1
EXHIBIT 4.13
$125,000,000
REVOLVING CREDIT AGREEMENT
DATED AS OF FEBRUARY 5, 1999
BY AND AMONG
THE MEN'S WEARHOUSE, INC.
(THE "BORROWER"),
NATIONSBANK, N.A.,
INDIVIDUALLY AND AS AGENT
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES L.L.C.
AS LEAD ARRANGER
AND
THE OTHER FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF
(COLLECTIVELY, THE "BANKS")
2
TABLE OF CONTENTS
Page
----
1. CERTAIN DEFINITIONS............................................................- 1 -
1.1. Accounting Principles.................................................- 1 -
1.2. Certain Defined Terms.................................................- 2 -
2. THE LOANS AND LETTERS OF CREDIT...............................................- 24 -
2.1. Loans................................................................- 24 -
2.2. Borrowing Procedure..................................................- 25 -
2.3. Letters of Credit....................................................- 27 -
2.4. Letter of Credit Requests............................................- 28 -
2.5. Letters of Credit Participations.....................................- 29 -
2.6. Agreement to Repay Letter of Credit Drawings.........................- 31 -
2.7. Conflict between Applications and Agreement..........................- 33 -
2.8. Increased Costs......................................................- 33 -
2.9. Unavailability of Alternate Currency.................................- 33 -
2.10. Letters of Credit Denominated in National Currency Units.............- 34 -
3. INTEREST RATE PROVISIONS......................................................- 34 -
3.1. Interest Rate Determination..........................................- 34 -
3.2. Utilization of Commitments ..........................................- 37 -
3.3. Increased Cost and Reduced Return....................................- 38 -
3.4. Limitation on Types of Loans.........................................- 40 -
3.5. Illegality; Deposits Unavailable.....................................- 40 -
3.6. Treatment of Affected Loans..........................................- 41 -
3.7. Compensation.........................................................- 42 -
3.8. Replacement of Banks.................................................- 42 -
3.9. Survival.............................................................- 43 -
4. PREPAYMENTS AND OTHER PAYMENTS................................................- 43 -
4.1. Required Prepayments.................................................- 43 -
4.2. Optional Prepayments.................................................- 43 -
4.3. Notice of Payments...................................................- 43 -
4.4. Place of Payment or Prepayment.......................................- 44 -
4.5. No Prepayment Premium or Penalty.....................................- 44 -
4.6. Taxes................................................................- 45 -
4.7. Reduction or Termination of the Commitments..........................- 47 -
4.8. Payments on Business Day.............................................- 47 -
4.9. Payment of Adjustment Amounts........................................- 47 -
- i -
3
5. COMMITMENT FEE AND OTHER FEES.................................................- 47 -
5.1. Commitment Fee.......................................................- 47 -
5.2. Arrangement Fee......................................................- 48 -
5.3 Upfront Fees.........................................................- 48 -
5.4 Administrative Agency Fee............................................- 48 -
5.5. Letter of Credit Fees................................................- 48 -
5.6. Fees Not Interest; Nonpayment........................................- 48 -
6. APPLICATION OF PROCEEDS.......................................................- 49 -
7. REPRESENTATIONS AND WARRANTIES................................................- 49 -
7.1. Organization and Qualification.......................................- 49 -
7.2. Financial Statements.................................................- 49 -
7.3. Litigation...........................................................- 49 -
7.4. Default..............................................................- 49 -
7.5. Title to Properties..................................................- 50 -
7.6. Payment of Taxes.....................................................- 50 -
7.7. Conflicting or Adverse Agreements or Restrictions....................- 50 -
7.8. Authorization, Validity, Etc.........................................- 50 -
7.9. Investment Company Act Not Applicable................................- 51 -
7.10. Public Utility Holding Company Act Not Applicable....................- 51 -
7.11. Margin Stock.........................................................- 51 -
7.12. ERISA................................................................- 51 -
7.13. Full Disclosure......................................................- 51 -
7.14. Environmental Matters................................................- 52 -
7.15. Permits and Licenses.................................................- 52 -
7.16. Solvency.............................................................- 53 -
7.17. Capital Structure....................................................- 53 -
7.18. Insurance............................................................- 53 -
7.19. Compliance with Laws.................................................- 54 -
7.20. No Consent...........................................................- 54 -
7.21. Year 2000............................................................- 54 -
8. CONDITIONS....................................................................- 55 -
8.1. Conditions to Effectiveness of Agreement.............................- 55 -
8.2. Conditions to each Loan and Letter of Credit.........................- 57 -
9. AFFIRMATIVE COVENANTS.........................................................- 58 -
9.1. Reporting and Notice Requirements....................................- 58 -
9.2. Corporate Existence..................................................- 61 -
9.3. Books and Records....................................................- 61 -
- ii -
4
9.4. Insurance.................................................................- 61 -
9.5. Right of Inspection.......................................................- 62 -
9.6. Maintenance of Property. .................................................- 62 -
9.7. Guarantees of Certain Restricted Subsidiaries; Pledge Agreement...........- 62 -
9.8. Accounting Principles.....................................................- 63 -
9.9. Patents, Trademarks and Licenses..........................................- 64 -
9.10. Taxes; Obligations........................................................- 64 -
10. NEGATIVE COVENANTS.................................................................- 64 -
10.1. Liens.....................................................................- 64 -
10.2. Debt......................................................................- 65 -
10.3. Restricted Payments.......................................................- 67 -
10.4. Mergers; Consolidations; Sale or Other Dispositions of All or
Substantially All Assets..................................................- 68 -
10.5. Investments, Loans and Advances...........................................- 69 -
10.6. Sale or Other Disposition of Less than Substantially All Assets;
Sale and Leasebacks.......................................................- 70 -
10.7. Use of Proceeds...........................................................- 72 -
10.8. Transactions with Affiliates..............................................- 72 -
10.9. Nature of Business........................................................- 72 -
10.10. Issuance and Disposition of Shares........................................- 72 -
10.11. ERISA.....................................................................- 73 -
10.12. Discount or Sale of Receivables...........................................- 74 -
10.13. Acquisitions..............................................................- 74 -
10.14. Certain Financial Tests...................................................- 74 -
10.15. Regulations T, U and X. .................................................- 75 -
10.16. Status....................................................................- 75 -
10.17. Compliance with Laws......................................................- 75 -
10.18. Unrestricted Subsidiaries.................................................- 76 -
10.19. Investments in Unrestricted Subsidiaries..................................- 76 -
10.20. No Commingling of Assets, Etc.............................................- 76 -
10.21. Restrictive Agreements....................................................- 77 -
10.22. Prepayments, Etc., of Certain Debt........................................- 77 -
11. EVENTS OF DEFAULT; REMEDIES........................................................- 77 -
11.1. Failure to Pay Principal..................................................- 78 -
11.2. Failure to Pay Other Amounts..............................................- 78 -
11.3. Default under Other Debt..................................................- 78 -
11.4. Misrepresentation or Breach of Warranty...................................- 78 -
11.5. Violation of Covenants....................................................- 78 -
11.6. Bankruptcy and Other Matters..............................................- 79 -
11.7. Dissolution...............................................................- 79 -
- iii -
5
11.8. Judgment..................................................................- 79 -
11.9. Nullity of Loan Documents.................................................- 79 -
11.10. Change of Control.........................................................- 80 -
11.11. ERISA.....................................................................- 80 -
11.12. Guarantors; Pledge Agreement..............................................- 80 -
11.13. Related Facilities........................................................- 80 -
11.14. Other Remedies............................................................- 80 -
11.15. Collateral Account........................................................- 80 -
11.16. Remedies Cumulative.......................................................- 81 -
12. THE AGENT..........................................................................- 81 -
12.1. Appointment, Powers and Immunities........................................- 81 -
12.2. Reliance by Agent.........................................................- 82 -
12.3. Defaults..................................................................- 82 -
12.4. Rights as Bank............................................................- 82 -
12.5. Indemnification...........................................................- 83 -
12.6. Non-Reliance on Agent and Other Banks.....................................- 83 -
12.7. Successor Agent...........................................................- 83 -
13. MISCELLANEOUS......................................................................- 84 -
13.1. Representation by the Banks...............................................- 84 -
13.2. Waivers, Etc..............................................................- 84 -
13.3. Notices...................................................................- 85 -
13.4. GOVERNING LAW.............................................................- 85 -
13.5. Survival of Representations, Warranties and Covenants.....................- 85 -
13.6. Counterparts..............................................................- 85 -
13.7. Separability..............................................................- 86 -
13.8. Descriptive Headings......................................................- 86 -
13.9. Right of Set-off, Adjustments.............................................- 86 -
13.10. Assignments and Participations............................................- 87 -
13.11. Interest..................................................................- 89 -
13.12. Expenses; Indemnification.................................................- 89 -
13.13. Payments Set Aside........................................................- 92 -
13.14. Loan Agreement Controls...................................................- 92 -
13.15. Obligations Several.......................................................- 92 -
13.16. SUBMISSION TO JURISDICTION; WAIVERS.......................................- 92 -
13.17. WAIVER OF JURY TRIAL......................................................- 93 -
13.18. Amendments, Etc...........................................................- 93 -
13.19. Relationship of the Parties...............................................- 94 -
13.20. Currency Conversion and Currency Indemnity................................- 94 -
13.21. Confidentiality...........................................................- 95 -
13.22. FINAL AGREEMENT...........................................................- 97 -
- iv -
6
EXHIBITS
Exhibit A: Note
Exhibit B: Notice of Borrowing
Exhibit C: Letter of Credit Request
Exhibit D: Notice of Rate Change/Continuation
Exhibit E: Compliance Certificate
Exhibit F: Eurodollar Rate Margin Certificate
Exhibit G: Guaranty
Exhibit H: Assignment and Acceptance
SCHEDULES
Schedule 1: Applicable Lending Offices
Schedule 2.3: Existing Letters of Credit
Schedule 7.17: Capital Structure
Schedule 10.1: Liens
Schedule 10.2: Debt
- v -
7
REVOLVING CREDIT AGREEMENT
The Men's Wearhouse, Inc., a corporation organized under the
laws of the State of Texas (the "Borrower"), the financial institutions listed
on the signature pages hereof (collectively, the "Banks" and individually, a
"Bank"), and NationsBank, N.A. (together with any successor thereof,
"NationsBank") in its capacity as agent (the "Agent") for the Banks hereunder,
hereby agree as follows:
PRELIMINARY STATEMENT
WHEREAS, the Borrower has received loans and other extensions
of credit pursuant to that certain Revolving Credit Agreement dated as of June
2, 1997 (as amended, the "Existing Credit Agreement") by and among the Borrower,
NationsBank of Texas, N.A. as agent and the other banks and financial
institutions signatory thereto;
WHEREAS, the Borrower has requested the Agent and the Banks to
make loans to the Borrower in an aggregate amount not to exceed the Dollar
Equivalent Value of $125,000,000 at any time outstanding and, pursuant to a
$25,000,000 sub-limit, issue letters of credit for the account of the Borrower
in an aggregate amount not to exceed the Dollar Equivalent Value of $25,000,000
at any time outstanding;
WHEREAS, a portion of such loans shall be used to repay in
full the Existing Credit Agreement; and
WHEREAS, pursuant to the terms and conditions hereof the Agent
and the Banks have agreed to such request upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1. ACCOUNTING PRINCIPLES. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the audited financial
statements referred to in Section 9.1 hereof. All financial information
delivered to the Agent pursuant to Section 9.1 hereof shall be prepared in
accordance with GAAP applied on a basis consistent with those reflected by the
initial financial statements delivered to the Agent pursuant to Section 7.2,
except (i) where such principles are inconsistent with the requirements of this
Agreement and (ii) for those changes made pursuant to Section 9.8 hereof.
- 1 -
8
1.2. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"Acquisitions" has the meaning specified in Section 10.13
hereof.
"Acquisition Target" means any Person acquired pursuant to
Section 10.13.
"Adjusted Debt" means, at any time and without duplication, an
amount equal to the sum of (a) Total Funded Debt plus (b) an amount equal to the
product of (i) Base Rent Expense for the immediately preceding quarter times
(ii) thirty-two (32).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar Loan for such
Interest Period by (b) 1 minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.
"Adjustment Amount" means, as to any Adjustment Date, an
amount equal to the Dollar Equivalent Value of the excess, if any, of the
Positive Adjustment Amount over the Negative Adjustment Amount.
"Adjustment Date" means the "Interest Payment Date" (as such
term is defined in the Canadian Term Loan Facility).
"Affiliate" means, with respect to a specified 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. If any
Person shall own, directly or indirectly, beneficially and of record twenty
percent (20%) or more of the equity (whether outstanding capital stock,
partnership interests or otherwise) of another Person, such Person shall be
deemed to be an Affiliate.
"Agent" shall have the meaning set forth in the preamble
hereto.
"Agreement" shall mean this Revolving Credit Agreement, as the
same may be amended, modified or supplemented from time to time.
"Alternate Currency" shall mean (i) subject to Section 2.10
hereof, as to Letters of Credit: euro, British pounds sterling, German deutsche
marks, Italian lira, French francs, Japanese yen and Canadian dollars and (ii)
as to Loans: British pounds sterling and Canadian dollars.
"Alternate Currency Loan" means a Loan hereunder denominated
in an Alternate Currency. Alternate Currency Loans shall be Eurodollar Loans.
- 2 -
9
"Applicable Lending Office" shall mean, with respect to each
Bank, such Bank's (a) Domestic Lending Office in the case of a Base Rate Loan
and (b) LIBOR Lending Office in the case of a Eurodollar Loan.
"Applicable Margin" means, (a) for the period from the Closing
Date until August 1, 1999, (i) as to Eurodollar Loans and Letter of Credit Fees,
1.00% per annum, and (ii) as to Commitment Fees, 0.15% per annum, (b) for the
period from August 1, 1999 to the next redetermination thereafter, the
Applicable Margin determined by the Agent based upon the certificate then most
recently delivered pursuant to Section 9.1(k), and (c) for each period
thereafter (each such period commencing 61 days after the end of each fiscal
quarter of the Borrower and ending 60 days after the end of the next fiscal
quarter of the Borrower), the applicable rate per annum set forth in the table
below opposite the ratio of Adjusted Debt to EBITDA plus Base Rent Expense for
the four immediately preceding fiscal quarterly periods; provided, however,
notwithstanding the foregoing, if at the time of determination, the Percentage
Usage during such period has at any time been greater than 50%, any such rate
per annum as to Loans and Letter of Credit Fees shall be increased by 0.125% per
annum, calculated for each day of such excess. Each determination of the
Applicable Margin shall be determined by the Agent for each such period after
its receipt of the applicable certificate delivered pursuant to Section 9.1(k)
and prior to the commencement of such period. Except as set forth above, each
change in the Applicable Margin shall be immediately effective commencing on the
61st day after each fiscal quarter end as to all Eurodollar Loans then
outstanding, the Letter of Credit Outstandings and the then Unused Commitment,
and remain effective until the next determination.
APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN
ADJUSTED DEBT TO EBITDA PLUS FOR EURODOLLAR LOANS FOR BASE RATE LOANS FOR COMMITMENT FEES
BASE RENT EXPENSE AND LETTER OF CREDIT ON THE UNUSED
FEES COMMITMENT
---------------------------- -------------------- ------------------- -------------------
Less than 3.0:1.0 0.75% 0.00% 0.125%
Equal to or greater than 3.0:1.0 0.875% 0.00% 0.125%
but less than 4.0:1.0
Equal to or greater than 4.0:1.0 1.0% 0.00% 0.15%
but less than 4.25:1.0
Equal to or greater than 4.25:1.0 1.125% 0.00% 0.175%
but less than 4.5:1.0
Equal to or greater than 4.5:1.0 1.25% 0.00% 0.225%
"Application" shall mean an application, in such form as the
Issuing Bank may specify from time to time, requesting the Issuing Bank to open
a Letter of Credit.
"Assignment and Acceptance" shall have the meaning set forth
in Section 13.10(a).
- 3 -
10
"Bank" shall have the meaning specified in the preamble hereto
and shall include the Agent, in its individual capacity.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (.5%) and (b) the per annum rate of interest in effect for such day as
established from time to time by NationsBank as its Dollar "prime rate", which
rate may not be the lowest rate of interest charged by NationsBank to its
customers. Any change in the Base Rate due to a change in the Dollar prime rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Dollar prime rate or Federal Funds Rate.
"Base Rate Loan" shall mean any Loan which bears interest at
the Base Rate plus the Applicable Margin. Base Rate Loans shall be denominated
in Dollars.
"Base Rent Expense" means, for any period, payments (whether
computed monthly or annually) due under Leases of real property (including those
resulting from sale-leaseback transactions), exclusive of payments for
percentage rent, common-area maintenance, insurance, taxes and any other amounts
recorded in the Borrower's or the Restricted Subsidiaries' books and records in
accordance with their customary practices as rent other than "base rent
expense"; provided, with respect to any acquisition of an Acquisition Target
which results in the requirement to provide proforma financial information
pursuant to Article 11 of Regulation S-X (Reg ss. 210.11.01, .02 and .03), Base
Rent Expense of the Acquisition Target for each full fiscal quarter included in
the applicable computation period prior to such Acquisition (including the
fiscal quarter during which it was acquired) shall be included, provided further
that Base Rent Expense of the Acquisition Target shall be adjusted for those
applicable items of base rent expense that will increase or decrease subsequent
to the date of Acquisition, such adjustments limited to those like adjustments
included in the proforma financial statements provided in the Form 8-K filed
with the Securities and Exchange Commission pursuant to Article 11 of Regulation
S-X.
"Borrower" shall have the meaning set forth in the preamble
hereto.
"Borrowing Date" shall mean a date upon which the Borrower has
requested a Loan is to be made in a Notice of Borrowing delivered pursuant to
Section 2.
"Business Day" shall mean a day when the Agent is open for
business, provided that (i) if the applicable Business Day relates to any
Eurodollar Loan, it shall mean a day when the Agent is open for business and on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London, (ii) if the applicable Business Day relates to
dates for the payment or purchase of any amount denominated in euro or National
Currency Units, it shall be deemed to mean a TARGET Business Day, and (iii) if
the applicable Business Day relates to the giving and receiving of notices
hereunder for Letters of Credit denominated in euro or National Currency Units
it shall be deemed to mean a TARGET Business Day on which banks are generally
- 4 -
11
open for business in London, Frankfurt, Dallas and/or in any other principal
financial center as the Agent shall from time to time determine for this
purpose.
"Canadian Dollar Equivalent Value" means, with respect to an
amount of Dollars, an amount of Canadian dollars into which the Agent determines
that it could, in accordance with its practice from time to time in the
interbank foreign exchange market, convert such amount of Dollars, determined by
using its applicable quoted spot rate on the date on which such equivalent is to
be determined pursuant to the provisions of this Agreement.
"Canadian Term Loan Facility" means that certain Term Credit
Agreement of even date herewith among the Borrower, Golden ▇▇▇▇▇▇ Finance
Company, the Agent and the Banks, as amended from time to time.
"Capital Stock" means and includes (i) any and all shares,
interests, participations or other equivalents of or interests in (however
designated) corporate stock, including, without limitation, shares of preferred
or preference stock, (ii) all partnership interests (whether general or limited)
in any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or Canada
or issued by an agency thereof and backed by the full faith and credit of the
United States or Canada, as the case may be, in each case maturing within ninety
(90) days after the date of acquisition thereof; (b) marketable direct
obligations issued by any state of the United States of America or province of
Canada or any political subdivision of any such state, province or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Service, Inc. (or, if at any time neither Standard & Poor's Corporation nor
▇▇▇▇▇'▇ Investors Service, Inc. shall be rating such obligations, then from such
other nationally recognized rating services acceptable to the Agent); (c)
commercial paper maturing no more than ninety (90) days after the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 or P-1 from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Service, Inc. (or, if at any time neither Standard & Poor's Corporation nor
▇▇▇▇▇'▇ Investors Service, Inc. shall be rating such obligations, then the
highest rating from such other nationally recognized rating services acceptable
to the Agent); (d) domestic and eurodollar certificates of deposit or bankers'
acceptances maturing within ninety (90) days after the date of acquisition
thereof issued by any Bank or any commercial bank organized under the laws of
the United States of America or Canada or any state or province thereof or the
District of Columbia having combined capital and surplus of not less than
$250,000,000 (or the Canadian Dollar Equivalent Value thereof); (e) repurchase
agreements of the Agent or any commercial bank organized under the laws of the
United States of America or Canada or any state or province thereof or the
District of Columbia having combined capital and surplus of not less than
$250,000,000 (or
- 5 -
12
the Canadian Dollar Equivalent Value thereof); (f) overnight investments with
the Agent or any commercial bank organized under the laws of the United States
of America or Canada or any state or province thereof or the District of
Columbia having combined capital and surplus of not less than $250,000,000 (or
the Canadian Dollar Equivalent Value thereof); (g) other readily marketable
instruments issued or sold by the Agent or any commercial bank organized under
the laws of the United States of America or Canada or any state or province
thereof or the District of Columbia having combined capital and surplus of not
less than $250,000,000 (or the Canadian Dollar Equivalent Value thereof); and
(h) funds invested in brokerage accounts with nationally recognized brokerage
houses or money market accounts, in each case for less than thirty (30) days.
"Change/Continuation Date" shall mean a date upon which the
Borrower has requested the change or continuation of the interest rate
applicable to any Loan pursuant to a Notice of Rate Change/Continuation
delivered pursuant to Section 3.
"Change of Control" means (i) any transaction (including a
merger or consolidation) the result of which is that any "Person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50 percent (50%) of the total voting power of all classes of the voting
stock of the Borrower or the surviving Person and/or warrants or options to
acquire such voting stock, calculated on a fully diluted basis (a "Control
Person"), other than any such transaction in which the current executive
officers of the Borrower who are also currently directors and their Affiliates
or The ▇▇▇▇▇▇ Family Foundation become, individually or collectively, a Control
Person or (ii) the sale, lease or transfer of all or substantially all of the
Borrower's assets (which includes the assets of its Subsidiaries) to any
"Person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act), except to the Borrower or one or more of its Subsidiaries.
"Closing Date" shall mean February 5, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, as now or hereafter in effect, together with all regulations, rulings
and interpretations thereof or thereunder issued by the Internal Revenue
Service.
"Combination Agreement" means that certain Combination
Agreement dated as of November 18, 1998 among the Borrower, Golden Moores
Company, ▇▇▇▇▇▇ Retail Group Inc., and the other Persons which are a party
thereto, as amended, modified or supplemented from time to time in accordance
with the terms of the Canadian Term Loan Facility.
"Commitment" shall mean, with respect to each Bank, such
Bank's Commitment, as defined in Section 2.1(a), and "Commitments" shall mean,
collectively, the Commitments of all of the Banks.
"Computation Date" has the meaning set forth in Section 3.2(a)
hereof.
- 6 -
13
"Consolidated Current Assets" means all items classified as
current assets on the consolidated financial statements of the Borrower and the
Restricted Subsidiaries delivered to the Banks pursuant to Section 9.1, all as
determined in accordance with GAAP consistently applied.
"Consolidated Current Liabilities" means all items classified
as current liabilities of Borrower and the Restricted Subsidiaries on the
consolidated financial statements delivered to the Banks pursuant to Section 9.1
other than any current portion of (i) the outstanding Loans and Letters of
Credit and (ii) Debt outstanding under the Related Facilities, all as determined
in accordance with GAAP consistently applied.
"Consolidated Net Income" means with respect to any period,
net income of the Borrower and the Restricted Subsidiaries on a consolidated
basis (after adjustment for income taxes), determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, the total
shareholders' equity of the Borrower and the Restricted Subsidiaries which
appears on the consolidated balance sheet of such Person as of such date,
determined in accordance with GAAP; excluding, however, (a) from total
shareholders' equity, mandatorily redeemable Preferred Stock of the Borrower or
a Restricted Subsidiary to the extent included in total shareholders' equity and
(b) Restricted Investments by the Borrower and the Restricted Subsidiaries in
any Unrestricted Subsidiaries.
"Contingent Liability" means (i) any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, otherwise to invest
in, a debtor, or otherwise to assure a creditor against loss) the Debt,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the ordinary course of collection), (ii)
obligations under surety, appeal or custom bonds, or (iii) guarantees of the
payment of dividends or other distributions upon the shares of or interest in
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitations set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
Debt, obligation or other liability guaranteed thereby or, if applicable, such
lesser principal amount as is expressly stated to be the maximum principal
amount of such Person's obligation thereunder.
"Contractual Rent Expense" means, for any period as to the
Borrower and the Restricted Subsidiaries, all payments (whether computed monthly
or annually) due under Leases of real property (including those resulting from
sale-leaseback transactions), including, without limitation, Base Rent Expense
and payments for percentage rent, common-area maintenance, insurance, and taxes
and any other amounts recorded in such Person's books and records in accordance
with their customary practices as rent expense, whether paid or accrued in the
applicable period of calculation, but excluding adjustments with respect to such
payments required to be made in conformity with GAAP for the purposes of
accounting for graduated lease payments, calculated
- 7 -
14
for the four (4) immediately preceding fiscal quarterly periods; provided, with
respect to any acquisition of an Acquisition Target which results in the
requirement to provide proforma financial information pursuant to Article 11 of
Regulation S-X (Reg ss. 210.11.01, .02 and .03), Contractual Rent Expense of the
Acquisition Target for each full fiscal quarter included in the applicable
computation period prior to such Acquisition (including the fiscal quarter
during which it was acquired) shall be included, provided further that
Contractual Rent Expense of the Acquisition Target shall be adjusted for those
applicable items of contractual expense that will increase or decrease
subsequent to the date of Acquisition, such adjustments limited to those like
adjustments included in the proforma financial statements provided in the Form
8-K filed with the Securities and Exchange Commission pursuant to Article 11 of
Regulation S-X.
"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.
"Debt" means (without duplication), for any Person:
(a) indebtedness of such Person for borrowed money (including
obligations, contingent or otherwise, of such Person relative to the
face amount of all letters of credit and letters of guaranty, whether
drawn or undrawn, and banker's acceptances issued for the account of
such Person);
(b) obligations of such Person evidenced by bonds, debentures,
notes or similar instruments (but excluding sight drafts that evidence
current account payables arising in the ordinary course of business
which are not more than 90 days past due the original due date);
(c) obligations of such Person to pay the deferred purchase
price of property or services (but excluding current accounts payable
arising in the ordinary course of business which are not more than 90
days past due the original due date);
(d) indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be
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;
(e) obligations of such Person as lessee under Leases that
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as Capital Leases;
(f) obligations under surety, appeal or custom bonds;
- 8 -
15
(g) Contingent Liabilities of such Person; and
(h) obligations of such Person under or in connection with a
Sale and Lease-Back Transaction or similar arrangements.
Debt of any Person shall include the Debt of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Debt provide that such Person is not liable therefor.
"Debtor Laws" shall mean all applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization, or similar laws, or general equitable principles from time to
time in effect affecting the rights of creditors generally or providing for the
relief of debtors.
"Default" shall mean (i) any of the events specified in
Section 11, whether or not there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act or (ii) any "Default" as
defined in any Related Facility.
"Disqualified Capital Stock" means, with respect to any
Person, that portion of any class or series of Capital Stock of such Person
that, by its terms or by the terms of any security into which it is convertible
or exchangeable, is, or upon the happening of an event or passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder), in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption sinking fund or similar payment due, in
either case, on or prior to the Maturity Date.
"Dollar Equivalent Value" means, with respect to an amount of
any Alternate Currency, an amount of Dollars into which the Agent determines
that it could, in accordance with its practice from time to time in the
interbank foreign exchange market, convert such amount of Alternate Currency,
determined by using its applicable quoted spot rate on the date on which such
equivalent is to be determined pursuant to the provisions of this Agreement. The
equivalent in Dollars of each Letter of Credit and Loan made in an Alternate
Currency shall be recalculated hereunder on each date that it shall be necessary
to determine the portion of each Bank's Unused Commitment or any or all Loans or
Letter of Credit Outstandings on such date, including without limitation on each
Computation Date.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, with respect to any
Bank, the office of such Bank specified as its "Domestic Lending Office"
opposite its name on Schedule I attached hereto
- 9 -
16
and made a part hereof or such other office of such Bank as such Bank may from
time to time specify to the Borrower and the Agent.
"Drawing" shall have the meaning set forth in Section 2.6(b)
hereof.
"EBITDA" means, for any period, as to the Borrower and the
Restricted Subsidiaries, an amount equal to earnings before income taxes and
adjustment for extraordinary items, plus (a) on a one time basis, transaction
costs incurred in connection with the Moores Acquisition, not to exceed
$8,000,000, plus (b) depreciation and amortization, plus (c) interest expense,
plus (or minus) (d) other non-cash charges or income affecting net earnings
(except for those related to extraordinary items), for the four (4) immediately
preceding fiscal quarterly periods; provided, with respect to any acquisition of
an Acquisition Target which results in the requirement to provide proforma
financial information pursuant to Article 11 of Regulation S-X (Reg ss.
210.11.01, .02 and .03), EBITDA of the Acquisition Target for each full fiscal
quarter included in the applicable computation period prior to such Acquisition
(including the fiscal quarter during which it was acquired) shall be included,
provided further that EBITDA of the Acquisition Target shall be adjusted for
those items of income and expense that will increase or decrease subsequent to
the date of Acquisition, such adjustments limited to those adjustments included
in the proforma financial statements provided in the Form 8-K filed with the
Securities and Exchange Commission pursuant to Article 11 of Regulation S-X.
"Eligible Assignee" means (i) a Bank; (ii) a Qualified
Affiliate of a Bank; and (iii) any other Person approved by the Agent and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 13.10, the Borrower, such
approval not to be unreasonably withheld or delayed by the Borrower and such
approval to be deemed given by the Borrower if no objection is received by the
assigning Bank and the Agent from the Borrower within ten (10) Business Days
after notice of such proposed assignment has been provided by the assigning Bank
to the Borrower; provided, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
"EMU" means Economic and Monetary Union as contemplated in
the Treaty on European Union.
"EMU Currency" means German deutsche marks, Italian lira, and
French francs.
"EMU Legislation" means legislative measures of the European
Council (including without limitation European Council regulations) for the
introduction of, changeover to or operation of the euro.
"Environmental Lien" means a Lien in favor of a Governmental
Authority or other Person (a) for any liability under any Environmental
Protection Statute or (b) for damages arising from or costs incurred by such
Governmental Authority or other Person in response to a release or threatened
release of Hazardous Materials into the environment.
- 10 -
17
"Environmental Protection Statute" means (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section
9601 et seq.), as amended from time to time, and any and all rules and
regulations issued or promulgated thereunder ("CERCLA"); (b) the Resource
Conservation and Recovery Act (as amended by the Hazardous and Solid Waste
Amendment of 1984, 42 U.S.C.A. Section 6901 et seq.), as amended from time to
time, and any and all rules and regulations promulgated thereunder ("RCRA"); (c)
the Clean Air Act, 42 U.S.C.A. Section 7401 et seq., as amended from time to
time, and any and all rules and regulations promulgated thereunder; (d) the
Clean Water Act of 1977, 33 U.S.C.A. Section 1251 et seq., as amended from time
to time, and any and all rules and regulations promulgated thereunder; (e) the
Toxic Substances Control Act, 15 U.S.C.A. Section 2601 et seq., as amended from
time to time, and any and all rules and regulations promulgated thereunder; or
(f) any other federal or state or provincial law, statute, rule or regulation
enacted in connection with or relating to the protection or regulation of the
environment (including, without limitation, those laws, statutes, rules and
regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Materials) and
any rules and regulations issued or promulgated in connection with any of the
foregoing by any Governmental Authority, and "Environmental Protection Statutes"
means, collectively, each of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any subsidiary or trade or business
(whether or not incorporated) which is a member of a group of which the Borrower
is a member and which is under common control within the meaning of Section 414
of the Code and the rules and regulations thereunder.
"ERISA Event" means any of the following events: (a) a
"Reportable Event" described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the provisions for
the thirty (30)-day notice to the PBGC under such regulations), (b) the
withdrawal of the Borrower from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or the
incurrence of liability by the Borrower under Section 4064 of ERISA, (c) the
distribution of a notice of intent to terminate a Plan pursuant to Section
4041(a)(2) of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by
the PBGC, or (e) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"euro" means the single currency of Participating Member
States of the European Community.
- 11 -
18
"Eurodollar Lending Office" shall mean, with respect to each
Bank, the office specified as such Bank's "Eurodollar Lending Office" opposite
its name on Schedule 1 attached hereto and made a part hereof (or, if no such
office is specified, its Domestic Lending Office) or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the Agent.
"Eurodollar Loans" means Loans that bear interest at rates
based upon the Adjusted Eurodollar Rate plus the Applicable Margin. Subject to
the terms and conditions hereof, Eurodollar Loans may be denominated in Dollars
or any Alternate Currency.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, (a) in the case of Dollars, the rate for deposits in
Dollars in the approximate amount of the requested borrowing, conversion or
continuation and for a period comparable to the relevant Interest Period which
appears on Telerate Page 3750 as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or if for any reason such rate
is not available, the rate per annum appearing on Reuters Screen LIBO Page as of
such date and time (provided, however if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%)), (b)
in the case of British pounds sterling, the rate for deposits in British pounds
sterling in the approximate amount of the requested borrowing, conversion or
continuation and for a period comparable to the relevant Interest Period which
appears on Telerate Page 3750 as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period (or, if for any reason such rate
is not available, any replacement page thereof or other applicable display page
designated by Telerate) and (c) in the case of Canadian dollars, the rate for
deposits in Canadian dollars in the approximate amount of the requested
borrowing, conversion or continuation and for a period comparable to the
relevant Interest Period which appears on Telerate Page 3740 as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
(or, if for any reason such rate is not available, any replacement page thereof
or other applicable display page designated by Telerate); provided, however,
that if Agent determines that the relevant foregoing source is unavailable for
any Interest Period, Eurodollar Rate means the rate of interest determined by
Agent to be the average (rounded upward, if necessary, to the nearest 1/10,000th
of 1%) of the rates per annum at which deposits in the relevant currency in
immediately available funds are offered to the Agent two (2) Business Days
preceding the first day of the relevant Interest Period by prime banks in the
London interbank eurocurrency market as of 11:00 a.m. London time for delivery
on the first day of such Interest Period, for the number of days comprised
therein and in an amount comparable to the amount of the relevant Loan.
"European Community" means those European countries that are
signatories to the Treaty on European Union.
- 12 -
19
"Event of Default" shall mean any of the events specified in
Section 11, provided that there has been satisfied any requirement in connection
with such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act.
"Exchangeable Shares" shall have the meaning set forth in the
Combination Agreement.
"Existing Credit Agreement" shall have the meaning set forth
in the preamble hereto.
"Existing Letters of Credit" shall mean the Letters of Credit
identified on Schedule 2.3 hereto.
"Expiration Date" shall mean the last day of an Interest
Period.
"Fair Market Value" shall mean (i) with respect to any asset
(other than cash) the price at which a willing buyer would buy and a willing
seller would sell, such asset in an arms' length transaction, and (ii) with
respect to cash, the amount of such cash.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 charged to
the Agent (in its individual capacity) on such day on such transactions as
determined by the Agent.
"Fiscal Year" means the Borrower's fifty-two (52) or
fifty-three (53) week fiscal year, which ends on the Saturday nearest January 31
in each calendar year; by way of example, references to "Fiscal 1998" shall mean
the fiscal year ended January 30, 1999.
"Fixed Charge Ratio" means, for any period as to the Borrower
and the Restricted Subsidiaries, the ratio of (i) EBITDA plus Contractual Rent
Expense minus capital expenditures (excluding Acquisitions) to (ii) Fixed
Charges. For purposes of this definition, capital expenditures shall be
calculated for the four immediately preceding fiscal quarterly periods.
"Fixed Charges" means, for any period as to the Borrower and
the Restricted Subsidiaries, and without duplication, an amount equal to the sum
of (a) cash interest expense plus (b) Contractual Rent Expense plus (c)
scheduled payments on Capital Leases plus (d) scheduled principal payments in
respect of any Debt (excluding Lease payments relating to Sale and Lease-Back
Transactions covered by clause (b) or (c) of this definition and excluding
scheduled
- 13 -
20
principal payments on the Obligations and on Debt under that certain Revolving
Credit Agreement of even date among the Borrower, ▇▇▇▇▇▇ Retail Group Inc., Bank
of America Canada and the other parties thereto, as amended from time to time)
plus (e) cash dividends by the Borrower; calculated for the four (4) immediately
preceding fiscal quarterly periods.
"Future Plan" has the meaning specified in Section 9.1(h)
hereof.
"GAAP" means generally accepted accounting principles 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 in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination.
"Governmental Approval" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any Governmental Authority.
"Governmental Authority" means any national, state,
provincial, county, municipal or other government, domestic or foreign, any
agency, board, bureau, commission, court, department or other instrumentality of
any such government, or any arbitrator.
"Governmental Requirement" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
franchise, permit, certificate, license, award, authorization or other
direction, guideline, or requirement of any Governmental Authority, including,
without limitation, any requirement under common law.
"Guaranty" has the meaning set forth in Section 9.7.
"Guarantor" means each Restricted Subsidiary which shall
execute and deliver a Guaranty (or any guaranty supplement) pursuant to Section
9.7.
"Hazardous Materials" means (a) any "hazardous waste" as
defined by RCRA; (b) any "hazardous substance" as defined by CERCLA; (c)
asbestos; (d) polychlorinated biphenyls; (e) any substance the presence of which
on any of the Borrower's or any Subsidiary's Properties is prohibited by any
Governmental Authority; (f) petroleum, including crude oil and any fraction
thereof, natural gas liquids, liquefied natural gas and synthetic gas useable
for fuel (or mixtures of natural gas and such synthetic gas); (g) drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal energy; and
(h) any other substance which, pursuant to any Governmental Requirement,
requires special handling in its collection, storage, treatment or disposal.
"Highest Lawful Rate" shall mean, with respect to each Bank,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken,
- 14 -
21
reserved, charged, or received with respect to the Notes or on other amounts, if
any, due to such Bank pursuant to this Agreement or any other Loan Document,
under laws applicable to such Bank which are presently in effect, or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow. To the extent required by applicable law in
determining the Highest Lawful Rate with respect to any Bank as of any date,
there shall be taken into account the aggregate amount of all payments and
charges theretofore charged, reserved or received by such Bank hereunder or
under the other Loan Documents which constitute or are deemed to constitute
interest under applicable law.
"Intercompany Credit Agreements" shall mean, collectively, (i)
that certain Credit Agreement dated as of February 10, 1999, between Golden
Moores Finance Company and ▇▇▇▇▇▇ Retail Group Inc. and the term note in the
amount of C$75,000,000 issued thereunder, (ii) the term notes dated as of
February 10, 1999 issued by Golden Brand Clothing (Canada) Ltd. and ▇▇▇▇▇▇ The
Suit People Inc. to ▇▇▇▇▇▇ Retail Group Inc. in the respective amounts of
C$50,000,000 and C$25,000,000, and (iii) the revolving notes dated as of
February 10, 1999 issued by Golden Brand Clothing (Canada) Ltd. and ▇▇▇▇▇▇ The
Suit People Inc., respectively, to ▇▇▇▇▇▇ Retail Group Inc., in the maximum
aggregate principal amount of C$30,000,000; as each may be amended, modified or
supplemented from time to time in accordance with the terms of the Canadian Term
Loan Facility.
"Interest Payment Date" shall mean (a) as to any Base Rate
Loan, the last day of each fiscal quarter, beginning with May 1, 1999 (or if any
such date is not a Business Day, then the next preceding Business Day); (b) as
to any Eurodollar Loan in which the Interest Period with respect thereto is not
greater than three (3) months, the date on which such Interest Period ends; (c)
as to any Eurodollar Loan in which the Interest Period with respect thereto is
greater than three (3) months, the date on which the third month of such
Interest Period ends, and the date on which each such Interest Period ends; and
(d) as to all Loans, at maturity.
"Interest Period" shall mean the period of time for which the
Eurodollar Rate shall be in effect as to any Eurodollar Loan which shall be a 1,
2, 3 or 6 month period of time, commencing with the Borrowing Date or the
Expiration Date of the immediately preceding Interest Period, as the case may
be, applicable to and ending on the effective date of any rate change or rate
continuation made as provided in Section 3.1(a) as the Borrower may specify in
the Notice of Borrowing or the Notice of Rate Change/Continuation, subject,
however, to the early termination provisions of Article III relating to any
Eurodollar Loan; provided, however, that: (i) any Interest Period which would
otherwise end on a day which 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) the duration of any Interest Period which commences before
any principal repayment installment date and otherwise ends after such date
shall end on such date, and (iii) no Interest Period shall extend beyond the
Maturity Date.
- 15 -
22
"Inventory" means the "inventory" (as that term is defined by
and within the meaning of GAAP) of the Borrower and any Restricted Subsidiary
including, without limitation, merchandise in transit and piece goods in the
possession of manufacturers.
"Investment" of any Person means any investment so classified
under GAAP, and, whether or not so classified, includes (a) any direct or
indirect loan or advance made by it to any other Person, whether by means of
stock purchase, loan, advance or otherwise, (b) any capital contribution to any
other Person, and (c) any ownership or similar interest in any other Person.
"Irrevocable Conversion Rate" with respect to any EMU
Currency, means the rate adopted and irrevocably fixed by the European Council
(in accordance with Article 1091(4) of the Treaty on European Union) on December
31, 1998 as the official exchange rate at which National Currency Units of such
EMU Currency shall be converted into euro, and euro shall be converted into
National Currency Units of such EMU Currency.
"Issuing Bank" shall mean NationsBank or any Affiliate
thereof, in its capacity as an issuer of Letters of Credit hereunder.
"Law" means any federal, state, provincial or local law,
statute, ordinance, code, rule, regulation, license, permit, authorization,
decision, order, injunction or decree, domestic or foreign.
"Lease" means, as to any Person, any operating lease other
than a Capital Lease of any Property (whether real, personal or mixed) by that
Person as a lessee, together with all renewals, extensions and options thereon.
"Letter of Credit" shall have the meaning specified in
Section 2.3(a).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (a) the aggregate Stated Amount of all outstanding
Letters of Credit and (b) the amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning specified
in Section 2.4(a).
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" or "Loans" shall mean a Loan or Loans, respectively, as
the case may be, from the Banks to the Borrower made under this Agreement.
- 16 -
23
"Loan Documents" shall mean this Agreement, the Notes, the
Letters of Credit, the Applications, the Guarantees, the Pledge Agreement and
all instruments, certificates and agreements now or hereafter executed or
delivered to the Agent, the Issuing Bank, or any Bank pursuant to any of the
foregoing and the transactions connected therewith, and all amendments,
modifications, renewals, extensions, increases and rearrangements of, and
substitutions for, any of the foregoing.
"Majority Banks" shall mean at any time Banks holding at least
66 2/3% of the aggregate unpaid principal amounts outstanding under the Notes
held by the Banks, or, if no such amounts are outstanding, Banks having at least
66 2/3% of the Commitments.
"Margin Stock" shall have the meaning assigned to such term
in Regulation U.
"Material Adverse Effect" means any material adverse effect on
(a) the financial condition, business, properties or operations of the Borrower
and its Restricted Subsidiaries, taken as a whole or (b) the ability of the
Borrower or any Restricted Subsidiary to perform its respective obligations
under this Agreement, any Note or any other Loan Document to which it is a party
on a timely basis.
"Maturity Date" shall mean February 5, 2004.
"Moores Acquisition" means the consummation of the
transactions contemplated by the Combination Agreement, including without
limitation the acquisition by the Borrower (directly or indirectly) of all the
outstanding Capital Stock (excluding the Exchangeable Shares) of ▇▇▇▇▇▇ Retail
Group Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing or has made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees
of the Borrower or an ERISA Affiliate and at least one entity other than the
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which
the Borrower or an ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"NationsBank" shall have the meaning set forth in the preamble
hereto.
"National Currency Unit" means a fraction or multiple of one
euro expressed in units of an EMU Currency.
"Negative Adjustment Amount" means, as of each Adjustment
Date, the amount of interest due and payable under the Canadian Term Loan
Facility.
- 17 -
24
"Non-Guaranteeing Restricted Subsidiary" shall have the
meaning set forth in Section 9.7.
"Note" or "Notes" shall have the meaning set forth in Section
2.1(c) hereof.
"Notice of Borrowing" shall have the meaning set forth in
Section 2.2(a) hereof.
"Notice of Rate Change/Continuation" shall have the meaning
set forth in Section 3.1(a)(ii).
"Obligations" means all of the obligations of the Borrower and
each Subsidiary now or hereafter existing under the Loan Documents, whether for
principal, Unpaid Drawings, interest, fees, expenses, indemnification or
otherwise.
"Officer's Certificate" shall mean a certificate signed in the
name of the Borrower by a Responsible Officer.
"Other Taxes" shall have the meaning set forth in Section
4.6(b).
"Overnight Rate" means, as to any Alternate Currency, for any
day, the rate of interest per annum at which overnight deposits in such
Alternate 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 the
Agent to major banks in the applicable offshore interbank market.
"Participating Member State" means each country so described
in any EMU Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PBGC Plan" means any Plan subject to Title IV of ERISA or
Section 412 of the Code.
"Percentage Usage" shall mean, as of any date, the quotient
(expressed as a percentage) obtained by dividing the balance of all Loans and
Letter of Credit Outstandings at the close of business on such date by the
Commitments at the close of business on such date (based on the Dollar
Equivalent Value thereof).
"Permitted Debt" shall have the meaning set forth in Section
10.2 hereof.
"Permitted Liens" means:
- 18 -
25
(a) Liens for current taxes, assessments or other governmental
charges which are not delinquent or remain payable without any penalty,
or the validity or amount of which is contested in good faith by
appropriate proceedings; provided however, that any right to seizure,
levy, attachment, sequestration, foreclosure or garnishment with
respect to Property of the Borrower or any Subsidiary by reason of such
Lien has not matured, or has been and continues to be effectively
enjoined or stayed;
(b) nonconsensual Liens imposed by operation of law,
including, without limitation, landlord Liens (including consensual
landlord Liens) for rent not yet due and payable, and Liens for
materialmen, mechanics, warehousemen, carriers, employees, workmen,
repairmen, current wages or accounts payable not yet delinquent and
arising in the ordinary course of business; provided, however, that any
right to seizure, levy, attachment, sequestration, foreclosure or
garnishment with respect to Property of the Borrower or any Subsidiary
by reason of such Lien has not matured, or has been, and continues to
be, effectively enjoined or stayed;
(c) easements, rights-of-way, restrictions and other similar
Liens or imperfections to title which do not materially interfere with
the occupation, use and enjoyment by the Borrower or any Subsidiary of
the Property encumbered thereby or materially impair the value of such
Property subject thereto;
(d) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, performance or payment bonds, purchase,
construction or sales contracts and other similar obligations, in each
case not incurred or made in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the deferred
purchase price of property;
(e) Liens arising out of or in connection with any litigation
or other legal proceeding which is being contested in good faith by
appropriate proceedings; provided however, that any right to seizure,
levy, attachment, sequestration, foreclosure or garnishment with
respect to Property of the Borrower or any Subsidiary by reason of such
Lien has not matured or has been, and continues to be, effectively
enjoined or stayed; and
(f) UCC protective filings with respect to personal property
leased to the Borrower or any Subsidiary.
"Person" shall mean an individual, partnership, joint venture,
corporation, joint stock company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
- 19 -
26
"Plan" means any employee benefit plan within the meaning of
Section 3(3) of ERISA, other than a Multiemployer Plan, maintained by the
Borrower or any ERISA Affiliate.
"Pledge Agreement" means that certain Pledge and Security
Agreement to be executed and delivered by the Pledgors, pursuant to Section 9.7
hereof, as amended from time to time.
"Pledgors" means Golden Moores Company and Golden Moores
Finance Company.
"Positive Adjustment Amount" means, as of each Adjustment
Date, the amount of interest which would have been due as of such date under the
Canadian Term Loan Facility if the Applicable Margin thereunder were calculated
on the same basis as the Applicable Margin for Eurodollar Loans set forth
herein.
"Preferred Stock" means any class or series of Capital Stock
of a Person which is entitled to a preference or priority over any other class
or series of Capital Stock of such Person with respect to any distribution of
such Person's assets, whether with respect to dividends, or upon liquidation or
dissolution, or both.
"Property" or Properties" shall mean any interest or right in
any kind of property or assets, whether real, personal, or mixed, owned or
leased, tangible or intangible, and whether now held or hereafter acquired.
"Pro Rata Percentage" shall mean with respect to any Bank, a
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Bank's Commitment and the denominator of which shall be the aggregate
amount of all the Commitments of the Banks, as adjusted from time to time in
accordance with Section 4.7.
"Qualified Affiliate" means, as to any Bank, any Affiliate
that is wholly-owned direct or indirect subsidiary of such Bank or of any Person
that wholly owns, directly or indirectly, such Bank, subject to the following
additional conditions:
(a) any right of such Bank assignor and such assignee
to vote as a Bank, or any other direct claims or rights
against any other Persons, shall be uniformly exercised or
pursued in the manner that such Bank assignor would have so
exercised such vote, claim or right if it had not made such
assignment or transfer;
(b) such assignee shall not be entitled to (i)
payment under Sections 2.8, 3.3 or 4.6 of amounts in excess of
those payable to such Bank assignor under such section
(determined without regard to such assignment or transfer) or
(ii) give notice under Section 3.2(b) or 3.2(c), other than
when such Bank assignor could have done so under such section
(determined without regard to such assignment or transfer);
and
- 20 -
27
(c) such assignee may become primarily liable for
such Commitment, but such assignment or transfer shall not
relieve or release the assignor Bank from such Commitment.
"Register" shall have the meaning set forth in Section
13.10(b).
"Related Facilities" means, collectively, (i) the Canadian
Term Loan Facility and (ii) that certain Revolving Credit Agreement dated as of
February 10, 1999 among the Borrower, Moores Retail Group Inc., Bank of America
Canada and the other parties thereto, as each may be amended from time to time.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Responsible Officer" means the Chairman of the Board,
President, Vice President-Finance or the Treasurer of the Borrower.
"Restricted Investments" shall have the meaning set forth in
Section 10.5.
"Restricted Payments" shall have the meaning set forth in
Section 10.3.
"Restricted Subsidiary" shall mean the Subsidiaries designated
as Restricted Subsidiaries on Schedule 7.17 attached hereto, together with any
Subsidiary hereafter created or acquired and, at the time of creation or
acquisition, not designated by the Board of Directors of the Borrower as an
Unrestricted Subsidiary. Any Subsidiary designated as an Unrestricted Subsidiary
for purposes of this Agreement may thereafter be designated as a Restricted
Subsidiary (upon approval by the Board of Directors of the Borrower) upon 30
days' prior written notice to the Agent if, at the time of such designation and
after giving effect thereto and after giving effect to the concurrent retirement
of any Debt, (i) no Event of Default or Default shall have occurred and be
continuing, (ii) such Subsidiary is organized under the laws of Canada, the
United Kingdom or the United States or any state thereof, (iii) (except for
directors' qualifying shares and the Exchangeable Shares) 100% of each class of
voting stock or other equity interests outstanding of such Subsidiary is owned
by the Borrower or a wholly-owned Restricted Subsidiary and (iv) the Borrower
and such
- 21 -
28
Subsidiary shall have complied with Section 9.7. Except for director's
qualifying shares and the Exchangeable Shares, each Restricted Subsidiary shall
be directly or indirectly wholly-owned by the Borrower. Any designation that
fails to comply with the terms of this definition shall be null and void and of
no effect whatsoever.
"Sale and Lease-Back Transaction" of any Person means any
arrangement entered into by such Person or any Subsidiary of such Person,
directly or indirectly, whereby such Person or any Subsidiary of such Person
shall sell or transfer any property, whether now owned or hereafter acquired,
and whereby such Person or any Subsidiary of such Person shall then or
thereafter rent or lease as lessee such property or any part thereof or other
property which such Person or any Subsidiary of such Person intends to use for
substantially the same purpose or purposes as the property sold or transferred.
"Securities Act" shall have the meaning set forth in Section
13.1.
"Similar Businesses" shall have the meaning set forth in
Section 7.18.
"Stated Amount" shall mean, as to each Letter of Credit, at
any time, the maximum amount then available to be drawn thereunder (without
regard to whether any conditions to drawing could then be met).
"Subscription Agreement" means that certain Subscription
Agreement dated as of February 10, 1999 between ▇▇▇▇▇▇ Retail Group Inc. and
Golden Moores Finance Company, as amended, modified or supplemented from time to
time in accordance with the terms of the Canadian Term Loan Facility.
"Subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"TARGET" means the Trans-European Automated Real-time Gross
settlement Express Transfer system.
"TARGET Business Day" means a day when TARGET is scheduled to
be open for business.
- 22 -
29
"Taxes" shall have the meaning set forth in Section 4.6(a).
"Total Funded Debt" means, at any time as to the Borrower and
the Restricted Subsidiaries, and without duplication, an amount equal to the sum
of (a) the aggregate principal amount of all Loans outstanding on such date plus
(b) the aggregate principal amount of drawings under Letters of Credit issued
hereunder and under the Related Facilities which have not then been reimbursed
pursuant to Section 2.6 hereof and thereof plus (c) the aggregate principal
amount of all other outstanding Debt of the Borrower and the Restricted
Subsidiaries of the type described in clauses (a)-(e) of the definition of
"Debt" (excluding any undrawn amounts under outstanding letters of credit).
"Transition Period" means the period established by EMU
Legislation, beginning on January 1, 1999 and ending on the Transition Period
Cutoff Date, during which sums of money in the Participating Member States may
be denominated in either euro or National Currency Units.
"Transition Period Cutoff Date" shall mean December 31, 2001,
or such other date as may be established by EMU Legislation.
"Treaty on European Union" means the Treaty of Rome of March
25, 1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty
(which was signed at Maastricht on February 1, 1992 and came into force on
November 1, 1993), as amended from time to time.
"Type" shall mean, with respect to any Loan, any Base Rate
Loan, any Canadian Prime Rate Loan, any Sterling Prime Rate Loan or any
Eurodollar Loan.
"Unpaid Drawing" shall have the meaning specified in Section
2.6(a).
"Unrestricted Subsidiary" shall mean each Subsidiary
designated as an Unrestricted Subsidiary on Schedule 7.17 attached hereto,
together with any Subsidiary which is hereafter designated by the Board of
Directors of the Borrower as an Unrestricted Subsidiary, and in each case and
without further action or qualification, any Subsidiary of such Subsidiary so
designated as an Unrestricted Subsidiary. Any Subsidiary may be designated an
Unrestricted Subsidiary (upon approval by the Board of Directors of the
Borrower) upon 30 days' prior written notice to the Agent if, at the time of
such designation and after giving effect thereto and after giving effect to the
concurrent retirement of any Debt, (i) no Event of Default or Default shall have
occurred and be continuing, (ii) such Subsidiary does not own, directly or
indirectly, any Debt or capital stock of, or other equity interest in, the
Borrower or a Restricted Subsidiary, (iii) such Subsidiary does not own or hold
any Lien on any property of the Borrower or any Restricted Subsidiary and (iv)
such Subsidiary is not liable, directly or indirectly, with respect to any Debt
other than Unrestricted Subsidiary Indebtedness.
- 23 -
30
"Unrestricted Subsidiary Indebtedness" of any Person means
Debt of such Person (a) as to which neither the Borrower nor any Restricted
Subsidiary is directly or indirectly liable (by virtue of the Borrower's or such
Restricted Subsidiary's being the primary obligor, or guarantor of, or otherwise
contractually liable in any respect on, such Debt), (b) which, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder of any Debt of the Borrower or any Restricted Subsidiary to declare, a
default on such Debt of the Borrower or any Restricted Subsidiary and (c) which
is not secured by any assets of the Borrower or of any Restricted Subsidiary.
"Unused Commitment" shall mean, as to each Bank, an amount
equal to such Bank's Commitment minus such Bank's Pro Rata Percentage of
outstanding Loans and Letter of Credit Outstandings at such time.
2. THE LOANS AND LETTERS OF CREDIT.
2.1. LOANS.
(a) Upon the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Loans to the Borrower denominated in Dollars or Alternate Currencies, from
time to time on any one or more Business Days during the period from the Closing
Date to the Maturity Date, up to an aggregate Dollar Equivalent Value of the
principal amount of Loans not exceeding at any one time outstanding the amount
set opposite such Bank's name on the signature pages hereof as such Bank's
Commitment (such amount, as it may be reduced from time to time pursuant to
Section 4.7 and Section 13.10 being such Bank's "Commitment"); provided,
however, that after giving effect to any Loan, in no event shall the Dollar
Equivalent Value of the outstanding amount of all Loans of all Banks made
hereunder to the Borrower plus the Dollar Equivalent Value of the Letter of
Credit Outstandings at such time exceed the Commitments of all the Banks. Within
such limits and during such period and subject to the terms and conditions of
this Agreement, the Borrower may borrow, repay and reborrow hereunder.
(b) The Borrower understands and agrees that the Existing
Credit Agreement shall terminate, without necessity of further act of the
parties, upon execution of this Agreement by the Borrower. The Borrower confirms
and acknowledges its obligations to pay on the Closing Date all amounts
outstanding under the Existing Credit Agreement, and the Borrower covenants and
each other party hereto acknowledges and agrees that proceeds of the initial
borrowings under this Agreement shall be used to pay all principal and accrued
interest (if any) and all other amounts outstanding under the Existing Credit
Agreement.
(c) The Borrower shall execute and deliver to the Agent for
each Bank to evidence the Loans made by each Bank, a promissory note (each, as
the same may be amended, modified or extended from time to time, a "Note"),
which shall be (i) dated the Closing Date; (ii) in the principal amount of such
Bank's Commitment; and (iii) in substantially the form attached hereto
- 24 -
31
as Exhibit A, with the blanks appropriately filled. The outstanding principal
balance of each Note shall be payable on the Maturity Date. Each Note shall bear
interest on the unpaid principal amount thereof from time to time outstanding at
the rate per annum determined as specified in Section 3, payable on each
Interest Payment Date and at maturity, commencing with the first Interest
Payment Date following the date of such Note.
(d) In the case of a proposed borrowing comprised of
Eurodollar Loans, the Agent shall promptly notify each Bank of the applicable
interest rate under Section 3.1. In the case of all borrowings, each Bank shall,
before 12:00 Noon (Dallas time) on the Borrowing Date, make available for the
account of its Applicable Lending Office to the Agent at the Agent's Domestic
Lending Office, in immediately available funds, and in the requested currency,
its Pro Rata Percentage of such borrowing. After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Section 8,
on the Borrowing Date the Agent shall make the borrowing available to the
Borrower at its Domestic Lending Office in immediately available funds and in
the requested currency. Each Bank may, at its option, post on a schedule
attached to its Note (x) the date and principal amount of each Loan made under
such Note; (y) the rate of interest each such Loan will bear; and (z) each
payment of principal thereon; provided, however, that any failure of such Bank
to so ▇▇▇▇ such Note shall not affect the Borrower's obligations thereunder; and
provided further that such Bank's records as to such matters shall be
controlling, absent manifest error, whether or not such Bank has so marked such
Note. Any deposit to the Borrower's demand deposit account by the Agent pursuant
to a request (whether written or oral) believed by the Agent to be an authorized
request by the Borrower for a Loan hereunder shall be deemed to be a Loan
hereunder for all purposes with the same effect as if the Borrower had in fact
requested the Agent to make such Loan.
2.2. BORROWING PROCEDURE.
(a) Each borrowing by the Borrower hereunder shall be (i) in
the case of any Eurodollar Loan, in an aggregate amount of not less than the
Dollar Equivalent Value of $3,000,000 or an integral multiple of the Dollar
Equivalent Value of $1,000,000 in excess thereof; or (ii) in the case of any
Base Rate Loan, in an aggregate amount of not less than $1,000,000 or an
integral multiple of $500,000 in excess thereof. Each Loan shall be made upon
prior written notice from the Borrower to the Agent in the form of Exhibit B
hereto (the "Notice of Borrowing") delivered to the Agent not later than 10:00
(Dallas time) at least (i) four Business Days prior to the requested Borrowing
Date in the case of Alternate Currency Loans, (ii) three Business Day prior to
the Borrowing Date, if such borrowing consists of Eurodollar Loans denominated
in Dollars; and (iii) on the requested Borrowing Date, if such borrowing
consists of Base Rate Loans denominated in Dollars. Each Notice of Borrowing
shall be irrevocable and shall specify (i) the amount of the proposed borrowing
in Dollars or Alternate Currencies, as the case may be, and of each Loan
comprising a part thereof; (ii) the Borrowing Date; (iii) the Type of Loan
requested; (iv) with respect to any Eurodollar Loan, the Interest Period with
respect to each such Loan and the Expiration Date of each such Interest Period
(provided, that there shall not be more than seven (7) Interest Periods
- 25 -
32
in effect at any one time under this Agreement); and (v) the demand deposit
account of the Borrower at the Agent's Domestic Lending Office with which the
proceeds of the borrowing are to be deposited. Promptly upon its receipt of a
Notice of Borrowing, the Agent shall deliver by telefacsimile a copy thereof to
each Bank. The Borrower may give the Agent telephonic notice by the required
time of any proposed borrowing under this Section 2.2(a); provided, that such
telephonic notice shall be promptly confirmed in writing by delivery to the
Agent of a Notice of Borrowing. Neither the Agent nor any Bank shall incur any
liability to the Borrower in acting upon any telephonic notice referred to above
which the Agent believes in good faith to have been given by the Borrower or for
otherwise acting in good faith under this Section 2.2(a).
(b) Unless the Agent shall have received notice from a Bank
(which must be received, except in the case of Base Rate Loans, at least one
Business Day prior to the date of any borrowing) that such Bank will not make
available to the Agent such Bank's Pro Rata Percentage of such borrowing as and
when required hereunder, the Agent may assume that such Bank has made such
portion available to the Agent on the date of such borrowing in accordance with
Section 2.1(c), and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. The Agent shall give notice to the Borrower of any notice
the Agent receives under this Section 2.2(b), provided that the Agent shall not
be liable for the failure to give such notice. If and to the extent any Bank
shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Borrower such amount, that Bank shall on the Business Day following such
Borrowing Date make such amount available to the Agent, together with interest
at the Federal Funds Rate or, in the case of any borrowing consisting of
Alternate Currency Loans, the Overnight Rate, for each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection (b) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such Bank's
Loan on the date of borrowing for all purposes of this Agreement. If such amount
is not made available to the Agent on the Business Day following the borrowing
date, the Agent will notify the Borrower by the next succeeding Business Day of
such failure to fund and, upon demand by the Agent, the Borrower shall pay such
amount to the Agent for the Agent's account, together with interest thereon for
each day elapsed since the date of such borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Loans comprising such borrowing.
(c) The failure of any Bank to make the Loan to be made by it
as part of any borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan on the date of such borrowing, but no Bank shall
be responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on the date of any borrowing.
(d) The Dollar Equivalent Value of any borrowing of Alternate
Currency Loans will be determined by the Agent for such borrowing on the
Computation Date therefor in accordance with Section 3.2(a).
- 26 -
33
2.3. LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions herein set
forth, including, without limitation, the applicable terms and conditions set
forth in Section 8 hereof, the Issuing Bank agrees that it will, at any time and
from time to time on or after the Closing Date following its receipt of a Letter
of Credit Request, issue for the account of the Borrower, in the name of the
Borrower or any Restricted Subsidiary, one or more irrevocable standby or
commercial letters of credit (all such letters of credit collectively, the
"Letters of Credit"); provided, that the Issuing Bank shall not issue any Letter
of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit or any
requirement of Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally; or
(ii) the Stated Amount of such Letter of Credit (in the case
of Letters of Credit denominated in Alternate Currencies, calculated,
as of the date of such issuance, by reference to the Dollar Equivalent
Value of such Stated Amount) shall be greater than an amount which when
added to the Letter of Credit Outstandings at such time (in the case of
Letters of Credit denominated in Alternate Currencies, calculated, as
of the date of such issuance, by reference to the Dollar Equivalent
Value of such Letter of Credit Outstandings) and the aggregate
principal amount of all Loans then outstanding and, in the case of
Alternate Currency Loans outstanding, calculated, as of the date of
such issuance, by reference to the Dollar Equivalent Value of such
Alternate Currency Loans (after giving effect to the principal amount
of all Loans repaid and all Unpaid Drawings reimbursed prior to or
concurrently with the issuance of such Letter of Credit) would exceed
the Commitments of all the Banks (after giving effect to any reductions
to the Commitments of all the Banks on such date); or
(iii) the Stated Amount of such Letter of Credit (in the case
of Letters of Credit denominated in Alternate Currencies, calculated,
as of the date of such issuance, by reference to the Dollar Equivalent
Value of such Stated Amount) shall be greater than an amount which when
added to the Letter of Credit Outstandings at such time (in the case of
Letter of Credit Outstandings denominated in Alternate Currencies,
calculated, as of the date of such issuance, by reference to the Dollar
Equivalent Value of such Letter of Credit Outstandings) (after giving
effect to the principal amount of all Unpaid Drawings reimbursed prior
to or concurrently with the issuance of such Letter of Credit) would
exceed $25,000,000; or
(iv) the expiry date, or, in the case of any Letter of Credit
containing an expiry date that is extendible at the option of the
Issuing Bank, the initial expiry date of such Letter
- 27 -
34
of Credit, is a date that is later than the earlier of (y) twelve (12)
months from the issuance date or (z) the Maturity Date.
(b) The Issuing Bank shall neither renew nor permit the
renewal of any Letter of Credit if any of the conditions precedent to such
renewal set forth in Section 8 are not satisfied. The Existing Letters of Credit
shall be deemed to have been issued hereunder. No Letter of Credit may be
issued, or remain outstanding, for the benefit of an Unrestricted Subsidiary.
2.4. LETTER OF CREDIT REQUESTS.
(a) Whenever the Borrower desires that a Letter of Credit be
issued for its account or that an existing expiry date shall be extended, it
shall deliver to the Agent its prior written request therefor not later than
11:30 a.m. (Dallas time) (i) in the case of a Letter of Credit to be issued, on
at least the second (2nd) Business Day prior to the requested issuance date and
(ii) in the case of the extension of the existing expiry date of any Letter of
Credit, on at least the second (2nd) Business Day prior to the date on which the
Issuing Bank must notify the beneficiary thereof that the Issuing Bank does not
intend to extend such existing expiry date. Each such request shall be in the
form of Exhibit C attached hereto (each a "Letter of Credit Request") and, in
the case of the issuance of any Letter of Credit, shall be accompanied by an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank or any Bank (through the Agent) may reasonably request. Subject to
Section 2.9, each Letter of Credit shall, at the Borrower's option, be
denominated in Dollars or an Alternate Currency, shall expire no later than the
date specified in Section 2.3, shall not be in an amount greater than is
permitted under Section 2.3(a) and shall be in such form as may be approved from
time to time by the Issuing Bank and the Borrower. Promptly upon its receipt of
a Letter of Credit Request, and, if applicable, the related Application, the
Agent shall so notify the other Banks. It is agreed that an Application may be
delivered by electronic transfer.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, this Agreement. Unless the Issuing Bank has received notice from the Agent
or any Bank (with a copy thereof to be simultaneously sent to the Borrower)
before it issues the respective Letter of Credit or extends the existing expiry
date of a Letter of Credit that one or more of the applicable conditions
specified in Section 8 are not then satisfied, or that the issuance of such
Letter of Credit would violate this Agreement, then the Issuing Bank may issue
the requested Letter of Credit for the account of the Borrower in accordance
with this Agreement and the Issuing Bank's usual and customary practices;
provided, however, that the Issuing Bank shall not be required to issue any
Letter of Credit earlier than two (2) Business Days after its receipt of the
Letter of Credit Request and the related Application therefor and all other
certificates, documents and other papers and information relating thereto. Upon
its issuance of any Letter of Credit or the extension of the existing expiry
date of any Letter of Credit, as the case may be, the Issuing Bank shall
promptly notify the Borrower of such issuance or extension, which notice shall
be accompanied
- 28 -
35
by a copy of the Letter of Credit actually issued or a copy of any amendment
extending the existing expiry date of any Letter of Credit, as the case may be.
Promptly upon its receipt of such documents, the Agent shall notify each Bank of
the issuance of such Letter of Credit or the extension of such expiry date, as
the case may be, and upon the request of any Bank shall deliver copies of such
documents to such Bank.
2.5. LETTERS OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by the Issuing Bank of each
Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred
to each Bank, and each Bank shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such Bank's Pro Rata
Percentage, in each such Letter of Credit (including extensions of the expiry
date thereof), each substitute letter of credit, each drawing made thereunder
and the obligations of the Borrower under this Agreement and the other Loan
Documents with respect thereto, and any security therefor or guaranty pertaining
thereto.
(b) In determining whether to pay under any Letter of Credit,
the Issuing Bank shall have no obligation relative to the Agent or the Banks
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct shall not create for the Issuing Bank any resulting liability to the
Agent or any Bank. It is the intent of the parties hereto that the Issuing Bank
shall have no liability to the Agent or the Banks for its ordinary sole or
contributing negligence.
(c) In the event that the Issuing Bank makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Issuing Bank pursuant to Section 2.6(a), the Agent shall
promptly notify each Bank of such failure, and each Bank shall promptly and
unconditionally pay to the Agent for the account of the Issuing Bank the amount
of such Bank's Pro Rata Percentage of such unreimbursed payment in Dollars (in
the case of Letters of Credit denominated in Alternate Currencies, calculated,
as of the date of such payment, by reference to the Dollar Equivalent Value of
such Letter of Credit) and in same day funds. If the Agent so notifies, prior to
11:30 a.m. (Dallas time) on any Business Day, any Bank required to fund a
payment under a Letter of Credit, such Bank shall make available to the Agent
for the account of the Issuing Bank such Bank's Pro Rata Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Bank shall not have so made its Pro Rata Percentage of the amount of
such payment available to the Agent for the account of the Issuing Bank, such
Bank agrees to pay to the Agent for the account of the Issuing Bank, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Agent for the account of the
Issuing Bank at the Federal Funds Rate (or, in the
- 29 -
36
case of Letters of Credit denominated in Alternate Currencies, the Overnight
Rate). The failure of any Bank to make available to the Agent for the account of
any Issuing Bank its Pro Rata Percentage of any payment under any Letter of
Credit shall not relieve any other Bank of its obligation hereunder to make
available to the Agent for the account of the Issuing Bank its Pro Rata
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Bank shall be responsible for the failure of any other
Bank to make available to the Agent for the account of such Issuing Bank such
other Bank's Pro Rata Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
the Issuing Bank any payments from the Banks pursuant to clause (c) above, the
Issuing Bank shall pay to the Agent, and the Agent shall promptly pay to each
Bank which has paid its Pro Rata Percentage thereof, in Dollars and in same day
funds, an amount equal to such Bank's Pro Rata Percentage thereof.
(e) The obligations of the Banks to make payments to the Agent
for the account of the Issuing Bank with respect to Letters of Credit shall be
absolute and not subject to any qualification or exception whatsoever and shall
be made in accordance with the terms and conditions of this Agreement under all
circumstances, including any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may be
acting), the Agent, the Issuing Bank, any Bank, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower or any other
Person and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Bank (other than the gross
negligence or willful misconduct of the Issuing Bank).
- 30 -
37
(f) THE BANKS AGREE TO INDEMNIFY THE ISSUING BANK (TO THE
EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY ACCORDING TO THE RESPECTIVE PRO
RATA PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST THE ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY LETTER OF CREDIT OR ANY ACTION TAKEN OR OMITTED BY THE ISSUING
BANK UNDER THIS AGREEMENT OR ANY LETTER OF CREDIT; PROVIDED, THAT NO BANK SHALL
BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING
FROM THE ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
2.6. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) Upon the receipt by the Issuing Bank of any Drawing from
a beneficiary under a Letter of Credit, the Issuing Bank promptly will provide
the Borrower with telecopy notice thereof. The Borrower hereby agrees to
reimburse the Issuing Bank by making payment to the Agent in immediately
available funds in Dollars or the Alternate Currency, as the case may be, in
which such Letter of Credit was denominated, at the account of the Agent located
in New York City, New York, identified to the Borrower, for any payment made by
the Issuing Bank under any Letter of Credit issued by it (each such amount so
paid until reimbursed, an "Unpaid Drawing") immediately after, and in any event
on the date of, such payment, with interest on the amount so paid by the Issuing
Bank, to the extent not reimbursed prior to 2:00 p.m. (Dallas time) on the date
of such payment, from and including the date paid but excluding the date
reimbursement is made as provided above, at a rate per annum equal to the lesser
of (x) 2% above the Base Rate or (y) the Highest Lawful Rate, such interest to
be payable on demand. Prior to the Maturity Date, unless otherwise paid by the
Borrower, such Unpaid Drawing may (and, if the Majority Banks so desire, shall
automatically), subject to satisfaction of the conditions precedent set forth in
Sections 2.3 and 8, be paid with the proceeds of Loans which shall bear interest
at an annual rate equal to the Base Rate, which rate the Borrower may in its
discretion continue or convert pursuant to Section 3.1(a)(ii).
(b) The Borrower's obligations under this Section 2.6 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances (except as provided below with respect to the gross negligence or
willful misconduct of the Issuing Bank) and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Bank (including the Issuing Bank in its capacity as the issuer of a
Letter of Credit or any Bank as a participant therein), including any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit (other than a defense
based upon the gross negligence or willful misconduct of the Issuing Bank in
determining whether such Drawing conforms to the terms of the Letter of Credit)
or any non-application or misapplication by the beneficiary of the proceeds of
such Drawing, including any of the following circumstances:
- 31 -
38
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may be
acting), the Agent, the Issuing Bank, any Bank, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower or any other
Person and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower (other than the
gross negligence or willful misconduct of the Issuing Bank).
(c) The Borrower also agrees with the Issuing Bank, the Agent
and the Banks that, in the absence of gross negligence or willful misconduct of
the Issuing Bank, the Issuing Bank shall not be responsible for, and the
Borrower's reimbursement obligations under Section 2.6(a) shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged or any dispute between or among the Borrower or
any other Party and the beneficiary of any Letter of Credit or any other party
to which such Letter of Credit may be transferred or any claims whatsoever of
the Borrower or any other Party against any beneficiary of such Letter of Credit
or any such transferee.
(d) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the Issuing Bank's gross negligence or
willful misconduct. The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and, except as otherwise provided by this Agreement or any applicable
Application, in accordance with the standards of care specified in the Uniform
Customs and Practice for Documentary Credits (1994 Revision), International
- 32 -
39
Chamber of Commerce, Publication No. 500 (and any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce and adhered to
by such Issuing Bank) (the "UCP") and, to the extent not inconsistent therewith,
the Uniform Commercial Code of the State of New York, shall not result in any
liability of the Issuing Bank to the Borrower or any other Person. It is the
intent of the parties hereto that the Issuing Bank shall not have any liability
under this Section 2.6 for the ordinary negligence of the Issuing Bank. Each
Letter of Credit shall be governed by the UCP and, to the extent applicable, the
ICC Decision On The Impact of the European Single Currency (Euro) on Monetary
Obligations Related to Transactions Involving ICC Rules, dated April 6, 1998.
2.7. CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. To the
extent that any provision of any Application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
2.8. INCREASED COSTS.
(a) Notwithstanding any other provision herein, but subject
to Section 13.11, if any Law, rule, regulation or guideline adopted pursuant to
or arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards" or the introduction or effectiveness
of any applicable law or regulation or any change in applicable Law or
regulation or in the interpretation or administration thereof, or compliance by
any Bank (or any lending office of such Bank) with any applicable guideline or
request from any central bank or governmental authority (whether or not having
the force of Law), in each case, as adopted, enacted, promulgated or announced
after the Closing Date, either (i) shall impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement generally applicable
against letters of credit issued, or participated in, by any Bank of a nature
generally similar to the type hereof, or (ii) shall impose on any Bank any other
conditions affecting this Agreement or any Letter of Credit; and the result of
any of the foregoing is to increase the cost to any Bank issuing, maintaining or
participating in any Letter of Credit, or reduce the amount of any sum received
or receivable by any Bank hereunder with respect to Letters of Credit, by an
amount deemed by such Bank to be material, then, from time to time, the Borrower
shall pay to the Agent for the account of such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction by
such Bank.
(b) Each Bank will notify the Borrower and the Agent of any
event which will entitle such Bank to compensation pursuant to paragraph (a)
above. A certificate of a Bank setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Bank as specified in paragraph
(a) above may be delivered to the Borrower and the Agent and shall be conclusive
absent manifest error. The Borrower shall pay to the Agent for the account of
such Bank the amount shown as due on any such certificate within fifteen (15)
days after its receipt of the same.
2.9. UNAVAILABILITY OF ALTERNATE CURRENCY. In the event that
there shall occur on or prior to the date of the issuance of any Letter of
Credit denominated in an Alternate Currency any material adverse change in
national or international financial, political or economic conditions
- 33 -
40
or currency exchange rates or exchange controls which would in the opinion of
the Agent make it impracticable for such Letter of Credit to be denominated in
the Alternate Currency specified by the Borrower, then the Agent shall forthwith
give notice thereof to the Borrower and the Banks, and such Letter of Credit
shall not be issued on the requested issuance date.
2.10. LETTERS OF CREDIT DENOMINATED IN NATIONAL CURRENCY
UNITS. Prior to the Transition Period Cutoff Date, and upon request by the
Borrower in accordance with Section 2.4 hereof, Letters of Credit may be issued,
funded and maintained in any Alternate Currency, as designated by the Borrower
in its Letter of Credit Request. Reimbursements of Draws under Letters of Credit
that were denominated in National Currency Units pursuant to this Section shall
be made in such National Currency Units; provided, however, that any Letter of
Credit that is (i) denominated in National Currency Units, and (ii) outstanding
as of the Transition Period Cutoff Date shall be automatically redenominated
into euro as of the close of business on such date at the applicable Irrevocable
Conversion Rate, and, provided, further, that reimbursements of all such Letters
of Credit made after the Transition Period Cutoff Date shall be made in euro.
After the Transition Period Cutoff Date, Letters of Credit may not be
denominated in National Currency Units.
3. INTEREST RATE PROVISIONS.
3.1. INTEREST RATE DETERMINATION.
(a) Except as specified in Sections 3.2, 3.3, 3.4, 3.5 and
3.6, the Loans shall bear interest on the unpaid principal amount thereof from
time to time outstanding, until maturity, at a rate per annum (calculated based
on a year of 360 days in the case of the Eurodollar Rate, and a year of 365 or
366 days, as the case may be, in the case of any Base Rate Loan, in each case
for the actual days elapsed) as follows:
(i) The principal balance of the Loans from time to time
outstanding shall bear interest at an annual rate equal to:
(A) with respect to any Eurodollar Loan, the lesser
of, (y) the Adjusted Eurodollar Rate plus the Applicable
Margin, with respect thereto or (z) the Highest Lawful Rate,
from the first day to, but not including, the Expiration Date
of the Interest Period then in effect with respect thereto;
(B) with respect to any Base Rate Loan, the lesser of
(y) the Base Rate plus the Applicable Margin, with respect
thereto or (z) the Highest Lawful Rate, from the first day to,
but not including, the earlier of the Maturity Date or
conversion to another Type of Loan;
(ii) (A) The Borrower may, upon irrevocable written notice to
the Agent in accordance with Section 3.1(a)(ii)(B),
- 34 -
41
(1) elect to convert, as of any Business
Day, any Base Rate Loans (or any part thereof not
less than $3,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof) into
Eurodollar Loans of the same currency;
(2) elect to convert, as of the last day of
the applicable Interest Period, any Eurodollar Loans
expiring on such day (or any part thereof in a Dollar
Equivalent Value not less than $1,000,000, or that is
in an integral multiple of a Dollar Equivalent Value
of $1,000,000 in excess thereof) into Base Rate Loans
of the same currency; or
(3) elect to continue (for the same or
different Interest Period), as of the last day of the
applicable Interest Period, any Eurodollar Loans
having Interest Periods expiring on such day (or any
part thereof in a Dollar Equivalent Value not less
than $3,000,000, or that is in an integral multiple
of a Dollar Equivalent Value of $1,000,000 in excess
thereof);
provided, that if at any time the aggregate Dollar Equivalent
Value of Eurodollar Loans is reduced by payment, prepayment,
or conversion of part thereof to be less than $3,000,000, such
Eurodollar Loans shall automatically convert into Base Rate
Loans, and on and after such date the right of the Borrower to
continue such Loans as, and convert such Loans into,
Eurodollar Loans shall terminate.
(B) To convert or continue a Loan as provided in
Section 3.1(a)(ii) the Borrower shall deliver a Notice of Rate
Change/Continuation in the form of Exhibit D hereto (a "Notice
of Rate Change/Continuation"), to be received by the Agent not
later than 11:00 a.m. (Dallas time) at least (i) three
Business Days in advance of the Change/Continuation Date, if
the Loans are to be converted into or continued as Eurodollar
Loans denominated in Dollars; (ii) four Business Days in
advance of the Change/Continuation Date, if the Loans are to
be converted into or continued as Eurodollar Loans denominated
in Alternate Currencies; and (iii) one Business Day in advance
of the Change/Continuation Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(i) the date on which such Loan was made;
(ii) the interest rate then applicable to
such Loan;
(iii) with respect to any Eurodollar Loan,
the Interest Period then applicable to such Loan;
(iv) the Dollar Equivalent Value of such
Loan;
(v) the proposed Change/Continuation Date;
- 35 -
42
(vi) the aggregate amount in Dollars or
Alternate Currencies, as the case may be, of Loans to
be converted or continued;
(vii) the Type of Loans resulting from the
proposed conversion or continuation; and
(viii) other than in the case or conversions
into Base Rate Loans, the duration of the requested
Interest Period.
(C) If upon the expiration of any Interest Period
applicable to Eurodollar Loans denominated in Dollars, the
Borrower has failed to select a new Interest Period to be
applicable to such Eurodollar Loans prior to the third
Business Day in advance of the expiration date of the current
Interest Period applicable thereto as provided in Section
3.1(a)(ii), or if any Default or Event of Default then exists,
the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such Interest Period, and all conditions to
such conversion shall be deemed to have been satisfied. If the
Borrower has failed to select a new Interest Period to be
applicable to Eurodollar Loans denominated in an Alternate
Currency prior to the fourth Business Day in advance of the
expiration date of the current Interest Period applicable
thereto as provided in Section 3.1(a)(ii) or if any Default or
Event of Default shall then exist, subject to the provisions
of Section 3.2(d), such Alternate Currency Loans shall be
redenominated and the Borrower shall be deemed to have elected
to convert such Eurodollar Loans into Base Rate Loans
effective as of the expiration date of such Interest Period,
and all conditions to such conversion shall be deemed to have
been satisfied.
(D) The Agent will promptly notify each Bank of its
receipt of a Notice of Rate Change/Continuation, or, if no
timely notice is provided by the Borrower, the Agent will
promptly notify each Bank of the details of any automatic
conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal
amounts of the Loans with respect to which the notice was
given held by each Bank.
(E) During the existence of a Default or Event of
Default, the Borrower may not elect to have a Loan converted
into or continued as an Eurodollar Loan.
(iii) Nothing contained herein shall authorize the Borrower
(A) to convert any Loan into or continue any Loan as a Eurodollar Loan
unless the Expiration Date of the Interest Period for such Loan occurs
on or before the Maturity Date or (B) to continue or change the
interest rates applicable to any Eurodollar Loan prior to the
Expiration Date of the Interest Period with respect thereto.
(iv) Notwithstanding anything set forth herein to the contrary
(other than Section 13.11), if a Default has occurred and is
continuing, and upon written notice to the
- 36 -
43
Borrower from the Agent, each outstanding Loan shall bear interest at a
rate per annum which shall be equal to the lesser of (x) 2% above the
interest rate otherwise applicable thereto or (y) the Highest Lawful
Rate, which interest shall be due and payable on demand.
(b) The Base Rate for each Base Rate Loan shall be
determined by the Agent on the first day and on each day such Base Rate Loan
shall be outstanding, or if such day is not a Business Day, on the next
succeeding Business Day. The Eurodollar Rate for the Interest Period for each
Eurodollar Loan shall be determined by the Agent two (2) Business Days before
the first day of such Interest Period.
(c) Each determination of an applicable interest rate by the
Agent shall be conclusive and binding upon the Borrower and the Banks in the
absence of manifest error.
3.2. UTILIZATION OF COMMITMENTS IN ALTERNATE CURRENCIES.
(a) The Agent will determine the Dollar Equivalent Value with
respect to any (i) borrowing comprised of Loans denominated in an Alternate
Currency as of the requested Borrowing Date, and (ii) outstanding Loans
denominated in an Alternate Currency as of any redenomination date pursuant to
this Section 3.2 or Section 3.5 (each such date under clauses (i) and (ii) a
"Computation Date").
(b) In the case of a proposed borrowing of Alternate Currency
Loans, the Banks shall be under no obligation to make such Alternate Currency
Loans as part of such borrowing if the Agent has received notice from any of the
Banks by 3:00 p.m. (Dallas time) three Business Days prior to the date of such
borrowing that such Bank cannot provide Loans in such Alternate Currency, in
which event the Agent will give notice to the Borrower no later than 9:00 a.m.
(Dallas time) on the second Business Day prior to the requested date of such
borrowing that the borrowing in such Alternate Currency is not then available,
and notice thereof also will be given promptly by the Agent to the Banks. If the
Agent shall have so notified the Borrower that any such borrowing in such
Alternate Currency is not then available, the Borrower may, by notice to the
Agent not later than 3:00 p.m. (Dallas time) two Business Days prior to the
requested date of such borrowing, withdraw the Notice of Borrowing relating to
such requested borrowing. If the Borrower does so withdraw such Notice of
Borrowing, the borrowing requested therein shall not occur and the Agent will
promptly so notify each Bank. If the Borrower does not so withdraw such Notice
of Borrowing, the Agent will promptly so notify each Bank and such Notice of
Borrowing shall be deemed to be a Notice of Borrowing that requests a borrowing
comprised of Base Rate Loans in an aggregate amount equal to the amount of the
originally requested borrowing as expressed in Dollars in the Notice of
Borrowing; and in such notice by the Agent to each Bank the Agent will state
such aggregate amount of such borrowing to be made in Dollars and such Bank's
Pro Rata Share thereof.
(c) In the case of a proposed continuation of Alternate
Currency Loans for an additional Interest Period pursuant to Section 3.1, the
Banks shall be under no obligation to continue such Alternate Currency Loans if
the Agent has received notice from any of the Banks by 5:00 p.m. (Dallas time)
three Business Days prior to the day of such continuation that such Bank cannot
- 37 -
44
continue to provide Eurodollar Loans denominated in such Alternate Currency, in
which event the Agent will give notice to the Borrower not later than 9:00 a.m.
(Dallas time) on the second Business Day prior to the requested date of such
continuation that the continuation of such Alternate Currency Loans is not then
available, and notice thereof also will be given promptly by the Agent to the
Banks. If the Agent shall have so notified the Borrower that any such
continuation of Alternate Currency Loans is not then available, any Notice of
Rate Change/Continuation with respect thereto shall be deemed withdrawn and such
Alternate Currency Loans shall be automatically converted into Base Rate Loans
with effect from the last day of the applicable Interest Period with respect to
such Alternate Currency Loans, and all conditions to such conversion shall be
deemed to have been satisfied. The Agent will promptly notify the Borrower and
the Banks of any such automatic conversion.
(d) Notwithstanding anything herein to the contrary during
the existence of a Default or an Event of Default, upon the request of the
Majority Banks, all or any part of any outstanding Alternate Currency Loans
shall be redenominated and converted into Base Rate Loans in Dollars with effect
from the last day of the Interest Period with respect to such Alternate Currency
Loans, and all conditions to such conversion shall be deemed to have been
satisfied. The Agent will promptly notify the Borrower of any such
redenomination and conversion request.
3.3. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable
law, rule, or regulation, or any change in any applicable law, rule, or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject such Bank (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Loans,
its Note, or its obligation to make Loans, or change the basis of
taxation of any amounts payable to such Bank (or its Applicable Lending
Office) under this Agreement or its Note (other than taxes imposed on
the overall net income or capital of such Bank by the jurisdiction in
which such Bank has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Bank (or its Applicable Lending Office), including the Commitment of
such Bank hereunder; or
(iii) shall impose on such Bank (or its Applicable Lending
Office) or on the United States or Canadian market for certificates of
deposit or the London interbank market
- 38 -
45
any other condition affecting this Agreement or its Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Bank (or its Applicable Lending Office) under this Agreement or its Note
with respect to any Eurodollar Loans, in each case by an amount deemed material
by such Bank, then the Borrower shall pay to such Bank such amount or amounts as
will compensate such Bank for such increased cost or reduction, provided, that
the Borrower will not be responsible for paying any amounts pursuant to this
Section 3.3 accruing for a period greater than 180 days prior to the date that
such Bank notifies the Borrower of the circumstances giving rise to such
increased costs or reductions and of such Bank's intention to claim compensation
therefor; provided further that, if the circumstances giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
If any Bank requests compensation by the Borrower under this Section 3.3(a), the
Borrower may, by notice to such Bank (with a copy to the Agent), suspend the
obligation of such Bank to make or continue Loans of the Type with respect to
which such compensation is requested, or to convert Loans of any other Type into
Loans of such Type, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.6 shall be
applicable); provided that such suspension shall not affect the right of such
Bank to receive the compensation so requested.
(b) If, after the date hereof, any Bank shall have determined
that the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such Bank
or any corporation controlling such Bank as a consequence of such Bank's
obligations hereunder to a level below that which such Bank or such corporation
could have achieved but for such adoption, change, request, or directive (taking
into consideration its policies with respect to capital adequacy), then from
time to time the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction, provided, that the
Borrower will not be responsible for paying any amounts pursuant to this Section
3.3 accruing for a period greater than 180 days prior to the date that such Bank
notifies the Borrower of the circumstances giving rise to such increased costs
or reductions and of such Bank's intention to claim compensation therefor;
provided further that, if the circumstances giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.
(c) Each Bank shall promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to
- 39 -
46
compensation pursuant to this Section and will use reasonable efforts to
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to it. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Bank in
connection with any such designation. Any Bank claiming compensation under this
Section shall do so in good faith on a nondiscriminatory basis. In determining
such amount, such Bank may use any reasonable averaging and attribution methods.
A certificate of a Bank setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Bank as specified in this
Section 3.3 may be delivered to the Borrower and the Agent and shall be
conclusive absent manifest error. The Borrower shall pay to the Agent for the
account of such Bank the amount shown as due on any such certificate within
fifteen (15) days after its receipt of the same.
3.4. LIMITATION ON TYPES OF LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Majority Banks determine (which determination shall be
conclusive) and notify the Agent that the Adjusted Eurodollar Rate plus
the Applicable Margin will not adequately and fairly reflect the cost
to the Banks of funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Banks shall be under no obligation to make
additional Loans of such Type, continue Loans of such Type, or to convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or convert such Loans into another Type
of Loan in accordance with the terms of this Agreement. Each Bank will use
reasonable efforts to designate a different Applicable Lending Office if such
designation will avoid the effects of this Section 3.4 and will not, in the
judgment of such Bank, be otherwise disadvantageous to it. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Bank in
connection with any such designation.
3.5. ILLEGALITY; DEPOSITS UNAVAILABLE. (a) If any Bank shall
determine (which determination shall be conclusive and binding on the Borrower)
that the introduction of or any change in or in the interpretation of any law,
regulation, guideline or order (in each case, introduced, changed or interpreted
after the Closing Date) makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Bank to make,
continue or maintain any Loan as, or to convert any Loan into, a Loan of a
certain Type, or a Loan or a Letter of Credit in a certain Alternate Currency,
the obligations of the affected Bank to make, continue, maintain or
- 40 -
47
convert any such Loans or issue or participate in any such Letters of Credit
shall, upon such determination, forthwith be suspended until such Bank shall
promptly notify the Agent and the Borrower that the circumstances causing such
suspension no longer exist at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion (in which case
the provisions of Section 3.6 shall be applicable).
(b) If any Bank (or in the case of Letters of Credit, the
Issuing Bank) shall have determined that (i) deposits in the relevant amount in
the relevant Alternate Currency are not available to such Bank in its relevant
market; or (ii) by reason of circumstances affecting such Bank's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Alternate Currency Loans, then it shall promptly notify
the Agent and the Borrower, and upon such notice, the obligations of all Banks
to make or continue any Loans as, or to convert any Loans into, Loans of such
Type or such Alternate Currency Loans, or to issue or participate in Letters of
Credit denominated in such Alternate Currency, as the case may be, shall, to the
extent adversely and directly affected by such circumstances, forthwith be
suspended until the Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist (in which case the
provisions of Section 3.6 shall be applicable).
(c) Each Bank will use reasonable efforts to designate a
different Applicable Lending Office if such designation will avoid the effects
of this Section 3.5 and will not, in the judgment of such Bank, be otherwise
disadvantageous to it. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Bank in connection with any such designation.
3.6. TREATMENT OF AFFECTED LOANS. If the obligation of any
Bank to make a Loan or to continue, or to convert Loans of any other Type into,
Loans of a particular Type, or a Loan or a Letter of Credit in a certain
Alternate Currency, shall be suspended pursuant to Section 3.3 or 3.5 hereof
(Loans of such Type being herein called "Affected Loans" and such Type being
herein called the "Affected Type"), such Bank's Affected Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a conversion
required by Section 3.5 hereof, on such earlier date as such Bank may specify to
the Borrower with a copy to the Agent) and, unless and until such Bank gives
notice as provided below that the circumstances specified in Section 3.3 or 3.5
hereof that gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Bank's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Bank as Loans of the Affected Type shall be made or continued
instead as Base Rate Loans, and all Loans of such Bank that would
otherwise be converted into Loans of the Affected Type shall be
converted instead into (or shall remain as) Base Rate Loans.
- 41 -
48
In the case of any Alternate Currency Loans, the borrowing, conversion or
continuation shall be in an aggregate amount equal to the Dollar Equivalent
Value of the originally requested borrowing, conversion or continuation in such
Alternate Currency, and to that end any outstanding Alternate Currency Loans
which are the subject of any such conversion or continuation shall be
redenominated and converted into Base Rate Loans in Dollars with effect from the
last day of the Interest Period with respect to any such Alternate Currency
Loans, and all conditions to such conversion shall be deemed to have been
satisfied.
If such Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.3 or 3.5 hereof that gave rise to the
conversion of such Bank's Affected Loans pursuant to this Section 3.6 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by the Banks holding Loans of the Affected Type and by
such Bank are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Commitments.
3.7. COMPENSATION. Upon the request of any Bank, the Borrower
shall pay to such Bank such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of-
(a) any payment, prepayment, or conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 11) on a date other than the last day of
the Interest Period for such Eurodollar Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article 8 to be satisfied) to borrow, convert, continue, or prepay a
Eurodollar Loan or Alternate Currency Loan on the date for such
borrowing, conversion, continuation, or prepayment specified in the
relevant notice of borrowing, prepayment, continuation, or conversion
under this Agreement.
3.8. REPLACEMENT OF BANKS. If any Bank requests compensation
under Sections 2.8, 3.3 or 4.6, or if any Bank defaults in its obligation to
fund Loans hereunder, or otherwise has given notice pursuant to Sections 3.2,
3.4 or 3.5 (unless in each case the basis for such request or notice is
generally applicable to all Banks), then the Borrower may, at its sole expense
and effort, upon notice to such Bank and the Agent within 90 days of such
request or notice, if no Default or Event of Default exists, require such Bank
to assign and delegate (in accordance with and subject to the restrictions
contained in Section 13.10), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Bank, if a Bank accepts such assignment); provided that (i) the
Borrower shall have received the prior
- 42 -
49
written consent of the Agent, which consent shall not unreasonably be withheld,
(ii) such Bank shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in Letters of Credit, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Sections
2.8, 3.3 or 4.6, such assignment will result in a reduction in such compensation
or payments. A Bank shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Bank or otherwise,
the circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
3.9. SURVIVAL. The agreements contained in Article 3 shall
survive the termination of this Agreement and the payment in full of the Notes
and all other amounts payable hereunder for a period of 180 days thereafter.
4. PREPAYMENTS AND OTHER PAYMENTS.
4.1. REQUIRED PREPAYMENTS. The Borrower agrees that if at any
time the Agent notifies the Borrower that the Agent has determined that the
Dollar Equivalent Value of the aggregate principal amount of Loans outstanding
plus the Dollar Equivalent Value of the Letter of Credit Outstandings exceeds
the Commitments, the Borrower will within two (2) Business Days following such
notice make a prepayment of principal in an amount at least equal to such
excess, together with interest accrued thereon to the date of such prepayment
and all amounts due, if any, under Section 3.7.
4.2. OPTIONAL PREPAYMENTS. The Borrower shall have the right
at any time and from time to time to prepay the Notes, in whole or in part;
provided, that each partial prepayment (i) of any Eurodollar Loans shall be in
an aggregate principal amount of the Dollar Equivalent Value of at least
$1,000,000 or an integral multiple of the Dollar Equivalent Value of $500,000 in
excess thereof, and (ii) of any Base Rate Loans shall be in an aggregate
principal amount of at least $500,000 or an integral multiple of $100,000 in
excess thereof, in each case, together with interest accrued thereon to the date
of such prepayment and all amounts due, if any, under Section 3.7.
4.3. NOTICE OF PAYMENTS. The Borrower shall give the Agent at
least three (3) Business Days' prior written notice of each prepayment proposed
to be made by it pursuant to Section 4.2, specifying the principal amount of the
Loans to be prepaid, the prepayment date and the account of the Borrower to be
charged if such prepayment is to be so effected. Notice of such prepayment
having been given, the principal amount of the Loans specified in such notice,
together with interest thereon to the date of prepayment, shall become due and
payable on such prepayment date. If the Borrower pays or prepays any Eurodollar
Loan prior to the end of the Interest Period applicable thereto, such payment
shall be subject to Section 3.7.
- 43 -
50
4.4. PLACE OF PAYMENT OR PREPAYMENT. (a) All payments to be
made by the Borrower shall be made without set-off, recoupment or counterclaim.
All payments and prepayments made in accordance with the provisions of this
Agreement or of the Notes in respect of commitment fees or of principal or
interest on the Notes shall be made to the Agent, for the account of the
relevant Bank, to an account located in New York City, New York as identified by
the Agent to the Borrower, no later than 12:00 Noon (Dallas time) in immediately
available funds and shall be made in the applicable borrowed currency. Unless
the Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Banks hereunder that the Borrower will not make
any payment due hereunder in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due to such Bank. If and to the extent
the Borrower shall not have so made such payment in full to the Agent, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate (or in the case of Alternate Currency Loans,
the Overnight Rate). If and to the extent that the Agent receives any payment or
prepayment from the Borrower and fails to distribute such payment or prepayment
to the Banks ratably on the basis of their respective Pro Rata Percentage on the
day the Agent receives such payment or prepayment, and such distribution shall
not be so made by the Agent in full on the required day, the Agent shall pay to
each Bank such Bank's Pro Rata Percentage thereof together with interest thereon
at the Federal Funds Rate (or in the case of Alternate Currency Loans, the
Overnight Rate) for each day from the date such amount is paid to the Agent by
the Borrower until the date the Agent pays such amount to such Bank.
Notwithstanding the Agent's failure to so distribute any such payment, as
between the Borrower and the Banks, such payment shall be deemed received and
collected.
(b) With respect to the payment of any amount denominated in
the euro or in any other Alternate Currency, the Agent shall not be liable to
the Borrower or any of the Banks in any way whatsoever for any delay, or the
consequences of any delay, in the crediting to any account of any amount
required by this Agreement to be paid by the Agent if the Agent shall have taken
all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in the euro unit or, as the case may be, in any other Alternate Currency)
to the account with the bank in the principal financial center which the
Borrower or, as the case may be, any Bank shall have specified for such purpose.
In this paragraph (b), "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures or such
clearing or settlement system as the Agent may from time to time determine for
the purpose of clearing or settling payments of the euro or any other relevant
Alternate Currency.
4.5. NO PREPAYMENT PREMIUM OR PENALTY. Each prepayment
pursuant to Section 4.1 or 4.2 shall be without premium or penalty.
- 44 -
51
4.6. TAXES.
(a) Subject to Section 13.11, any and all payments by the
Borrower hereunder or under any other Loan Document to or for the account of any
Bank or the Agent shall be made free and clear of and without deduction for any
and all present or future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto, including, without limitation, such taxes,
deductions, charges, withholdings or liabilities whatsoever, excluding, in the
case of each Bank and Agent, taxes imposed on its net income (including
penalties and interest payable in respect thereof), and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Bank, taxes imposed on its net income (including penalties and interest
payable in respect thereof), and franchise taxes imposed on it, by the
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof and, in the case of each Bank and Agent, taxes imposed by
reason of such Bank or Agent, for the purposes of the Income Tax Act (Canada),
not dealing at arm's length with the Borrower or being resident in Canada or
carrying on business in Canada, determined otherwise than solely on the basis of
entering into any Loan Document to which it is a party or consummating the
transactions contemplated thereby or in order to exercise the rights purported
to be granted thereto under the Loan Documents or receiving payments thereunder
(all such non-excluded taxes, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). In the case of a Bank that is a
domestic corporation, within the meaning of Section 7701 of the Code, the taxes
that are imposed by the United States of America and that are identified in the
preceding sentence are the taxes that are imposed by Section 11, Section 55 and
Section 59A of the Code, or by any comparable provision of future law. Subject
to Section 13.11 hereof, if the Borrower shall be required by Law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Bank or Agent (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) such Bank or Agent (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, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Law and (iv) the Borrower shall
confirm that all applicable Taxes, if any, imposed on it by virtue of the
transactions under this Agreement have been properly and legally paid by it to
the appropriate taxing authorities by sending official tax receipts or notarized
copies of such receipts to such Bank within thirty (30) days after payment of
any applicable tax.
(b) In addition, subject to Section 13.11 hereof, the
Borrower agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under the Notes or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "Other Taxes").
- 45 -
52
(c) SUBJECT TO SECTION 13.11 HEREOF, THE BORROWER WILL
INDEMNIFY EACH BANK AND AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES
(INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED BY ANY
JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 4.6) PAID BY SUCH BANK OR
AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY BANK) (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH
RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR
LEGALLY ASSERTED. THIS INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS
FROM THE DATE SUCH BANK OR AGENT (AS THE CASE MAY BE) MAKES WRITTEN DEMAND
THEREFOR.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Bank remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Bank is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Bank has failed to
provide the Borrower and the Agent with the appropriate form pursuant to Section
4.6(d) (unless such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section 4.6
with respect to Taxes imposed by the United States; provided, however, that
should a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 4.6, then such Bank will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Bank, is not
otherwise disadvantageous to such Bank.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent the original or a certified copy
of a receipt evidencing such payment.
- 46 -
53
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreement and obligations of the Borrower
contained in this Section 4.6 shall survive the payment in full of principal and
interest hereunder and under the Notes.
4.7. REDUCTION OR TERMINATION OF THE COMMITMENTS. The Borrower
may at any time or from time to time reduce or terminate the Commitment of each
Bank by giving not less than three (3) full Business Days' prior written notice
to such effect to the Agent; provided, that any partial reduction shall be in an
amount of not less than $5,000,000 or an integral multiple of $5,000,000 in
excess thereof. Promptly after the Agent's receipt of such notice of reduction,
the Agent shall notify each Bank of the proposed reduction and such reduction
shall be effective on the date specified in Borrower's notice with respect to
such reduction and shall reduce the Commitment of each Bank proportionately in
accordance with its Pro Rata Percentage. After each such reduction, the
commitment fee shall be calculated upon the aggregate Commitments as so reduced.
The Commitment of each Bank shall automatically terminate on the Maturity Date
or in the event of acceleration of the maturity date of the Notes. Each
reduction of the Commitments hereunder shall be irrevocable.
4.8. PAYMENTS ON BUSINESS DAY. Whenever any payment or
prepayment hereunder or under any Note shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest; provided, however, if such extension would
cause payment of interest on or principal of Eurodollar Loans to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
4.9. PAYMENT OF ADJUSTMENT AMOUNTS. Within two (2) Business
Days following notice of the Agent's calculation of the Adjustment Amount, the
Borrower shall pay to the Agent, for distribution to the Banks based on the
Banks' pro rata interests under the Canadian Term Loan Agreement, the Adjustment
Amount, if any, applicable for such date. If the Borrower disagrees with the
calculation of the Adjustment Amount set forth in any corresponding notice
thereof from the Agent, the Agent shall promptly following its receipt of
Borrower's notice of such disagreement provide to the Borrower a certificate
setting forth in reasonable detail its computation thereof . Each determination
of the Adjustment Amount by the Agent shall be conclusive and binding upon the
Borrower and the Banks in the absence of manifest error.
5. COMMITMENT FEE AND OTHER FEES.
5.1. COMMITMENT FEE. The Borrower agrees to pay to the Agent
for the account of each Bank a commitment fee computed on a daily basis of a
year of 360 days from the Closing Date to, but not including, the earlier of the
Maturity Date or the termination of the Commitment of such Bank, at the
Applicable Margin per annum on the daily average amount of such Bank's Unused
Commitment, such commitment fee to be payable in arrears 61 days after the end
of each fiscal quarterly period, beginning with the quarterly period ended May
1, 1999. For purposes of
- 47 -
54
determining utilization of each Bank's Commitment in order to calculate the
commitment fee due under Section 5.1, the amount of any outstanding Alternate
Currency Loan and Letters of Credit denominated in Alternate Currency on any
date shall be determined based upon the Dollar Equivalent Value as of the most
recent Computation Date with respect to such Alternate Currency Loan and Letters
of Credit.
5.2. ARRANGEMENT FEE. The Borrower agrees to pay to
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities L.L.C. for its own account the fees set forth
in that certain fee letter dated as of November 23, 1998 between NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities L.L.C., NationsBank and the Borrower.
5.3. UPFRONT FEES. The Borrower agrees to pay to each Bank
(other than NationsBank) for its own account the fees set forth in those certain
fee letters dated as of December 4, 1998 to each such Bank from NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities L.L.C.
5.4. ADMINISTRATIVE AGENCY FEE. The Borrower agrees to pay to
the Agent for its own account the fees set forth in that certain fee letter
dated as of November 23, 1998 between NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities L.L.C.,
NationsBank, the Borrower and the Agent.
5.5. LETTER OF CREDIT FEES. (a) The Borrower agrees to pay the
Agent for distribution to the Banks (based upon their respective Pro Rata
Percentage) a fee in respect of each Letter of Credit issued for the account of
such Borrower (the "Letter of Credit Fee"), equal to the greater of (i) amount
to be computed at a rate per annum equal to the Applicable Margin on the Stated
Amount of such Letter of Credit and (ii) $250.00.
(b) The Borrower agrees to pay to the Issuing Bank for its
own account a fronting fee for each Letter of Credit issued hereunder, equal to
an amount to be computed at a rate per annum equal to .125% on the Stated Amount
of such Letter of Credit.
(c) Fees due to the Agent and the Issuing Bank pursuant to
this Section 5.4 shall be computed on the basis of a year of 360 days and, (i)
as to standby Letters of Credit, shall be due and payable in arrears 61 days
after the end of each fiscal quarterly period, the first such payment to be made
on the first such payment date for which such Letter of Credit is outstanding
hereunder for which no such fees shall heretofore have been paid, and on the
date such Letter of Credit expires and (ii) as to commercial Letters of Credit,
shall be paid at issuance.
5.6. FEES NOT INTEREST; NONPAYMENT. The fees described in this
Agreement represent compensation for services rendered and to be rendered
separate and apart from the lending of money or the provision of credit and do
not constitute compensation for the use, detention, or forbearance of money,
and, subject to Section 13.11, the obligation of the Borrower to pay each fee
described herein shall be in addition to, and not in lieu of, the obligation of
the Borrower to pay interest, other fees described in this Agreement, and
expenses otherwise described in this Agreement.
- 48 -
55
Fees shall be payable when due in Dollars and in immediately available funds.
Subject to Section 13.11 hereof, all fees, including, without limitation, the
commitment fee referred to in Section 5.1, shall be non-refundable, and shall,
to the fullest extent permitted by Law, bear interest, if not paid when due, at
a rate per annum equal to the lesser of (a) 2% above the Base Rate or (b) the
Highest Lawful Rate. Each determination of an interest rate or a Dollar
Equivalent Value by the Agent shall be conclusive and binding on the Borrower
and the Banks in the absence of manifest error.
6. APPLICATION OF PROCEEDS. The Borrower agrees that the proceeds of
the Loans shall be used for (i) repayment in full of the Existing Credit
Agreement, (ii) Acquisitions permitted under Section 10.13, and (iii) general
corporate purposes and working capital needs.
7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
that:
7.1. ORGANIZATION AND QUALIFICATION. The Borrower and each
Restricted Subsidiary (a) is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization; (b) has the power
and authority to own its properties and to carry on its business as now
conducted; and (c) is duly qualified to do business and is in good standing in
every jurisdiction where such qualification is necessary and where failure to be
so qualified would have a Material Adverse Effect.
7.2. FINANCIAL STATEMENTS. The Borrower has furnished the
Banks with its certified consolidated audited financial statements for the
Fiscal Year 1997, and for the fiscal quarter ended October 31, 1998, including
balance sheets, income and cash flow statements. The statements described above
have been prepared in conformity with GAAP. The statements described above fully
and fairly reflect the consolidated financial condition of the Borrower and its
Subsidiaries and the results of their operations as at the dates and for the
periods indicated. As of the Closing Date, there has been no event since October
31, 1998 which could reasonably be expected to have a Material Adverse Effect.
As of the Closing Date, there exists no material contingent liabilities or
obligations of the Borrower or any of its Subsidiaries which are not fully
disclosed in such financial statements or disclosed by the Borrower to the Agent
in writing.
7.3. LITIGATION. There is no action or proceeding pending (or,
to the best knowledge of the Borrower, threatened) against the Borrower or any
Subsidiary thereof before any court, administrative agency or arbitrator which
could reasonably be expected to have a Material Adverse Effect.
7.4. DEFAULT. Neither the Borrower nor any Subsidiary thereof
is in default under or in violation of (i) the provisions of any instrument
evidencing any Debt or of any agreement relating thereto or (ii) any judgment,
order, writ, injunction or decree of any court or any order, regulation or
demand of any Governmental Authority, in each case which default or violation
could
- 49 -
56
reasonably be expected to have a Material Adverse Effect. There is in effect no
waiver or waivers with respect to any loan agreement, indenture, mortgage,
security agreement, lease or other agreement or obligation to which the Borrower
or any Restricted Subsidiary thereof is a party which is limited as to duration
or is subject to the fulfillment of any condition which if not in effect could
reasonably be expected to have a Material Adverse Effect.
7.5. TITLE TO PROPERTIES. The Borrower and each Restricted
Subsidiary have good and indefeasible title to, or valid leasehold interests in,
its respective material real and personal Properties, in each case, purported to
be owned or leased by it, as the case may be, free of any Liens except those
permitted in Section 10.1. All Leases necessary for the conduct of the business
of the Borrower and each Restricted Subsidiary are valid and subsisting and are
in full force and effect.
7.6. PAYMENT OF TAXES. The Borrower and each Subsidiary
thereof has filed or caused to be filed all federal, state, provincial and
foreign income tax returns which are required to be filed, and has paid or
caused to be paid all taxes as shown on such returns or on any assessment
received by it to the extent that such taxes have become due, except for such
taxes and assessments as are being contested in good faith in appropriate
proceedings and reserved for in accordance with GAAP in the manner required by
Section 9.10.
7.7. CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS.
Neither Borrower nor any Subsidiary thereof is a party to any contract or
agreement or subject to any restriction which could reasonably be expected to
have a Material Adverse Effect. Neither the execution and delivery by Borrower
or any Subsidiary of the Loan Documents to which it is a party nor the
consummation by it of the transactions contemplated thereby nor its fulfillment
and compliance with the respective terms, conditions and provisions thereof will
(i) result in a breach of, or constitute a default under, the provisions of (a)
any order, writ, injunction or decree of any court which is applicable to it or
(b) any material contract or agreement to which it is a party or by which it is
bound, (ii) result in or require the creation or imposition of any Lien on any
of its property pursuant to the express provisions of any material agreement to
which it is party, or (iii) result in any violation by it of (a) its charter or
bylaws or (b) any Law or regulation of any Governmental Authority applicable to
it.
7.8. AUTHORIZATION, VALIDITY, ETC. The Borrower and each
Subsidiary thereof has the power and authority to make, execute, deliver and
carry out the Loan Documents to which it is a party and the transactions
contemplated therein and to perform its obligations thereunder and all such
action has been duly authorized by all necessary proceedings on its part. The
Loan Documents to which it is a party have been duly and validly executed and
delivered by the Borrower and each Subsidiary thereof and constitute valid and
legally binding agreements of the Borrower and each Subsidiary thereof
enforceable in accordance with their respective terms, except as limited by
Debtor Laws.
- 50 -
57
7.9. INVESTMENT COMPANY ACT NOT APPLICABLE. Neither Borrower
nor any Subsidiary thereof is an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
7.10. PUBLIC UTILITY HOLDING COMPANY ACT NOT APPLICABLE.
Neither Borrower nor any Subsidiary thereof is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company", or an affiliate of a "subsidiary company" of a "holding company", or a
"public utility", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
7.11. MARGIN STOCK. Neither the Borrower nor any Subsidiary
thereof is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no proceeds of any Loan will be used
(a) to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock; (b) to reduce or retire any
Debt which was originally incurred to purchase or carry any such Margin Stock;
(c) for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of Regulation T, U or X; or (d) to acquire any
security of any Person who is subject to Sections 13 and 14 of the Securities
Exchange Act. After applying the proceeds of each Loan, not more than
twenty-five percent (25%) of the value (as determined by any reasonable method)
of the Borrower's assets is represented by Margin Stock. Neither the Borrower
nor any Subsidiary thereof, nor any Person acting on behalf of the Borrower or
any Subsidiary, has taken or will take any action which might cause any Loan
Document to violate Regulation T, U or X or any other regulation of the Board of
Governors of the Federal Reserve System.
7.12. ERISA. Neither the Borrower nor any ERISA Affiliate has
ever established, maintained, contributed to or been obligated to contribute to,
and neither the Borrower and each ERISA Affiliate nor any ERISA Affiliate has
any liability or obligation with respect to any PBGC Plan, Multiemployer Plan or
Multiple Employer Plan. Neither the Borrower nor any ERISA Affiliate has any
present intention to establish a PBGC Plan, a Multiemployer Plan or a Multiple
Employer Plan. Neither the Borrower nor any ERISA Affiliate has ever
established, maintained, contributed to or been obligated to contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by Section 601 of
ERISA). The Borrower and each ERISA Affiliate is in compliance in all material
respects with all applicable provisions of ERISA and the Code with respect to
each Plan, including the fiduciary provisions thereof, and each Plan is, and has
been, maintained in compliance in all material respects with ERISA and, where
applicable, the Code. Full payment when due has (and, on the Closing Date will
have) been made of all amounts which the Borrower and each ERISA Affiliate is
required under the terms of each Plan or applicable law to have paid as
contributions to such Plan as of the date hereof.
7.13. FULL DISCLOSURE. All information heretofore or
contemporaneously furnished by or on behalf of the Borrower or any Subsidiary
thereof in writing to the Agent or any Bank for
- 51 -
58
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all other such information hereafter furnished by or on behalf of
the Borrower or any Subsidiary thereof in writing to the Agent or any Bank will
be, (a) true and accurate in all material respects on the date as of which such
information is dated or certified and (b) taken as a whole with all such written
information provided to the Agent or any Bank, not incomplete by omitting to
state any material fact necessary to make such information not misleading in
light of the circumstances under which such information was provided. There is
no fact known to the Borrower or any Subsidiary which is reasonably likely to
have a Material Adverse Effect, which has not been disclosed herein or in such
other written documents, information or certificates furnished to the Agent and
the Banks for use in connection with the transactions contemplated hereby.
7.14. ENVIRONMENTAL MATTERS. (a) Neither the Borrower nor any
Subsidiary thereof (i) has received any summons, citation, directive, letter,
notice or other form of communication, or otherwise learned of any claim,
demand, action, event, condition, report or investigation indicating or
concerning any potential or actual liability which would individually, or in the
aggregate, have a Material Adverse Effect arising in connection with (A) any
noncompliance with, or violation of, the requirements of any Environmental
Protection Statute; (B) the release, or threatened release, of any Hazardous
Materials into the environment; or (C) the existence of any Environmental Lien
on any Property of the Borrower or any Subsidiary; or (ii) has any actual or, to
its knowledge, threatened liability to any Person under any Environmental
Protection Statute which would, individually or in the aggregate, have a
Material Adverse Effect.
(b) The Borrower and each Subsidiary thereof has obtained all
consents, licenses or permits which are required under all Environmental
Protection Statutes (including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into the
environment (including, without limitation, air, surface water, ground water or
land) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials),
except to the extent that failure to have or obtain any such consent, license or
permit does not have a Material Adverse Effect. The Borrower and each Subsidiary
thereof is in compliance with all terms and conditions of the consents, licenses
or permits required to be obtained by it, and is also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those laws or
contained in any regulation, code, plan, order, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
that failure to comply does not have a Material Adverse Effect.
7.15. PERMITS AND LICENSES. All material permits, licenses and
other Governmental Approvals necessary for the Borrower and its Restricted
Subsidiaries to carry on their respective businesses have been obtained and are
in full force and effect and neither the Borrower nor any Subsidiary is in
material breach of the foregoing. The Borrower and each Restricted Subsidiary
thereof own, or possess adequate licenses or other valid rights to use, United
States trademarks, trade names, service marks, copyrights, patents and
applications therefore which are material to the
- 52 -
59
conduct of the business, operations or financial condition of the Borrower or
such Restricted Subsidiary.
7.16. SOLVENCY. As of the Closing Date, upon giving effect to
the ▇▇▇▇▇▇ Acquisition and the issuance of the Notes and the execution of the
Loan Documents by the Borrower and each Subsidiary which is a party thereto, the
following are true and correct:
(a) The fair saleable value of the assets of the Borrower
and each Subsidiary exceeds the amount that will be required to be paid
on, or in respect of, the existing debts and other liabilities
(including, without limitation, pending or overtly threatened
litigation in reasonably foreseeable amounts in excess of effective
insurance coverage and all other contingent liabilities) of the
Borrower and each Subsidiary as they mature;
(b) The assets of the Borrower and each Subsidiary do not
constitute unreasonably small capital for it to carry out its business
as now conducted and as proposed to be conducted including its capital
needs, taking into account the particular capital requirements of the
business conducted by it, and reasonably projected capital requirements
and capital availability thereof; and
(c) Neither the Borrower, nor any Subsidiary, intends to
incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash reasonably expected to be
received by the Borrower and such Subsidiary, as the case may be, and
of amounts reasonably expected to be payable on or in respect of debt
of the Borrower and such Subsidiary, as the case may be).
7.17. CAPITAL STRUCTURE. As of the Closing Date and after
giving effect to the ▇▇▇▇▇▇ Acquisition, the Borrower owns the percentage of all
classes of Capital Stock of each Subsidiary and the ownership of each such
Subsidiary and the ownership of Borrower as of the date hereof is as set forth
on Schedule 7.17 attached hereto. Except for the Subsidiaries described on
Schedule 7.17 or as otherwise notified to the Agent in writing pursuant to
Section 9.1(i), the Borrower has no other Subsidiaries. As of the Closing Date
and after giving effect to the ▇▇▇▇▇▇ Acquisition, Borrower has no partnership
or joint venture interests in any other Person except as set forth in Schedule
7.17. All of the issued and outstanding shares of Capital Stock of the Borrower
and each Subsidiary are fully paid and nonassessable and, except as created by
the Pledge Agreement and, with respect to the Exchangeable Shares, except for
the rights of the holders of the Exchangeable Shares to receive Capital Stock of
the Borrower pursuant to the Combination Agreement, are free and clear of any
Lien.
7.18. INSURANCE. The Borrower and each Subsidiary maintain
insurance of such types as is usually carried by corporations of established
reputation engaged in the same or similar business and which are similarly
situated ("Similar Businesses") with financially sound and reputable insurance
companies and associations (or as to workers' compensation or similar
- 53 -
60
insurance, in an insurance fund or by self-insurance authorized by the
jurisdiction in which its operations are carried on), and in such amounts as
such insurance is usually carried by Similar Businesses.
7.19. COMPLIANCE WITH LAWS. The business and operations of the
Borrower and each Restricted Subsidiary as conducted at all times have been and
are in compliance in all respects with all applicable Laws, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.
7.20. NO CONSENT. Except to the extent the same has already
been obtained, no authorization or approval or other action by, and no notice to
or filing with, any Person or any Governmental Authority is required for the due
execution, delivery and performance by the Borrower or any Subsidiary thereof of
this Agreement or any other Loan Document to which it is a party, the borrowings
hereunder or issuance of Letters of Credit, in each case as contemplated herein,
or the effectuation of the transactions contemplated under any Loan Document to
which it is a party.
7.21. YEAR 2000.
(a) Borrower has (i) begun analyzing the operations of
Borrower and its Subsidiaries and Affiliates that could be adversely affected by
failure to become Year 2000 compliant (that is, that computer applications,
imbedded microchips and other systems will be able to perform date-sensitive
functions prior to and after December 31, 1999) and; (ii) developed a plan for
becoming Year 2000 compliant in a timely manner, the implementation of which is
on schedule in all material respects. Borrower reasonably believes that it will
become Year 2000 compliant for its operations and those of its Subsidiaries and
Affiliates on a timely basis except to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
(b) Borrower reasonably believes any suppliers and vendors
that are material to the operations of Borrower or its Subsidiaries and
Affiliates will be Year 2000 compliant for their own computer applications
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(c) Borrower will promptly notify the Agent in the event
Borrower determines that any computer application which is material to the
operations of Borrower, its Subsidiaries or any of its material vendors or
suppliers will not be fully Year 2000 compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
- 54 -
61
8. CONDITIONS.
8.1. CONDITIONS TO EFFECTIVENESS OF AGREEMENT. The
effectiveness of Agreement is subject to the following conditions:
(a) Approvals. The Borrower shall have obtained all orders,
approvals or consents of all Persons required for the execution,
delivery and performance by the Borrower and each Subsidiary of each
Loan Document to which it is a party.
(b) Compliance with Law. The business and operations of the
Borrower and each Subsidiary as conducted at all times relevant to the
transactions contemplated by this Agreement to and including the close
of business on the Closing Date shall have been and shall be in
compliance (other than any failure to be in compliance that does not
result in a Material Adverse Effect) with all applicable Laws. No Law
shall prohibit the transactions contemplated by the Loan Documents. No
order, judgment or decree of any Governmental Authority, and no action,
suit, investigation or proceeding pending or threatened in any court or
before any arbitrator or Governmental Authority that purports to affect
the Borrower or any Subsidiary, shall exist that could reasonably be
expected to have a Material Adverse Effect.
(c) Officer's Certificate. On the Closing Date, the Agent
shall have received a certificate dated the Closing Date of a
Responsible Officer of the Borrower (with a copy thereof for each Bank)
certifying that (i) except as disclosed by the Borrower to the Agent in
writing, there has not occurred a material adverse change in the
business, assets, operations, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries or in the facts and
information regarding such Persons as represented in the Borrower's
most recent quarterly financial statements dated October 31, 1998, (ii)
the Borrower and its Restricted Subsidiaries are in compliance with all
existing financial obligations, (iii) after giving effect to the Moores
Acquisition, no Default or Event of Default shall have occurred and be
continuing, and (iv) the representations and warranties of the Borrower
and each Restricted Subsidiary contained in the Loan Documents (other
than those representations and warranties limited by their terms to a
specific date, in which case they shall be true and correct as of such
date) shall be true and correct on and as of the Closing Date, after
giving effect to the Moores Acquisition.
(d) Insurance. On the Closing Date, the Agent shall have
received all such information as the Agent shall reasonably request
concerning the insurance maintained by the Borrower and each
Subsidiary.
(e) Payment of Fees and Expenses. Payment of (i) all fees due
and owing and described in Section 5 hereof and (ii) the reasonable
expenses of, or incurred by, the Agent
- 55 -
62
and counsel, to the extent billed as of the Closing Date, to and
including the Closing Date in connection with the negotiation and
closing of the transactions contemplated herein.
(f) Fee Letters. The Borrower shall have executed and
delivered the fee letters described in Sections 5.2 and 5.4.
(g) Required Documents and Certificates. On the Closing
Date. the Banks shall have received the following, in each case in
form, scope and substance satisfactory to the Banks:
(i) this Agreement;
(ii) the Notes;
(iii) the Guaranty, executed and delivered by Golden
Moores Company and Golden Moores Finance Company and each
other Restricted Subsidiary organized in the United States of
America or any state thereof (other than ▇▇▇▇▇▇ The Suit
People U.S., Inc., Men's Wearhouse (Canada), Inc., TMW Moores
Group, Inc., The Men's Wearhouse (Nevada) Inc. and Value
Priced Clothing II, Inc.),
existing as of the Closing Date;
(iv) if the Moores Acquisition has occurred, the
Pledge Agreement, together with any certificates representing
all shares of such stock so pledged and for each such
certificate a stock power executed in blank;
(v) an Officer's Certificate from the Borrower,
Golden Moores Company and Golden Moores Finance Company and
each other Restricted Subsidiary organized in the United
States of America or any state thereof (excluding ▇▇▇▇▇▇ The
Suit People U.S., Inc., The Men's Wearhouse (Nevada) Inc.,
Value Priced Clothing II, Inc., Men's Wearhouse (Canada),
Inc., and TMW Moores Group, Inc.), dated as of the Closing
Date certifying, inter alia, (A) Articles of Incorporation or
Bylaws (or equivalent corporate documents), as amended and in
effect of such Person; (B) resolutions duly adopted by the
Board of Directors of such Person authorizing the transactions
contemplated by the Loan Documents to which it is a party and
(C) the incumbency and specimen signatures of the officers of
such Person executing documents on its behalf;
(vi) a certificate from the appropriate public
official of each jurisdiction in which the Borrower and each
Subsidiary is organized as to the continued existence and good
standing of such Person;
- 56 -
63
(vii) a certificate from the appropriate public
official of each jurisdiction in which the Borrower and each
Subsidiary is authorized and qualified to do business as to
the due qualification and good standing of such Person, where
failure to be so qualified or certified is reasonably likely
to have a Material Adverse Effect;
(viii) legal opinions in form, substance and scope
satisfactory to the Agent from counsel for, and issued upon
the express instructions of, the Borrower;
(ix) certified copies of Requests for Information of
Copies (Form UCC-11), or equivalent reports, for the States of
Texas and California listing all effective financing
statements which name the Borrower and each Subsidiary (under
its present name, any trade names and any previous names) as
debtor and which are filed, together with copies of all such
financing statements;
(x) repayment in full of the Existing Credit
Agreement and the termination thereof;
(xi) any other documents reasonably requested by the
Agent prior to the Closing Date.
In addition, as of the Closing Date, all legal matters
incident to the transactions herein contemplated shall be satisfactory to
counsel for the Agent and the Banks.
8.2. CONDITIONS TO EACH LOAN AND LETTER OF CREDIT. The
obligation of the Banks to make, continue and convert each Loan and of the
Issuing Bank to issue, renew and extend any Letter of Credit is subject to the
following conditions:
(a) Representations True and No Defaults. (i) The
representations and warranties of the Borrower and each Subsidiary
contained in the Loan Documents (other than those representations and
warranties limited by their terms to a specific date, in which case
they shall be true and correct as of such date) shall be true and
correct on and as of the particular Borrowing Date or the applicable
Conversion/ Continuation Date or on the date of issuance, renewal or
extension of any Letter of Credit, as the case may be, as though made
on and as of such date; (ii) except as disclosed by the Borrower to the
Agent in writing, no event has occurred since the date of the most
recent financial statements delivered pursuant to Section 9.1(a) (or in
the case of a borrowing prior to the delivery of such statements,
October 31, 1998), that has caused a Material Adverse Effect; and (iii)
no Event of Default or Default shall have occurred and be continuing.
(b) Borrowing Documents. On each Borrowing Date, the Agent
shall have received a Notice of Borrowing in respect of the Loans
delivered in accordance with Section 2.2.
- 57 -
64
(c) Conversion/Continuation Documents. On each
Conversion/Continuation Date, the Agent shall have received a Notice of
Rate Change/Continuation.
(d) Letter of Credit Documents. On the date of the issuance,
renewal or extension of any Letter of Credit, the Agent shall have
received a Letter of Credit Request, delivered in accordance with
Section 2.5.
9. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees that, so
long as any Note shall remain unpaid, any Letter of Credit shall remain
outstanding, or any Bank shall have any Commitment hereunder, the Borrower will:
9.1. REPORTING AND NOTICE REQUIREMENTS. Furnish to the Agent
(with a copy for each Bank) for delivery to the Banks:
(a) Quarterly Financial Statements. As soon as available and
in any event within sixty (60) days after the end of each fiscal
quarter of the Borrower (excluding the fourth quarter), consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of
such quarter and consolidated statements of earnings, shareholders'
equity and cash flow of the Borrower and its Subsidiaries for the
period commencing at the end of the previous Fiscal Year of the
Borrower and ending with the end of such fiscal quarter, setting forth
in each case in comparative form corresponding consolidated figures for
the corresponding period in the immediately preceding Fiscal Year of
the Borrower, all in reasonable detail and certified by a Responsible
Officer as presenting fairly the consolidated financial position of the
Borrower and its Subsidiaries as of the date indicated and the results
of their operations for the period indicated in conformity with GAAP,
consistently applied, subject to changes resulting from year-end
adjustments.
(b) Annual Financial Statements. As soon as available and in
any event within one hundred and five (105) days after the end of each
Fiscal Year of the Borrower, audited consolidated statements of
earnings, shareholders' equity and cash flow of the Borrower and its
Subsidiaries for such Fiscal Year, and audited consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of such
Fiscal Year, setting forth in each case in comparative form
corresponding consolidated figures for the immediately preceding year,
all in reasonable detail and satisfactory in form, substance, and scope
to the Agent, together with the unqualified opinion of independent
certified public accountants of recognized national standing selected
by the Borrower, stating that such financial statements fairly present
the consolidated financial position of the Borrower and its
Subsidiaries as of the date indicated and the consolidated results of
their operations and cash flow for the period indicated in conformity
with GAAP, consistently applied (except for such inconsistencies which
may be disclosed in such report), and that the audit by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards.
- 58 -
65
(c) Consolidated Statements. In the event that the Borrower
or any of its Restricted Subsidiaries have made an Investment in an
Unrestricted Subsidiary and such Investment continues to be
outstanding, consolidated financial statements (balance sheets,
statements of earnings, shareholders' equity and cash flow) of the
Borrower and Restricted Subsidiaries. The consolidated financial
statements referred to in this Section 9.1(c) will be provided within
the time frame specified in Section 9.1(a) or 9.1(b), as appropriate,
but will not be subject to audit and will not include customary
footnotes.
(d) Compliance Certificate. Together with the delivery of any
information required by Subsection (a) and Subsection (b) of this
Section 9.1, a certificate in the form of Exhibit E hereto signed by a
Responsible Officer, (i) stating that there exists no Event of Default
or Default, or if any Event of Default or Default exists, specifying
the nature thereof, the period of existence thereof, and what action
the Borrower proposes to take with respect thereto; and (ii) setting
forth such schedules, computations and other information as may be
required to demonstrate that the Borrower is in compliance with its
covenants in Sections 10.13 and 10.14 hereof.
(e) Notice of Default. Promptly after any Responsible Officer
or the Corporate Controller of the Borrower knows or has reason to know
that any Default or Event of Default has occurred, a written statement
of a Responsible Officer of the Borrower setting forth the details of
such event and the action which the Borrower has taken or proposes to
take with respect thereto.
(f) Notice of Litigation. Promptly after any Responsible
Officer or the Corporate Controller of the Borrower or of any
Subsidiary obtaining knowledge of the commencement thereof, notice of
any litigation, legal, administrative or arbitral proceeding,
investigation or other action of any nature which involves the
reasonable possibility of any judgment or liability which could have a
Material Adverse Effect and which notice does not require a waiver of
the attorney-client privilege in respect of such litigation, proceeding
or investigation, and upon request by the Agent or any Bank, details
regarding such litigation which are satisfactory to the Agent or such
Bank.
(g) Securities Filings. Promptly after the sending or filing
thereof and in any event within fifteen (15) days thereof, copies of
all reports which the Borrower sends to any of its securityholders, and
copies of all reports (including each regular and periodic report
(excluding registration statements on Form S-8)) and each registration
statement or prospectus, which the Borrower or any Subsidiary files
with the Securities and Exchange Commission or any national securities
exchange.
(h) ERISA Notices, Information and Compliance. The Borrower
will, and will cause each of its ERISA Affiliates to deliver to the
Agent, as soon as possible and in any event within ten (10) days after
the Borrower or any of its ERISA Affiliates knows of the
- 59 -
66
occurrence of any of the following, a certificate of the chief
financial officer of the Borrower (or, if applicable, of the ERISA
Affiliate) setting forth the details as to such occurrence and the
action, if any, which the Borrower or ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given or filed with or by the Borrower, an ERISA Affiliate, the PBGC or
plan administrator with respect thereto:
(i) the establishment or adoption of any PBGC Plan,
Multiemployer Plan or Multiple Employer Plan by the Borrower
or any ERISA Affiliate on or after the Effective Date (a
"Future Plan");
(ii) the occurrence of an ERISA Event with respect
to any Future Plan;
(iii) the existence of an accumulated funding
deficiency (within the meaning of Section 302 of ERISA) with
respect to any Future Plan as determined as of the end of each
Fiscal Year of the Future Plan;
(iv) the making of an application to the Secretary of
the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments)
or extension of any amortization period under Section 412 of
the Code with respect to any Future Plan;
(v) the institution of a proceeding pursuant to
Section 515 of ERISA to collect delinquent contributions from
the Borrower or an ERISA Affiliate with respect to a Future
Plan;
(vi) the occurrence of any "prohibited transaction"
as described in Section 406 of ERISA or in Section 4975 of the
Code, in connection with any Plan or any trust created
thereunder; or
(vii) the failure to pay when due all amounts that
the Borrower or any ERISA Affiliate is required under the
terms of each Plan or applicable law to have paid as a
contribution to such Plan.
Upon written request of the Agent, the Borrower will and will
cause its ERISA Affiliates to obtain and deliver to the Agent, as soon
as possible and in any event within ten (10) days from receipt of the
request, a complete copy of the most recent annual report (Form 5500)
of each Plan required to be filed with the Internal Revenue Service and
copies of any other reports or notices which the Borrower or an ERISA
Affiliate files with the Internal Revenue Service, PBGC or the United
States Department of Labor or which the Borrower or an ERISA Affiliate
receives from such Governmental Authority.
- 60 -
67
(i) Notice of New Subsidiaries. Within ten (10) days after
the formation or acquisition of any Subsidiary of the Borrower, a
certificate of a Responsible Officer notifying the Agent of such event.
(j) Notice of Material Adverse Effect. Promptly after any
Responsible Officer or the Corporate Controller of the Borrower knows
or has reason to know of the occurrence of any action or event which
may cause a Material Adverse Effect, a written statement of the
Responsible Officer of the Borrower setting forth the details of such
action or event and the action which the Borrower has taken or proposes
to take with respect thereto.
(k) Eurodollar Rate Margin Certificate. Within fifty-five
(55) days after the end of each fiscal quarter of the Borrower, a
certificate in the form of Exhibit F hereto signed by a Responsible
Officer, (i) setting forth (x) the ratio of Adjusted Debt to EBITDA
plus Base Rent Expense for the four immediately preceding fiscal
quarterly periods ending on such fiscal quarter, (y) subject to
confirmation of the Dollar Equivalent Value by the Agent, the number of
days that the Percentage Usage exceeded 50%, and the excess for each
such day, in each case for which an increased Applicable Margin of
0.125% per annum had not been assessed by the Banks and paid by
Borrower, and (z) the resultant Applicable Margin determined as of the
end of the relevant fiscal quarter for the four fiscal quarters ending
on such date and (ii) setting forth such computations and other
financial information as may be required to determine such ratio of
Adjusted Debt to EBITDA plus Base Rent Expense.
(l) Other Information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any
of its Subsidiaries as any Bank through the Agent may from time to time
reasonably request.
9.2. CORPORATE EXISTENCE. Except as otherwise permitted by
Section 10.4 and except for the liquidation of Men's Wearhouse (Canada), Inc.,
TMW Moores Group, Inc., Value Priced Clothing II, Inc. and The Men's Wearhouse
(Nevada) Inc., remain, and cause each Restricted Subsidiary to remain, (i) a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of organization, with the power to own its properties
and to carry on its business; and (ii) duly qualified to do business and in good
standing in every jurisdiction where such qualification is necessary and where
failure to be so qualified would have a Material Adverse Effect.
9.3. BOOKS AND RECORDS. Maintain, and cause each Subsidiary
to maintain, complete and accurate books of record and account in accordance
with sound accounting practices in which true, full and correct entries will be
made of all its dealings and business affairs.
9.4. INSURANCE. Maintain, and cause each Subsidiary to
maintain, insurance of such types as Similar Businesses with financially sound
and reputable insurance companies and associations (or as to workers'
compensation or similar insurance, in an insurance fund or by self-insurance
authorized by the jurisdiction in which its operations are carried on),
including without
- 61 -
68
limitation public liability insurance, casualty insurance against loss or damage
to its Properties, assets and businesses now owned or hereafter acquired, and
business interruption insurance, and in such amounts as such insurance is
usually carried by Similar Businesses.
9.5. RIGHT OF INSPECTION. In each case subject to the last
sentence of this Section 9.5, from time to time during regular business hours
upon reasonable notice to the Borrower and at no cost to the Borrower (unless a
Default or Event of Default shall have occurred and be continuing at such time)
permit, and cause each Subsidiary to permit, any officer, or employee of, or
agent designated by, the Agent or any Bank to visit and inspect any of the
Properties of the Borrower or any Subsidiary, examine the Borrower's or such
Subsidiary's corporate books or financial records, take copies and extracts
therefrom and discuss the affairs, finances and accounts of the Borrower or any
Subsidiary with the Borrower's or such Subsidiary's officers or certified public
accountants (subject to the agreement of such accountants), all as often as the
Agent or any Bank may reasonably desire. At the request of the Agent, the
Borrower will use its best efforts to assure that its certified public
accountants agree to meet with the Banks to discuss such matters related to the
affairs, finances and accounts of the Borrower or any Subsidiary as they may
request; provided that a representative of the Borrower shall be present during
any such discussions with such certified public accountants. Each of the
foregoing inspections shall be made subject to compliance with applicable safety
standards and the same conditions applicable to Borrower or any Restricted
Subsidiary in respect of property of that Borrower or any Restricted Subsidiary
on the premises of Persons other than Borrower or any Restricted Subsidiary, and
all information, books and records furnished or requested to be furnished, or of
which copies, photocopies or photographs are made or requested to be made, all
information to be investigated or verified and all discussions conducted with
any officer, employee or representative of Borrower or any Restricted Subsidiary
shall be subject to any applicable attorney-client privilege exceptions which
Borrower or any Restricted Subsidiary determines is reasonably necessary and
compliance with conditions to disclosures under non-disclosure agreements
between any Borrower or any Restricted Subsidiary and Persons other than
Borrower or any Restricted Subsidiary and the express undertaking of each Person
acting at the direction of or on behalf of any Bank or Agent to be bound by the
confidentiality provisions of Section 13.21 of this Agreement.
9.6. MAINTENANCE OF PROPERTY. At all times maintain,
preserve, protect and keep, and cause each Restricted Subsidiary to at all times
maintain, preserve, protect and keep, or cause to be maintained, preserved,
protected and kept, its Property in good repair, working order and condition
(ordinary wear and tear excepted) and, from time to time, will make, or cause to
be made, all repairs, renewals, replacements, extensions, additions, betterments
and improvements to its Property as are appropriate, so that each of (a) (i) the
Borrower and (ii) the Borrower and its Restricted Subsidiaries, taken as a
whole, maintain their current line of business, and (b) the business carried on
in connection therewith may be conducted properly and efficiently at all times.
9.7. GUARANTEES OF CERTAIN RESTRICTED SUBSIDIARIES; PLEDGE
AGREEMENT. (a) Immediately upon the designation, formation or acquisition of any
Restricted Subsidiary (and
- 62 -
69
until designated an Unrestricted Subsidiary in accordance with the terms
hereof), cause such Restricted Subsidiary to provide to the Agent for the
benefit of the Banks a guaranty of the obligations of the Borrower under this
Agreement which shall be in the form of the guaranty supplement which is set
forth as Exhibit A to the Guaranty Agreement attached hereto as Exhibit G (each,
a "Guaranty"), together with written evidence satisfactory to Agent and its
counsel that such Restricted Subsidiary has taken all corporate and other action
and obtained all consents necessary to duly approve and authorize its execution,
delivery and performance of the Guaranty, any other documents which it is
required to execute, and an opinion of counsel to such Restricted Subsidiary in
form, scope and substance acceptable to the Agent; provided, however, any
Subsidiary organized under the laws of any jurisdiction other than a
jurisdiction located in the United States of America (unless treated as a U.S.
taxpayer under Section 7701 of the Code and the regulations issued thereunder,
or any successor provisions) shall not be required to execute and deliver a
Guaranty (any such Restricted Subsidiary herein referred to as a
"Non-Guaranteeing Restricted Subsidiary"). It is agreed and understood that the
agreement of the Borrower under this Section 9.7 to cause any such Restricted
Subsidiary to provide to the Agent for the benefit of the Banks a Guaranty is a
condition precedent to the making of the Loans and the issuance of Letters of
Credit pursuant to this Agreement and that the entry into this Agreement by the
Banks constitutes good and adequate consideration for the provision of such
Guaranty. It is agreed and understood that the Borrower contemplates the
liquidation of Men's Wearhouse (Canada), Inc., TMW Moores Group, Inc., The Men's
Wearhouse (Nevada) Inc. and Value Priced Clothing II, Inc. and the distribution
of their assets to the Borrower and Value Priced Clothing, Inc., respectively.
Consequently, the guaranty of such Subsidiaries will not be required on the
Closing Date and the Borrower covenants that such Subsidiaries shall remain
dormant and inactive until such liquidation. However, each such Subsidiary shall
be a Restricted Subsidiary, and if any such Subsidiary has not been liquidated
and dissolved by February 12, 1999, then such Subsidiary shall then be required
to execute and deliver a Guaranty pursuant to the provisions of this Section
9.7. In addition, it is agreed and understood that because ▇▇▇▇▇▇ The Suit
People U.S., Inc. is a de minimis Subsidiary, such Subsidiary shall be a
Restricted Subsidiary but shall not be required to execute a Guaranty as of the
Closing Date. If there is a substantial increase in the net worth of ▇▇▇▇▇▇ The
Suit People U.S., Inc. after the Closing Date, the Borrower agrees to cause such
Restricted Subsidiary to become a Guarantor upon the request of the Agent.
(b) Upon consummation of the Moores Acquisition, the Parent
shall cause the Pledgors to execute and deliver the Pledge Agreement, together
with written evidence satisfactory to Agent and its counsel that each Pledgor
has taken all corporate and other action and obtained all consents necessary to
duly approve and authorize its execution, delivery and performance of the Pledge
Agreement, any other documents which it is required to execute, and an opinion
of counsel to each Pledgor in form, scope and substance acceptable to the Agent.
9.8. ACCOUNTING PRINCIPLES. If any changes in accounting
principles from those used in the preparation of the financial statements
referenced in Section 9.1 are adopted by the Borrower and such changes result in
a change in the method of calculation or the interpretation of
- 63 -
70
any of the financial covenants, standards or terms found in Section 9.1, Section
10.13, Section 10.14 or any other provision of this Agreement, deliver to the
Agent a reconciliation prepared by a Responsible Officer showing the effect of
such changes hereunder; provided that the Borrower and the Banks agree to amend
any such affected terms and provisions so as to reflect such changes with the
result that the criteria for evaluating Borrower's or such Subsidiaries'
financial condition shall be the same after such changes as if such changes had
not been made.
9.9. PATENTS, TRADEMARKS AND LICENSES. Maintain, and cause
each Restricted Subsidiary to maintain, all assets, licenses, patents,
copyrights, trademarks, service marks, trade names, permits and other
Governmental Approvals necessary to conduct its business except where the
failure to so maintain is not reasonably likely to have a Material Adverse
Effect.
9.10. TAXES; OBLIGATIONS. Pay and discharge, and cause each
Subsidiary to pay and discharge, before they become delinquent, all taxes,
assessments, and governmental charges or levies imposed upon the Borrower, any
Subsidiary or upon the income or any Property of the Borrower or any Subsidiary
as well as all material claims and obligations of any kind (including, without
limitation, claims for labor, materials, supplies, and rent) which, if unpaid,
might become a Lien upon any Property of the Borrower or any Restricted
Subsidiary; provided, however, that neither the Borrower nor any Subsidiary
shall be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings diligently conducted by or on behalf of the
Borrower or any such Subsidiary and, if required under GAAP, the Borrower or any
such Subsidiary shall have established adequate reserves therefor.
10. NEGATIVE COVENANTS. So long as any Note shall remain unpaid, any
Letter of Credit shall remain outstanding, or any Bank shall have any Commitment
hereunder:
10.1. LIENS. The Borrower shall not, and shall not permit any
Restricted Subsidiary to, create, assume or permit to exist any Lien (including
the charge upon assets purchased under a conditional sales agreement, purchase
money mortgage, security agreement or other title retention agreement) upon any
of its Properties, whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income, other than:
(a) Permitted Liens;
(b) Liens existing on the Closing Date and described on
Schedule 10.1 attached hereto and made a part hereof and any Lien
securing the Debt described in Section 10.2(c)(ii) and Liens extending
the duration of any such existing Lien; provided that the principal
amount secured by such Lien is not increased and the extended Lien does
not cover any Property of the Borrower or any Restricted Subsidiary
which is not covered by the provisions of the instruments, as in effect
on the Closing Date, providing for the existing Lien extended thereby;
- 64 -
71
(c) Liens securing the Debt permitted by Section 10.2(b),
10.2(e) and 10.2(f) hereof;
(d) Liens created by the Pledge Agreement;
(e) purchase options granted to Golden Moores Finance
Company pursuant to the Subscription Agreement to purchase Capital
Stock of ▇▇▇▇▇▇ Retail Group Inc.; and
(f) rights of the holders of the Exchangeable Shares to
exchange such shares for Capital Stock of the Borrower pursuant to the
Combination Agreement.
10.2. DEBT. The Borrower will not create or suffer to exist,
and will not permit any Restricted Subsidiary to create, incur, assume or suffer
to exist, any Debt except as set forth below, all of which shall be "Permitted
Debt":
(a) Debt of the Borrower and the Guarantors to the Banks,
the Agent and the Issuing Bank evidenced by any Loan Document;
(b) in addition to Debt otherwise permitted to be incurred
by the Borrower or any Restricted Subsidiary, as the case may be, by
this Section 10.2, secured or unsecured Debt of the Borrower or any
Restricted Subsidiary to Persons (other than the Borrower or any
Subsidiary) (other than the type of Debt permitted by Subsections (e)
and (f) hereof); provided that (i) at no time shall the aggregate
amount of all such Debt of the Borrower and the Restricted Subsidiaries
permitted by this Section 10.2(b) exceed 7 1/2% of Consolidated Net
Worth, of which secured Debt may constitute no more than 4% of
Consolidated Net Worth and (ii) such Debt shall not be incurred when a
Default or Event of Default exists or would result therefrom;
(c) (i) Debt of the Borrower or any Restricted Subsidiary
to any Person (other than to the Borrower or any Subsidiary) and (ii)
secured or unsecured Debt of ▇▇▇▇▇▇ The Suit People U.S., Inc. to
▇▇▇▇▇▇ Retail Group Inc. and Golden Brand Clothing (Canada) Ltd., in
each case existing on the date hereof and described on Schedule 10.2
attached hereto and made a part hereof; provided that such Debt is not
increased;
(d) unsecured Debt of the Borrower to any Restricted
Subsidiary, and unsecured Debt of any Restricted Subsidiary to the
Borrower or any other Restricted Subsidiary; provided that (i) in each
case the term and provisions of such Debt shall be subject to Section
10.8, (ii) any such unsecured Debt of the Borrower or any Guarantor
shall be subordinated in form and substance satisfactory to the
Majority Banks to the Obligations, (iii) any such unsecured Debt is
incurred when no Default or Event of Default exists or would result
therefrom, and (iv) the aggregate principal amount of all Debt of the
Non-Guaranteeing Restricted Subsidiaries (except as permitted by
Section 10.2(h)) to the
- 65 -
72
Borrower and the Guarantors shall not exceed the lesser of (A)
$30,000,000 and (B) 10% of the Consolidated Net Worth;
(e) Debt of the Borrower or any Restricted Subsidiary
representing Capital Leases; provided that at no time shall the
aggregate amount of such Debt of the Borrower and its Restricted
Subsidiaries permitted by this Section 10.2(e) exceed 5% of
Consolidated Net Worth;
(f) Debt relating to Sale and Lease-Back Transactions
permitted under Section 10.6(c);
(g) unsecured Debt incurred in the ordinary course of
business for the purchase of inventory, including deferred purchases of
inventory;
(h) intercompany Debt described in Section 10.5(l);
(i) other unsecured Debt of the Borrower or any Restricted
Subsidiary to Persons (other than the Borrower or any Subsidiary)
(other than the type of Debt permitted under Subsections (e) and (f)
hereof) provided that (i) the aggregate amount thereof plus the
aggregate amount of Debt outstanding which is permitted by Section
10.2(b) shall not exceed $100,000,000, (ii) such Debt shall not require
any principal payment, repurchase, redemption or defeasance prior to
(or the deposit of any payment or property or sinking fund payment in
respect of), or have a maturity shorter than, 90 days after the
Maturity Date, (iii) such Debt shall be on terms no more restrictive
than those set forth in the Loan Documents, and (iv) such Debt shall
not be incurred when a Default or Event of Default exists or would
result therefrom; and
(j) Debt under the Related Facilities, including guarantees
thereof.
For purposes of this Section 10.2, any Debt (1) which is
extended, renewed or refunded shall be deemed to have been incurred when
extended, renewed or refunded, (2) of a Person when it becomes, or is merged
into, or is consolidated with a Restricted Subsidiary or the Borrower shall be
deemed to have been incurred at that time, (3) which is permitted by Section
10.2(d) and which is owing to a Restricted Subsidiary when it ceases to be a
Restricted Subsidiary shall be deemed to have been incurred at that time, (4) of
a Restricted Subsidiary which is owing to the Borrower or any other Restricted
Subsidiary shall be deemed to have been incurred at the time the Borrower or
such other Restricted Subsidiary disposes of such Debt to any Person other than
the Borrower or a Restricted Subsidiary, and (5) which is Debt of the Borrower
or a Restricted Subsidiary consisting of a reimbursement obligation in respect
of a letter of credit or similar instrument shall be deemed to be incurred when
such letter of credit or similar instrument is issued.
- 66 -
73
10.3. RESTRICTED PAYMENTS. The Borrower will not directly or
indirectly, and will not permit any Restricted Subsidiary to directly or
indirectly, declare or make any dividend payment or other distribution of
Properties, cash, rights, obligations or securities on account of any shares of
any class of Capital Stock of or any partnership or other interest in the
Borrower or any Subsidiary, or purchase, redeem, retire or otherwise acquire for
value (or permit any Subsidiary to do so) any shares of any class of Capital
Stock of the Borrower or any Subsidiary or any warrants, rights or options to
acquire any such Capital Stock, partnership interests or other interests, now or
hereafter issued, outstanding or created (all the foregoing being herein
collectively referred to as "Restricted Payments"); provided that:
(a) the Borrower and each Subsidiary may declare and make
any dividend payment or other distribution payable in common stock of
the Borrower or any Subsidiary to the extent that such dividends in
stock are payable only with respect to stock of the same type or class,
(b) the Borrower and each Restricted Subsidiary (if such
Preferred Stock is issued to the Borrower) may pay or declare any
dividend in respect of Preferred Stock of the Borrower or such
Restricted Subsidiary,
(c) any Subsidiary may declare and make a dividend or other
distribution to the Borrower or any Restricted Subsidiary; provided
that no Guarantor may declare and make a dividend or other distribution
to any Non-Guaranteeing Restricted Subsidiary,
(d) from and after the Closing Date the Borrower may (i)
repurchase shares of its common stock and (ii) purchase, redeem or
otherwise acquire shares of Capital Stock in connection with the
payment for the exercise of options granted to an employee or director
pursuant to an employee or director stock option plan or withhold
shares otherwise issuable upon the exercise of an option in connection
with the payment of any federal or state taxes resulting from the
exercise of any such option; provided that all such payments pursuant
to this Section 10.3(d) may not exceed $30,000,000 in the aggregate,
(e) from and after the Closing Date, the Borrower may make
payments not to exceed an aggregate amount of $500,000 to its
shareholders required in connection with any stock split or stock
dividend with respect to its common stock in order to avoid the
issuance of fractional shares of its common stock,
(f) ▇▇▇▇▇▇ Retail Group Inc. may make payments to Golden
Moores Finance Company and Golden Moores Finance Company may acquire
the Capital Stock of ▇▇▇▇▇▇ Retail Group Inc., in each case pursuant to
the Subscription Agreement; and
- 67 -
74
(g) the Borrower or any Restricted Subsidiary may make
capital contributions of, and deliver, Capital Stock of the Borrower to
any Restricted Subsidiary to effectuate an exchange for the
Exchangeable Shares;
further provided however that prior to and after giving effect
to any such proposed dividend, distribution, purchase, redemption, retirement or
acquisition for value, no Default or Event of Default has occurred or would
exist.
10.4. MERGERS; CONSOLIDATIONS; SALE OR OTHER DISPOSITIONS OF
ALL OR SUBSTANTIALLY ALL ASSETS. The Borrower will not, and will not permit any
Restricted Subsidiary to, merge, amalgamate or consolidate with or into any
other Person, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of related transactions) all or substantially all of
its assets (i.e., assets which could not otherwise be disposed of pursuant to
Section 10.6) (whether now owned or hereafter acquired) to any other Person;
provided that:
(a) any Restricted Subsidiary may merge, amalgamate or
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 to, any Guarantor (provided that
in the case of any such merger, amalgamation or consolidation, the
Guarantor shall be the surviving entity);
(b) any Restricted Subsidiary may merge, amalgamate or
consolidate with or into any Person; provided that the surviving entity
shall be a Guarantor, further provided that prior to and after giving
effect thereto, no Default or Event of Default has occurred or would
exist;
(c) any Restricted Subsidiary may merge, amalgamate or
consolidate with or into or transfer all or substantially all of its
assets to the Borrower (provided that in the case of any such merger,
amalgamation or consolidation to which the Borrower is a party, the
Borrower shall be the surviving entity);
(d) the Borrower may merge, amalgamate or consolidate with
or into any Person; provided that in the case of any such merger,
amalgamation or consolidation to which the Borrower is a party, the
Borrower shall be the surviving entity and, further provided that prior
to and after giving effect thereto, no Default or Event of Default has
occurred or would exist; and
(e) any Non-Guaranteeing Restricted Subsidiary may merge,
amalgamate or 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 to, any other
Non-Guaranteeing Restricted Subsidiary.
- 68 -
75
10.5. INVESTMENTS, LOANS AND ADVANCES. The Borrower will not,
and will not permit any Restricted Subsidiary to, (i) (a) make or permit to
remain outstanding any Investment in, (b) endorse, or otherwise be or become
contingently liable, directly or indirectly, for the payment of money or the
obligations, stock or dividends of, (c) own, purchase or acquire any Capital
Stock, obligations, evidences of indebtedness or securities of, or any other
equity interest in (including any option, warrant or other right to acquire any
of the foregoing), or (d) make or permit to remain outstanding any capital
contribution to, any Person (other than in the Borrower or a Guarantor), or (ii)
otherwise make, incur, create, assume or suffer to exist any Investment in any
other Person (other than in the Borrower or a Guarantor), or purchase or acquire
the assets of any other Person (other than in the Borrower or a Guarantor)
constituting a business unit (excluding, in any event, the contingent liability
of a general partner for the obligations of its partnership arising under law
due to the nature of its general partnership interest) (collectively,
"Restricted Investments"), except that:
(a) the Borrower and its Restricted Subsidiaries may make or
permit to remain outstanding Restricted Investments to the extent
within the prohibitions of, and permitted by, Sections 10.4 and 10.6;
(b) the Borrower or any Restricted Subsidiary may acquire
and own stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the
Borrower or any Restricted Subsidiary;
(c) the Borrower or any Restricted Subsidiary may own,
purchase or acquire Cash Equivalents;
(d) the Borrower or any Restricted Subsidiary may permit to
remain outstanding guarantees resulting from endorsement of instruments
for collection in the ordinary course of business;
(e) the Borrower and its Restricted Subsidiaries may make or
permit to remain outstanding loans to employees (not including payments
covered by subsection (f) of this Section 10.5) made in the ordinary
course of business in an aggregate amount not to exceed at any time
$4,000,000;
(f) the Borrower and its Restricted Subsidiaries may make or
permit to remain outstanding payment by the Borrower of premiums on
life insurance policies naming ▇▇▇▇▇▇ ▇▇▇▇▇▇ as insured as provided for
in that certain Split-Dollar Agreement, dated November 25, 1994, among
the Borrower, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, as Co-Trustee, a copy of
which has been delivered to the Agent, and payment by the Borrower of
premiums on similar life insurance policies naming ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ as insureds;
- 69 -
76
(g) the Borrower and the Restricted Subsidiaries may make or
permit to remain outstanding intercompany loans and advances which are
permitted under Section 10.2(d) hereof;
(h) the Borrower and its Restricted Subsidiaries may make or
permit to remain outstanding Investments in Unrestricted Subsidiaries;
provided that all such Investments of the Borrower and its Restricted
Subsidiaries shall be subject to Section 10.19;
(i) the Borrower and its Restricted Subsidiaries may make or
permit to remain additional outstanding Restricted Investments (other
than the types of Restricted Investments permitted under Subsections
(a) through (h) and (j) through (l) hereof) (including, without
limitation, Restricted Investments in Non-Guaranteeing Restricted
Subsidiaries), provided that all such Restricted Investments of the
Borrower and its Restricted Subsidiaries shall not exceed in an
aggregate amount at any time 7 1/2% of Consolidated Net Worth; provided
that, prior to and immediately after making such Restricted
Investments, no Default or Event of Default has occurred and is
continuing or would exist; further provided (i) if such Restricted
Investment also constitutes an Acquisition as that term is defined
under Section 10.13, such Restricted Investment will be governed by
Section 10.13 hereof in lieu of this Section 10.5, and (ii) if such
Restricted Investment is in a Unrestricted Subsidiary, such Restricted
Investment is governed by Section 10.5(h) hereof in lieu of this
Section 10.5(i);
(j) the Borrower and its Restricted Subsidiaries may make or
permit to remain outstanding Investments (excluding Acquisitions, which
shall be governed by Section 10.13) made by an exchange of stock for
stock or stock for assets;
(k) (i) Golden Moores Finance Company may make Investments
in ▇▇▇▇▇▇ Retail Group Inc. pursuant to the Subscription Agreement,
(ii) the Borrower may contribute shares of its Capital Stock to Golden
Moores Company pursuant to the Combination Agreement, and (iii) Golden
Moores Company may make contributions to ▇▇▇▇▇▇ Retail Group Inc. of
Capital Stock of the Borrower pursuant to the Combination Agreement;
and
(l) in connection with the closing of the Related
Facilities, pursuant to the Intercompany Credit Agreements, Golden
Moores Finance Company may make a term loan to ▇▇▇▇▇▇ Retail Group Inc.
in the principal amount of C$75,000,000 and ▇▇▇▇▇▇ Retail Group Inc.
may make term loans to Golden Brand Clothing (Canada) Ltd. and ▇▇▇▇▇▇
The Suit People Inc. in the respective amounts of C$50,000,000 and
C$25,000,000.
10.6. SALE OR OTHER DISPOSITION OF LESS THAN SUBSTANTIALLY ALL
ASSETS; SALE AND LEASEBACKS. The Borrower will not, and will not permit any
Restricted Subsidiary to, sell, assign, lease, exchange, transfer or otherwise
dispose of (whether in one transaction or in a series of related transactions)
part, but less than all or substantially all, of its respective Property to any
other Person (whether now owned or hereafter acquired); provided however that:
- 70 -
77
(a) the Borrower or any Restricted Subsidiary may in the
ordinary course of business dispose of Property to Persons (other than
the Borrower or any Restricted Subsidiary, as to which the provisions
of Section 10.6(e) shall apply) consisting of (i) Inventory, (ii) goods
or equipment that are, in the reasonable opinion of the Borrower or
such Restricted Subsidiary, obsolete or unproductive, and (iii) (except
in connection with any Sale and Lease-Back Transaction, which shall be
governed solely by Subsection (c) hereof) other assets if, after giving
effect to such sale, exchange, transfer or other disposition (1) the
aggregate Fair Market Value (without duplication) of (i) all assets of
the Borrower and its Restricted Subsidiaries sold, exchanged,
transferred or otherwise disposed of (on a consolidated basis) (but
excluding assets sold, exchanged, transferred or otherwise disposed of
pursuant to any other subsection of this Section 10.6) during the
period of 12 consecutive months previously preceding such sale,
exchange, transfer or other disposition and (ii) the assets of all
Restricted Subsidiaries, the stock of which have been sold or otherwise
disposed of pursuant to this Section 10.6(a) during such 12 month
period shall not exceed 5% of Consolidated Net Worth as of the end of
the fiscal quarter immediately preceding or coinciding with such sale,
exchange, transfer or other disposition, and (2) the assets described
in the foregoing subclauses (i) and (ii) shall not have contributed
more than 5% of EBITDA for the four most recently completed fiscal
quarters taken as a single accounting period;
(b) the Borrower may sell, transfer or otherwise dispose of
its common stock being held by it as treasury stock;
(c) the Borrower may enter into Sale and Lease-Back
Transactions with any Person (other than an Unrestricted Subsidiary or
a Non-Guaranteeing Restricted Subsidiary) during the period from the
Closing Date to the Maturity Date relating to sales of real property
and related fixtures and improvements in an aggregate amount
(calculated on the basis of Fair Market Value) not exceeding (i) the
sum of (A) $16,000,000 for the Fiscal Year 1998 plus (B) $3,000,000 for
each Fiscal Year thereafter, minus (ii) the aggregate amount sold under
sale-leaseback transactions previously entered into under this Section
10.6(c);
(d) to the extent such sale, assignment, lease, exchange,
transfer or disposition is also a disposition of Properties subject to
Section 10.3, the Borrower and its Restricted Subsidiaries may make
such sale, assignment, lease, exchange, transfer or disposition to the
extent permitted by Section 10.3;
(e) the Borrower and its Restricted Subsidiaries may sell,
assign, lease, transfer or otherwise dispose of (whether in one
transaction or in a series of transactions) part, but less than all or
substantially all, of its respective Property to the Borrower or any
other Restricted Subsidiary to the extent within the prohibitions of,
and permitted by, Section 10.4 (to the same extent in respect of all or
substantially all of its assets) and Section 10.5; and
- 71 -
78
(f) Golden Moores Company and/or ▇▇▇▇▇▇ Retail Group Inc.
may exchange its shares of Capital Stock of the Borrower in exchange
for the Exchangeable Shares pursuant to the Combination Agreement.
10.7. USE OF PROCEEDS. The Borrower will not use, nor permit
the use of, all or any portion of any Loan for any purpose except as described
in Section 6 hereof.
10.8. TRANSACTIONS WITH AFFILIATES. Except as permitted in
Section 10.5(f) and except for the transactions contemplated by the Intercompany
Credit Agreements and the Subscription Agreement, the Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, engage in
any transaction with any Affiliate or any shareholder, officer or director of
the Borrower or of any Affiliate, including, without limitation, the purchase,
sale or exchange of assets or the rendering of any service, except in the
ordinary course of business and pursuant to the reasonable requirements of the
business of the Borrower or such Restricted Subsidiary, as the case may be, and
upon fair and reasonable terms that are not less favorable to the Borrower or
such Restricted Subsidiary, as the case may be, than those which might be
obtained in an arm's-length transaction at the time from wholly independent and
unrelated sources.
10.9. NATURE OF BUSINESS. The Borrower will not, and will not
permit any Restricted Subsidiary to, make any material change in the nature of
the business conducted by the Borrower and its Restricted Subsidiaries, taken as
a whole.
10.10. ISSUANCE AND DISPOSITION OF SHARES. The Borrower will
not (i) issue or have outstanding, or permit any Restricted Subsidiary to issue
or have outstanding, any Preferred Stock or Disqualified Capital Stock, or any
warrants, options, conversion rights or other rights to subscribe for, purchase,
or acquire any Preferred Stock or Disqualified Capital Stock, (ii) or permit any
Restricted Subsidiary to, issue, sell or otherwise dispose of options which by
their terms require the Borrower or any Restricted Subsidiary to purchase or
acquire any Capital Stock or other equity securities, and (iii) permit any
Restricted Subsidiary to, issue, sell or otherwise dispose of to any Person
other than the Borrower or any Restricted Subsidiary, any shares of its Capital
Stock or other equity securities, or any warrants, options, conversion rights or
other rights to subscribe for, purchase, or acquire any Capital Stock or other
equity securities; provided, however, the foregoing shall not prohibit (a)
Preferred Stock of the Borrower which is not Disqualified Capital Stock, (b) the
Exchangeable Shares, (c) stock options granted under employee or director stock
option plans which provide that the exercise price may be paid with shares of
the Borrower's common stock or that the optionee may satisfy any withholding tax
requirements upon exercise of the option by having the Borrower withhold shares
otherwise issuable upon such exercise, (d) Preferred Stock of any Restricted
Subsidiary owned by the Borrower and (e) the transactions contemplated by the
Subscription Agreement. The Borrower will not permit any Restricted Subsidiary
to issue or have outstanding any Capital Stock (other than to the Borrower or a
Restricted Subsidiary) and will not permit any Person (other than the Borrower
or a Restricted Subsidiary) to own any Capital Stock of a Restricted Subsidiary,
except for the Exchangeable Shares and directors' qualifying shares.
- 72 -
79
10.11. ERISA. The Borrower shall not and shall not permit any
ERISA Affiliate to:
(a) do any of the following, which in the aggregate would
reasonably be expected to have a Material Adverse Effect:
(i) engage in any transaction which it knows or has
reason to know could result in a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code;
(ii) fail to make any payments when due to any
Multiemployer Plan that the Borrower or an ERISA Affiliate may
be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(iii) incur withdrawal liability under ERISA with
respect to a Multiemployer Plan;
(iv) voluntarily terminate or, in the case of a
"substantial employer" as defined in Section 4001(a)(2) of
ERISA, withdraw from any Plan if such termination or
withdrawal could result in the imposition of a Lien on the
Borrower or an ERISA Affiliate under Section 4068 of ERISA;
(v) fail to make any required contribution when due
to any Plan subject to Section 412(n) of the Code that with
the passage of time would likely result in a Lien upon the
properties or assets of the Borrower or an ERISA Affiliate;
(vi) adopt any amendment to a Plan, the effect of
which is to increase the "current liability" under the Plan as
defined in Section 302(d)(7) of ERISA;
(vii) act or fail to act, if, as a result thereof, an
event similar to any of those referred to in clauses (i) to
(vi) would likely occur under the applicable laws of a foreign
country; or
(b) permit any Plan subject to Title IV of ERISA to have an
accumulated funding deficiency (as defined in Section 302 of ERISA) as
of the end of any Fiscal Year of the Plan; or
(c) permit the adoption, implementation or amendment of any
unfunded deferred compensation agreement or other arrangement of a
similar nature irrespective of whether subject to the funding
requirements of ERISA which could reasonably be expected to have a
Material Adverse Effect.
- 73 -
80
10.12. DISCOUNT OR SALE OF RECEIVABLES. The Borrower will not
discount or sell, nor permit any Restricted Subsidiary to discount or sell, any
of its notes receivable, receivables under leases or other accounts receivable,
other than in the ordinary course of collections of delinquent notes and
receivables, provided that, notwithstanding the foregoing, the Borrower and any
Restricted Subsidiary may, in the normal course of its business, acquire such
assets and sell such assets at Fair Market Value.
10.13. ACQUISITIONS. The Borrower will not, and will not
permit any Restricted Subsidiary to, acquire by purchase or merger (a) the power
to direct or cause the direction of the management and policies of any other
Person (other than the Borrower or any Subsidiary), directly or indirectly,
whether through the ownership of voting securities or by contract or otherwise
or (b) more than 20% of the Capital Stock or other equity interest of any such
other Person or all or substantially all of the assets or Properties of any such
other Person (the events described in clauses (a) and (b) of this Section 10.13
herein referred to as "Acquisitions"), except that the Borrower or any
Restricted Subsidiary may make such Acquisitions if:
(i) (excluding the Moores Acquisition), after giving effect
thereto, the aggregate cash consideration paid for all such
Acquisitions plus any Debt assumed or incurred in connection therewith
does not exceed an amount equal to $75,000,000 (provided, however, such
amount shall be increased to $100,000,000 so long as the aggregate
equity component of all such Acquisitions is not less than 30% of the
total consideration paid for all such Acquisitions) (provided that,
notwithstanding the limitations of Section 10.13(i), the Borrower or
any Restricted Subsidiary may participate in an exchange of stock for
stock or stock for assets with such Person, which exchange shall be
excluded from the provisions of this Section 10.13(i));
(ii) prior to and immediately after making such Acquisition,
no Default or Event of Default has occurred and is continuing or would
exist; and
(iii) in the case of the purchase of the capital stock or
other equity interest of any such other Person, such Person shall be
designated a Restricted Subsidiary.
10.14. CERTAIN FINANCIAL TESTS. (a) Consolidated Net Worth.
The Borrower will not permit Consolidated Net Worth at any time to be less than
an amount equal to the sum of (i) $245,000,000 plus (ii) seventy-five percent
(75%) of cumulative positive Consolidated Net Income, from January 30, 1999
through the determination date and without deduction for losses in Consolidated
Net Income, plus (iii) fifty percent (50%) of net cash proceeds received by the
Borrower or a Restricted Subsidiary in consideration for the issuance of shares
of any Capital Stock of the Borrower or any Restricted Subsidiary to any Person
(other than the Borrower or any Subsidiary) on or after January 30, 1999
(excluding any proceeds from (i) any issuance resulting from the conversion of
Debt to equity and (ii) the issuance and conversion of the Exchangeable Shares).
- 74 -
81
(b) Leverage Ratio. The Borrower shall not permit the
ratio of (i) Adjusted Debt to (ii) EBITDA plus Base Rent Expense to exceed (i)
during Fiscal Year 1999, 4.75 to 1.00 and, (ii) thereafter, 4.50 to 1.00,
determined in each case on the last day of each fiscal quarterly period for the
four fiscal quarters ending on such date.
(c) Fixed Charge Ratio. The Borrower shall not permit its
Fixed Charge Ratio to be less than (i) during Fiscal Year 1999, 1.30 to 1.00 ,
(ii) during Fiscal Year 2000, l.35 to 1.00, and (iii) thereafter, 1.40 to 1.00,
determined in each case on the last day of each fiscal quarterly period for the
four fiscal quarters ending on such date.
(d) Current Ratio. The Borrower will not permit the ratio
of Consolidated Current Assets to Consolidated Current Liabilities to be less
than 1.50 to 1.00 determined on the last day of each fiscal quarterly period.
(e) Consolidated Net Worth Attributable to Foreign Assets.
The Borrower will not permit the percentage of Consolidated Net Worth of the
Borrower and its Restricted Subsidiaries attributable to operating assets
(exclusive of Inventory in process of, or held for, manufacture) located outside
the United States, Canada and the United Kingdom at any time to be greater than
ten percent (10%).
10.15. REGULATIONS T, U AND X. The Borrower will not take or
permit, and will not permit any Subsidiary to take or permit, any action which
would involve the Agent or the Banks in a violation of Regulation T, Regulation
U, Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or a violation of the Securities Exchange Act of 1934, in each
case as now or hereafter in effect.
10.16. STATUS. The Borrower will not, and will not permit any
Subsidiary to:
(i) be or become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; or
(ii) be or become 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", or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
10.17. COMPLIANCE WITH LAWS. The Borrower will not fail to
comply, nor permit any Restricted Subsidiary to fail to comply, in all material
respect with all Laws.
- 75 -
82
10.18. UNRESTRICTED SUBSIDIARIES.
(a) The Borrower will not, and will not permit any
Restricted Subsidiaries to, create or otherwise designate any Subsidiary as an
Unrestricted Subsidiary or as a Restricted Subsidiary unless the terms set forth
in the definition of Unrestricted Subsidiary or Restricted Subsidiary, as the
case may be, are complied with respect to such Subsidiary.
(b) The Borrower will not, and will not permit any
Restricted Subsidiary to, permit any Unrestricted Subsidiary to fail to comply
with the requirements set forth in the definition of "Unrestricted Subsidiary."
10.19. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES. The sum of
the Fair Market Value of all Restricted Investments in Unrestricted Subsidiaries
permitted by Section 10.5(h) (calculated at the time of such Investment) shall
not exceed $50,000,000 in the aggregate at any time, nor shall the same be
incurred if prior to or immediately thereafter a Default or Event of Default has
occurred or would exist. For purposes of this Section 10.19, any such Restricted
Investment to or for the benefit of a Person other than an Unrestricted
Subsidiary shall be deemed to be incurred at the time any such Person becomes an
Unrestricted Subsidiary.
10.20. NO COMMINGLING OF ASSETS, ETC. (a) Except (i) as among
the Borrower and the Guarantors and (ii) as set forth in Section 10.20(b), the
Borrower and each Subsidiary shall not commingle its assets with those of any
other Person and its funds and other assets shall be separately identified and
segregated from those of any other Person. Except (i) as among the Borrower and
the Guarantors and (ii) as set forth in Section 10.20(b), the Borrower and each
Subsidiary shall pay from the assets of the Borrower and its Subsidiaries all
liabilities, obligations and indebtedness of any kind incurred by such Person
and, except as otherwise expressly permitted in this Agreement, shall not pay
from its assets any liabilities, obligations or indebtedness of any other
Person. Except as among the Borrower and the Guarantors, the Borrower and each
Subsidiary shall maintain its corporate, financial and accounting books and
records separate from those of any other Person. Except as among the Borrower
and the Guarantors, the Borrower and each Subsidiary shall indicate in such
statements and records the separateness of such Person's assets and liabilities
from those of any other Person. Except (i) as among the Borrower and the
Guarantors and (ii) in the case of registered "d.b.a." names, the Borrower and
each Subsidiary shall not, at any time, hold itself out to the public
(including, without limitation, any creditors of any of its Affiliates) under
the name of any other Person.
(b) The restrictions set forth in the first two sentences
of Section 10.20(a) shall not prohibit the Borrower or any Subsidiary from
commingling funds and paying the liabilities of any other Person in connection
with the ordinary course of its operations, in an aggregate amount not to exceed
$1,000,000.
- 76 -
83
10.21. RESTRICTIVE AGREEMENTS. Anything herein or any other
Loan Document to the contrary notwithstanding, the Borrower will not, and will
not permit any Subsidiary to, enter into, create or otherwise allow to exist any
agreement or restriction (other than a Loan Document or any "Loan Document" as
defined in the Related Facilities) that (i) prohibits or restricts the creation
or assumption of any Lien upon any Property of the Borrower or any Restricted
Subsidiary in favor of any Person, including without limitation the Banks, (ii)
prohibits or restricts any Restricted Subsidiary from executing any guarantee
which may be required under Section 9.7 hereof, (iii) requires any obligation of
the Borrower or any Subsidiary to be secured by any Property of the Borrower or
any Restricted Subsidiary if any obligation of the Borrower or such Subsidiary
to the Banks is secured in favor of another Person, including without limitation
the Banks, or (iv) prohibits or restricts the ability of (A) any Restricted
Subsidiary (1) to pay dividends or make other distributions or contributions or
advances to the Borrower or any other Restricted Subsidiary, (2) to repay loans
and other indebtedness owing by it to the Borrower or any other Restricted
Subsidiary, (3) to redeem equity interests held by it by Borrower or any other
Restricted Subsidiary, or (4) to transfer any of its assets to the Borrower or
any other Restricted Subsidiary, or (B) the Borrower or any other Restricted
Subsidiary to make any payments required or permitted under the Loan Documents
or any Related Facility or otherwise prohibit or restrict compliance by the
Borrower and the Subsidiaries thereunder.
10.22. PREPAYMENTS, ETC., OF CERTAIN DEBT. Except for interest
payments, the Parent will not, and will not permit any Subsidiary to, directly
or indirectly, pay, prepay, redeem, purchase, defease or otherwise satisfy (in
whole or in part) prior to the scheduled maturity thereof in any manner (or make
any deposit of any payment or property or sinking fund payment in respect of),
any Debt of the type permitted by Section 10.2(i).
11. EVENTS OF DEFAULT; REMEDIES. If any of the following events shall
occur, then the Agent shall at the request, or may with the consent, of the
Majority Banks, (i) by notice to the Borrower, declare the Commitment of each
Bank and the several obligations of each Bank to make Loans hereunder and
participate in Letters of Credit (and of the Issuing Bank to issue Letters of
Credit) to be terminated, whereupon the same shall forthwith terminate, (ii)
declare the Notes and all interest accrued and unpaid thereon, the Unpaid
Drawings and all other amounts payable under the Notes and this Agreement, to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts, shall become and be forthwith due and payable without
presentment, demand, protest, or further notice of any kind (including, without
limitation, notice of default, notice of intent to accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower, (iii)
terminate any Letter of Credit providing for such termination by sending a
notice of termination as provided therein and (iv) direct the Borrower to take
any action required by Section 11.15; provided, however, that with respect to
any Event of Default described in Section 11.6 or 11.7 hereof, (A) the
Commitment of each Bank and the several obligations of each Bank to make Loans
hereunder and participate in Letters of Credit (and of the Issuing Bank to issue
Letters of Credit) shall automatically be terminated and (B) the entire unpaid
principal amount of the Notes, all interest accrued and unpaid thereon, the
Unpaid Drawings and all such other amounts
- 77 -
84
payable under the Notes and this Agreement, shall automatically become
immediately due and payable, without presentment, demand, protest, or any notice
of any kind (including, without limitation, notice of default, notice of intent
to accelerate and notice of acceleration), all of which are hereby expressly
waived by the Borrower.
11.1. FAILURE TO PAY PRINCIPAL. The Borrower shall fail to
pay any principal of any Note when the same becomes due and payable; or
11.2. FAILURE TO PAY OTHER AMOUNTS. The Borrower shall fail to
pay interest on any Note or fees or other amounts due under any Note or this
Agreement or any other Loan Document, when the same becomes due and payable and
such failure shall remain unremedied for one (1) Business Day; or
11.3. DEFAULT UNDER OTHER DEBT. The Borrower or any Restricted
Subsidiary shall fail to pay any principal of or premium or interest on any Debt
which is outstanding in a principal amount of at least $5,000,000 in the
aggregate (or the equivalent thereof, if in a currency other than Dollars) when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event constituting a default
(however defined) shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument if the effect of
such event or condition is to accelerate, or to enable or permit the
acceleration of, the maturity of such Debt; or any such Debt shall become or be
declared to be due and payable, or required to be prepaid, or the Borrower or
any Restricted Subsidiary shall be required to repurchase, redeem or defease or
offer to repurchase, redeem or defease such Debt, in each case prior to the
stated maturity thereof; or
11.4. MISREPRESENTATION OR BREACH OF WARRANTY. Any
representation or warranty made by the Borrower or any Subsidiary herein or in
any other Loan Document or in any certificate, document or instrument otherwise
furnished to the Agent or the Banks in connection with this Agreement shall be
incorrect, false or misleading in any material respect when made or when deemed
made; or
11.5. VIOLATION OF COVENANTS.
(i) The Borrower violates any covenant, agreement or
condition contained in Section 9.1(e), 9.2, 9.7 or in Article 10; or
(ii) The Borrower violates any other covenant, agreement or
condition contained herein or in any other Loan Document to which it is
a party and such default shall continue unremedied for thirty (30) days
after the occurrence of such event; or
- 78 -
85
11.6. BANKRUPTCY AND OTHER MATTERS.
(i) The Borrower or any Restricted Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any Debtor Law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall admit in writing its inability to pay its
debts generally, or shall take any corporate action to authorize any of
the foregoing; or
(ii) An involuntary case or other proceeding shall be
commenced against the Borrower or any Restricted Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any Debtor Law or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of sixty
(60) days; or an order for relief under U.S. Federal Bankruptcy Law (or
a similar order under other Debtor Law) shall be entered against the
Borrower or any Restricted Subsidiary; or
11.7. DISSOLUTION. Any order is entered in any proceeding
against the Borrower or any Restricted Subsidiary decreeing the dissolution,
liquidation, winding-up or split-up of the Borrower or any Restricted
Subsidiary; or
11.8. JUDGMENT. Any judgment or order for the payment of money
which, individually or in the aggregate, shall be in excess of 5% of Net Worth
at any time, shall be rendered against the Borrower or any of its Restricted
Subsidiaries (or any combination thereof) and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
11.9. NULLITY OF LOAN DOCUMENTS. Any Loan Document shall, at
any time after its execution and delivery and for any reason, cease to be in
full force and effect or be declared to be null and void, or the validity or
enforceability thereof shall be contested by the Borrower or any Affiliate
thereof, or the Borrower or any Subsidiary thereof shall deny that it has any or
any further liability or obligations under any Loan Document to which it is a
party, or the Pledge Agreement shall for any reason not grant the Agent a first
priority Lien on the collateral purported to be subject thereto; or
- 79 -
86
11.10. CHANGE OF CONTROL. A Change of Control shall occur; or
11.11. ERISA. With respect to (a) any Future Plan (as such
term is defined in Section 9.1(g) hereof), other than a Multiemployer Plan
within the meaning of Section 4001(a)(3) of ERISA, (i) such Future Plan shall
fail to satisfy the minimum funding standard or a waiver of such standard or
extension of any amortization period is sought under Section 412 of the Code;
(ii) such Future Plan is or is proposed to be terminated and as a result thereof
liability in excess of $1,000,000 can be asserted under Title IV of ERISA
against the Borrower or ERISA Affiliate; (iii) such Future Plan shall have an
unfunded current liability in excess of $1,000,000; or (iv) there has been a
withdrawal from any such Future Plan and as a result liability in excess of
$1,000,000 can be asserted under Section 4062(e) or 4063 of ERISA against the
Borrower or any ERISA Affiliate; or (b) any Future Plan that is a Multiemployer
Plan under Section 4001(a)(3) of ERISA, such Future Plan is insolvent or in
reorganization or the Borrower or an ERISA Affiliate has withdrawn, or proposes
to withdraw, either totally or partially, from such Future Plan and, in any
case, the Borrower or its ERISA Affiliate might reasonably be anticipated to
incur a liability which would have a Material Adverse Effect; or (c) any Plan
other than a Future Plan, the Borrower or its ERISA Affiliate could reasonably
be anticipated to incur a liability which would have a Material Adverse Effect;
or
11.12. GUARANTORS; PLEDGE AGREEMENT. (i) Any Guarantor
violates any covenant, agreement or condition contained in any Guaranty or any
default or event of default otherwise occurs thereunder or (ii) any Pledgor
violates any covenant, agreement or condition contained in the Pledge Agreement
or any default or event of default otherwise occurs thereunder; or
11.13. RELATED FACILITIES. Any "Event of Default" occurs
under any Related Facility, as such term is defined therein.
11.14. OTHER REMEDIES. In addition to and cumulative of any
rights or remedies expressly provided for in this Section 11, if any one or more
Events of Default shall have occurred, the Agent shall at the request, and may
with the consent, of the Majority Banks proceed to protect and enforce the
rights of the Banks hereunder by any appropriate proceedings as the Agent may
elect. The Agent shall at the request, and may with the consent, of the Majority
Banks also proceed either by the specific performance of any covenant or
agreement contained in this Agreement or the other Loan Documents or by
enforcing the payment of the Notes or by enforcing any other legal or equitable
right provided under this Agreement or the other Loan Documents or otherwise
existing under any Law in favor of the holder of the Notes. The Agent shall not,
however, be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the Borrower
or any other Person or against or in payment of any or all obligations under any
Loan Document.
11.15. COLLATERAL ACCOUNT. The Borrower hereby agrees that in
the event of (i) the payment in full of the Loans and the termination of the
Commitments, or (ii) the occurrence of an Event of Default it shall, if
requested by the Agent or the Majority Banks (through the Agent), pay
- 80 -
87
to the Agent an amount in immediately available funds equal to 100% of the then
aggregate amount of Letter of Credit Outstandings, which funds shall be held by
the Agent in a collateral account to be maintained by the Agent. The Borrower
hereby agrees to execute and deliver to the Agent and the Banks such security
agreements, pledges or other documents as the Agent or any of the Banks may,
from time to time, reasonably require to perfect the pledge, lien and security
interest in and to any such funds provided for in this Section 11.15. Upon the
payment or expiry of all Letter of Credit Outstandings, all such Collateral
shall be released to the Borrower in due form at Borrower's cost.
11.16. REMEDIES CUMULATIVE. No remedy, right or power
conferred upon the Banks is intended to be exclusive of any other remedy, right
or power given hereunder or now or hereafter existing at Law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
12. THE AGENT.
12.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank hereby
irrevocably (subject to Section 12.7) appoints and authorizes the Agent to act
as its agent under this Agreement and the other Loan Documents with such powers
and discretion as are specifically delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this sentence
and in Section 12.5 and the first sentence of Section 12.6 hereof shall include
its affiliates and its own and its affiliates' officers, directors, employees,
and agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Bank; (b) shall not be responsible to the Banks for any statement,
representation, or warranty (whether written or oral) made in or in connection
with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, or sufficiency of
any Loan Document, or any other document referred to or provided for therein or
for any failure by any Loan Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Person or the satisfaction of any condition or to
inspect the property (including the books and records) of any Person; (d) shall
not be required to initiate or conduct any litigation or collection proceedings
under any Loan Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct. Without limiting the
generality of the foregoing sentence, the use of the term "agent" in this
Agreement with reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
- 81 -
88
12.2. RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
the Borrower), independent accountants, and other experts selected by the Agent.
The Agent may deem and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until the Agent receives and accepts an Assignment
and Acceptance executed in accordance with Section 13.11 hereof. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks. For purposes of determining compliance
with the conditions specified in Section 8.1, each Bank that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent to such
Bank for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to the Bank.
12.3. DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Agent has received written notice from a Bank or the Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default, the Agent shall give prompt notice thereof to
the Banks. The Agent shall (subject to Section 12.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Majority Banks, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Banks.
12.4. RIGHTS AS BANK. With respect to its Commitment and the
Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its affiliates may without having to account
therefor to any Bank accept deposits from, lend money to, make investments in,
provide services to, and generally engage in any kind of lending, trust, or
other business with the Borrower or any of its Subsidiaries or Affiliates as if
it were not acting as Agent, and NationsBank (and any successor acting as Agent)
and its affiliates may accept fees and other consideration from the Borrower or
any of its Subsidiaries or Affiliates for
- 82 -
89
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
12.5. INDEMNIFICATION. THE BANKS AGREE TO INDEMNIFY THE AGENT
(TO THE EXTENT NOT REIMBURSED UNDER SECTION 13.12 HEREOF, BUT WITHOUT THE
OBLIGATIONS OF THE BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENTS, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT (INCLUDING BY ANY BANK) IN
ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER ANY LOAN
DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE
AGENT); PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE
EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON
TO BE INDEMNIFIED. WITHOUT LIMITATION OF THE FOREGOING, EACH BANK AGREES TO
REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
EXPENSES PAYABLE BY THE BORROWER UNDER SECTION 13.12, TO THE EXTENT THAT THE
AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES BY THE BORROWER.
THE AGREEMENTS CONTAINED IN THIS SECTION SHALL SURVIVE PAYMENT IN FULL OF THE
LOANS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT.
12.6. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition, or business of the Borrower or any
of its Subsidiaries or affiliates that may come into the possession of the Agent
or any of its affiliates. Each Bank acknowledges that ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. is
acting in the transactions contemplated by the Loan Documents as special counsel
to the Agent only. Each Bank will consult with its own legal counsel to the
extent that it deems necessary in connection with the transactions contemplated
by the Loan Documents.
12.7. SUCCESSOR AGENT. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower, and may be removed at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority Banks and no
successor Agent shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation or the Majority
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent which shall
- 83 -
90
be a commercial bank organized under the laws of the United States of America
having combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article 12 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above.
13. MISCELLANEOUS.
13.1. REPRESENTATION BY THE BANKS. Each Bank represents that
it is the present intention of such Bank, as of the date of its acquisition of
the Notes, to acquire the Notes for its account or for the account of its
Affiliates, and not with a view to the distribution or sale thereof, and,
subject to any applicable Laws, the disposition of such Bank's property shall at
all times be within its control. The Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be
transferred, sold or otherwise disposed of except (a) in a registered offering
under the Securities Act; (b) pursuant to an exemption from the registration
provisions of the Securities Act; or (c) if the Securities Act shall not apply
to the Notes or the transactions contemplated by the Loan Documents. Nothing in
this Section 13.1 shall affect the characterization of the Loans and the
transactions contemplated hereunder as commercial lending transactions.
13.2. WAIVERS, ETC. No failure or delay on the part of any
Bank or the Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No course of dealing between the Borrower and any Bank or
the Agent shall operate as a waiver of any right of any Bank or the Agent. No
modification or waiver of any provision of this Agreement, the Notes or any
other Loan Document nor consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
- 84 -
91
13.3. NOTICES. All notices and other communications provided
for herein shall be in writing (including telex, facsimile, or cable
communication) and shall be mailed, couriered, telecopied, telexed, cabled or
delivered addressed as follows:
If to the Borrower, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
and if to any Bank or the Agent, at its Domestic Lending Office specified
opposite its name on Schedule I attached hereto, or as to the Borrower, or the
Agent, to such other address as shall be designated by such party in a written
notice to the other party and, as to each other party, at such other address as
shall be designated by such party in a written notice to the Borrower and the
Agent. All such notices and communications shall, when mailed, delivered by
courier, telecopied, telexed, transmitted, or cabled, become effective when
three (3) Business Days have elapsed after being deposited in the mail (with
first class postage prepaid and addressed as aforesaid), or when confirmed by
telex answerback, transmitted to the correct telecopier, or delivered to the
courier or the cable company, except that notices and communications from the
Borrower to the Agent shall not be effective until actually received by the
Agent.
13.4. GOVERNING LAW. EACH LOAN DOCUMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
UNITED STATES OF AMERICA.
13.5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants contained herein or made in
writing by the Borrower and its Restricted Subsidiaries in connection herewith
shall survive the execution and delivery of this Agreement and the Notes, and
will bind and inure to the benefit of the respective successors and permitted
assigns of the parties hereto, whether so expressed or not, provided that the
undertaking of the Banks to make Loans and issue Letters of Credit to the
Borrower shall not inure to the benefit of any successor or assign of the
Borrower. No investigation at any time made by or on behalf of the Banks shall
diminish the Banks' right to rely thereon.
13.6. COUNTERPARTS. This Agreement may be executed in several
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered,
- 85 -
92
shall constitute an original instrument, and all such separate counterparts
shall constitute but one and the same instrument.
13.7. SEPARABILITY. Should any clause, sentence, paragraph or
section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision shall not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein. Each
covenant contained in this Agreement shall be construed (absent an express
contrary provision herein) as being independent of each other covenant contained
herein, and compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with one or more other
covenants.
13.8. DESCRIPTIVE HEADINGS. The section headings in this
Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
provisions of this Agreement.
13.9. RIGHT OF SET-OFF, ADJUSTMENTS. (a) Upon the occurrence
and during the continuance of any Event of Default, each Bank (and each of its
Affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank (or any of its Affiliates) 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 and
the Note held by such Bank, irrespective of whether such Bank shall have made
any demand under this Agreement or such Note and although such obligations may
be unmatured. Each Bank agrees promptly to notify the Borrower after any such
set-off and application made by such Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 13.9 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Bank may have.
(b) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of the Loans owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by setoff, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Bank, if any, in respect of such other Bank's
Loans owing to it, or interest thereon, such benefitted Bank shall purchase for
cash from the other Banks a participating Interest in such portion of each such
other Bank's Loans owing to it, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Bank to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Banks; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
- 86 -
93
without interest. The Borrower agrees that any Bank so purchasing a
participation from a Bank pursuant to this Section may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Person were the
direct creditor of the Borrower in the amount of such participation.
13.10. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Bank may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Note, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Bank or
an assignment of all of a Bank's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $10,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Bank shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement and the Note;
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance in
the form of Exhibit H hereto (the "Assignment and Acceptance"),
together with any Note subject to such assignment and a processing fee
of $3,500; and
(v) any such Bank shall simultaneously assign to such
Eligible Assignee a pro rata portion of its rights and obligations
under the Canadian Term Loan Facility.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Bank hereunder and
the assigning Bank shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee in exchange for the
surrendered Note(s). Upon receipt by the Agent of such new Note or Notes
conforming to the requirements set forth in the preceding sentences, the Agent
shall return to the Borrower such surrendered Note or Notes, marked to show that
such surrendered Note or Notes has (have) been replaced, renewed and extended by
such new Note or Notes. If the assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 4.6.
- 87 -
94
(b) The Agent shall maintain at its address referred to in
Section 13.3 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, and principal amount of the Loans owing to, each Bank
from time to time (the "Register"). The entries in the register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time on reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee by such assignor or assignee, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit H hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Bank may sell participations to one or more Persons
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and its Loans); provided, however,
that (i) such Bank's obligations under this Agreement shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Section 3.2 and the
right of set-off contained in Section 13.9, provided that no participant shall
be entitled to recover under Section 3.2 an amount in excess of the
proportionate share which such participant holds of the original aggregate
principal amount hereunder to which the selling Bank would otherwise have been
entitled and (iv) the Borrower shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement, and such Bank shall retain the sole right to enforce the obligations
of the Borrower relating to its Loans and its Note and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal of or
the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending its Commitment). The Bank selling any such
participation shall give notice thereof to the Borrower, identifying the
participant and the amount of such participation and the Agent shall also give
such notice to the Borrower in the event the Agent has knowledge thereof,
provided that such Bank and the Agent shall not be liable for the failure to
provide such notice.
(e) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time assign or pledge all or any portion of its
rights under this Agreement, its Note and the other Loan Documents to secure
obligations of such Bank to any Federal Reserve Bank; provided that (i) no such
assignment or pledge shall relieve such Bank from its obligations hereunder and
(ii) all related costs, fees and expenses incurred by such Bank in connection
with such assignment
- 88 -
95
and the reassignment back to it, free of any interests of such assignee, shall
be for the sole account of such Bank.
(f) Subject to Section 13.21, any Bank may furnish any
information concerning the Borrower or any of its Subsidiaries in the possession
of such Bank from time to time to assignees and participants (including
prospective assignees and participants).
13.11. INTEREST. All agreements between the Borrower, the
Agent or any Bank, whether now existing or hereafter arising and whether written
or oral, are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of demand being made on any Note or otherwise,
shall the amount contracted for, charged, reserved or received by the Agent or
any Bank for the use, forbearance, or detention of the money to be loaned under
this Agreement or otherwise or for the payment or performance of any covenant or
obligation contained herein or in any other Loan Document exceed the maximum
amount of interest permitted to be contracted for, charged or received under
applicable law from time to time in effect or the Highest Lawful Rate. If, as a
result of any circumstances whatsoever, fulfillment by the Borrower or any
Restricted Subsidiary of any provision hereof or of any of such documents, at
the time performance of such provision shall be due, shall involve transcending
the limit of validity prescribed by applicable usury law or result in the Agent
or Bank having or being deemed to have contracted for, charged, reserved or
received interest (or amounts deemed to be interest) in excess of the maximum
lawful rate or amount of interest allowed by applicable law to be so contracted
for, charged, reserved or received by such Agent or Bank, then, ipso facto, the
obligation to be fulfilled by the Borrower shall be reduced to the limit of such
validity, and if, from any such circumstance, the Agent or any Bank shall ever
receive interest or anything which might be deemed interest under applicable law
which would exceed the maximum amount of interest permitted to be contracted
for, charged or received under applicable law from time to time in effect or the
Highest Lawful Rate, such amount which would be excessive interest shall be
refunded to the Borrower, or, to the extent (i) permitted by applicable law and
(ii) such excessive interest does not exceed the unpaid principal balance of the
Notes and the amounts owing on other obligations of the Borrower to the Agent or
any Bank under any Loan Document, applied to the reduction of the principal
amount owing on account of the Notes or the amounts owing on other obligations
of the Borrower to the Agent or any Bank under any Loan Document and not to the
payment of interest. All sums paid or agreed to be paid to the Agent or any Bank
for the use, forbearance, or detention of the indebtedness of the Borrower to
the Agent or any Bank shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full term of such
indebtedness until payment in full of the principal thereof (including the
period of any renewal or extension thereof) so that the interest on account of
such indebtedness shall not exceed the Highest Lawful Rate. The terms and
provisions of this Section 13.11 shall control and supersede every other
provision hereof and of all other agreements between the Borrower and the Banks.
13.12. EXPENSES; INDEMNIFICATION. (a) The Borrower agrees to
pay within 15 days after demand all reasonable costs and expenses of the Agent
in connection with the initial
- 89 -
96
syndication, preparation, execution, delivery, modification, and amendment of
(and, if a Default or Event of Default exists, in connection with the
administration of) this Agreement, the other Loan Documents, and the other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Agent (including the cost of
internal counsel) with respect thereto and with respect to advising the Agent as
to its rights and responsibilities under the Loan Documents. The Borrower
further agrees to pay on demand all reasonable costs and expenses of the Agent
and the Banks, if any (including, without limitation, reasonable attorneys' fees
and expenses and the cost of internal counsel), in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Loan Documents and the other documents to be delivered hereunder.
(b) THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS THE
AGENT AND EACH BANK AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") IN AND
AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED
BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING
OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR REPARATION OF
DEFENSE IN CONNECTION THEREWITH):
(i) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF
THE LOANS OR LETTERS OF CREDIT, OR
(ii) THE EXECUTION AND DELIVERY OF THE DOCUMENTS RELATED TO
ANY ACQUISITION, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
THEREBY, OR IN CONNECTION WITH THE PURCHASE OR ATTEMPTED PURCHASE
PURSUANT TO THE TERMS OF SUCH DOCUMENTS, INCLUDING, WITHOUT LIMITATION,
DAMAGES, COSTS AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED PARTIES
IN INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING
EVIDENCE, PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF
ANY COMMENCED OR THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW
OR ANY OTHER LAW OF ANY JURISDICTION OR AT COMMON LAW WHICH IS ALLEGED
TO ARISE OUT OF OR IS BASED UPON:
(A) THE CLAIMS OF ANY PERSON THAT, IN CONNECTION
WITH ANY ACQUISITION, ANY OF THE INDEMNIFIED
PARTIES HAS VIOLATED ANY FIDUCIARY OR
CONFIDENTIALITY RESPONSIBILITIES, OR ANY
REPRESENTATIONS, WARRANTIES OR COVENANTS,
EXPRESS OR IMPLIED, MADE OR ALLEGED TO HAVE
BEEN MADE BY ANY OF THE INDEMNIFIED PARTIES,
TO OR IN FAVOR OF SUCH PERSON;
(B) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT OF ANY MATERIAL FACT BY THE
BORROWER OR ANY AFFILIATE IN ANY DOCUMENT OR
SCHEDULE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR ANY OTHER
GOVERNMENTAL AUTHORITY;
- 90 -
97
(C) ANY OMISSION OR ALLEGED OMISSION TO STATE
ANY MATERIAL FACT REQUIRED TO BE STATED IN
ANY DOCUMENT OR SCHEDULE OR NECESSARY TO
MAKE THE STATEMENTS MADE THEREIN NOT
MISLEADING IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH MADE;
(D) ANY ACTS OR OMISSIONS, OR ALLEGED ACTS OR
OMISSIONS OF THE BORROWER, ANY AFFILIATE OR
THEIR AGENTS RELATED TO ANY ACQUISITION,
PURCHASE OR SALE OF STOCK OR ASSETS, OR THE
FINANCING THEREOF, WHICH ARE ALLEGED TO
VIOLATE ANY FEDERAL SECURITIES LAW OR ANY
OTHER LAW OF ANY JURISDICTION APPLICABLE TO
SUCH ACQUISITION, THE PURCHASE OR SALE OF
STOCK OR ASSETS, OR THE FINANCING THEREOF;
(E) ANY WITHDRAWALS, TERMINATION OR
CANCELLATION OF ANY ACQUISITION; OR
(F) ANY OTHER CLAIMS OF ANY NATURE WHATSOEVER
ARISING FROM OR RELATED TO ANY ACQUISITIONS;
EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS
FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION
TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT PROVIDED THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE
INDEMNIFIED PARTIES BE INDEMNIFIED FOR SUCH CLAIM, DAMAGE, LOSS, LIABILITY,
COST, OR EXPENSE ARISING FROM ITS OWN NEGLIGENCE. IN THE CASE OF AN
INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS
SECTION 13.12 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR TO THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. THE BORROWER AGREES NOT TO
ASSERT ANY CLAIM AGAINST THE AGENT, ANY BANK, ANY OF THEIR AFFILIATES, OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENT'S, AND
ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE
PROCEEDS OF THE LOANS OR THE LETTERS OF CREDIT.
(c) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 13.12 shall survive the payment in full of the Loans
and all other amounts payable under this Agreement.
- 91 -
98
13.13. PAYMENTS SET ASIDE. To the extent any payments on the
Obligations or proceeds of any collateral or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other Person under any Debtor Law or equitable cause, then, to
the extent of such recovery, the Obligation or part thereof originally intended
to be satisfied, and all rights and remedies therefor, shall be revived and
shall continue in full force and effect, and the Agent's and the Banks' rights,
powers and remedies under this Agreement and each other Loan Document shall
continue in full force and effect, as if such payment had not been made or such
enforcement or setoff had not occurred. In such event, each Loan Document shall
be automatically reinstated and the Borrower shall take such action as may be
reasonably requested by the Agent and the Banks to effect such reinstatement.
13.14. LOAN AGREEMENT CONTROLS. If there are any conflicts
or inconsistencies among this Agreement and any of the other Loan Documents, the
provisions of this Agreement shall prevail and control.
13.15. OBLIGATIONS SEVERAL. The obligations of each Bank
under each Loan Document to which it is a party are several, and no Bank shall
be responsible for any obligation or Commitment of any other Bank under any Loan
Document to which it is a party. Nothing contained in any Loan Document to which
it is a party, and no action taken by any Bank pursuant thereto, shall be deemed
to constitute the Banks to be a partnership, an association, a joint venture, or
any other kind of entity.
13.16. SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE
BORROWER, THE AGENT AND THE BANKS IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS, FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATES OF TEXAS AND NEW
YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF
TEXAS, THE COURTS OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY
- 92 -
99
REGISTERED OR CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL POSTAGE
PREPAID) TO THE ADDRESS SET FORTH IN SECTION 13.3 HEREOF OR AT SUCH OTHER
ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING
PURSUANT TO SECTION 13.3; AND
(d) NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL
IN ANY WAY AFFECT THE RIGHT OF THE AGENT OR ANY BANK OR THE BORROWER TO BRING
ANY ACTION ARISING OUT OF OR RELATING TO THE NOTES OR THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COMPETENT COURT ELSEWHERE HAVING JURISDICTION OVER
THE BORROWER, THE AGENT OR ANY BANK, AS THE CASE MAY BE, OR ITS PROPERTY.
13.17. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE BORROWER HERETO (A) WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY;
(B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES;
AND (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVERS.
13.18. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, nor consent to
any departure by the Borrower or any Subsidiary herefrom or therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Borrower or such Subsidiary, as the case may be, as to amendments, and by the
Majority Banks in all cases, and then, in any case, such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by 100% of the Banks, do any of the following: (a)
change the definition of "Majority Banks", "Commitment", or "Pro Rata
Percentage", (b) forgive or reduce or increase the amount of the Commitment of
any Bank or subject any Bank to any additional obligations, (c) forgive or
reduce the principal of, or rate or amount of interest applicable to, any Loan,
other than as provided in this Agreement or forgive or reduce the amount of the
commitment fee or any Letter of Credit Fee, (d) postpone any date fixed for any
payment or prepayment of principal of, or interest on, the Notes, (e) change
Section 13.15 or this
- 93 -
100
Section 13.18, (f) change the aggregate unpaid principal amount of the Notes, or
the number of Banks, which shall be required for the Banks or any of them to
take any action hereunder, (g) waive any of the conditions specified in Section
8.1 or Section 8.2, or (h) except as otherwise provided herein, release all or
substantially all of any collateral or release any Guarantor; and provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Banks required above to take such action, affect
the rights or duties of the Agent under this Agreement, any Note or any other
Loan Document.
13.19. RELATIONSHIP OF THE PARTIES. This Agreement provides
for the making of loans by the Banks, in their capacity as Banks, to the
Borrower, in its capacity as a borrower, and for the payment of interest and
repayment of principal by the Borrower to the Banks. The relationship between
the Banks and the Borrower is limited to that of creditors/secured parties, on
the one hand, and debtor, on the other hand. The provisions herein for
compliance with financial, environmental, and other covenants, delivery of
financial, environmental and other reports, and financial, environmental and
other inspections, investigations, audits, examinations or tests are intended
solely for the benefit of the Banks to protect their interests as Banks in
assuming payments of interest and repayment of principal and nothing contained
in this Agreement or the Notes shall be construed as permitting or obligating
the Banks to act as financial or business advisors or consultants to the
Borrower, as permitting or obligating the Banks to control the Borrower or to
conduct or operate the Borrower's operations, as creating any fiduciary
obligation on the part of the Banks to the Borrower, or as creating any joint
venture, agency, or other relationship between the parties other than as
explicitly and specifically stated in this Agreement. The Borrower acknowledges
that it has had the opportunity to obtain the advice of experienced counsel of
its own choosing in connection with the negotiation and execution of this
Agreement and to obtain the advice of such counsel with respect to all matters
contained herein, including, without limitation, the provision in Section 13.17
for waiver of trial by jury. The Borrower further acknowledges that it is
experienced with respect to financial and credit matters and has made its own
independent decision to apply to the Banks for the financial accommodations
provided hereby and to execute and deliver this Agreement.
13.20. CURRENCY CONVERSION AND CURRENCY INDEMNITY. (a)
Payments in Agreed Currency. The Borrower shall make payment relative to each
Loan or Letter of Credit in the currency (the "Agreed Currency") in which the
Loan or Letter of Credit was effected. If any payment is received on account of
any Loan or Letter of Credit in any currency (the "Other Currency") other than
the Agreed Currency (whether voluntarily or pursuant to an order or judgment or
the enforcement thereof or the realization of any security or the liquidation of
the Borrower or otherwise howsoever), such payment shall constitute a discharge
of the liability of the Borrower hereunder and under the other Loan Documents in
respect of such obligation only to the extent of the amount of the Agreed
Currency which the relevant Bank or the Agent, as the case may be, is able to
purchase with the amount of the Other Currency received by it on the Business
Day next following such receipt in accordance with its normal procedures and
after deducting any premium and costs of exchange.
- 94 -
101
In addition, as to any reimbursement by the Banks to the
Issuing Bank under Section 2.5(c) in respect of a Letter of Credit in an
Alternate Currency, as to any repayment received on account of such Letter of
Credit from the Borrower, such payment shall constitute a discharge of the
liability of the Borrower in respect of such obligation only to the extent of
the amount of Dollars which the relevant Bank is able to purchase with the
amount of the Alternate Currency received by it on the Business Day next
following such receipt in accordance with its normal procedures and after
deducting any premium and costs of exchange, and the Borrower hereby agrees to,
indemnify and save the Banks and the Agent harmless from and against any loss,
cost or expense arising out of or in connection with any deficiency, on demand.
(b) Conversion of Agreed Currency into Judgment Currency.
If, for the purpose of obtaining or enforcing judgment in any court in any
jurisdiction, it becomes necessary to convert into a particular currency (the
"Judgment Currency") any amount due in the Agreed Currency then the conversion
shall be made on the basis of the rate of exchange prevailing on the Business
Day next preceding the day on which judgment is given and in any event the
Borrower shall be obligated to pay the Agent and the Banks any deficiency in
accordance with Section 13.20(a). For the foregoing purposes "rate of exchange"
means the rate at which the relevant Bank or the Agent, as applicable, in
accordance with its normal banking procedures is able on the relevant date to
purchase the Agreed Currency with the Judgment Currency after deducting any
premium and costs of exchange.
(c) Circumstances Giving Rise to Indemnity. If (i) any
Bank or the Agent receives any payment or payments on account of the liability
of the Borrower hereunder pursuant to any judgment or order in any Other
Currency, and (ii) the amount of the Agreed Currency which the relevant Bank or
the Agent, as applicable, is able to purchase on the Business Day next following
such receipt with the proceeds of such payment or payments in accordance with
its normal procedures and after deducting any premiums and costs of exchange is
less than the amount of the Agreed Currency due in respect of such obligations
immediately prior to such judgment or order, then the Borrower on demand shall,
and the Borrower hereby agrees to, indemnify and save the Banks and the Agent
harmless from and against any loss, cost or expense arising out of or in
connection with such deficiency.
(d) Indemnity Separate Obligation. The agreement of
indemnity provided for in this Section 13.20 shall constitute an obligation
separate and independent from all other obligations contained in this Agreement,
shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Banks or the Agent or any of them
from time to time, and shall continue in full force and effect notwithstanding
any judgment or order for a liquidated sum in respect of an amount due hereunder
or under any judgment or order.
13.21. CONFIDENTIALITY. The Agent and each Bank agrees (on
behalf of itself and each of its Affiliates, and each of its and their
directors, officers, agents, attorneys, employees, and representatives) that it
(and each of them) will take all reasonable steps to keep confidential any
- 95 -
102
non-public information supplied to it by or at the direction of the Borrower or
any Subsidiary so identified when delivered, provided, however, that this
restriction shall not apply to information which (a) has at the time in question
entered the public domain, (b) is required to be disclosed by Law (whether valid
or invalid) of any Governmental Authority, (c) is disclosed to any Affiliates,
auditors, attorneys, or agents of the Agent or such Bank, (d) is furnished to
the Agent or any Bank or to any purchaser or prospective purchaser of
participations or other interests in any Loan or Loan Document (provided each
such purchaser or prospective purchase first agrees to hold such information in
confidence on the terms provided in this section), or (d) is disclosed in the
course of enforcing its rights and remedies during the existence of an Event of
Default.
- 96 -
103
13.22. FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto, by their respective
officers thereunto duly authorized, have executed this Agreement effective as of
February 5, 1999.
THE MEN'S WEARHOUSE, INC.
By: /s/ NEILL ▇. ▇▇▇▇▇
--------------------------------
Name: Neill ▇. ▇▇▇▇▇
------------------------------
Title: Vice President/ Treasurer
-----------------------------
104
Commitment Pro Rata Percentage NATIONSBANK, N.A.
as a Bank and as Agent
$26,000,000 20.8% By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Title: VICE PRESIDENT
-------------------------
105
Commitment Pro Rata Percentage BANKBOSTON; N.A.
$20,000,000 16.0% By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
--------------------------
Title: Vice President
-------------------------
106
Commitment Pro Rata Percentage UNION BANK OF CALIFORNIA, N.A.
$20,000,000 16.0% By: /s/ ILLEGIBLE
----------------------------
Name:
--------------------------
Title: Vice President
-------------------------
107
Commitment Pro Rata Percentage ▇▇▇▇▇ FARGO BANK, N.A.
$20,000,000 16.0% By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
-------------------------
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Vice President
-------------------------
108
Commitment Pro Rata Percentage CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
$14,500,000 11.6% By: /s/ ▇▇▇▇▇ ▇. DOLPHIN
----------------------------
Name: ▇▇▇▇▇ ▇. Dolphin
--------------------------
Title: Senior Vice President
-------------------------
109
Commitment Pro Rata Percentage FIRST UNION NATIONAL BANK
$14,500,000 11.6% By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
-------------------------
110
Commitment Pro Rata Percentage BANK OF MONTREAL
$10,000,000 8.0% By: /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
--------------------------
Title: PORTFOLIO MANAGER
-------------------------
111
EXHIBIT A
REVOLVING NOTE
U.S. $__________Initial Commitment February 5, 1999
FOR VALUED RECEIVED, the undersigned, THE MEN'S WAREHOUSE, INC., a
corporation organized under the laws of Texas (the "Borrower"), HEREBY PROMISES
TO PAY to the order of ________________ (the "Bank"), on or before the Maturity
Date, the aggregate unpaid amount of all Loans made by the Bank to the Borrower
pursuant to the Credit Agreement hereinafter referred to, in accordance with the
terms and provisions of that certain Revolving Credit Agreement dated as of
February 5, 1999 by and among the Borrower, NationsBank, N.A., as Agent, the
Bank, and the other parties thereto (as same may be amended, modified,
increased, supplemented and/or restated from time to time, the "Credit
Agreement"; capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement).
The outstanding principal balance of this Note shall be due and
payable on the Maturity Date and as otherwise provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal balance of this
Note from the date of any Loan evidenced by this Note until the principal
balance thereof is paid in full. Interest shall accrue on the outstanding
principal balance of this Note from and including the date of any Loan evidenced
by this Note to but not including the Maturity Date at the rate or rates, and
shall be due and payable on the dates, set forth in the Credit Agreement.
Payments of principal and interest, and all amounts due with respect
to costs and expenses, shall be made in immediately available funds, without
deduction, set-off or counterclaim to the Agent not later than 12:00 noon
(Dallas time) on the dates, and in the currencies, on which such payments shall
become due pursuant to the terms and provisions set forth in the Credit
Agreement.
In addition to all principal and accrued interest on this Note, the
Borrower agrees to pay (a) all costs and expenses incurred by all owners and
holders of this Note in collecting this Note through any probate,
reorganization, bankruptcy or any other proceeding and (b) reasonable attorneys'
fees when and if this Note is placed in the hands of an attorney for collection
after default.
Except as otherwise specifically provided for in the Credit Agreement,
the Borrower and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, protest,
notice of protest, notice of intent to accelerate, notice of acceleration and
diligence in collecting and bringing of suit against any party hereto, and agree
-1-
112
to all renewals, extensions or partial payments hereon and to any release or
substitution of security hereof, in whole or in part, with or without notice,
before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and
delivered by its officer thereunto duly authorized effective as of the date
first above written.
THE MEN'S WEARHOUSE, INC.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
-2-