Agent or an L/C Issuer, to
the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuers hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to
Article II if such Lender or such L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Change of Address, Etc. Each of the Borrower, the Administrative Agent
and the L/C Issuers may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrower, the
Administrative Agent and the L/C Issuers.
(d) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
87
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify the Administrative Agent, each L/C Issuer, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other telephonic communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder 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.
10.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out of
pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out of pocket expenses incurred by each L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out of
pocket expenses incurred by the Administrative Agent, any Lender or any L/C
Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or any L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or any L/C Issuer, in connection with the enforcement or protection of
its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans
made or Letters of Credit issued hereunder, including all such out of pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
88
proceeds therefrom (including any refusal by such L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee's obligations hereunder or under any other Loan Document, if
the Borrower or such other Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction; provided further, that with respect to indemnity relating to
payment of Taxes or Other Taxes, Section 3.01 shall control.
(c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), any L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), such L/C Issuer or such Related Party, as the case may be, such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or such L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or such L/C Issuer
in connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, no Borrower shall assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
89
(f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent and any L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
10.05 PAYMENTS SET ASIDE. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent, any L/C Issuer or any Lender,
or the Administrative Agent, any L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, such L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and each L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
applicable Overnight Rate from time to time in effect, in the applicable
currency of such recovery or payment. The obligations of the Lenders and the L/C
Issuers under clause (b) of the preceding sentence shall survive the payment in
full of the Obligations and the termination of this Agreement.
10.06 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations) at the time owing to it); provided that
90
(i) except in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the Commitment is not then in effect, the principal outstanding
balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
"Trade Date" is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing,
the Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent and each L/C Issuer unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 (except in case of an assignment
to an Affiliate), and the Eligible Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
91
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrower and the L/C Issuers at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender wishing to consult with other Lenders
in connection therewith may request and receive from the Administrative Agent a
copy of the Register.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations) owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Lenders
and the L/C Issuers shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.
(e) Limitation upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note(s), if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
92
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Resignation as L/C Issuer after Assignment. Notwithstanding anything to
the contrary contained herein, if at any time Bank of America assigns all of its
Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i)
upon 30 days' notice to the Borrower and the Lenders, resign as L/C Issuer. In
the event of any such resignation as L/C Issuer, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer hereunder; provided,
however, that no failure by the Borrower to appoint any such successor shall
affect the resignation of Bank of America as L/C Issuer, as the case may be. If
Bank of America resigns as L/C Issuer, it shall retain all the rights and
obligations of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Committed Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)).
10.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of the
Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to a Borrower and its obligations, (g) with the consent of the Borrower
or (h) to the extent such Information (x) becomes publicly available other than
as a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, any L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.
93
For purposes of this Section, "Information" means all information received
from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
10.08 RIGHT OF SETOFF. If an Event of Default shall have occurred and be
continuing and any Obligations are due and payable, each Lender, each L/C Issuer
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, such L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender or such L/C Issuer, and
although such obligations of the Borrower may be contingent or unmatured or are
owed to a branch or office of such Lender or such L/C Issuer different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, each L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, such L/C Issuer or their respective
Affiliates may have. Each Lender and each L/C Issuer agrees to notify (i) the
Administrative Agent immediately prior to any such setoff and application and
(ii) the Borrower promptly after any such setoff and application, provided that
the failure to give such notice shall not affect the validity of such setoff and
application.
10.09 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
94
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
10.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.12 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13 REPLACEMENT OF LENDERS. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment
fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower or applicable Designated Subsidiary (in the case of all other amounts);
95
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
10.14 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
96
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16 USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
10.17 JUDGMENT CURRENCY. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of the Borrower
in respect of any such sum due from it to the Administrative Agent or the
Lenders hereunder or under the other Loan Documents shall, notwithstanding any
judgment in a currency (the "Judgment Currency") other than that in which such
sum is denominated in accordance with the applicable provisions of this
Agreement (the "Agreement Currency"), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from the Borrower
in the Agreement Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to return
97
the amount of any excess to the Borrower (or to any other Person who may be
entitled thereto under applicable law).
10.18 WAIVER BY LENDERS OF NEGATIVE PLEDGE CONTAINED IN OTHER AGREEMENTS.
To the extent there exists any provision in any loan agreement, line of credit
or other agreement or instrument (other than the Loan Documents) by and between
any Lender and the Borrower or any Subsidiary that restricts or would have the
effect of restricting the ability of (a) the Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on any assets of such Person or
(b) any Subsidiary to guaranty payment or, otherwise incur a Contingent
Obligation with respect to, the Obligations, each Lender hereby waives such
provision and the restrictions contained therein to the extent applicable to
creating, incurring, assuming or suffering to exist any Lien in support of the
Obligations or the ability of any Subsidiary to guaranty payment of, or
otherwise incur Contingent Obligations with respect to, the Obligations.
Notwithstanding any provision of this Agreement or any other Loan Document to
the contrary, each Lender agrees that the waivers and agreements contained in
this Section 10.18 shall survive the termination of this Agreement and shall be
binding upon each Lender notwithstanding the sale or assignment of any interest
hereunder or such Person ceasing to be a Lender hereunder for any reason.
98
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
KELLWOOD COMPANY
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
99
BANK OF AMERICA, N.A., as Administrative Agent
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A., as a Lender and L/C
Issuer
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
101
JPMORGAN CHASE BANK, as Syndication Agent and
a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Co-Documentation
Agent and a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
103
SUNTRUST BANK, as Co-Documentation Agent and a
Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
104
U.S. BANK NATIONAL ASSOCIATION, as
Co-Documentation Agent and a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
105
WACHOVIA BANK NATIONAL ASSOCIATION, as
Co-Documentation Agent and a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
107
HSBC BANK USA, NATIONAL ASSOCIATION, as a
Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
108
MIZUHO CORPORATE BANK, LTD., as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
109
STANDARD CHARTERED BANK, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
110
UMB BANK, NATIONAL ASSOCIATION, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A., as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
112
NATIONAL CITY BANK OF THE MIDWEST, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
113
FIRST BANK, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
114
CITIBANK, NA, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
▇▇▇
▇▇▇▇▇▇ DISCOUNT BANK OF NEW YORK, as a Lender
By:_______________________________________
Name: ____________________________________
Title: ____________________________________
116
SCHEDULE 1.01(A)
DESIGNATED SUBSIDIARIES
Refer to Schedule 5.13 for a list of subsidiaries, all of which shall constitute
Designated Subsidiaries; except for the following exclusions:
▇▇▇▇▇-Ropa, ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Rica, S.A.
AG Distributors
Ivy International Limited
Kellwood Financial Resources, Inc.
Kellwood Shared Services, Inc.
The Kellwood Foundation
Kellwood Haiti, S. A.
XCSI, Inc.
Altair International, S. A.
J. W. Confecciones A. M., S. A.
3095-9563 Quebec, Inc.
Tri-W Corporation
SCHEDULE 5.05
SUPPLLEMENT TO INTERIM FINANCIAL STATEMENTS
No Exceptions
SCHEDULE 5.06
LITIGATION
No Exceptions
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
No Exceptions
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries.
------------
Attached is a current list of all Kellwood subsidiaries
All entities listed are corporations and indentations in the listing indicate
subsidiary status, e.g., Canadian Recreation Products, Inc. is a wholly-owned
subsidiary of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc., which is a wholly-owned subsidiary of
American Recreation Products, Inc., which is a wholly-owned subsidiary of
Kellwood Company.
Except for National Garments Manufacturing (Pte.) Limited (50% owned) and Ningbo
Smart Youngor Manufacturers Co. Ltd, all listed subsidiaries are wholly-owned.
All shares are common stock and no options, warrants, or other rights to acquire
any subsidiary's stock exist.
Part (b). Other Equity Investments.
1. National Garments Manufacturing (Pte.) Limited is 50% owned. Winner Company
of Hong Kong is our 50/50 partner.
2. Tri-W Corporation (100% owned by Kellwood) is a 50/50 partner with ▇▇▇▇▇▇▇
One, Inc. in the ownership of Hawthorn Office Park, the Kellwood
headquarters building in St. Louis.
3. Borrower has a $7.6 million loan to a menswear retail chain and in return
Kellwood Menswear will receive a five-year supply contract
4. There is a 50% investment in Ningbo Smart Youngor Manufacturers Co. Ltd. in
Ningbo China by Smart Shirts
5. There is an 8% investment in a fabric mill named Ningbo Sunrise Textile
Dyeing & Finishing Co. Ltd. in Ningbo China by Smart Shirts
ATTACHMENT TO SCHEDULE 5.13
KELLWOOD COMPANY SUBSIDIARIES
Date of Formation
-----------------
▇▇▇▇▇-Ropa, S.A. - 100% Owned - Foreign - Mexico - Inactive 01/09/73
**American Recreation Products, Inc. - 100% Owned - Domestic - Delaware - Camping Equipment/Garment Mfgs. 08/16/85
American Recreation Products International, Inc. - 100% Owned - Domestic - Delaware - Camping Equipment/Garment Mfgs. 03/19/98
*2426-4152 Quebec, Inc. - 100% Owned - Foreign - Quebec, Canada - Holding Company 01/26/87
*Canadian Recreation Products, Inc. - 100% Owned - Foreign - Quebec, Canada - Camping Equipment/Garment Mfgs. 01/13/87
▇▇▇▇▇▇▇▇▇▇▇ de Costa Rica, S.A. - 100% Owned - Foreign - Costa Rica - Inactive
**Sierra Designs Acquisition Corporation - 100% Owned - Domestic - Delaware - Camping Equipment/Garment Mfgs. 04/11/94
**Biflex International, Inc. - 100% Owned - Domestic - New York
Berlei Hestia Philippines, Inc. - 100% Owned - Foreign - Philippines
Biflex Sales Corp. - 100% Owned - Domestic - Delaware
**▇▇▇▇▇▇ New York, Inc. - 100% Owned - Domestic - Delaware 10/29/02
**Dorby Frocks, Ltd. - 100% Owned - Domestic - New York - Garment Mfgs. 10/05/56
AG Distributors - 100% Owned - Domestic - New Jersey - Inactive 02/06/74
**Gerber Childrenswear, Inc. - 100% Owned - Domestic - Delaware 06/27/02
**Costura Dominicana, Inc. - 100% Owned - Domestic - Delaware
**GCI IP Sub, Inc. - 100% Owned - Domestic - Delaware
**GCW Holdings Inc. - 100% Owned - Domestic - Delaware
Costura ▇▇▇▇▇▇▇▇▇ ▇.▇. de C.V. - 100% Owned (through 99.99% ownership of GCW Holdings Inc.) - Foreign - Mexico
GCW Mexico S.A. de C.V. - 100% Owned (through 99.99% ownership of GCW Holdings Inc.) - Foreign - Mexico
Gerber Childrenswear Canada, Inc. - 100% Owned - Domestic - Delaware
**Halmode Apparel, Inc. - 100% Owned - Domestic - Delaware - Garment Mfgs. 08/08/86
Ivy International Limited - 100% Owned - Foreign - Hong Kong - Import & Export/Trading (formerly Latexco) - Inactive 08/11/92
**Kellwood Financial Resources, Inc. - 100% Owned - Domestic - Tennessee 12/09/99
Kellwood Shared Services, Inc. - 100% Owned - Domestic - Delaware 12/06/99
The Kellwood Foundation - 100% Owned - Domestic - Illinois - Charitable Foundation 10/28/65
Kellwood Haiti, S.A. - 100% Owned - Foreign - Haiti - Garment Mfgs. - Inactive 02/07/85
Kellwood Honduras, S.A. - 100% Owned - Foreign - Honduras - Garment Mfgs. (Lingerie) 12/24/91
Kellwood Mexico, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Sportswear) 12/22/97
**Koret of California, Inc. - 100% Owned - Domestic - California 02/13/68
MJF Imports, Inc. - 100% Owned - Domestic - New York 06/03/86
**New Campaign, Inc. - 100% Owned - Domestic - Delaware 01/27/95
**Phat Fashions LLC - 100% Owned - Domestic - New York 06/14/96
**Phat Licensing LLC - 100% Owned - Domestic - New York 06/23/98
XCSI, Inc. - 100% Owned - Domestic - Delaware 03/25/98
Koret Hong Kong Limited - 100% Owned - Foreign - Hong Kong
West Coast Apparel, Inc. - 100% Owned - Foreign - British Columbia, Canada 12/04/95
Koret Outlet Stores, Inc. - 100% Owned - Domestic - Delaware 05/04/01
**KWD Holdings, Inc. - 100% Owned - Domestic - Delaware - Holding Company 04/13/88
▇▇▇▇ ▇▇ Manufactura, S.A. de C.V. - 100% Owned - Foreign - Mexico
*KW Apparel, S.A. de C.V. - 100% Owned - Foreign - El Salvador - Garment Mfgs. (Sportswear) 09/27/95
*Kellwood Asia Limited - 100% Owned - Foreign - Hong Kong - Holding Company 06/06/72
Arden Fabrics Limited - 100% Owned - Foreign - Hong Kong - Trading/Property Investment 05/01/84
Bluet Investment Co. Ltd. - 100% Owned - Foreign - Hong Kong - Holding Company 08/18/78
CEO (Jilin) Garment Company, Ltd. - 100% Owned - Foreign - China - Garment Mfgs. 02/20/93
Diplom Limited - 100% Owned - Foreign - Hong Kong - Garment Mfgs. 01/08/88
Altair Internacional, S.A. - 100% Owned - Foreign - Costa Rica - Garment Mfgs. - Inactive 04/19/74
▇.▇. Confecciones A.M., S.A. - 100% Owned - Foreign - Costa Rica - Garment Mfgs. - Inactive 06/20/86
*Smart Shirts Limited - 100% Owned - Foreign - Hong Kong - Holding Company 12/12/69
Greenland Garments Limited - 100% Owned - Foreign - Hong Kong - Exporter 10/31/59
National Garments Manufacturing (Pte.) Limited - 50% Owned - Foreign - Singapore - Garment Mfgs. 07/23/99
P.T. National Garments Bintan - 100% Owned - Foreign - Bintan
SGF (Textiles Processing) Pte. Ltd. - 100% Owned - Foreign - Singapore
P.T. SGF (Indonesia) - 100% Owned - Foreign - Indonesia
*Smart Shirts Manufacturers, Limited - 100% Owned - Foreign - Hong Kong - Garment Mfgs. 03/28/56
Smart Shirts (Phils.), Inc. - 100% Owned - Foreign - Philippines
Smart Shirts Manufacturers (Singapore) Ltd. - Foreign - Singapore 04/06/91
*South Asia Garments Limited - 100% Owned - Foreign - Hong Kong - Exporter 08/28/59
Smart Shirts (Lanka) Limited - 100% Owned - Foreign - Sri Lanka - Garment Mfgs. 06/16/78
*Kellwood Trading, Ltd. - 100% Owned - Foreign - Hong Kong 05/02/02
Kellwood Trading (Singapore) Pte Ltd. - 100% Owned - Foreign - Singapore
KWD Trading (M) Sdn. Bhd. - 100% Owned - Foreign - Malaysia
*Smart Shirts Trading (Private) Ltd. - 100% Owned - Foreign - Sri Lanka
Utex Textiles Limited - 100% Owned - Foreign - Hong Kong 02/24/81
Smart Shirts (Shenzhen) Co., Ltd. - 100% Owned - Foreign - China - Garment Mfgs. 12/30/92
Kellwood del Sureste - 100% Owned - Foreign - Mexico (Sportswear) 09/06/00
Kellwood Manufactura, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Lingerie) 04/21/99
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. - 100% Owned - Foreign - Quebec, Canada - Inactive 09/93
KWD Mexico, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Lingerie) 03/12/99
Newkell, Inc. - 100% Owned - Domestic - Delaware - Holding Company 10/29/02
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ Outlet Stores, Inc. - 100% Owned - Domestic - Delaware - Retail Sales 08/23/90
Tri-W Corporation - 100% Owned - Domestic - North Carolina - Property Management 09/23/49
* MATERIAL SUBSIDIARIES
**MATERIAL DOMESTIC SUBSIDIARIES
SCHEDULE 5.16
INTELLECTUAL PROPERTY MATTERS
No Exceptions
SCHEDULE 7.01
SCHEDULE OF EXISTING LIENS
(Amount in Dollars)
-------------------
MATURITY
DEBTOR AMOUNT RATE DATE CREDITOR
------ --------- ---- ---- --------
CAPITALIZED LEASES: **
----------------------------------------
Gerber $249,427 8% 3/31/2006 IKON Financial
Total Capitalized Leases $249,427
** NOTE: ALL OF THE CAPITALIZED LEASEES ARE SECURED
SCHEDULE 7.02
EXISTING INVESTMENTS
1. Refer to the items listed in Schedule 5.13, which is incorporated
herein.
2. Cash and Marketable Securities as of July 31, 2004 were $240 million,
invested through various financial institutions.
SCHEDULE 7.03
SCHEDULE OF INDEBTEDNESS
(Amount in Dollars)
-------------------
O/S LINE OF MATURITY
DEBTOR AMOUNT CREDIT DATE CREDITOR
------ ------ ------ ---- --------
REGIONAL LINES
----------------------------------------------------
Kellwood Company 0 10,000,000 US Bank
Kellwood Company 0 5,000,000 UMB Bank St. Louis
------------- ------------
$0 $15,000,000
COMMITTED FACILITIES - LOANS
----------------------------------------------------
Kellwood Company $0 $280,000,000 4/30/2005 Bank of America - Lead Arranger
Canadian Recreation Products 0 5,000,000 10/31/2005 The Bank of Nova Scotia
West Coast Apparel 0 5,000,000 10/31/2005 The Bank of Nova Scotia
-------------
$0
-------------
Smart Shirts $0 $6,000,000 Bank of America
Smart Shirts 0 2,000,000 BNP
Smart Shirts 0 12,800,000 Chekiang First Bank
Smart Shirts 0 4,500,000 HongKong Bank
National Garment (50%) 194,310 2,650,000 Standard Chartered Bank
------------- ------------
$194,310 $27,950,000
▇▇▇▇▇ ▇▇▇▇▇, Inc. $11,000 4/4/2005 Navistar Financial
-------------
Total Short Term Debt $205,310
COMMITTED FACILITIES - LETTERS OF CREDIT
----------------------------------------------------
Kellwood Company $86,305,004 $175,000,000 4/30/2005 Bank of America - Lead Arranger
Canadian Recreation Products 0 5,000,000 10/31/2005 The Bank of Nova Scotia
West Coast Apparel 84,827 5,000,000 10/31/2005 The Bank of Nova Scotia
-------------
$86,389,831
-------------
Smart Shirts $0 $6,000,000 Bank of America
Smart Shirts 0 2,000,000 BNP
Smart Shirts 5,071,804 12,800,000 Chekiang First Bank
Smart Shirts 35,979 4,500,000 HongKong Bank
National Garment (50%) 1,822,093 2,650,000 Standard Chartered Bank
------------- ------------
$6,929,876 $27,950,000
Total Letters of Credit $93,319,707
SENIOR DEBT
----------------------------------------------------
Kellwood Company $129,485,000 10/15/2017 Public Debentures
Kellwood Company 140,092,000 7/15/2009 Public Senior Notes
Kellwood Company 200,000,000 6/15/2034 Public Converible Debentures
-------------
Total Senior Debt $469,577,000
O/S LINE OF MATURITY
DEBTOR AMOUNT CREDIT DATE CREDITOR
------ ------ ------ ---- --------
CAPITALIZED LEASES: *
----------------------------------------------------
Gerber $249,427 8% 3/31/2006 IKON Financial
-------------
Total Capitalized Leases $249,427
Total Indebtedness** $470,031,737
Total Letters of Credit $93,319,707
* NOTE: ALL OF THE CAPITALIZED LEASEES ARE SECURED
** NOTE: TOTAL DOES NOT INCLUDE L/CS
