Exhibit 10.35
EXECUTION COPY
CREDIT AGREEMENT
dated as of December 15, 2005
among
MOVADO WATCH COMPANY SA and MGI LUXURY GROUP S.A.,
as Borrowers,
MOVADO GROUP, INC.,
as Parent,
the Lenders signatory hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
----------
▇.▇. ▇▇▇▇▇▇ SECURITIES, INC.,
as Sole Lead Arranger and Sole Bookrunner,
BANK OF AMERICA, N.A.,
as Syndication Agent
and
THE BANK OF NEW YORK
and
CITIBANK, N.A.,
as Documentation Agents
Table of Contents
Page
----
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS................................. 1
Section 1.1. Definitions............................................ 1
Section 1.2. Accounting Terms....................................... 10
Section 1.3. Terms Generally........................................ 10
ARTICLE 2. THE LOANS..................................................... 11
Section 2.1. Loans.................................................. 11
Section 2.2. Making of Loans........................................ 11
Section 2.3. Borrowing Procedure as to Loans........................ 12
Section 2.4. Repayment of Loans..................................... 12
Section 2.5. Certain Fees........................................... 13
Section 2.6. Interest on Loans...................................... 13
Section 2.7. Default Interest....................................... 14
Section 2.8. Termination and Reduction of Commitments............... 14
Section 2.9. Continuation of Borrowings............................. 14
Section 2.10. Optional and Mandatory Prepayments..................... 15
Section 2.11. Payments............................................... 16
Section 2.12. Purpose................................................ 16
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC............................. 17
Section 3.1. Alternate Rate of Interest............................. 17
Section 3.2. Reserve Requirement; Change in Circumstances........... 17
Section 3.3. Change in Legality..................................... 18
Section 3.4. Indemnity.............................................. 19
Section 3.5. Taxes.................................................. 19
Section 3.6. Duty to Mitigate....................................... 21
Section 3.7. Replacement of Lenders................................. 21
Section 3.8. Certain Additional Costs............................... 21
ARTICLE 4. CONDITIONS PRECEDENT.......................................... 22
Section 4.1. Documentary Conditions Precedent....................... 22
Section 4.2. Additional Conditions Precedent........................ 23
Section 4.3. Deemed Representations................................. 23
ARTICLE 5. REPRESENTATIONS AND WARRANTIES................................ 24
Section 5.1. Incorporation, Good Standing and Due Qualification..... 24
Section 5.2. Corporate Power and Authority; No Conflicts............ 24
Section 5.3. Legally Enforceable Agreements......................... 24
Section 5.4. Litigation............................................. 24
Section 5.5. Financial Statements................................... 25
Section 5.6. Ownership and Liens.................................... 25
Section 5.7. Taxes.................................................. 25
Section 5.8. ERISA.................................................. 25
Section 5.9. Subsidiaries and Ownership of Stock.................... 26
Section 5.10. Credit Arrangements.................................... 26
Section 5.11. Operation of Business.................................. 27
Section 5.12. Hazardous Materials.................................... 27
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Section 5.13. No Default on Outstanding Judgments or Orders.......... 28
Section 5.14. No Defaults on Other Agreements........................ 29
Section 5.15. Labor Disputes and Acts of God......................... 29
Section 5.16. Governmental Regulation................................ 29
Section 5.17. Partnerships........................................... 29
Section 5.18. No Forfeiture.......................................... 29
Section 5.19. Solvency............................................... 29
Section 5.20. Certain Particular Assurances as to the Borrowers...... 30
ARTICLE 6. AFFIRMATIVE COVENANTS......................................... 31
Section 6.1. Maintenance of Existence............................... 31
Section 6.2. Conduct of Business.................................... 31
Section 6.3. Maintenance of Properties.............................. 31
Section 6.4. Maintenance of Records................................. 31
Section 6.5. Maintenance of Insurance............................... 31
Section 6.6. Compliance with Laws; Payment of Taxes................. 32
Section 6.7. Right of Inspection.................................... 32
Section 6.8. Reporting Requirements................................. 32
Section 6.9. Equal and Ratable Lien................................. 35
ARTICLE 7. NEGATIVE COVENANTS............................................ 35
Section 7.1. Debt................................................... 35
Section 7.2. Guaranties, Etc........................................ 36
Section 7.3. Liens.................................................. 37
Section 7.4. Leases................................................. 38
Section 7.5. Investments............................................ 39
Section 7.6. Dividends.............................................. 40
Section 7.7. Sale of Assets......................................... 40
Section 7.8. Stock of Subsidiaries, Etc............................. 41
Section 7.9. Transactions with Affiliates........................... 42
Section 7.10. Mergers, Etc........................................... 42
Section 7.11. Acquisitions........................................... 42
Section 7.12. No Material Change in Business......................... 43
Section 7.13. No Restriction......................................... 43
Section 7.14. Swap and Exchange Agreements........................... 43
ARTICLE 8. FINANCIAL COVENANTS........................................... 43
Section 8.1. Interest Coverage Ratio................................ 43
Section 8.2. Average Debt Coverage Ratio............................ 43
Section 8.3. Capital Expenditures................................... 43
ARTICLE 9. EVENTS OF DEFAULT............................................. 44
Section 9.1. Events of Default...................................... 44
Section 9.2. Remedies............................................... 46
ARTICLE 10. THE ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS AND PARENT 46
Section 10.1. Appointment, Powers and Immunities of Administrative
Agent.............................................................. 46
Section 10.2. Reliance by Administrative Agent....................... 47
Section 10.3. Defaults............................................... 47
Section 10.4. Rights of Administrative Agent as a Lender............. 47
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Section 10.5. Indemnification of Administrative Agent................ 48
Section 10.6. Documents.............................................. 48
Section 10.7. Non-Reliance on Administrative Agent and Other Lenders. 48
Section 10.8. Failure of Administrative Agent to Act................. 49
Section 10.9. Resignation of Administrative Agent.................... 49
Section 10.10. Amendments Concerning Agency Function.................. 49
Section 10.11. Liability of Administrative Agent...................... 49
Section 10.12. Delegation of Agency Functions......................... 49
Section 10.13. Non-Receipt of Funds by the Administrative Agent....... 50
Section 10.14. Several Obligations and Rights of Lenders.............. 50
Section 10.15. Pro Rata Treatment of Loans, Etc....................... 50
Section 10.16. Sharing of Payments Among Lenders...................... 51
Section 10.17. Other Agents........................................... 51
ARTICLE 11. MISCELLANEOUS................................................ 51
Section 11.1. Amendments and Waivers; Remedies Cumulative............ 51
Section 11.2. Usury.................................................. 52
Section 11.3. Expenses; Indemnity; Damage Waiver..................... 52
Section 11.4. Survival............................................... 53
Section 11.5. Assignment; Participations............................. 53
Section 11.6. Notices................................................ 57
Section 11.7. Setoff................................................. 57
Section 11.8. JURISDICTION; JURY WAIVER; IMMUNITIES.................. 57
Section 11.9. Table of Contents; Headings............................ 59
Section 11.10. Severability........................................... 59
Section 11.11. Authorization of Parent................................ 59
Section 11.12. Integration............................................ 59
Section 11.13. GOVERNING LAW.......................................... 59
Section 11.14. Confidentiality........................................ 59
Section 11.15. Treatment of Certain Information....................... 60
Section 11.16. Judgment Currency...................................... 60
Section 11.17. Counterparts........................................... 61
Section 11.18. USA PATRIOT Act........................................ 61
Section 11.19. Borrowers' Mutual Obligations.......................... 61
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EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Authorization Letter
Exhibit C-1 Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Exhibit C-2 Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP
Exhibit C-3 Form of Opinion of Swiss Counsel for the Borrowers
Exhibit D Form of Parent Guarantee
Exhibit E Form of Assignment and Assumption Agreement
SCHEDULES
Schedule I Lenders and Revolving Credit Commitments
Schedule II Applicable Rates
Schedule III Subsidiaries of Parent
Schedule IV Credit Arrangements
Schedule V Environmental Matters
Schedule VI Affiliate Transactions
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CREDIT AGREEMENT dated as of December 15, 2005 among MOVADO WATCH
COMPANY SA, a corporation organized under the laws of Switzerland ("MWC"); MGI
LUXURY GROUP S.A., a corporation organized under the laws of Switzerland
("Luxury"); MOVADO GROUP, INC., a corporation organized under the laws of New
York (the "Parent"); each of the lenders which is a signatory hereto
(individually a "Lender" and collectively the "Lenders"); and JPMORGAN CHASE
BANK, N.A., as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Administrative Agent").
MWC and Luxury desire that the Lenders make loans to each of them as
provided herein, and the Lenders are prepared to make such loans, with the
guarantee and certain other undertakings of the Parent. Accordingly, MWC,
Luxury, the Parent, the Lenders and the Administrative Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.1. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"Acquisition" is defined in Section 7.11.
"Administrative Agent" is defined in the initial paragraph of this
Agreement. If the Administrative Agent pursuant to Section 10.12 designates any
of its Affiliates to perform any of its duties or exercise any of its rights or
powers, the term "Administrative Agent" shall include, as well, such Affiliate
with respect thereto.
"Administrative Agent Fees" is defined in Section 2.5(c).
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, when used 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.
"Aggregate Credit Exposure" means, at any time, the aggregate of the
Lenders' Loan Exposures at such time.
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Rate" means, for any day, with respect to any Loan, or
with respect to the Commitment Fees, as the case may be, the applicable rate per
annum set forth on Schedule II under the caption "Loan Spread" or "Commitment
Fee Rate", as the case may be, based upon the Average Debt Coverage Ratio. Each
change in the Applicable Rate resulting from a change in the Average Debt
Coverage Ratio shall be effective with respect to all outstanding Loans and with
respect to the Commitment Fees on and after the first day of the calendar month
following
the date of delivery to the Administrative Agent of the financial statements
required by paragraph (a) or (b) (as the case may be) of Section 6.8 indicating
that a change in the Average Debt Coverage Ratio has occurred, through the date
immediately preceding the first day of the calendar month following the next
date of delivery of such financial statements indicating that another change in
the Average Debt Coverage Ratio has occurred. Notwithstanding the foregoing, but
subject to the next sentence, during the period commencing on the Closing Date
and ending on the date immediately preceding the first day of the calendar month
following the date of delivery of the first such financial statements, the
Average Debt Coverage Ratio shall be deemed to be in Category 1 (as set forth on
Schedule II) for purposes of determining the Applicable Rate. Notwithstanding
the foregoing, (a) at any time during which the Parent has failed to deliver the
financial statements required by either such paragraph of Section 6.8, or (b) at
any time after the occurrence and during the continuance of an Event of Default,
the Average Debt Coverage Ratio shall be deemed to be in Category 4 (as set
forth on Schedule II) for purposes of determining the Applicable Rate.
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Assignment and Assumption Agreement" means an assignment and
assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 11.5), and accepted by the
Administrative Agent, in the form of Exhibit E or any other form approved by the
Administrative Agent.
"Authorization Letter" means the letter agreement executed by the
Parent and the Borrowers in the form of Exhibit B.
"Availability Period" means the period from and including the Closing
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Revolving Credit Commitments.
"Average Debt Coverage Ratio" means the ratio of (i) the sum of
indebtedness for borrowed money, indebtedness for the deferred purchase price of
property or services (excluding trade payables in the ordinary course of
business; and excluding wages or other compensation payable to employees of the
Parent or any of its Subsidiaries in the ordinary course of business),
obligations arising under acceptance facilities, and obligations as lessee under
Capital Leases (in all cases) of the Parent and its Consolidated Subsidiaries on
a consolidated basis as of the last day of each fiscal quarter for four
consecutive fiscal quarters, divided by four, to (ii) consolidated earnings
before interest expense, taxes, depreciation and amortization of the Parent and
its Consolidated Subsidiaries for such period of four consecutive fiscal
quarters. For purposes of this definition only, if such clause (ii) is less than
one dollar, it shall be deemed to be one dollar.
"Borrower" means the MWC or Luxury (as applicable).
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"Borrowing" means Loans made to a single Borrower made or continued on
the same date and as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the applicable Borrower for
Loans in accordance with the terms of Section 2.3 in form satisfactory to the
Administrative Agent.
"Breakage Event" is defined in Section 3.4.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close; provided, however, that the term "Business Day" shall also exclude (a)
any day on which banks are not open for dealings in dollar deposits in the
London interbank market; and (b) any day on which commercial banks and the
London foreign exchange market do not settle payments in the principal financial
center where Swiss francs are cleared and settled as reasonably determined by
the Administrative Agent.
"Capital Expenditures" means, for any period, the dollar amount of
gross expenditures (including obligations under Capital Leases) during such
period made for fixed assets, real property, plant and equipment, and all
renewals, improvements and replacements thereto (but not repairs thereof) that
are required to be capitalized under, and determined in accordance with, GAAP.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Closing Date" means the date on which the conditions specified in
Section 4.1 are satisfied (or waived in accordance with Section 11.1).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment Fees" is defined in Section 2.5(b).
"Consolidated Capital Expenditures" means Capital Expenditures of the
Parent and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Parent in accordance
with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth of the
Parent and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
"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 ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
3
"Core Business" means the business of designing, manufacturing and
distributing watches, jewelry and other accessories (including the operation of
retail stores to distribute the same), other businesses related thereto, or
businesses that in the judgment of the board of directors of the Parent are
derived from the exploitation by the Parent of its trademarks, including the
operation of retail stores to distribute products utilizing the same.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business;
and except wages or other compensation payable to employees of such Person in
the ordinary course of business); (c) the face amount of any outstanding letters
of credit issued for the account of such Person; (d) obligations arising under
acceptance facilities; (e) (without duplication of other Debt) guaranties,
endorsements (other than for collection in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person, or otherwise to assure a creditor against
loss with respect to any Debt of the type referred to in clauses (a), (b), (c),
(d) and (g) of this definition; (f) Debt of others secured by any Lien on
property of such Person; and (g) obligations of such Person as lessee under
Capital Leases.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" is defined in Section 2.7.
"Defaulted Amount" is defined in Section 2.7.
"Designated Sales" means (i) sales of assets of the Parent or any
Subsidiary that are prohibited by Section 7.7 (excluding clause (f) thereof),
and (ii) sales of all the shares of capital stock of any Subsidiary that are
prohibited by Section 7.8 (excluding clause (d) thereof); and (iii) cash mergers
of a Subsidiary into another entity (that is, where the outstanding shares of
such Subsidiary are entirely converted to cash upon such merger) that are
prohibited by Section 7.10 (excluding clause (c) thereof), provided that such
sales and mergers shall be for fair market value and on an arms'-length basis.
"dollars" or "$" means lawful money of the United States of America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
4
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which the Parent is a member, or (ii)
solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the
Code of which the Parent is a member.
"Euro" means the single currency of the European Union as constituted
by the Treaty on European Union and as referred to in the legislative measures
of the European Union for the introduction of, changeover to or operation of the
Euro in one or more member states.
"Event of Default" is defined in Section 9.1.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income or gross or net turnover, and (b) any branch
profits taxes or similar taxes imposed on it.
"Facility Documents" means this Agreement, the Notes, the
Authorization Letter and the Parent Guarantee.
"Fees" means the Commitment Fees and the Administrative Agent Fees.
"Forfeiture Proceeding" means any action or proceeding against the
Parent or any of its Subsidiaries before any court, governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
the receipt of notice by any such party that any of them is a suspect in or a
target of any governmental investigation, as to which there is a reasonable
possibility of a determination adverse to the Parent or such Subsidiary and
which (if determined adversely to the Parent or such Subsidiary) would, in any
one case or in the aggregate, materially adversely affect the financial
condition, operations or business of the Parent and its Subsidiaries taken as a
whole or the ability of any Borrower or the Parent to perform its obligations
under the Facility Documents to which it is a party.
"Future Permitted Private Placement Debt" means unsecured indebtedness
for money borrowed by the Parent that is privately placed with one or more
institutional investors after the Closing Date (including the indebtedness
evidenced by the Prudential Shelf Notes), provided that (a) not more than 20% of
the original principal amount of any such indebtedness shall be scheduled to
mature or to be repaid in any fiscal year prior to the Maturity Date; and (b)
the terms and conditions associated with such indebtedness (whether in the notes
evidencing such indebtedness, or in the note purchase agreements or similar
agreements pursuant to which such indebtedness is issued, or otherwise) are not
more restrictive of the Parent or any of its Subsidiaries than the corresponding
terms and conditions of this Agreement (which determination as to
restrictiveness may be made by the Administrative Agent in its reasonable
judgment); provided, however, that the foregoing clause (a) shall not apply to
the indebtedness evidenced by the Prudential Shelf Notes; and provided further
that the foregoing clause (b) shall not apply to the indebtedness evidenced by
the Prudential Shelf Notes unless the Note Purchase
5
and Private Shelf Agreement dated March 21, 2001, as amended prior to the
Closing Date, between the Parent and The Prudential Insurance Company of America
is hereafter amended.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the date hereof, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.5.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"▇▇▇▇▇▇▇▇ Group" means the group consisting of Gedalio ▇▇▇▇▇▇▇▇, his
spouse, each of their estates and their issue; and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, his spouse,
each of their estates and their issue; and every Person (other than an
individual) Controlled by any of the foregoing.
"Guarantor" means the Parent as guarantor under the Parent Guarantee.
"Hazardous Material" is defined in Section 5.12(a).
"Inactive Subsidiary" means a Subsidiary of the Parent that has (and
only for so long as it has) assets of less than $1,000,000; provided, however,
that (i) there shall not be more than ten Inactive Subsidiaries at any time
during the term of this Agreement and (ii) the assets of all Inactive
Subsidiaries in the aggregate shall not exceed $4,000,000.
"Indemnified Taxes" means Taxes arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement other than Excluded Taxes and Other Taxes.
"Indemnitee" is defined in Section 11.3(b).
"Interest Coverage Ratio" for any period means the ratio of (a)
consolidated earnings before interest expense and taxes of the Parent and its
Consolidated Subsidiaries for such period, to (b) cash interest paid during such
period by the Parent and its Consolidated Subsidiaries on a consolidated basis.
"Interest Payment Date" means with respect to any Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Borrowing with an Interest Period of more than three
months' duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months' duration been applicable to such
Borrowing, and in addition, the date of any prepayment of such Borrowing.
"Interest Period" means, as to any Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day (or,
if there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3, 6 or (subject to availability for each Lender) 9 or 12
months thereafter, as the applicable Borrower may elect;
6
provided, however, that (i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"JPMCB" means JPMorgan Chase Bank, N.A. and its successors.
"Judgment Currency" is defined in Section 11.16(a).
"Judgment Currency Conversion Date" is defined in Section 11.16(a).
"Lenders" means (a) the Persons listed on Schedule I (other than any
such Person that has ceased to be a party hereto pursuant to an Assignment and
Assumption Agreement) and (b) any Person that has become a party hereto pursuant
to an Assignment and Assumption Agreement.
"Lending Office" means, for each Lender and for each Type of Loan to
each Borrower, the lending office of such Lender (or of an Affiliate of such
Lender) specified in writing by such Lender from time to time to the
Administrative Agent and the Parent as the office by which its Loans of such
Type to such Borrower are to be made and maintained.
"LIBO Rate" means, with respect to any Borrowing for any Interest
Period, the rate determined by reference to the British Bankers' Association
Interest Settlement Rates (as reflected on the applicable Telerate service) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for deposits in Swiss francs
with a maturity comparable to such Interest Period. In the event that such rate
is not available at such time for any reason, then the "LIBO Rate" with respect
to such Borrowing for such Interest Period shall be the rate at which the Person
serving as the Administrative Agent is offered Swiss franc deposits of CHF
5,000,000 and for a maturity comparable to such Interest Period in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan Exposure" means, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Loans of such Lender.
"Loans" means the revolving loans made by the Lenders to any Borrower
pursuant to Section 2.1.
"Luxury" is defined in the initial paragraph of this Agreement.
"MWC" is defined in the initial paragraph of this Agreement.
"Maturity Date" means December 15, 2010.
7
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Parent or any ERISA Affiliate
and which is covered by Title IV of ERISA.
"Note" is defined in Section 2.4(a).
"Obligation Currency" is defined in Section 11.16(a).
"Obligations" means, collectively, all of the Debt, liabilities and
obligations of each Borrower to the Administrative Agent and/or the Lenders
arising under this Agreement and the other Facility Documents, in each case
whether fixed, contingent, now existing or hereafter arising, created, assumed,
incurred or acquired, and whether before or after the occurrence of any Event of
Default under clause (e) of Section 9.1 and including any obligation or
liability in respect of any breach of any representation or warranty and all
post-petition interest and funding losses, whether or not allowed as a claim in
any proceeding arising in connection with such an event. The term includes all
interest, charges, expenses, fees, and any other sums chargeable to any Borrower
under this Agreement or any other Facility Document.
"Other Credit Agreement" means the Credit Agreement dated as of the
date hereof between the Parent, MWC and Luxury, as borrowers, the lenders party
thereto and JPMCB, as administrative agent for such lenders, as swingline bank,
and as issuing bank.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies or any
value added or similar tax arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.
"Parent" is defined in the initial paragraph of this Agreement.
"Parent Guarantee" means the guarantee executed and delivered by the
Parent on the Closing Date in favor of the Lenders and the Administrative Agent,
in respect of the obligations of the Borrowers under this Agreement and the
other Facility Documents, in substantially the form attached hereto as Exhibit
D.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Parent or any ERISA
Affiliate and which is covered by Title IV of ERISA, other than a Multiemployer
Plan.
8
"Pro Rata Percentage" of any Lender at any time means the percentage
of the Total Revolving Credit Commitment represented by such Lender's Revolving
Credit Commitment (or, if the Lenders' Revolving Credit Commitments shall have
expired or been terminated in accordance with this Agreement and the Aggregate
Credit Exposure is greater than zero, such percentage immediately prior to such
expiration or termination, giving effect to any assignments by or to such Lender
pursuant to Section 11.5).
"Prudential Existing Notes" means (a) the promissory notes of the
Parent in the original aggregate principal amount of $40,000,000 issued pursuant
to the Note Agreement dated as of November 9, 1993, as amended prior to the
Closing Date, between the Parent and The Prudential Insurance Company of
America, and (b) the Series A promissory notes of the Parent in the original
aggregate principal amount of $25,000,000 issued pursuant to the Note Purchase
and Private Shelf Agreement dated as of November 30, 1998, as amended prior to
the Closing Date, between the Parent and The Prudential Insurance Company of
America.
"Prudential Shelf Notes" means, to the extent hereafter actually
issued, the shelf promissory notes of the Parent in the aggregate principal
amount of up to $40,000,000 authorized pursuant to the Note Purchase and Private
Shelf Agreement dated as of March 21, 2001, as amended prior to the Closing
Date, between the Parent and The Prudential Insurance Company of America.
"Qualifying Bank" means any legal entity which is recognized as a bank
by the banking laws in force in its country of incorporation and which exercises
as its main purpose a true banking activity, having bank personnel, premises,
communication devices of its own and the authority of decision-making.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees and agents
of such Person and such Person's Affiliates.
"Release" is defined in Section 5.12(a).
"Required Lenders" means, at any time, Lenders having Loan Exposure
and unused Revolving Credit Commitments representing more than 50% of the sum of
all Loan Exposure and unused Revolving Credit Commitments at such time.
"Required Payment" is defined in Section 10.13.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Loans hereunder as set forth on Schedule I, or
in the Assignment and Assumption Agreement pursuant to which such Lender assumed
its Revolving Credit Commitment, as the same may be (a) reduced from time to
time pursuant to Section 2.8, and/or (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 11.5.
"S&P" means Standard & Poor's Ratings Services.
9
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person. Unless the context otherwise
requires, references in this Agreement to a Subsidiary mean a Subsidiary of the
Parent.
"Swiss francs" or "CHF" means the lawful money of Switzerland.
"Tangible Net Worth" of a Person means, at any date of determination
thereof, the excess of total assets of such Person over total liabilities of
such Person, excluding, however, (A) from the determination of total assets: (i)
all assets which would be classified as intangible assets under GAAP, including,
without limitation, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks, trade names,
copyrights, franchises, and deferred charges (including, without limitation,
unamortized debt discount and expense, organization cost, and research and
development costs); and (ii) any write-up in the book value of any asset since
January 31, 2005; and (B) any foreign exchange translation adjustment in the
cumulative amount, and any adjustments to other comprehensive income for
derivative instruments and other hedging activities, that would (in each case)
be properly shown in the shareholders' equity section of such Person's balance
sheet prepared in accordance with GAAP.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Revolving Credit Commitment" means, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Parent or
any ERISA Affiliate under Title IV of ERISA.
Section 1.2. Accounting Terms. All accounting terms used herein and
not specifically defined herein shall be construed in accordance with GAAP, and
all financial data required to be delivered hereunder shall be prepared in
accordance with GAAP. If any change in GAAP, as in effect on the date hereof,
occurs after the date of this Agreement, compliance with all financial covenants
contained herein shall continue to be determined in accordance with GAAP as in
effect on the date hereof, except to the extent that the Parent and the Required
Lenders otherwise agree in writing.
Section 1.3. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word
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"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
ARTICLE 2. THE LOANS.
Section 2.1. Loans. Subject to the terms and conditions hereof, each
Lender agrees, severally and not jointly, to make, from time to time during the
Availability Period, Loans to MWC and Luxury denominated in Swiss francs, in an
aggregate principal amount at any time outstanding that will not result in the
Aggregate Credit Exposure exceeding the Total Revolving Credit Commitment.
Within the limits set forth in the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrowers may borrow, pay or
prepay and reborrow Loans.
Section 2.2. Making of Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Revolving Credit Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). The Loans comprising any
Borrowing shall be in an aggregate principal amount that is an integral multiple
of CHF 3,000,000.
(b) Each Lender may at its option make any Loan by causing any branch
of such Lender or any Affiliate of such Lender which is a Qualifying Bank to
make such Loan; provided that any exercise of such option shall not affect the
obligation of the applicable Borrower to repay such Loan in accordance with the
terms of this Agreement. No Borrower shall be entitled to request any Borrowing
that, if made, would result in more than twelve Borrowings outstanding hereunder
at any time. Borrowings having different Interest Periods (regardless of whether
they commence on the same date), or made by different Borrowers, shall be
considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, London time (or the time of such other city designated by the
Administrative Agent), on such date to the account of the Administrative Agent
most recently designated by it for such purpose by notice to
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the Lenders. The Administrative Agent will make such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like
funds, to an account of such Borrower maintained with the Administrative Agent
(or its designee) in London (or such other city as the Administrative Agent may
in its reasonable judgment designate), in each case designated by such Borrower
in the applicable Borrowing Request; or if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
the Administrative Agent shall return the amounts so received to the respective
Lenders.
(d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request any Borrowing of Loans that are Loans if the
Interest Period requested with respect thereto would end after the Maturity
Date.
Section 2.3. Borrowing Procedure as to Loans. In order to request a
Borrowing of Loans, the applicable Borrower shall hand deliver or telecopy to
the Administrative Agent a duly completed Borrowing Request not later than 11:00
a.m., London time, three Business Days before a proposed Borrowing.
Notwithstanding the immediately preceding sentence, the Administrative Agent
agrees that it will (subject to the Authorization Letter) accept from the
applicable Borrower a Borrowing Request by telephone by the applicable date and
time specified in the immediately preceding sentence, provided that the same is
confirmed by such Borrower to the Administrative Agent in writing promptly (and
in all events on the same day as such telephone communication). Each Borrowing
Request shall be irrevocable, shall be signed by the applicable Borrower, shall
refer to this Agreement and shall specify the following information: (a) the
date of such Borrowing (which shall be a Business Day); (b) the number and
location of the account to which funds are to be disbursed (which shall be an
account that complies with the requirements of Section 2.2(c)); (c) the amount
of such Borrowing; (d) the Interest Period or Periods with respect to such
Borrowing; and (e) the identity of the applicable Borrower of such Borrowing;
provided, however, that notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing of Loans shall comply with the
requirements set forth in Section 2.2. If no Interest Period with respect to any
Borrowing is specified in any such notice, then the applicable Borrower shall be
deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section (and the contents thereof), and of each Lender's
portion of the requested Borrowing.
Section 2.4. Repayment of Loans. (a) Each Borrower hereby
unconditionally agrees to pay to the Administrative Agent for the account of
each Lender on the Maturity Date the then unpaid principal amount of each Loan
of such Lender to such Borrower in Swiss francs. Upon the request of any Lender
at any time, such obligation of each Borrower in favor of such Lender shall be
evidenced by a promissory note of such Borrower in favor of such Lender in
substantially the form of Exhibit A hereto (the "Note" of such Lender as to the
applicable Borrower).
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
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(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the identity of the
applicable Borrower thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from each Borrower to each Lender and (iii) the amount of any sum received by
the Administrative Agent hereunder from any Borrower or the Guarantor and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of any Borrower to repay
its Loans in accordance with their terms.
Section 2.5. Certain Fees. (a) The Borrowers agree to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December in each year and on the date on which the Revolving
Credit Commitment of such Lender shall expire or be terminated as provided
herein, a commitment fee equal to the average daily unused amount of the
Revolving Credit Commitment of such Lender during the preceding quarter (or
other period commencing with the Closing Date or ending with the Maturity Date
or the date on which the Revolving Credit Commitment of such Lender shall expire
or be terminated) multiplied by the Applicable Rate for such quarter or other
period (appropriately pro-rated, if the Applicable Rate changes during such
quarter or other period).
(b) All commitment fees described in paragraph (a) of this Section
(the "Commitment Fees") shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the Closing Date and shall cease to accrue on the date on
which the Revolving Credit Commitment of such Lender shall expire or be
terminated as provided herein.
(c) The Borrowers agree to pay to the Administrative Agent, for its
own account, the fees with respect to the Administrative Agent's services
hereunder payable at the times and in the amounts separately agreed upon between
the Borrowers and the Administrative Agent (the "Administrative Agent Fees").
(d) The Commitment Fees and the Administrative Agent Fees shall be
paid on the dates due in immediately available funds to the Administrative
Agent, for distribution, if and as appropriate, among the Lenders. Once paid,
none of such Fees shall be refundable under any circumstances.
Section 2.6. Interest on Loans. (a) Subject to the provisions of
Section 2.7, the Loans comprising each Borrowing shall bear interest (computed
on the basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate in effect from time to time.
(b) Interest on each Loan shall be payable by the Borrower of such
Loan on the Interest Payment Dates applicable to such Loan except as otherwise
provided in this
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Agreement. The applicable LIBO Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
Section 2.7. Default Interest. If any Borrower shall default in the
payment required to be made by it of the principal of or interest on any Loan or
any other amount becoming due under this Agreement (the "Defaulted Amount"), at
stated maturity, by acceleration or otherwise, or under any other Facility
Document, then each Borrower shall on demand from time to time pay interest, to
the extent permitted by law, on its Loans then or thereafter outstanding
(irrespective of whether or not such Loans are due) and on all other amounts
then or thereafter due from it under this Agreement, to but excluding the date
of actual payment (after as well as before judgment) of the Defaulted Amount, at
a rate (the "Default Rate") equal to (a) in the case of overdue principal of
each outstanding Loan, the rate otherwise applicable to such Loan pursuant to
Section 2.6 plus 2.0% per annum and (b) in all other cases, 2.0% plus the rate
per annum which would have been payable if the overdue amount had, during the
period of non-payment, constituted a Loan for successive Interest Periods (each
of a duration reasonably selected by the Administrative Agent).
Section 2.8. Termination and Reduction of Commitments. (a) The
Revolving Credit Commitments shall automatically expire and terminate on the
Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Revolving Credit Commitments; provided, however, that (i) each partial
reduction of the Revolving Credit Commitments shall be an integral multiple of
CHF 1,000,000 and in a minimum amount of CHF 3,000,000 and (ii) the Total
Revolving Credit Commitment shall not be reduced to an amount that is less than
the Aggregate Credit Exposure at the time (after giving effect to any concurrent
prepayment of Loans). If the Administrative Agent receives such a notice from
the Borrowers, the Administrative Agent shall promptly advise the Lenders
thereof.
(c) Each reduction in the Revolving Credit Commitments hereunder shall
be made ratably among the Lenders in accordance with their respective Revolving
Credit Commitments. The Borrowers shall pay to the Administrative Agent for the
account of the applicable Lenders, on the date of each termination or reduction,
the Commitment Fees on the amount of the Revolving Credit Commitments so
terminated or reduced accrued to but excluding the date of such termination or
reduction.
Section 2.9. Continuation of Borrowings. (a) The applicable Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent not later than 11:00 a.m., London time, three Business Days
prior to continuation, to continue any Borrowing for an additional Interest
Period or Periods, subject in each case to the following:
(i) each continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising
the continued Borrowing;
14
(ii) if less than all the outstanding principal amount of any
Borrowing shall be continued, then each resulting Borrowing shall satisfy
the limitations specified in Sections 2.2(a) and 2.2(b) regarding the
principal amount and maximum number of Borrowings; and
(iii) a Borrower may select an Interest Period of a period of less
than one month only if necessary to ensure that the current Interest Period
or Interest Periods do not end after the Maturity Date.
Each notice pursuant to this Section shall be irrevocable and shall
refer to this Agreement and specify (i) the identity of the Borrower of the
applicable Borrowing and the amount of the Borrowing that is requested to be
continued and (ii) the Interest Period with respect to the applicable Borrowing.
No such notice shall be given more than seven Business Days prior to the
effective date of the applicable continuation. If no Interest Period is
specified in any such notice with respect to any continuation or if notice shall
not have been given in accordance with this Section to continue any Borrowing of
Loans into a subsequent Interest Period, the applicable Borrower shall be deemed
to have selected an Interest Period of one month's duration. The Administrative
Agent shall advise the Lenders of any notice given pursuant to this Section and
of each Lender's portion of any continued Borrowing.
(b) Notwithstanding any contrary provision contained in this
Agreement, upon notice to the Borrowers from the Administrative Agent given at
the request of the Required Lenders, after the occurrence and during the
continuance of an Event of Default, each Borrowing (unless such Borrowing is
paid at or before the end of the Interest Period applicable thereto) shall at
the end of the Interest Period applicable thereto be continued as a Borrowing
with an Interest Period of one month's duration subject to paragraph (c) of this
Section.
Section 2.10. Optional and Mandatory Prepayments. (a) Each Borrower
shall have the right at any time and from time to time to prepay any Borrowing,
in whole or in part, upon at least three Business Days' prior written or
telecopy notice to the Administrative Agent before 11:00 a.m., London time;
provided, however, that each partial prepayment shall be in an amount that is an
integral multiple of CHF 1,000,000. Notwithstanding the immediately preceding
sentence, the Administrative Agent agrees that it will (subject to the
Authorization Letter) accept from any Borrower notice by telephone of prepayment
by the dates and time specified in the immediately preceding sentence, provided
that the same is confirmed by such Borrower to the Administrative Agent in
writing promptly (and in all events on the same day as such telephone
communication).
(b) Each notice of prepayment shall specify the identity of the
Borrower, the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing by the amount stated therein on the
date stated therein.
(c) In the event of any termination of all the Revolving Credit
Commitments, each Borrower shall on the date of such termination repay or prepay
all its outstanding Borrowings. In the event of any partial reduction of the
Revolving Credit Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the
15
Borrowers and the Lenders of the Aggregate Credit Exposure after giving effect
thereto and (ii) if the Aggregate Credit Exposure would exceed the Total
Revolving Credit Commitment after giving effect to such reduction, then on the
date of such reduction one or more Borrowers shall prepay its or their
respective Borrowings in an amount sufficient to eliminate such excess.
(d) All prepayments under this Section shall be subject to Section
3.4, but shall otherwise be without premium or penalty. All prepayments under
this Section shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
Section 2.11. Payments. (a) The Borrowers shall make each payment
required to be made by it hereunder and under any Facility Document (whether of
principal, interest, fees, or otherwise) not later than 12:00 noon, London time
at the place of payment, on the date when due in immediately available funds,
without setoff, defense or counterclaim. Any amounts received after such time on
any date may, in the reasonable discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. Each such payment shall be made to the
Administrative Agent at such account as the Administrative Agent shall designate
to the Borrowers in writing. Each such payment shall be made in Swiss francs,
except as otherwise expressly provided herein. The Administrative Agent, or any
Lender for whose account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the applicable Borrower with the
Administrative Agent or such Lender, as the case may be, and any Lender so doing
shall promptly notify the Administrative Agent; such Lender or (if the
Administrative Agent effects such debit) the Administrative Agent shall promptly
after effecting such debit give notice thereof to the applicable Borrower as
well, provided, however, that a failure to give such notice to the applicable
Borrower shall not affect the validity of such debit or place such Lender or the
Administrative Agent under any liability to the applicable Borrower. Each
Borrower shall, at the time of making each payment under this Agreement or the
Notes, specify to the Administrative Agent the principal or other amount payable
by the applicable Borrower under this Agreement or the Notes to which such
payment is to be applied (and in the event that it fails to so specify, or if a
Default or Event of Default has occurred and is continuing), the Administrative
Agent may apply such payment as it may elect in its sole discretion (subject to
Section 10.15)).
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Facility
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may, except as otherwise provided in the definition
of Interest Period, be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.
Section 2.12. Purpose. Each Borrower shall use the proceeds of the
Loans borrowed by it for (i) working capital and general corporate purposes of
such Borrower and its Subsidiaries, (ii) purposes of effecting a corporate
reorganization of the ownership of such Borrower and/or (iii) purposes of making
a repatriation dividend to the Parent.
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ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.1. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Borrowing:
(a) the Administrative Agent determines (which determination, if made
on a reasonable and nondiscriminatory basis, shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Borrowing for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any request to
continue any Borrowing shall be ineffective, and any outstanding Borrowing shall
be repaid on the last day of the then current Interest Period with respect
thereto and (ii) any Borrowing Request shall be ineffective.
Section 3.2. Reserve Requirement; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Loan made by such Lender or any Fees or other
amounts payable hereunder (other than changes in respect of taxes imposed on the
overall net income of such Lender by the jurisdiction in which such Lender has
its principal office or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender or shall impose on such Lender or
the London interbank market (or other relevant interbank market) any other
condition affecting this Agreement or Loans made by such Lender, and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder in respect thereof (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material, then
the applicable Borrower shall pay to such Lender upon demand such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered. There shall be no duplication of payments in
respect of Indemnified Taxes and Other Taxes required to be made by this Section
and by Section 3.5.
(b) If any Lender shall have determined that the adoption after the
date hereof of any law, rule, regulation, agreement or guideline regarding
capital adequacy or any change after the date hereof in any law, rule,
regulation, agreement or guideline regarding capital adequacy (whether or not
such law, rule, regulation, agreement or guideline has been adopted) or
17
in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by any
Lender (or any lending office of such Lender) or any Lender's holding company
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any Governmental Authority has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement or the
Loans made to a level below that which such Lender or such Lender's holding
company could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time the applicable
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender's holding company for any such reduction
suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as applicable, as
specified in paragraph (a) or (b) above shall be delivered to the applicable
Borrower and shall (if the determination of such amount or amounts is made on a
reasonable and nondiscriminatory basis) be conclusive absent manifest error. The
applicable Borrower shall pay such Lender the amount shown as due on any such
certificate delivered by it within 10 days after receipt by such Borrower of the
same.
(d) Failure or delay on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital shall not constitute a waiver of such Lender's
right to demand such compensation; provided, however, that if any Lender demands
such compensation in respect of a period prior to the date on which written
demand therefor is given to the applicable Borrower, then the obligation of such
applicable Borrower to pay such compensation in respect of such period shall be
limited to the three months prior to the giving of such written demand, plus (if
such demand results from a retroactive change in the aforesaid law, regulation,
interpretation, administration, or guideline) the period of such retroactivity;
however, such limitation shall not apply in respect of the period from and after
the giving of such written demand. The protection of this Section shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition that shall have occurred or been imposed.
Section 3.3. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Loan or to give effect to its obligations
as contemplated hereby with respect to any Loan, then, by written notice to the
Borrowers and to the Administrative Agent:
(x) such Lender may declare that Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods); and
(y) such Lender may require that all outstanding Loans made by it be
repaid by the applicable Borrower or (if the Borrowers and all the Lenders
shall mutually agree
18
on a substitute basis for determining the interest rate on the outstanding
Loans) shall be continued and bear interest at such substitute rate (for
the duration of such unlawfulness), in which event all such Loans shall be
so repaid or continued (as applicable) as of the effective date of such
notice as provided in paragraph (b) of this Section.
(b) For purposes of this Section, a notice to the applicable Borrower
by any Lender shall be effective as to each Loan made by such Lender, if lawful,
on the last day of the Interest Period then applicable to such Loan; in all
other cases such notice shall be effective on the date of receipt by such
Borrower.
Section 3.4. Indemnity. As to the Loans of each Borrower, such
Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount on
account of the principal of any Loan prior to the end of the Interest Period in
effect therefor or (ii) any Loan to be made by such Lender (including any Loan
to be made pursuant to a continuation under Section 2.9) not being made after
notice of such Loan shall have been given by the applicable Borrower hereunder
(any of the events referred to in this clause (a) being called a "Breakage
Event") or (b) any default in the making of payment or prepayment required to be
made hereunder. In the case of any Breakage Event, such loss shall include an
amount equal to the excess, as reasonably determined by such Lender, of (i) its
cost of obtaining funds for the Loan that is the subject of such Breakage Event
for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section shall be delivered
to the applicable Borrower and shall (if the determination of such amount or
amounts is made on a reasonable and nondiscriminatory basis) be conclusive
absent manifest error.
Section 3.5. Taxes. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes except as otherwise required
by applicable law; provided that, if any Borrower shall be required by
applicable law to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or each Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the applicable Borrower shall make such
deductions, and (iii) the applicable Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes payable by it
to the relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent and each
Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with
19
respect to any payment by or on account of any obligation of such Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the applicable Borrower by a Lender or
by the Administrative Agent on its own behalf or on behalf of a Lender shall (if
there is a reasonable basis for such payment or liability, and if the
determination of the amount thereof is made on a reasonable basis) be conclusive
absent manifest error.
(d) After payment by a Borrower to the demanding party of the amount
demanded pursuant to paragraph (c) of this Section, such Borrower shall be
entitled to commence a legal proceeding against the applicable Governmental
Authority to recover the Indemnified Taxes or Other Taxes so paid by the
demanding party; and (after such payment by such Borrower to the demanding
party) the demanding party shall at the sole expense of such Borrower cooperate
with such Borrower as such Borrower may reasonably request with respect to such
legal proceeding, provided that the demanding party may do so without material
risk of liability.
(e) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by a Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent written evidence thereof reasonably
satisfactory to the Administrative Agent.
(f) If the Administrative Agent or any Lender determines, in its sole
discretion, or becomes aware, that it has received, or is entitled to, a refund
of any Taxes or Other Taxes as to which it has been indemnified by the
applicable Borrower or with respect to which such Borrower has paid additional
amounts pursuant to this Section, the Administrative Agent or such Lender, as
the case may be, shall pay over to such Borrower (i) such refund or (ii) if the
Administrative Agent or such Lender, as the case may be, has decided to not make
a claim for a refund to the relevant Governmental Authority, the amount of any
refund the Administrative Agent or such Lender, as the case may be, would have
been entitled, in its reasonable judgment, to receive had it made such claim
(but, in each case, only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all reasonable and documented
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that each Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority.
(g) This Section shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to any Borrower or any other
Person.
20
Section 3.6. Duty to Mitigate. If (i) any Lender shall request
compensation under Section 3.2, (ii) any Lender delivers a notice described in
Section 3.3 or (iii) a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority on account of any Lender, pursuant to
Section 3.5, then such Lender shall use reasonable efforts (which shall not
require such Lender to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrowers or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 3.2 or enable it to withdraw its notice pursuant to
Section 3.3 or would reduce amounts payable pursuant to Section 3.5, as the case
may be, in the future. The Borrowers hereby agrees to pay all reasonable and
documented costs and expenses incurred by any Lender in connection with any such
filing or assignment, delegation and transfer.
Section 3.7. Replacement of Lenders. If any Lender requests
compensation under Section 3.2, or if any Lender delivers a notice described in
Section 3.3, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.5, or if any Lender defaults in its obligation to fund Loans
hereunder, then the applicable Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 11.5, which restrictions shall apply, for
purposes of this Section, with reference to a Lender) all its interests, rights
and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) if the assignee is not a Lender, the applicable
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld; and (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans, accrued interest thereon and accrued fees and other amounts
(including amounts under Sections 3.2, 3.3, 3.4 and 3.5) payable to it hereunder
from the assignee or the applicable Borrower; and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 3.2 or payments
required to be made pursuant to Section 3.3 or 3.5, such assignment will result
in a reduction in such compensation or payments. A Lender shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the applicable
Borrower to require such assignment and delegation cease to apply.
Section 3.8. Certain Additional Costs. If and so long as any Lender is
required to comply with reserve assets, liquidity, cash margin or other
requirements of any monetary or other authority (including any such requirement
imposed by the European Central Bank or the European System of Central Banks,
but excluding requirements reflected in the Statutory Reserve Rate) in respect
of any of such Lender's Loans, such Lender may require the Borrower to which
such Lender has made a Loan to pay, contemporaneously with each payment of
interest on each of such Lender's Loans subject to such requirements, additional
interest on such Loan at a rate per annum specified by such Lender to be the
cost to such Lender of complying with requirements in relation to such Loan. Any
additional interest owed pursuant to this Section
21
shall be determined by the relevant Lender, which determination (if made on a
reasonable and nondiscriminatory basis) shall be conclusive absent manifest
error, and notified to the applicable Borrower (with a copy to the
Administrative Agent) at least five Business Days before each date on which
interest is payable for the relevant Loan, and such additional interest so
notified by such Lender shall be payable to the Administrative Agent for the
account of such Lender on each date on which interest is payable for such Loan.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.1. Documentary Conditions Precedent. The execution and
delivery of this Agreement by the Lenders and the Administrative Agent are
subject to the condition precedent that the Administrative Agent shall have
received not later than December 1, 2005 each of the following, in form and
substance satisfactory to the Administrative Agent and its counsel:
(a) if requested by any Lender prior to such date, a duly executed
Note of MWC and Luxury, payable in each case to such Lender;
(b) the Authorization Letter, duly executed by the Borrowers;
(c) the Parent Guarantee, duly executed by the Parent;
(d) a certificate of the Secretary (or equivalent officer) of MWC,
dated the Closing Date, attesting (i) to all corporate action taken by MWC,
including resolutions of its shareholders and its Board of Directors,
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement; (ii) to a true and complete copy of its organizational documents; and
(iii) to the names and true signatures of officers of MWC authorized to sign the
Facility Documents to which it is a party and the other documents to be
delivered by MWC under this Agreement;
(e) a certificate of the Secretary (or equivalent officer) of Luxury,
dated the Closing Date, attesting (i) to all corporate action taken by Luxury,
including resolutions of its shareholders and its Board of Directors,
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement; (ii) to a true and complete copy of its organizational documents; and
(iii) to the names and true signatures of officers of Luxury authorized to sign
the Facility Documents to which it is a party and the other documents to be
delivered by Luxury under this Agreement;
(f) a certificate of the Secretary or Assistant Secretary of the
Parent, dated the Closing Date, attesting (i) to all corporate action taken by
the Parent, including resolutions of its Board of Directors, authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement; (ii)
to a true and complete copy of its certificate of incorporation and by-laws;
(iii) to the names and true signatures of officers of the Parent authorized to
sign the Facility Documents to which it is a party and the other documents to be
delivered by the Parent under this Agreement and (iv) to the good standing of
the Parent in the State of New York, which shall be evidenced by a certificate
of the appropriate Governmental Authority thereof;
22
(g) a certificate of each of the Parent, MWC and Luxury, dated the
Closing Date, stating that the representations and warranties in Article 5 are
true and correct on such date as though made on and as of such date and that no
event has occurred and is continuing which constitutes a Default or an Event of
Default;
(h) opinions of counsel for the Borrowers (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP), dated the Closing Date, in
substantially the forms of Exhibit C-1 and Exhibit C-2 (respectively) and as to
such other matters as the Administrative Agent or any Lender may reasonably
request;
(i) an opinion of Swiss counsel for the Borrowers, dated the Closing
Date, in substantially the form of Exhibit C-3 and as to such other matters as
the Administrative Agent or any Lender may reasonably request;
(j) evidence that the Borrowers have paid in full (i) all fees that
are required to be paid by the Borrowers to the Lenders on the Closing Date; and
(ii) the reasonable and documented fees and disbursements of New York and Swiss
counsel for the Administrative Agent in connection with the closing of the
transaction contemplated by this Agreement; and
(k) such other approvals, opinions, certificates and documents as the
Administrative Agent may reasonably request.
Section 4.2. Additional Conditions Precedent. The obligations of the
Lenders to make any Loans pursuant to a Borrowing which increases the amount of
Loans outstanding hereunder (including the initial Borrowing) shall be subject
to the further conditions precedent that on the date of such Loans, the
following statements shall be true:
(a) the representations and warranties contained in Article 5 are true
and correct in all material respects on and as of the date such Loans are made
as though made on and as of such date, provided that (i) any representation and
warranty contained in Section 5.5 that specifically relates to January 31, 2005
(other than the last sentence of Section 5.5) shall be true and correct as of
January 31, 2005; and (ii) any such representation or warranty which by its
terms contains a materiality qualification is true and correct in all respects
on and as of such date; and
(b) no Default or Event of Default has occurred and is continuing, or
would result from such Loans.
Section 4.3. Deemed Representations. Each Borrowing Request and each
acceptance by the applicable Borrower of the proceeds of such Borrowing, shall
constitute a representation and warranty by the Borrowers that the statements
contained in Section 4.2 are true and correct both on the date of such Borrowing
Request and, unless the Borrowers otherwise notify the Administrative Agent
prior to such Borrowing, as of the date of such Borrowing.
23
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers and the Parent hereby represents and warrants as follows
(provided, however, that such representations and warranties by each Borrower
and the Parent shall be as to such Borrower or the Parent, as the case may be,
and its respective Subsidiaries only):
Section 5.1. Incorporation, Good Standing and Due Qualification. Each
of the Parent and its Subsidiaries is duly incorporated or formed, validly
existing and (where such concept exists) in good standing under the laws of the
jurisdiction of its incorporation or organization, has the corporate, limited
liability company or other power and authority to own its assets and to transact
the business in which it is now engaged, and is duly qualified as a foreign
corporation, limited liability company or partnership and in good standing under
the laws of each other jurisdiction in which the failure to be so qualified
would have a material adverse effect on the business, financial condition or
operations of the Parent and its Subsidiaries taken as a whole.
Section 5.2. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by each of the Borrowers and the Parent of
the Facility Documents to which it is a party are within its corporate, limited
liability company or other power and authority and have been duly authorized by
all necessary corporate, limited liability company or other action and do not
and will not: (a) require any consent or approval of its stockholders or
members; (b) contravene any of its organizational documents; (c) violate any
provision of, or require any filing, registration, consent or approval under,
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Parent or
any Subsidiaries or Affiliates of the Parent; (d) result in a breach of or
constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which any
Borrower or the Parent is a party or by which it or its properties may be bound
or affected; (e) result in, or require, the creation or imposition of any Lien
upon or with respect to any of the properties now owned or hereafter acquired by
any Borrower or the Parent; or (f) cause the Parent (or any Subsidiary or
Affiliate of the Parent, as the case may be) to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award or any such indenture, agreement, lease or instrument.
Section 5.3. Legally Enforceable Agreements. Each Facility Document to
which any Borrower or the Parent is a party is a legal, valid and binding
obligation of such Borrower or the Parent (as the case may be) enforceable
against such Borrower or the Parent (as the case may be) in accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law).
Section 5.4. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Parent or any Borrower, threatened, against
or affecting the Parent or any of its Subsidiaries before any court,
governmental agency or arbitrator, as to which there is a reasonable possibility
of determination adverse to the Parent or such Subsidiary and which (if
determined adversely to the Parent or such Subsidiary) would, in any one case or
in the aggregate, materially adversely affect the financial condition,
operations or business of the
24
Parent and its Subsidiaries taken as a whole or the ability of any Borrower or
the Parent to perform its obligations under the Facility Documents to which it
is a party.
Section 5.5. Financial Statements. The consolidated and consolidating
balance sheet of the Parent and its Consolidated Subsidiaries as at January 31,
2005, and the related consolidated income statement and statements of cash flows
and changes in stockholders' equity and the related consolidating income
statement of the Parent and its Consolidated Subsidiaries for the fiscal year
then ended, and the accompanying footnotes, together with the accompanying
opinion of PricewaterhouseCoopers LLP, independent certified public accountants,
copies of which have been furnished or made available to each of the Lenders,
are complete and correct in all material respects and fairly present the
financial condition of the Parent and its Consolidated Subsidiaries as at such
date and the results of the operations of the Parent and its Consolidated
Subsidiaries for the period covered by such statements, all in accordance with
GAAP consistently applied. There are no liabilities of the Parent or any of its
Consolidated Subsidiaries, fixed or contingent, which are material in relation
to the consolidated financial condition of the Parent but are not reflected in
the financial statements or in the notes thereto, other than liabilities arising
in the ordinary course of business since January 31, 2005. No information,
exhibit or report furnished by any Borrower to the Administrative Agent or any
of the Lenders in connection with the negotiation of this Agreement, when read
together with the financial statements referred to in this Section, contained
any material misstatement of fact or omitted to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading. Since January 31, 2005, there has been no material adverse change in
the condition (financial or otherwise), business or operations of the Parent and
the Consolidated Subsidiaries taken as a whole.
Section 5.6. Ownership and Liens. Each of the Parent and its
Consolidated Subsidiaries has title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Section 5.5 (other than any properties or assets disposed of in the
ordinary course of business, and other than properties and assets that are not
material to the Parent and its Subsidiaries taken as a whole and other than any
other sales that are permitted by this Agreement), and none of the properties
and assets owned by the Parent or any of its Subsidiaries and none of its
leasehold interests is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder.
Section 5.7. Taxes. Each of the Parent and its Subsidiaries has filed
or has caused to be filed all tax returns (foreign, federal, state and local)
required to be filed and has paid all material taxes, assessments and
governmental charges and levies shown thereon to be due, including interest and
penalties, except for such taxes and other amounts as are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP and reflected on the consolidated balance
sheet of the Parent.
Section 5.8. ERISA. (a) No accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No liability
to the PBGC has been or is expected by the Parent or any ERISA Affiliate to be
incurred with respect to any Plan (other than a
25
Multiemployer Plan) by the Parent, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, financial condition or
operations of the Parent and its Subsidiaries taken as a whole. Neither the
Parent, nor any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, financial condition or operations of the Parent and its Subsidiaries
taken as a whole.
(b) Neither the Parent nor any of its Subsidiaries has breached the
fiduciary rules of ERISA or engaged in any prohibited transaction in connection
with which the Parent or any of its Subsidiaries or ERISA Affiliates could be
subjected to (in the case of any such breach) a suit for damages or (in the case
of any such prohibited transactions) with a civil penalty assessed under Section
502(i) of ERISA or a tax imposed by Section 4975 of the Code, which suit,
penalty or tax, in any case, would be materially adverse to the business,
financial condition or operations of the Parent and its Subsidiaries taken as a
whole.
(c) There has been no reportable event (within the meaning of Section
4043(b) of ERISA) or any other event or condition with respect to any Plan
(other than a Multiemployer Plan) which presents a risk of termination of any
such Plan by the PBGC under circumstances which in any case could result in
liability which would be materially adverse to the business, financial condition
or operations of the Parent and its Subsidiaries taken as a whole.
(d) The present value of all vested accrued benefits under all Plans
(other than Multiemployer Plans), determined as of the end of the Parent's most
recently ended fiscal year on the basis of reasonable actuarial assumptions, did
not exceed the current value of the assets of such Plans allocable to such
vested accrued benefits by more than $20,000,000. The terms "present value",
"current value", and "accrued benefit" have the meanings specified in Section 3
of ERISA.
(e) Neither the Parent nor any of its Subsidiaries is or has ever been
obligated to contribute to any Multiemployer Plan.
Section 5.9. Subsidiaries and Ownership of Stock. Schedule III is a
complete and accurate list, as of the Closing Date, of the Subsidiaries of the
Parent, showing the jurisdiction of incorporation or organization of each
Subsidiary and showing the percentage of the Parent's ownership of the
outstanding stock or other interest of each such Subsidiary. All of the
outstanding capital stock or other interest of each such Subsidiary has been
validly issued, is fully paid and nonassessable and (to the extent owned by the
Parent or any other Subsidiary) is owned by the Parent or such other Subsidiary,
as the case may be, free and clear of all Liens.
Section 5.10. Credit Arrangements. Schedule IV is a complete and
correct list, as of the Closing Date, of all credit agreements, indentures,
purchase agreements, guaranties, Capital Leases and other investments,
agreements and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing or for credit lines extended for
the purchase of foreign-exchange contracts) in respect of which the Parent or
any of its Subsidiaries is in any manner directly or contingently obligated to
pay money (excluding trade payables in the ordinary course of business, and
excluding other extensions of credit that do not exceed $500,000 in the
26
aggregate of all such other extensions of credit), including all modifications
thereof and amendments thereto; and the maximum principal or face amounts of the
credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens (if any) of any nature given or agreed to be given as
security therefor are correctly described or indicated in such Schedule.
Section 5.11. Operation of Business. Each of the Parent and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, necessary in any material respect
to conduct the business substantially as now conducted of the Parent and its
Subsidiaries taken as a whole, and neither the Parent nor any of its
Subsidiaries is in violation of any valid rights of others with respect to any
of the foregoing.
Section 5.12. Hazardous Materials. The Parent and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations or business of the
Parent and its Consolidated Subsidiaries taken as a whole. The Parent and each
of its Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not have a material adverse effect
on the consolidated financial condition, operations or business of the Parent
and its Consolidated Subsidiaries taken as a whole.
In addition, except as set forth in Schedule V and except to the
extent it would not have a material adverse effect on the consolidated financial
condition, operations or business of the Parent and its Consolidated
Subsidiaries taken as a whole:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and, to the best of the Parent's knowledge, no
investigation or review is pending or threatened by any governmental or other
entity with respect to any alleged failure by the Parent or any of its
Subsidiaries to have any permit, license or authorization required under the
Environmental Laws in connection with the conduct of the business of the Parent
or any of its Subsidiaries or with respect to any generation, treatment,
storage, recycling, transportation, release or disposal, or any release as
defined in 42 U.S.C. Section 9601(22) ("Release"), of any substance regulated
under Environmental Laws ("Hazardous Materials") generated by the Parent or any
of its Subsidiaries.
(b) Neither the Parent nor any of its Subsidiaries has handled any
Hazardous Material, other than as a generator, on any property now or previously
owned or leased by the Parent or any of its Subsidiaries; and
(i) no polychlorinated biphenyl is present at any property now or
owned or leased by the Parent or any of its Subsidiaries;
27
(ii) no asbestos is present at any property now owned or leased by the
Parent or any of its Subsidiaries;
(iii) there are no underground storage tanks for Hazardous Materials,
active or abandoned, at any property now owned or leased by the Parent or
any of its Subsidiaries.
No Hazardous Materials have been Released, in a reportable quantity, where such
a quantity has been established by statute, ordinance, rule, regulation or
order, at, on or under any property now owned by the Parent or any of its
Subsidiaries.
(c) Neither the Parent nor any of its Subsidiaries has transported or
arranged for the transportation of any Hazardous Material to any location which
is listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), listed
for possible inclusion on the National Priorities List by the Environmental
Protection Agency in the Comprehensive Environmental Response and Liability
Information System as provided by 40 C.F.R. Section 300.5 ("CERCLIS") or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which are reasonably expected to
lead to claims against the Parent or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by the Parent or any of its
Subsidiaries has been recycled, treated, stored, disposed of or Released by the
Parent or any of its Subsidiaries at any location other than those listed in
Schedule V.
(e) No oral or written notification of a Release of a Hazardous
material has been filed by or on behalf of the Parent or any of its Subsidiaries
and no property now owned or leased by the Parent or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List promulgated
pursuant to CERCLA, on CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
laws which have been imposed on any of the real property or properties owned or
leased by the Parent or any of its Subsidiaries, and (to the best of the
Parent's knowledge) no government actions have been taken or are in process
which could subject any of such properties to such Liens and neither the Parent
nor any of its Subsidiaries would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any property owned by it in
any deed to such property.
(g) There have been no environmental investigations, studies, audits,
test, reviews or other analyses conducted by or which are in the possession of
the Parent or any of its Subsidiaries in relation to any property or facility
now or previously owned or leased by the Parent or any of its Subsidiaries which
have not been made available to the Lenders, except to the extent prepared to
satisfy routine reporting obligations under the Environmental Laws.
Section 5.13. No Default on Outstanding Judgments or Orders. Each of
the Parent and its Subsidiaries has satisfied all judgments and neither the
Parent nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation
28
of any court, arbitrator or federal, state, municipal or other Governmental
Authority, commission, board, bureau, agency or instrumentality, domestic or
foreign, except where any such defaults in the aggregate would not result in a
material adverse effect on the business, financial condition or operations of
the Parent and its Subsidiaries taken as a whole.
Section 5.14. No Defaults on Other Agreements. Neither the Parent nor
any of its Subsidiaries is subject to any charter or corporate restriction which
is reasonably expected to have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of the
Parent or any of its Subsidiaries, or the ability of any Borrower or the Parent
to carry out its obligations under the Facility Documents to which it is a
party. Neither the Parent nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument which is reasonably expected to have a material adverse effect on the
ability of any Borrower or the Parent to carry out its obligations under the
Facility Documents to which it is a party. The Parent is not in default in any
respect under any of the Prudential Existing Notes (or under either note
agreement pursuant to which they were issued) or under any outstanding Future
Permitted Private Placement Debt (or under any note or other agreement pursuant
to which such Debt shall have been issued). Neither the Parent nor any of its
Subsidiaries is in default in any material respect under any other agreement or
instrument to which the Parent or such Subsidiary is a party, except where any
such defaults in the aggregate would not result in a material adverse effect on
the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole.
Section 5.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Parent or of any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), materially and adversely
affecting the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole.
Section 5.16. Governmental Regulation. Neither the Parent nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for money borrowed or to obtain letters of credit as
contemplated hereby.
Section 5.17. Partnerships. As of the Closing Date, neither the Parent
nor any of its Subsidiaries is a partner in any partnership.
Section 5.18. No Forfeiture. No Forfeiture Proceeding is pending.
Section 5.19. Solvency.
(a) The present fair saleable value of the assets of each Borrower
after giving effect to all the transactions contemplated by the Facility
Documents and the funding of all Revolving Credit Commitments hereunder exceeds
the amount that will be required to be paid on or in respect of the existing
debts and other liabilities (including contingent liabilities) of such Borrower
as they mature.
29
(b) The property of each Borrower does not constitute unreasonably
small capital for such Borrower to carry out its business as now conducted and
as presently proposed to be conducted including the capital needs of such
Borrower.
(c) No Borrower intends to, nor does any Borrower believe that it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by such Borrower, and
of amounts to be payable on or in respect of debt of such Borrower). The cash
available to each Borrower after taking into account all other anticipated uses
of the cash of such Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of such Borrower when such amounts are required
to be paid.
(d) No Borrower believes that final judgments against it in actions
for money damages will be rendered at a time when, or in an amount such that,
such Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to each Borrower after
taking into account all other anticipated uses of the cash of such Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 5.20. Certain Particular Assurances as to the Borrowers. (a)
This Agreement and each of the other Facility Documents to which a Borrower is
intended to be a party are in proper legal form under the law of Switzerland for
the enforcement thereof against such Borrower under such law. All formalities
required in Switzerland for the validity and enforceability of this Agreement
and each of such other Facility Documents (including, without limitation, any
necessary registration, recording or filing with any court or other authority in
Switzerland) have been accomplished, and no Taxes are required to be paid to
Switzerland, or any political subdivision thereof or therein, and no
notarization is required, for the validity and enforceability hereof or thereof.
(b) This Agreement and the other Facility Documents to which a
Borrower is intended to be a party and the obligations evidenced hereby and
thereby are and will at all times be direct and unconditional general
obligations of such Borrower, and rank and will at all times rank in right of
payment and otherwise at least pari passu with all other unsecured Debt of such
Borrower whether now existing or hereafter outstanding, except for such
preferences as are provided by any mandatory applicable provision of law. There
exists no Lien (including any Lien arising out of any attachment, judgment or
execution), nor any segregation or other preferential arrangement of any kind,
on, in or with respect to any of the property or revenues of any Borrower or any
of its Subsidiaries, except as expressly permitted by Section 7.3.
(c) Each Borrower is subject to civil and commercial law with respect
to its obligations under this Agreement and each of the other Facility Documents
to which it is intended to be a party. The execution, delivery and performance
by each Borrower of this Agreement and each of such other Facility Documents
constitute private and commercial acts rather than public or governmental acts.
No Borrower, nor any of its properties or revenues, is entitled to any right of
immunity in any jurisdiction from suit, court jurisdiction, judgment, attachment
(whether before or after judgment), set-off or execution of a judgment or from
any
30
other legal process or remedy relating to the obligations of such Borrower under
this Agreement or any of such other Facility Documents.
(d) The inclusion in this Article of the representations and
warranties contained in this Section shall not limit the generality of the other
representations and warranties contained in this Article with reference to the
Borrowers.
ARTICLE 6. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Revolving Credit Commitment under this Agreement, the Parent shall:
Section 6.1. Maintenance of Existence. Preserve and maintain (except
as otherwise permitted by Section 7.7 or Section 7.8 or Section 7.10), and cause
each of its Subsidiaries (other than Inactive Subsidiaries) to preserve and
maintain (except as otherwise permitted by Section 7.7 or Section 7.8 or Section
7.10), its corporate, limited liability company or other existence and good
standing in the jurisdiction of its incorporation or organization, and qualify
and remain qualified, and cause each of its Subsidiaries to qualify and remain
qualified, as a foreign corporation, limited liability company or other entity
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on (a) the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole; (b) the ability of any
Borrower or the Parent to perform any of its obligations under any Facility
Document; (c) the legality, validity or enforceability of any Facility Document;
or (d) the rights of, or remedies available to the Administrative Agent and the
Lenders under any Facility Document.
Section 6.2. Conduct of Business. Continue, and cause each of its
Subsidiaries (other than Inactive Subsidiaries) to continue, to engage primarily
in the Core Business.
Section 6.3. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of the
properties (tangible and intangible) necessary or useful in the proper conduct
of the business of the Parent and its Subsidiaries in good working order and
condition (ordinary wear and tear excepted), except to the extent that such
properties are not material to the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole.
Section 6.4. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in compliance with then-current guidelines as to generally
accepted accounting principles, reflecting all financial transactions of the
Parent and its Subsidiaries.
Section 6.5. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
31
Section 6.6. Compliance with Laws; Payment of Taxes. (a) Comply, and
cause each of its Subsidiaries to comply, with all applicable laws (including
all Environmental Laws), rules, regulations and orders, the noncompliance with
which would materially adversely affect (i) the business, financial condition or
operations of the Parent and its Subsidiaries taken as a whole, (ii) the ability
of any Borrower or the Parent to perform any of its obligations under any
Facility Document, (iii) the legality, validity or enforceability of any
Facility Document, or (iv) the rights of or remedies available to the
Administrative Agent and the Lenders under any Facility Document. Without
limiting the generality of the foregoing, the Parent shall cause each Borrower
to obtain and maintain at all times in effect all such governmental licenses,
authorizations, consents, permits and approvals as may be required for such
Borrower to borrow and repay the Borrowings of such Borrower and to comply with
all the other obligations of such Borrower under this Agreement and the other
Facility Documents to which such Borrower is a party; and
(b) Pay or discharge, and cause each of its Subsidiaries to pay or
discharge, before the same become delinquent all taxes, assessments and
governmental charges imposed upon the Parent or any Subsidiary or any of their
respective properties; provided, however, that the Parent shall not be required
to pay or discharge or cause to be paid or discharged, any such tax, assessment
or governmental charge the applicability or validity of which is being contested
by the Parent or such Subsidiary in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP.
Section 6.7. Right of Inspection. At any reasonable time and from time
to time and upon reasonable prior notice, permit the Administrative Agent or any
Lender or any agent or representative thereof, to examine and make copies and
abstracts from the records and books of account of, and visit the properties of,
the Parent and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent and any such Subsidiary with any of their respective
officers and directors and the Parent's independent accountants so long as the
Parent is afforded an opportunity to be present during such discussions with
such accountants; provided that each such visit or discussion shall be at the
sole expense of the Administrative Agent or any Lender, as applicable, unless a
Default or an Event of Default shall have occurred and be continuing at the time
thereof in which case the reasonable and documented expenses of the
Administrative Agent or any Lender, as applicable, in connection thereof shall
be paid or reimbursed by the Parent.
Section 6.8. Reporting Requirements. Furnish directly to each of the
Lenders:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Parent, a consolidated and consolidating balance
sheet of the Parent and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statements of cash flows and
changes in stockholders' equity and a consolidating income statement of the
Parent and its Consolidated Subsidiaries for such fiscal year, all in reasonable
detail and stating in comparative form the respective consolidated and
consolidating figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with GAAP and as to the consolidated
statements audited and accompanied by an opinion thereon by
PricewaterhouseCoopers LLP or other independent accountants of national standing
selected by the Parent and acceptable to the Required Lenders (without a "going
concern" or like
32
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Parent and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) as soon as available and in any event within 75 days after the end
of each of the first three quarters of each fiscal year of the Parent, a
consolidated and consolidating balance sheet of the Parent and its Consolidated
Subsidiaries as of the end of such quarter and a consolidated income statement
and statements of cash flows and changes in stockholders' equity and a
consolidating income statement of the Parent and its Consolidated Subsidiaries
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, all in reasonable detail and stating in comparative
form the respective consolidated and consolidating figures for the corresponding
date and period in the previous fiscal year and all prepared in accordance with
GAAP and certified by the chief financial officer of the Parent (subject to
year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to above, a certificate of the chief financial officer of the Parent
(i) certifying that to the best of his knowledge no Default or Event of Default
has occurred and is continuing or, if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with computations
demonstrating whether there has been compliance with the covenants contained in
Article 8, and with the financial covenants contained in the agreements between
the Parent and The Prudential Insurance Company of America pursuant to which the
Prudential Existing Notes and (if applicable) the Prudential Shelf Notes have
been issued, and with the financial covenants contained in the agreements
pursuant to which all other Future Permitted Private Placement Debt shall have
been issued;
(d) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, affecting the
Parent or any of its Subsidiaries which would reasonably be expected to have a
material adverse effect on (i) the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole, (ii) the ability of any
Borrower or the Parent to perform any of its obligations under any Facility
Document, (iii) the legality, validity or enforceability of any Facility
Document, or (iv) the rights of or remedies available to the Administrative
Agent and the Lenders under any Facility Document;
(e) as soon as possible and in any event within 10 days after the
occurrence of each Default or Event of Default a written notice setting forth
the details of such Default or Event of Default and the action which is proposed
to be taken by the Parent with respect thereto;
(f) as soon as possible, and in any event within ten days after the
Parent receives notice from the PBGC or any other Person, or otherwise acquires
knowledge, that any of the events or conditions specified below with respect to
any Plan or Multiemployer Plan have occurred or exist, a statement signed by a
senior financial officer of the Parent setting forth details respecting such
event or condition and the action, if any, which the Parent or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be
33
filed with or given to PBGC by the Parent or an ERISA Affiliate with respect to
such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA, with
respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302 of ERISA
including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code) and any request
for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Parent or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Parent or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by
the Parent or any ERISA Affiliate that results in liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt of the Parent
or any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Parent or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to a
notification letter from the Internal Revenue Service under Section
401(a)(29) of the Code or Section 307 of ERISA would result in the loss of
tax-exempt status of the trust of which such Plan is a part if the Parent
or an ERISA Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;
(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for the Parent or any ERISA Affiliate to
incur liability under Title IV of ERISA or under Sections 412(c)(11) or
412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or more Plans increase
after the date of this Agreement in an amount which is material in relation
to the financial condition of the Parent.
34
(g) promptly after the request of any Lender, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Parent or an ERISA
Affiliate;
(h) upon the request of the Administrative Agent, promptly after the
furnishing thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
any other clause of this Section;
(i) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Parent or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which the Parent or any such
Subsidiary files with the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or with any national securities
exchange;
(j) promptly after the commencement thereof or promptly after the
Parent knows of the commencement or threat thereof, notice of any Forfeiture
Proceeding; and
(k) such other information respecting the condition or operations,
financial or otherwise, of the Parent or any of its Subsidiaries as the
Administrative Agent or any Lender may from time to time reasonably request.
Section 6.9. Equal and Ratable Lien. Make or cause to be made, if any
property (whether now owned or hereafter acquired) is subjected to a Lien in
violation of Section 7.3, effective provision reasonably satisfactory in form
and substance to the Required Lenders whereby the obligations of the Borrowers
under this Agreement and the Notes and of the Parent under the Parent Guarantee,
as applicable, will be secured by such Lien equally and ratably with any and all
other liabilities secured thereby. Such violation of Section 7.3 shall be an
Event of Default, whether or not any such provision is made pursuant to this
Section.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Revolving Credit Commitment under this Agreement, the Parent shall not:
Section 7.1. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist any Debt,
except:
(a) Debt of each Borrower and the Parent under this Agreement, the
other Facility Documents and the Other Credit Agreement;
35
(b) Debt described in Schedule IV (including the Prudential Shelf
Notes), including renewals, extensions or refinancings thereof (and including
refinancings by institutions other than those institutions identified on
Schedule IV), provided that the principal amount thereof does not increase;
(c) Debt of the Parent subordinated (on terms satisfactory to the
Administrative Agent and the Required Lenders) to the Parent's obligations under
this Agreement and the other Facility Documents;
(d) Debt of the Parent to any Subsidiary; and Debt of any Subsidiary
to the Parent or to another Subsidiary, provided that the aggregate amount at
any time outstanding of all Debt of Subsidiaries to the Parent or to other
Subsidiaries does not exceed 20% of the Consolidated Tangible Net Worth at the
time of determination;
(e) Debt consisting of leases permitted under Section 7.4 or of
guaranties permitted under subsections (a), (b), (c), (d) and (g) of Section
7.2;
(f) Future Permitted Private Placement Debt; and
(g) other Debt of the Parent or any Subsidiary of the Parent, provided
that (i) the aggregate amount of such Debt outstanding at any time shall not
exceed $25,000,000 (as to all of the Parent and its Subsidiaries) and (ii) the
aggregate amount of liability in respect of letters of credit (excluding Letters
of Credit issued under the Other Credit Agreement) outstanding at any time shall
not exceed $10,000,000 (as to all of the Parent and its Subsidiaries) (which
liability shall include liability for outstanding letters of credit that have
not been drawn upon, as well as outstanding reimbursement obligations as to
letters of credit that have been drawn upon; and which $10,000,000 limitation
shall be inclusive of the letters of credit identified in Schedule IV and
renewals and extensions thereof).
Section 7.2. Guaranties, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except
(a) guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(b) obligations of the Borrowers hereunder, the Parent Guarantee and
the guaranty of the Parent and its Subsidiaries in respect of obligations under
the Other Credit Agreement;
(c) guaranties by the Parent of ordinary rent obligations incurred by
any of its Subsidiaries for the lease of retail stores; provided, however, that
the aggregate of the amount so guaranteed for foreign Subsidiaries shall not
exceed $5,000,000 at any time;
36
(d) guaranties by the Parent of obligations incurred by any of its
domestic Subsidiaries in the ordinary course of business other than for borrowed
money, letters of credit or acceptance financing;
(e) guaranties by the Parent in favor of any of its Subsidiaries, and
guaranties by any Subsidiary of the Parent in favor of the Parent or another
Subsidiary of the Parent, as to obligations owing to the guaranteed party by a
Subsidiary of the Parent or by the Parent; provided, however, that in no event
shall the outstanding guaranty liability permitted by this clause (e) exceed at
any time $20,000,000 as to the Parent and its Subsidiaries in the aggregate;
(f) letters of credit permitted under Section 7.1;
(g) guaranties by any Subsidiary of the Prudential Existing Notes and
any Future Permitted Private Placement Debt including renewals, extensions or
refinancings thereof; and
(h) other guaranties, provided, however, that in no event shall the
outstanding guaranty liability permitted by this clause (h) exceed at any time
$2,000,000 as to the Parent and its Subsidiaries in the aggregate.
Section 7.3. Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired (including, without limitation, any Lien upon any stock or other
securities issued by a Subsidiary), except:
(a) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(b) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(c) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to amounts on deposit in one or more bank accounts
maintained by the Parent and its Subsidiaries, in each case granted in the
ordinary course of business in favor of one or more banks or other depositary
institutions with which such accounts are maintained; provided that such Liens
shall not secure the repayment of any Debt for borrowed money;
(d) Liens under workmen's compensation, unemployment insurance, social
security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
37
(f) judgment and other similar Liens arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Parent or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of any Subsidiary to the Parent;
(i) purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease; provided that:
(i) any property subject to any of the foregoing is acquired by the
Parent or any such Subsidiary in the ordinary course of its business and
the Lien on any such property is created contemporaneously with such
acquisition;
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 95% of the lesser of cost or fair market value as
of the time of acquisition of the property covered thereby to the Parent or
such Subsidiary acquiring the same;
(iii) each such Lien shall attach only to the property so acquired and
fixed improvements thereon, attachments thereto and proceeds thereof; and
(iv) the related expenditure is permitted under Section 8.3;
(j) Liens identified on Schedule IV, including renewals, extensions or
refinancings thereof (and including refinancings by institutions other than
those institutions identified on Schedule IV), provided that the principal
amount secured by such Liens does not increase;
(k) other Liens, provided that in no event shall the outstanding
liabilities secured by Liens permitted by this clause (k) exceed at any time
$2,000,000 as to the Parent and its Subsidiaries in the aggregate.
Section 7.4. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except:
(a) leases existing on the date of this Agreement and any extensions
or renewals thereof;
38
(b) Capital Leases permitted by Sections 7.1 and 7.3; and
(c) other leases (excluding Capital Leases) that are, in the judgment
of the management of the Parent, appropriate for the business objectives of the
Parent and its Subsidiaries.
Section 7.5. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, or
permit any such Subsidiary to purchase or otherwise acquire, any capital stock,
assets (except as otherwise permitted by this Agreement), obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person, except:
(a) direct obligations of the United States of America or any agency
thereof with maturities of two years or less from the date of acquisition;
(b) commercial paper of a domestic issuer rated at least "A-1" by S&P
or "P1" by ▇▇▇▇▇'▇;
(c) certificates of deposit and time deposits with maturities of one
year or less from the date of acquisition issued by any commercial bank whose
(or whose parent company's) short-term commercial paper rating is rated at least
"A-1" by S&P or "P-1" by ▇▇▇▇▇'▇.;
(d) for stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the Parent or any
such Subsidiary;
(e) inventory purchased in the ordinary course of business of the
Parent or such Subsidiary;
(f) any Acquisition permitted by Section 7.11;
(g) investments in shares of investment companies registered under the
Investment Company Act of 1940 which are no-load money-market funds and which
invest primarily in obligations of the type described in clauses (a), (b) and
(c) of this Section and which are classified as current assets in accordance
with GAAP, provided that any such investment company shall have an aggregate net
asset value of not less than $50,000,000;
(h) advances to employees of the Parent or any of its Subsidiaries
that do not exceed $500,000 outstanding at any time in the aggregate as to all
such employees of the Parent and its Subsidiaries;
(i) loans and advances permitted by Section 7.1(d), other investments
by any foreign Subsidiary of the Parent in any other foreign Subsidiary of the
Parent that is wholly owned by the Parent and other investments by the Parent or
any Subsidiary of the Parent in any other Subsidiary of the Parent;
(j) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
39
(k) other investments of up to $15,000,000 in the aggregate as to all
of the Parent and its Subsidiaries;
(l) as permitted under Sections 7.7(c), 7.7(d) and 7.7(e); and
(m) taxable or tax-exempt municipal securities that have an
established secondary market, asset-backed securities and/or corporate bonds, in
each case which are rated "A2" or better by ▇▇▇▇▇'▇ or "A" or better by S&P.
Section 7.6. Dividends. Declare or pay any dividends (other than
dividends payable solely in shares of its common stock), purchase, redeem,
retire or otherwise acquire for value any of its capital stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such
whether in cash, assets or in obligations of the Parent, or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption or retirement of any shares of its capital
stock, or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock, or permit any of its Subsidiaries to
do any of the foregoing, or permit any of its Subsidiaries to purchase or
otherwise acquire for value any stock of the Parent or another such Subsidiary
(except as permitted by Section 7.8(b)), except that the Parent may pay
dividends or acquire its stock (or both), provided that:
(x) no Default or Event of Default exists either immediately prior to
such payment or acquisition, or after giving effect to such payment or
acquisition; and
(y) the aggregate amount expended by the Parent after January 31, 2005
for all such dividends and acquisitions does not exceed the sum of (i)
$75,000,000, plus (ii) 50% of the cumulative net income of the Parent for
its fiscal year ending January 31, 2006 and each subsequent fiscal year
that shall have ended prior to the payment of such dividend or the
acquisition of such stock (which net income for any year shall be adjusted
to exclude non-recurring gains, except to the extent that the Parent shall
have received actual cash representing such gain in such year), less (iii)
100% of the cumulative net loss (if any) of the Parent for its fiscal year
ending January 31, 2006 and each subsequent fiscal year that shall have
ended prior to the payment of such dividend or the acquisition of such
stock.
and except that any Subsidiary may pay dividends or make distributions to the
Parent and to any Subsidiary of the Parent.
Section 7.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests), except:
(a) for inventory disposed of in the ordinary course of business;
(b) the sale or other disposition of assets no longer used or useful
in the conduct of its business;
40
(c) that any such Subsidiary may sell, lease, assign, transfer or
otherwise dispose of its assets to the Parent, and except that any such
Subsidiary (other than a Borrower) may sell, lease, assign, transfer or
otherwise dispose of its assets to another Subsidiary that shall have previously
executed and delivered a Guarantee pursuant to Section 6.9, and except that any
Borrower may sell, lease, assign, transfer or otherwise dispose of its assets to
the other Borrower;
(d) that any foreign Subsidiary of the Parent (other than a Borrower)
may sell, lease, assign, transfer or otherwise dispose of its assets to another
foreign Subsidiary of the Parent that is wholly owned by the Parent;
(e) as contemplated under Section 7.8(a) or (b); and
(f) for Designated Sales (provided that (i) all the outstanding shares
of each Borrower shall at all times be wholly owned directly or indirectly by
the Parent, (ii) no Default or Event of Default has occurred and is continuing
at the time of any such sale and (iii) after giving effect to any such sale, the
Parent shall be in pro forma compliance with the covenants in Article 8 (and, in
the case of each Designated Sale of assets exceeding a fair market value of
$10,000,000, the Parent shall have provided to the Administrative Agent a
certificate of the chief financial officer of the Parent certifying to and
setting forth in reasonable detail computations demonstrating such compliance
at, or immediately prior to, the time of such sale)).
In no event shall any disposition of assets by the Parent or any Subsidiary be
for less than fair market value.
Section 7.8. Stock of Subsidiaries, Etc. Sell or otherwise dispose of,
or permit any of its Subsidiaries to sell or otherwise dispose of, any shares of
capital stock of any of its Subsidiaries, except:
(a) for a sale of all or substantially all of the stock of any
Subsidiary for less than $3,000,000 where (i) the sales proceeds are made
available to the Parent and (ii) such proceeds represent the fair value of such
Subsidiary;
(b) the shares of any foreign Subsidiary of the Parent may be sold to
another foreign Subsidiary of the Parent or to the Parent, except that the
outstanding shares of each Borrower shall at all times be majority-owned
directly or indirectly by the Parent;
(c) the shares of any domestic Subsidiary of the Parent may be sold to
another domestic Subsidiary of the Parent or to the Parent; and
(d) for Designated Sales (provided, however, that all the outstanding
shares of each Borrower shall at all times be wholly owned directly or
indirectly by the Parent);
or permit any such Subsidiary to issue any additional shares of its capital
stock, except directors' qualifying shares and except in connection with a
transaction permitted by clause (a), (b) or (c) of this Section to the extent
necessary to effectuate such transaction; provided that, notwithstanding the
foregoing or anything in this Agreement to the contrary, the Parent may acquire
and own a majority interest in one or more entities incorporated in
jurisdictions outside of the United States of America.
41
Section 7.9. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate or permit any of its Subsidiaries
to enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Parent's or such Subsidiary's business (including without limitation direct
and indirect promotional and advertising efforts of the Parent, consistent with
past practice) and upon fair and reasonable terms that are (except for loans and
advances permitted by clauses (h) and (j) of Section 7.5) no less favorable to
the Parent or such Subsidiary than would obtain in a comparable arm's length
transaction with a Person not an Affiliate, and except for (i) transactions
between the Parent and any Subsidiary or between Subsidiaries, (ii) Investments
permitted under Section 7.5, (iii) dividends or other payments permitted under
Section 7.6, (iv) any employment, compensation, indemnification, noncompetition
or confidentiality agreement or arrangement entered into by the Parent or any of
its Subsidiaries with their employees or directors in the ordinary course of
business and (v) transactions listed in Schedule VI.
Section 7.10. Mergers, Etc. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or of a line of business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of its Subsidiaries to do so, except:
(a) for Acquisitions that are permitted pursuant to Section 7.11;
(b) sales of assets that are permitted pursuant to clauses (c) and (d)
of Section 7.7 and clauses (a), (b) and (c) of Section 7.8; and
(c) for Designated Sales (provided, however, that all the outstanding
shares of each Borrower shall at all times be wholly owned directly or
indirectly by the Parent).
Section 7.11. Acquisitions. Make any Acquisition unless:
(i) no Default or Event of Default exists either immediately prior to
such Acquisition or after giving effect to such Acquisition;
(ii) such Acquisition is approved by the board of directors of the
corporation (if any) which is the subject of such Acquisition, or is
recommended by such board to the shareholders of such corporation; and
(iii) if the principal business of the corporation or other entity
which is the subject of such Acquisition is not in the Core Business, then
the aggregate amount expended by the Parent or any Subsidiary for such
Acquisition, and for all other Acquisitions where the principal business of
the corporation or other entity which is the subject thereof is not in the
Core Business, is not more than $20,000,000.
As used herein, the term "Acquisition" means any transaction pursuant to which
the Parent or any of its Subsidiaries (a) acquires equity securities (or
warrants, options or other rights to
42
acquire such securities) of any corporation or other entity other than the
Parent or any corporation which is not then a Subsidiary of the Parent, pursuant
to a solicitation of tenders therefor, or in one or more negotiated block,
market or other transactions not involving a tender offer, or a combination of
any of the foregoing, or (b) makes any corporation or other entity a Subsidiary
of the Parent, or causes any such corporation or other entity to be merged into
the Parent or any of its Subsidiaries, in any case pursuant to a merger,
purchase of securities or of assets or any reorganization providing for the
delivery or issuance to the holders of the then outstanding securities of such
corporation or other entity, in exchange for such securities, of cash or
securities of the Parent or any of its Subsidiaries, or a combination thereof,
or (c) purchases all or substantially all of the assets or of any line of
business of any corporation or other entity.
Section 7.12. No Material Change in Business. Make or permit any of
its Subsidiaries (other than an Inactive Subsidiary) to make a material change
in the nature of its business such that it is no longer primarily engaged in the
Core Business.
Section 7.13. No Restriction. Agree, or permit any of its Subsidiaries
to agree, to any restriction on the right of any Subsidiary to pay to the Parent
any dividends or repayments of loan advances.
Section 7.14. Swap and Exchange Agreements. Enter into, or permit any
of its Subsidiaries to enter into, any interest-rate swap, cap, floor, collar or
other similar agreement, or any foreign exchange contract, currency swap
agreement or other similar agreement, except for the purpose of hedging its risk
in the ordinary course of business.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Revolving Credit Commitment under this Agreement:
Section 8.1. Interest Coverage Ratio. The Parent shall not permit, as
of the last day of any fiscal quarter of the Parent, the Interest Coverage Ratio
for the period of the four consecutive fiscal quarters ending on such day to be
less than 3.5 to 1.0.
Section 8.2. Average Debt Coverage Ratio. The Parent shall not permit,
as of the last day of any fiscal quarter of the Parent, the Average Debt
Coverage Ratio for the period of four consecutive fiscal quarters ending on such
day to be greater than 3.25 to 1.0.
Section 8.3. Capital Expenditures. The Parent shall not permit (a)
Consolidated Capital Expenditures to exceed $25,000,000 for any fiscal year and
(b) the sum of Consolidated Capital Expenditures to exceed $100,000,000 during
the period from February 1, 2005 through the Maturity Date; provided that (i) if
the amount of Consolidated Capital Expenditures made in any fiscal year shall be
less than the maximum amount permitted under clause (a) above (before giving
effect to any carryover), then the unused portion of such maximum amount may be
added to the amount of Consolidated Capital Expenditures permitted under such
clause (a) for the immediately succeeding (but not any other) fiscal year and
(ii) the maximum amount permitted under clauses (a) and (b) above shall be
increased by the amount of net cash insurance proceeds, or proceeds of a
condemnation award or other compensation, received by the Parent and its
Subsidiaries during the relevant period in respect of any loss of, damage to or
destruction of, or
43
any condemnation or taking of, property (provided that no later than 30 days
after the end of the fiscal quarter in which such proceeds are so received, the
Parent shall have delivered to the Administrative Agent setting forth in
reasonable detail the amount of such net cash proceeds).
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.1. Events of Default. Any of the following events shall be
an "Event of Default":
(a) any Borrower shall: (i) fail to pay the principal of any of its
Notes as and when due and payable; or (ii) fail to pay interest on any of its
Notes or any fee or other amount due from it hereunder as and when due and
payable and such failure shall continue for three days;
(b) any representation or warranty made or deemed made by any Borrower
or the Parent in this Agreement or in any other Facility Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;
(c) any Borrower or the Parent shall: (i) fail to perform or observe
any term, covenant or agreement required to be performed or observed by it that
is contained in Section 2.12, or Articles 7 or 8; or (ii) fail to perform or
observe any term, covenant or agreement on its part to be performed or observed
(other than the obligations specifically referred to elsewhere in this Section)
in any Facility Document and (in the case of a failure referred to in this
clause (ii)), such failure shall continue for 30 consecutive days;
(d) the Parent or any of its Subsidiaries shall: (i) fail to pay any
indebtedness, including but not limited to indebtedness for borrowed money
(other than the payment obligations described in (a) above), of the Parent or
such Subsidiary, as the case may be, or any interest or premium thereon, when
due (whether by installment, scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) fail to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, after the giving of notice or
passage of time, or both, the maturity of such indebtedness, provided that (in
the case of both (i) and (ii)) the aggregate principal amount of such
indebtedness as to which such failure to pay has occurred (and not merely the
installment or other portion thereof not paid), or as to which the maturity is
or is permitted to be accelerated by reason of such failure to perform or
observe, shall be $5,000,000 or more; or any such indebtedness whose principal
amount is $5,000,000 or more shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) the Parent or any of its Subsidiaries: (i) shall generally not, or
be unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii) shall commence
any proceeding under any bankruptcy, reorganization, arrangement or
44
readjustment of debt law or statute, or (except in the case of an Inactive
Subsidiary) any dissolution or liquidation law or statute, of any jurisdiction
whether now or hereafter in effect; or (iv) shall have had any such petition or
application filed or any such proceeding shall have been commenced, against it,
in which an adjudication or appointment is made or order for relief is entered,
or which petition, application or proceeding remains undismissed or unstayed for
a period of 30 days or more; or shall be the subject of any proceeding under
which its assets may be subject to seizure, forfeiture or divestiture (other
than a proceeding in respect of a Lien permitted under Section 7.3 (a)); or (v)
by any act or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or order for relief
or the appointment of a custodian, receiver or trustee for all or any
substantial part of its property; or (vi) shall suffer any such custodianship,
receivership or trusteeship to continue undischarged for a period of 30 days or
more;
(f) one or more judgments, decrees or orders for the payment of money
in excess of $5,000,000 in the aggregate shall be rendered against the Parent or
any of its Subsidiaries and such judgments, decrees or orders shall continue
unsatisfied and in effect for a period of 60 consecutive days without being
vacated, discharged, satisfied or stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with respect to any
Plan or Multiemployer Plan concerning which the Parent is under an obligation to
furnish a report to the Lenders in accordance with Section 6.8(f) and as a
result of such event or condition, together with all other such events or
conditions, the Parent or any ERISA Affiliate has incurred or in the opinion of
the Required Lenders is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a Section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of the
Parent and its Subsidiaries, on a consolidated basis;
(h) the Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material;
(i) if at any time the capital stock of the Parent owned by the
▇▇▇▇▇▇▇▇ Group represents less than 25% of the voting power of (x) all
outstanding capital stock of the Parent and (y) all outstanding securities and
rights that are then convertible into or exchangeable for capital stock of the
Parent or upon the exercise of which capital stock of the Parent will be issued
in respect of such securities or rights;
(j) there is a seizure by or forfeiture in favor of any Governmental
Authority of any property of the Parent or any of its Subsidiaries having a
value in excess of $5,000,000, other than (i) by an eminent domain proceeding
where the Parent or such Subsidiary receives reasonable compensation therefor;
or (ii) if such seizure or forfeiture does not have a material adverse effect on
the financial condition, business or operations of the Parent and its
Subsidiaries taken as a whole or on the ability of any Borrower or the Parent to
perform any of its obligations under any Facility Document; or
45
(k) the Parent Guarantee shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Guarantor, or the Guarantor shall deny it has any further
liability or obligation thereunder or shall fail to perform its obligations
thereunder.
Section 9.2. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may or, upon request of the Required
Lenders, shall by notice to the Parent and the Borrowers, do any or all of the
following: (a) declare the Revolving Credit Commitments to be terminated,
whereupon the same shall forthwith terminate; and (b) declare the outstanding
principal of the Notes, all interest thereon and all other amounts payable under
this Agreement or the Notes to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each Borrower (provided that, in the
case of an Event of Default referred to in Section 9.1(e) as to the Parent or
any Borrower, the Revolving Credit Commitments shall be immediately terminated,
and the Notes, all interest thereon and all other amounts payable under this
Agreement shall be immediately due and payable without any notice and without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Parent and each Borrower).
ARTICLE 10. THE ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS AND PARENT.
Section 10.1. Appointment, Powers and Immunities of Administrative
Agent. Each Lender hereby irrevocably (but subject to removal by the Required
Lenders pursuant to Section 10.9) appoints and authorizes the Administrative
Agent to act as its agent hereunder and under any other Facility Document with
such powers as are specifically delegated to the Administrative Agent by the
terms of this Agreement and any other Facility Document, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and any other Facility Document, and shall not by reason of this
Agreement be a trustee for any Lender. The Administrative Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Parent or any Borrower or any officer or official of the
Parent, any Borrower or any other Person contained in this Agreement or any
other Facility Document, or in any certificate or other document or instrument
referred to or provided for in, or received by any of them under, this Agreement
or any other Facility Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Facility Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any collateral
security for the Loans or for any failure by the Parent or any Borrower to
perform any of its obligations hereunder or thereunder. The Administrative Agent
may employ agents and attorneys-in-fact and shall not be responsible, except as
to money or securities received by it or its authorized agents, for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any
46
other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct.
Section 10.2. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Lender as
the holder of the Loans made by it for all purposes hereof unless and until an
Assignment and Assumption Agreement shall have been furnished to the
Administrative Agent in accordance with Section 11.5, but the Administrative
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan or any such participation from a Lender. As to any
matters not expressly provided for by this Agreement or any other Facility
Document, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Lenders, and such instructions of the Required Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders and any other holder of all or any portion of any Loan or any
such participation.
Section 10.3. Defaults. The Administrative Agent shall not be deemed
to have knowledge of the occurrence of a Default or Event of Default (other than
the non-payment of principal of or interest on the Loans to the extent the same
is required to be paid to the Administrative Agent for the account of the
Lenders) unless the Administrative Agent has received notice from a Lender or
the Parent or a Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default." In the event that the Administrative
Agent receives such a notice of the occurrence of a Default or Event of Default,
the Administrative Agent shall give prompt notice thereof to the Lenders (and
shall give each Lender prompt notice of each such non-payment). The
Administrative Agent shall (subject to Section 10.8 and Section 11.1(a)) take
such action with respect to such Default or Event of Default which is continuing
as shall be directed by the Required Lenders; provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may 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 Lenders; and provided further that the Administrative Agent shall not be
required to take any such action which it determines to be contrary to law.
Section 10.4. Rights of Administrative Agent as a Lender. With respect
to its Revolving Credit Commitment and the Loans made by it, the entity which is
the Administrative Agent in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Administrative Agent, and the term "Lender"
or "Lenders" shall, unless the context otherwise indicates, include the entity
which is the Administrative Agent in its capacity as a Lender. The entity which
is the Administrative Agent and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to (on a secured or
unsecured basis), and generally engage in any kind of banking, trust or other
business with, the Parent (and any of its Affiliates including the Borrowers) as
if it were not acting as the Administrative Agent, and the entity which is the
Administrative Agent may accept fees and other consideration from the Parent or
any Borrower
47
for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders. Although the Administrative Agent and its
Affiliates may in the course of such relationships and relationships with other
Persons acquire information about the Parent, its Affiliates and such other
Persons, the Administrative Agent shall have no duty to disclose such
information to the Lenders.
Section 10.5. Indemnification of Administrative Agent. The Lenders
agree to indemnify the Administrative Agent (to the extent not reimbursed under
Section 11.3 or under the applicable provisions of any other Facility Document,
but without limiting the obligations of the Borrowers under Section 11.3 or such
provisions), ratably in accordance with their respective Pro Rata Percentages,
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Facility Document or any other documents contemplated by or referred
to herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which any Borrower is obligated to pay under
Section 11.3 or under the applicable provisions of any other Facility Document
but excluding, unless a Default or Event of Default has occurred, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents or instruments; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
Section 10.6. Documents. The Administrative Agent will forward to each
Lender, promptly after the Administrative Agent's receipt thereof, a copy of
each report, notice or other document required by this Agreement or any other
Facility Document to be delivered to the Administrative Agent for such Lender.
Section 10.7. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Parent and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Facility Document.
The Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Parent or any Borrower of this Agreement or any
other Facility Document or any other document referred to or provided for herein
or therein or to inspect the properties or books of the Parent or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Parent or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Administrative Agent or
any of its Affiliates. The Administrative Agent shall not be required to file
this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, for record or give notice of this
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Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 10.8. Failure of Administrative Agent to Act. Except for
action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall have received further assurances
(which may include cash collateral) of the indemnification obligations of the
Lenders under Section 10.5 in respect of any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Section 10.9. Resignation of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Lenders, the Parent and the Borrowers. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor Administrative
Agent, subject (unless an Event of Default exists) to the approval of the
Parent, which approval shall not be unreasonably withheld. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, subject (unless an Event of Default exists) to the
approval of the Parent, which approval shall not be unreasonably withheld, which
shall be a Lender or (if no Lender accepts the appointment) a bank which has
offices in New York, New York and London and has a combined capital and surplus
of at least $1,000,000,000. The Required Lenders or the retiring Administrative
Agent, as the case may be, shall upon the appointment of a successor
Administrative Agent promptly so notify the Parent, the Borrowers and the other
Lenders. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 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 the Administrative Agent.
Section 10.10. Amendments Concerning Agency Function. The
Administrative Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document which affects its
duties hereunder or thereunder unless it shall have given its prior consent
thereto.
Section 10.11. Liability of Administrative Agent. The Administrative
Agent shall not have any liabilities or responsibilities to the Parent or any
Borrower on account of the failure of any Lender to perform its obligations
hereunder or to any Lender on account of the failure of the Parent or any
Borrower to perform its obligations hereunder or under any other Facility
Document.
Section 10.12. Delegation of Agency Functions. The Administrative
Agent may perform any and all its duties and exercise any or all of its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and
49
any such sub-agent may perform any and all its duties and exercise any and all
of its rights and powers through their respective Affiliates. The exculpatory
provisions as to the Administrative Agent contained in this Article shall apply
to any such sub-agent and to the Affiliates of the Administrative Agent and any
such sub-agent.
Section 10.13. Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender or a
Borrower (either one as appropriate being the "Payor") (or by the Parent or any
Borrower) prior to the date on which such Lender is to make payment hereunder to
the Administrative Agent of the proceeds of a Loan or such Borrower is to make
payment to the Administrative Agent, as the case may be (either such payment
being a "Required Payment"), which notice shall be effective upon receipt, that
the Payor does not intend to make the Required Payment to the Administrative
Agent, the Administrative Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and, if
the Payor has not in fact made the Required Payment to the Administrative Agent,
the recipient of such payment (and, if such recipient is a Borrower and the
Payor Lender fails to pay the amount thereof to the Administrative Agent
forthwith upon demand, such Borrower) shall, on demand, repay to the
Administrative Agent the amount made available to it together with interest
thereon for the period from the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of a Borrower, the interest
rate applicable at such time to the applicable Loan, and (ii) in the case of
such Lender, a rate determined by the Administrative Agent to represent its cost
of overnight or short-term funds in Swiss francs (which determination shall be
conclusive absent manifest error). If a Lender makes a Required Payment to the
Administrative Agent pursuant to the immediately preceding sentence and a
Borrower shall have repaid such amount to the Administrative Agent pursuant to
such sentence, the Administrative Agent shall promptly return to such Borrower
any amount (including interest) paid by such Borrower to the Administrative
Agent pursuant to such sentence.
Section 10.14. Several Obligations and Rights of Lenders. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each of
them shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other of them to be joined as
an additional party in any proceeding for such purpose.
Section 10.15. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise expressly provided: (a) each Borrowing of Loans pursuant to Section
2.1 shall be made from the Lenders, each reduction or termination of the amount
of the Revolving Credit Commitments under Section 2.8 shall be applied to the
Revolving Credit Commitments, and each payment of Commitment Fees accruing under
Section 2.5 shall be made for the account of the Lenders, pro rata according to
the amounts of their respective unused Revolving Credit Commitments; and (b)
each prepayment and payment of principal of or interest on Loans of a particular
Interest Period shall be made to the Administrative Agent for the account of the
Lenders holding Loans of such
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Interest Period pro rata in accordance with the respective unpaid principal
amounts of such Loans of such Interest Period held by such Lenders.
Section 10.16. Sharing of Payments Among Lenders. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it, through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means it shall promptly purchase from the other Lenders participations in
(or, if and to the extent specified by such Lender, direct interests in) the
Loans made by the other Lenders, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in accordance with the
unpaid principal and interest on the Loans held by each of them. To such end the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Each Borrower agrees that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders may exercise all rights
of setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of any Borrower.
Section 10.17. Other Agents. Notwithstanding anything herein to the
contrary, the Sole Lead Arranger and Sole Bookrunner, the Syndication Agent and
the Documentation Agents named on the cover page of this Agreement shall not
have any duties or liabilities under this Agreement, except in their capacity,
if any, as Lenders.
ARTICLE 11. MISCELLANEOUS.
Section 11.1. Amendments and Waivers; Remedies Cumulative. (a) Except
as otherwise expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in writing signed by
the Borrowers and the Parent, the Administrative Agent and the Required Lenders,
or by the Borrowers and the Parent, and the Administrative Agent acting with the
consent of the Required Lenders, and any provision of this Agreement may be
waived by the Required Lenders or by the Administrative Agent acting with the
consent of the Required Lenders; provided that no amendment, modification or
waiver shall, unless by an instrument signed by all of the Lenders or by the
Administrative Agent acting with the consent of all of the Lenders: (i) increase
or extend the term, or extend the time for the reduction or termination, of the
Revolving Credit Commitments, (ii) extend the date fixed for the payment of
principal of or interest on any Loan or any fees payable hereunder, (iii) reduce
the amount of any payment of principal thereof or the rate at which interest is
payable thereon or any fee payable hereunder, (iv) alter the terms of this
Section or any other provision hereof specifying that the approval of all
Lenders is required (including such provisions contained in Section 11.5(a)),
(v) amend the definition of the term "Required Lenders", (vi) release collateral
(if any) in any material amount, (vii) release or limit the Parent Guarantee or
(viii) add any currency (other than Euro) as a currency in which Loans may be
made; and provided, further, that any amendment of Article 10 or any amendment
which increases the obligations of the Administrative Agent hereunder shall
require the consent of the Administrative Agent.
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(b) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power 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. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Parent or any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (a) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent or
any Lender may have had notice or knowledge of such Default or Event of Default
at the time.
Section 11.2. Usury. Anything herein to the contrary notwithstanding,
the obligations of each Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Lender limiting rates of interest which may be charged or collected by such
Lender.
Section 11.3. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay (i) all reasonable and documented out-of-pocket expenses incurred by
the Administrative Agent, including the reasonable and documented fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facility provided for herein, the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), and (ii) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the reasonable and documented fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made,
including all such reasonable and documented out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans. The
liability of each Borrower under this paragraph (a) shall be limited to such
out-of-pocket expenses that (x) relate to such Borrower or to the Loans made to
such Borrower or to the obligations incurred by such Borrower under this
Agreement or under any other Facility Document to which such Borrower is a
party, or (y) arise as a result of such Borrower being a party to this Agreement
or to another Facility Document.
(b) The Borrowers shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the reasonable and documented fees, charges and disbursements of any counsel for
any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the use of proceeds of a Loan or (ii)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing or to the execution or delivery of this
Agreement or any other Facility Document or any agreement or instrument
contemplated hereby or thereby or to the performance by the parties
52
hereto or thereto of their respective obligations hereunder or thereunder or to
the consummation of the transactions contemplated hereby or thereby or to any
Loan, whether the same is based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee. The
liability of each Borrower under this paragraph (b) shall be limited to such
losses, claims, damages, liabilities and related expenses that (x) relate to
such Borrower or to the Loans made to such Borrower or to the obligations
incurred by such Borrower under this Agreement or under any other Facility
Document to which such Borrower is a party, or (y) arise as a result of such
Borrower being a party to this Agreement or to another Facility Document.
(c) To the extent that the Borrowers fail to pay any amount required
to be paid to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's Pro Rata Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Facility Document or any
agreement or instrument contemplated hereby or thereby, any Loan or the use of
the proceeds thereof.
Section 11.4. Survival. The obligations of the Borrowers under Article
3 and Section 11.3 shall survive the repayment of the Loans and the termination
of the Revolving Credit Commitments.
Section 11.5. Assignment; Participations. (a) This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrowers, the
Administrative Agent, the Lenders and their respective successors and assigns,
except that no Borrower may assign or transfer its rights or obligations
hereunder without the written approval of all the Lenders (and any attempted
such assignment or transfer without such consent shall be null and void).
(b) Each Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Revolving Credit Commitment and the Loans owing to it), with the prior
written consent (such consent not to unreasonably withheld) of (i) the
Administrative Agent and (ii) the Parent; provided that (x) no such consent of
the Parent shall be required for an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund or if any Event of Default exists as a result of the
commencement of a case with respect to the Parent under the U.S. Federal
Bankruptcy Code or as a result of the commencement of a bankruptcy, insolvency,
reorganization, receivership or similar proceeding
53
with respect to either Borrower under Swiss or other foreign law, to any other
assignee and (y) the provisions of paragraph (g) below shall have been complied
with.
Assignments shall be subject to the following additional conditions:
(A) each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
and the assignment shall cover the same percentage of such Lender's Revolving
Credit Commitment and Loans;
(B) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Revolving Credit Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the effective date of the Assignment and Assumption Agreement with respect
to such assignment) shall in no event be less than CHF 5,000,000 and shall be an
integral multiple of CHF 1,000,000, unless the Administrative Agent and the
Parent otherwise consent (provided that no such consent of the Parent shall be
required if any Event of Default exists as a result of the commencement of a
case with respect to the Parent under the U.S. Federal Bankruptcy Code or as a
result of the commencement of a bankruptcy, insolvency, reorganization,
receivership or similar proceeding with respect to either Borrower under Swiss
or other foreign law);
(C) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its approval and acceptance, an Assignment and
Assumption Agreement;
(D) the Administrative Agent shall receive from the assignor (or, in
the case of an assignment pursuant to Section 3.7, from the Parent) a processing
fee of $3,500; and
(E) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Upon such execution, delivery, approval and acceptance, and on the
effective date specified in the applicable Assignment and Assumption Agreement,
(a) the assignee thereunder shall become a party hereto and a "Lender" for
purposes hereof and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Assumption Agreement, shall
have the rights and obligations of a Lender hereunder and (b) the
Lender-assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Assumption
Agreement, relinquish its rights (except under Article 3 and Section 11.3 in
respect of the period prior to the effective date of such Assignment and
Assumption) and be released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and Assumption
Agreement, the Lender-assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Assumption Agreement, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Facility Document or the execution,
legality,
54
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Facility Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Parent or any Subsidiary or the performance or observance by the Parent or any
Subsidiary of any of their respective obligations under any Facility Document or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 6.8(a) and (b) and
such other Facility Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Assumption Agreement; (iv) such assignee will, independently
and without reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Facility
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent shall maintain a copy of each Assignment
and Assumption Agreement delivered to and accepted by it and shall record the
names and addresses of each Lender and the Revolving Credit Commitment of, and
principal amount of the Loans owing to such Lender from time to time. Each
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is so recorded as a Lender hereunder for all purposes of this Agreement,
absent manifest error. Such record shall be available for inspection by each
Borrower and each Lender.
(e) Upon its receipt of an Assignment and Assumption Agreement
executed by an assigning Lender and an assignee and (to the extent required by
this Section) consented to by the Parent and the Administrative Agent and the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the Administrative Agent shall, if such
Assignment and Assumption Agreement has been properly completed, (i) accept such
Assignment and Assumption Agreement, (ii) record the information contained
therein and (iii) give prompt notice thereof to the Borrowers and the Lenders.
Upon request, each Borrower shall execute and deliver to the Administrative
Agent appropriate promissory notes in favor of each assignee evidencing such
assignee's Pro Rata Percentage of the Total Revolving Credit Commitment. If the
Lender-assignor shall have assigned its entire Revolving Credit Commitment and
Loans, the original promissory notes evidencing such Revolving Credit Commitment
and Loans shall be cancelled and returned to the applicable Borrower.
(f) Subject to paragraph (g) of this Section, each Lender may sell
participations to one or more banks, finance companies, insurance or other
financial institutions in or to all or a portion of its rights and obligations
under this Agreement (including without limitation all or a portion of its
Revolving Credit Commitment and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement (including without
55
limitation its Revolving Credit Commitment) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such participant shall have no rights
under any of the Facility Documents, (iv) each Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and with regard to any and all payments to be made under this
Agreement and its Notes, and (v) the agreement executed by such Lender in favor
of the participant shall not give the participant the right to require such
Lender to take or omit to take any action hereunder except action directly
relating to (i) the extension of a payment date with respect to any portion of
the principal of or interest on any amount outstanding hereunder allocated to
such participant, (ii) the reduction of the principal amount outstanding
hereunder allocated to such participant or (iii) the reduction of the rate of
interest payable on such amount or any amount of fees payable hereunder to a
rate or amount, as the case may be, below that which the participant is entitled
to receive under its agreement with such Lender.
(g) Notwithstanding anything herein to the contrary, without the prior
written consent of the Parent, no Lender shall effect any assignment of all or a
portion of, or any sale of a participation in or entry into any
sub-participation agreement (each a "transfer") with respect to, any Loan made
to any Borrower if such transfer would result in more than five Lenders which
are not Qualifying Banks. Each Lender further agrees that if in connection with
any transfer by such Lender the proposed transferee is not a Qualifying Bank,
such Lender shall give at least ten days' prior notice of such proposed transfer
to the Parent and the Administrative Agent (which shall promptly notify each of
the other Lenders). Any such purported assignment, participation or
sub-participation that does not comply with the requirements of this paragraph
(including the requirement for notice pursuant to the immediately preceding
sentence) shall be null and void.
(h) Each Borrower will use reasonable efforts to cooperate with the
Administrative Agent and Lenders in connection with the assignment of interests
under this Agreement or the sale of participations herein.
(i) No Lender shall be permitted to assign or sell all or any portion
of its rights and obligations under this Agreement to the Parent or any
Affiliate of the Parent.
(j) Any Lender that proposes to sell any assignment or participation
hereunder may furnish any information concerning the Parent and its Affiliates
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information, as provided in Section 11.14.
(k) In addition to the assignments and participations permitted under
the foregoing provisions of this Section, any Lender may at any time pledge or
grant a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation any
pledge or grant to secure obligations of such Lender to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or grant of a security
interest; provided that no such pledge or grant of a security interest shall
release a Lender from
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any of its obligations hereunder or substitute any such pledgee or grantee for
such Lender as a party hereto.
Section 11.6. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, (i) in the case of
any Borrower or the Administrative Agent, to it at its address set forth beneath
its signature line below and (ii) in the case of any Lender, to it at its
address (or telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or any
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
Section 11.7. Setoff. Each Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a
Lender may otherwise have, each Lender (and any Affiliate thereof through which
any Loan is made) shall be entitled, at its option, to offset balances (general
or special, time or demand, provisional or final) held by it for the account of
such Borrower at any of such Lender's offices, in dollars or in any other
currency, against any amount payable by such Borrower to such Lender under this
Agreement or such Lender's Note which is not paid when due (regardless of
whether such balances are then due to such Borrower), in which case it shall
promptly notify such Borrower and the Administrative Agent thereof; provided
that such Lender's failure to give such notice shall not affect the validity
thereof or place such Lender under any liability to such Borrower. Payments by
each Borrower hereunder shall be made without setoff or counterclaim.
Section 11.8. JURISDICTION; JURY WAIVER; IMMUNITIES. (a) EACH OF THE
BORROWERS AND THE PARENT HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY OVER
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTES OR ANY OTHER FACILITY DOCUMENT, AND EACH OF THE BORROWERS AND THE PARENT
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT.
EACH OF THE BORROWERS AND THE PARENT IRREVOCABLY CONSENTS TO THE SERVICE
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OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
OF SUCH PROCESS TO THE PARENT OR SUCH BORROWER AT THE ADDRESS FOR IT SPECIFIED
IN SECTION 11.6. EACH OF THE BORROWERS AND THE PARENT AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. EACH OF THE BORROWERS AND THE PARENT FURTHER WAIVES ANY
OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN
SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. EACH OF THE BORROWERS AND THE
PARENT FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE
ADMINISTRATIVE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY.
(b) Furthermore, each Borrower hereby agrees that service of all
writs, process and summonses in any such action or proceeding brought in the
State of New York may be made upon Corporation Service Company, presently
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. (the
"Process Agent") and each Borrower hereby confirms and agrees that the Process
Agent has been duly and irrevocably appointed as its agent and true and lawful
attorney-in-fact in its name, place and stead to accept such service of any and
all such writs, process and summonses, and agrees that the failure of the
Process Agent to give any notice of any such service of process to such Borrower
(or to any other Person) shall not impair or affect the validity of such service
or of any judgment based thereon.
(C) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.
(d) Nothing in this Section shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by law or affect the right of the Administrative Agent or any Lender
to bring any action or proceeding against the Parent or any Borrower or its
respective property in the courts of any other jurisdictions.
(e) To the extent that any Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or
58
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, such Borrower hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and its Notes.
Section 11.9. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 11.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 11.11. Authorization of Parent. Each Borrower hereby
authorizes the Parent to give on behalf of such Borrower all notices, consents
and other communications that may be given by such Borrower under or in
connection with this Agreement or any other Facility Document, and to receive on
behalf of such Borrower all notices, consents and other communications that may
be given to such Borrower under or in connection with this Agreement or any
other Facility Document (in each case, irrespective of whether or not such
notice, consent or other communication is expressly provided elsewhere in this
Agreement to be given or received by the Parent on behalf of such Borrower).
Such notices, consents and other communications may include Borrowing Requests,
notices as to continuations and prepayments of Loans, notices and demands in
connection with Events of Default, and notices and demands in connection with
the exercise by the Administrative Agent or any Lender of remedies. Such
notices, consents and other communications may be given by or to the Parent in
its own name or in the name of such Borrower. The authority given by each
Borrower in this Section is coupled with an interest and is irrevocable until
all the Revolving Credit Commitments of the Lenders have expired or been
terminated and all the obligations of such Borrower under this Agreement and the
other Facility Documents have been paid in full.
Section 11.12. Integration. The Facility Documents set forth the
entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 11.14. Confidentiality. (a) Each Lender and the Administrative
Agent agrees (on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives) to use reasonable precautions to keep
confidential, in accordance with safe and sound banking practices, any
non-public information supplied to it by the Parent or any Borrower pursuant to
this Agreement which is identified by the Parent or such Borrower, as
applicable, as being confidential at the time the same is delivered to the
Lenders or the Administrative Agent, provided that nothing herein shall limit
the disclosure of any such
59
information (a) to its Affiliates or any of its or such Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
participant in, or any prospective assignee of or participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Parent or any Borrower and its respective obligations, (g) with the consent
of the Parent or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Parent and the Borrowers; provided further that in
no event shall the Administrative Agent or any Lender be obligated or required
to return any materials furnished by any Borrower.
(b) Notwithstanding anything in this Agreement to the contrary, each
Lender and the Administrative Agent (and such Lender's or Administrative Agent's
employees, representatives or other agents, as the case may be) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement, and all materials
of any kind (including opinions or other tax analyses) related to such tax
treatment and tax structure, except that (i) this sentence shall not apply to
the extent that nondisclosure is reasonably necessary to comply with the
securities laws, and (ii) this sentence shall not permit any Person to reveal
the identity of the Parent or any of its Subsidiaries.
Section 11.15. Treatment of Certain Information. Each Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Lender or by one or more of their
respective subsidiaries or Affiliates and (b) acknowledges that information
delivered to each Lender by any Borrower (or by the Parent on behalf of a
Borrower) may be provided to each such subsidiary and Affiliate.
Section 11.16. Judgment Currency. (a) The obligations hereunder of any
Borrower to make payments in Swiss francs (the "Obligation Currency") shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent or such
Lender under this Agreement or the other Facility Documents. If, for the purpose
of obtaining or enforcing judgment against any Borrower or the Parent in any
court or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion of the amount of such other currency into
Swiss francs shall be made at a spot exchange rate for the purchase of Swiss
francs as reasonably determined by the Administrative Agent, in each case, as of
the date immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment
60
Currency Conversion Date") using such exchange rate as of the Judgment Currency
Conversion Date.
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the applicable Borrower, as the case may be, covenants and agrees to
pay, or cause to be paid, such additional amounts, if any (but in any event not
a lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the date
of payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the equivalent amount in the
Obligation Currency of amounts in another other currency, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
Section 11.17. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 11.18. USA PATRIOT Act. Each Lender hereby notifies the
Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), such Lender may be required
to obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify the Borrowers in accordance with said
Act.
Section 11.19. Borrowers' Mutual Obligations.
(a) The Borrowers are interdependent for their operational and
financial needs. Each Borrower jointly and severally and irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrower with respect to the payment and
performance of all of the Obligations, it being the intention of the parties
hereto that all the Obligations shall be the joint and several obligations of
each Borrower without preferences or distinction among them, and each Borrower
further agrees that if any of the Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Borrowers will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever and
notwithstanding anything in any provision of this Agreement, other than
paragraph (e) of this Section, to the contrary (for avoidance of doubt, it being
agreed that paragraph (e) of this Section shall prevail over the second sentence
of this Section 11.19(a)). All Borrowers acknowledge and agree that the delivery
of funds to any Borrower under this Agreement shall constitute valuable
consideration and reasonably equivalent value to all Borrowers for the purpose
of binding them and their assets on a joint and several basis for the
obligations hereunder.
61
(b) The joint and several obligations of each Borrower hereunder are
of payment and not of collection and are independent of the obligations of any
other Borrower and a separate action or actions may be brought against each
Borrower whether or not action is brought against any other Borrower. The
Administrative Agent or any Lender may enforce this Agreement and the other
Facility Documents against any Borrower without first making demand upon or
instituting collection proceedings against any other Borrower. Each Borrower
waives, to the fullest extent permitted by law, the benefits of any statutes of
limitations affecting its liability hereunder. Each Borrower hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
the obligations of any other Borrower and any requirement that any Lender
protect, secure, perfect or insure any security interest or Lien, or any
property subject thereto, or exhaust any right or take any action against any
other Borrower or entity.
(c) The unconditional liability of each Borrower for the entire
Obligations shall not be impaired by any event whatsoever, including, but not
limited to, the merger, consolidation, dissolution, cessation of business or
liquidation of any Borrower; the financial decline or bankruptcy of any
Borrower; the failure of any other party to guarantee the Obligations or to
provide collateral therefor; the Lenders' compromise or settlement with or
without release of any Borrower; the Administrative Agent's release of any
collateral for the Obligations, with or without notice to any Borrower; the
Administrative Agent's or Lenders' failure to file suit against any Borrower
(regardless of whether such Borrower is becoming insolvent, is believed to be
about to leave the state or jurisdiction or any other circumstance); the
Administrative Agent's or Lenders' failure to give any Borrower notice of
default; the unenforceability of the Obligations against any Borrower due to
bankruptcy discharge, counterclaim, or for any other reason; the Administrative
Agent's or Lenders' acceleration of the Obligations at any time; the extension,
modification or renewal of the Obligations or any Facility Document; the
Administrative Agent's or Lenders' failure to undertake or exercise diligence in
collection efforts against any party or property; the termination of any
relationship of any Borrower with any other Borrower, including, but not limited
to, any relationship of commerce or ownership; any Borrower's change of name or
use of any name other than the name used to identify such Borrower in this
Agreement; or any Borrower's use of the credit extended for any purpose
whatsoever.
(d) Each Borrower agrees not to seek payment directly or indirectly
from another Borrower or any other Person through a claim of indemnity,
contribution, or otherwise with respect to the Obligations, until the
Obligations (other than contingent obligations that survive the termination of
this Agreement) have been repaid in full and the Revolving Credit Commitments
have terminated.
(e) Notwithstanding anything to the contrary herein, the aggregate
liability of any Borrower under this Agreement for, or with respect to,
Obligations originally or primarily incurred by the other Borrower shall not
exceed at any time the amount of such Borrower's freely disposable equity in
accordance with Swiss law (being the relevant Borrower's total shareholder
equity less the total of (i) its aggregate share capital and (ii) its statutory
reserves (including reserves for its own shares and revaluations as well as
agio)) at the time of the start of the proceedings for enforcement of the
Obligations of such Borrower under this Section 11.19,
62
which amount (x) shall be determined on the basis of an up to date audited
interim balance sheet of such Borrower prepared for such determination, (y)
shall be approved by the auditors of such Borrower as a distributable amount,
and (z) shall be or has been approved as a distribution by a duly convened
meeting of the shareholders of such Borrower, the parties being aware that any
payment in respect of such Obligations will be subject to Swiss withholding tax.
[The remainder of this page has intentionally been left blank.]
63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MOVADO WATCH COMPANY SA, as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: COO
Address for Notices:
Movado Watch Company SA
c/o Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
with a simultaneous copy to:
Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
MGI LUXURY GROUP S.A.,
as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: COO
Address for Notices:
MGI Luxury Group S.A.
c/o Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
with a simultaneous copy to:
Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
MOVADO GROUP, INC.,
as Parent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior VP/CFO
Address for Notices:
Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
with a simultaneous copy to:
Movado Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title: Vice President
Address for Notices as Administrative
Agent and Lender:
▇.▇. ▇▇▇▇▇▇ Europe Limited
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ 5 AJ
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: ▇▇(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: ▇▇(▇▇▇)▇▇▇-▇▇▇▇
with a simultaneous copy to:
JPMorgan Chase Bank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No,: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CREDIT PRODUCTS OFFICER
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
69
CITIBANK, N.A., LONDON BRANCH
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Citigroup Director
70
EXHIBIT A
PROMISSORY NOTE
[Date of Note]
________________ (the "Borrower"), for value received, hereby promises
to pay to the order of ______________ (the "Lender"), at the office of JPMorgan
Chase Bank, N.A., as administrative agent (in such capacity, the "Administrative
Agent"), described in the Credit Agreement (as such term is hereinafter
defined), for the account of the appropriate Lending Office of the Lender, the
amount of the Loans made by the Lender to the Borrower pursuant to the Credit
Agreement, in immediately available funds, on the dates, in Swiss francs and in
the manner provided in the Credit Agreement. The Borrower also promises to pay
interest on the unpaid principal balance hereof, for the period such balance is
outstanding, at said office for the account of such Lending Office at the rates
of interest provided in the Credit Agreement, on the dates, in Swiss francs and
in the manner provided in the Credit Agreement.
The date and amount of each Loan made by the Lender to the Borrower
under the Credit Agreement, and the date and amount of each payment of principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note (or, at the discretion of the Lender, at any other time), endorsed
by the Lender on the schedule attached hereto or any continuation thereof.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time, the "Credit Agreement") dated as of December 15,
2005 among Movado Watch Company SA, MGI Luxury Group S.A., Movado Group, Inc.,
the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent. This Note evidences the Loans made by the Lender to the Borrower
thereunder. All capitalized terms not defined herein shall have the meanings
given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
the principal of this Note upon the occurrence of certain Events of Default
specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the law of the State of New York.
[NAME OF BORROWER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date Amount of Loan Currency Amount of Payment Balance Outstanding Notation By
---- -------------- -------- ----------------- ------------------- -----------
-2-
EXHIBIT B
December 15, 2005
JPMorgan Chase Bank, N.A.,
as Administrative Agent
c/o ▇.▇. ▇▇▇▇▇▇ Europe Limited
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Re: The Credit Agreement dated as of the date hereof (which, as the same may
hereafter be amended, will be called herein the "Credit Agreement") among
Movado Watch Company SA, MGI Luxury Group S.A., Movado Group, Inc., the
Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent. Capitalized terms used herein have the meanings ascribed to them in
the Credit Agreement.
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, the Borrowers
hereby designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess or email:
NAME
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fabrice ▇▇▇▇▇▇▇▇▇
▇▇▇ Avrany
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Instructions may be honored on the oral, telephonic, teleprocess or
email instructions of anyone purporting to be any one of the above designated
persons. The Parent will furnish you with confirmation of each such instruction
either by telex (whether tested or untested) or in writing signed by any person
designated above (including any telecopy which appears to bear the signature of
any person designated above) on the same day that the instruction is provided to
you but your responsibility with respect to any instruction shall not be
affected by your failure to receive such confirmation or by its contents.
Transactions that are the subject of such instructions are to be processed (a)
for MWC, through Movado Watch Company SA at UBS SA, Swift Code: ▇▇▇▇▇▇▇▇▇▇▇,
IBAN: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No.: 235-▇▇▇▇▇▇▇▇.0; (b) for Luxury,
through MGI Luxury Group S.A. at UBS SA, Swift Code: ▇▇▇▇▇▇▇▇▇▇▇, IBAN: CH37
0023 5235 5051 01340, Account No.: 235-▇▇▇▇▇▇▇▇.0; or (c) in the case of any
Borrower, such other account as may be mutually agreed to by you and such
Borrower (the such Borrower's agreement as to such other account to be evidenced
by a writing signed by two of the above-designated persons).
You shall be fully protected in, and shall incur no liability to the
Parent or any of the Borrowers for, acting upon any instructions which you in
good faith believe to have been given by any person designated above, and in no
event shall you be liable for special, consequential or punitive damages. In
addition, the Parent and the Borrowers agree to hold you and your agents
harmless from any and all liability, loss and expense arising directly or
indirectly out of instructions that the Parent or any Borrower provides to you
in connection with the Credit Agreement except for liability, loss or expense
occasioned by the gross negligence or willful misconduct of you or your agents.
Upon notice to the Parent, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that the Parent agreed to in writing.
The Parent will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
MOVADO GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MOVADO WATCH COMPANY SA
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-2-
MGI LUXURY GROUP S.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-3-
EXHIBIT C-1
(Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.)
December 15, 2005
To each of the Lenders party to the Credit Agreement
referred to below and JPMorgan Chase Bank, N.A. as
Agent
Ladies and Gentlemen:
I have acted as counsel to Movado Group, Inc., a New York corporation
(the "Parent"), in connection with that certain Credit Agreement (the "Credit
Agreement") dated as of the date hereof among the Parent, MGI Luxury Group S.A.,
a corporation organized under the laws of Switzerland ("MGI"), Movado Watch
Company SA, a corporation organized under the laws of Switzerland (together with
MGI, the "Borrowers" and, together with MGI and the Parent the "Principal
Parties"), the Lenders signatory thereto and JPMorgan Chase Bank, N.A. as Agent
(the "Agent Bank"). I have also acted as counsel to the Parent and the
Borrowers, in connection with the Parent Guarantee in favor of the Lenders and
the Agent Bank. Except as otherwise defined herein, all terms used herein and
defined in the Credit Agreement shall have the meanings assigned to them
therein.
In connection with this opinion, I have examined executed copies of
the Facility Documents and such other documents, records, agreements and
certificates as I have deemed appropriate. I have also reviewed such matters of
law as I have considered relevant for the purpose of this opinion.
Based upon the foregoing, I am of the opinion that:
1. Each of the Parent and the Borrowers is a corporation duly
incorporated, validity existing and in good standing under the laws of the State
of New York (in the case of the Parent) or under the laws of Switzerland (in the
case of the Borrowers); and each of them has the corporate power and authority
to own its assets and to transact the business in which it is now engaged and is
duly qualified as a foreign corporation and in good standing under the laws of
each other jurisdiction in which the failure to be so qualified would have a
material adverse effect on the business, financial condition or operations of
the Parent and its Subsidiaries taken as a whole.
2. Each Facility Document has been duly executed and delivered by each
Principal Party which is a party to it. Each Facility Document constitutes a
legal, valid and binding obligation of each Principal Party which is a party to
it, enforceable against that Principal Party in accordance with its terms.
3. The execution, delivery and performance by the Parent (and in the
case of clauses (d), (e) and (f) below, each Borrower) of the Facility Documents
to which it is a party are
within its power and authority and have been duly authorized by all necessary
corporate action, as applicable, and do not: (a) require any consent or approval
of its stockholders; (b) contravene its charter or by-laws, as applicable; (c)
violate any provision of, or require any filing, registration, consent or
approval under, any law (other than the law of the State of New York and Federal
law of the United States), rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to the
Parent; (d) result in a breach of or constitute a default or require any consent
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which such Borrower or such Parent is a party or by which it or
its properties may be bound or affected; (e) result in, or require, the creation
or imposition of any Lien upon or with respect to any of the properties now
owned or hereafter acquired by such Borrower or Parent; or (f) cause the Parent
or any of its Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
4. To the best of my knowledge (after due inquiry), there are no
pending or threatened actions, suits or proceedings against or affecting the
Parent or any of its Subsidiaries before any court, governmental agency or
arbitrator, which would, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Parent or any of its Subsidiaries taken as a whole or the ability of the
Parent to perform its obligations under the Facility Documents.
The opinions expressed herein are solely for your benefit in
connection with the transactions referred to in the Credit Agreement and may not
be circulated to, or relied upon by, any other Person, except that it may be
circulated to any prospective Lender in accordance with the Credit Agreement and
may be relied upon by any Person who, in the future, becomes a Lender; provided
that each Lender may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their normal
examination, (ii) to its professional advisers, (iii) pursuant to an order or
legal process of any court or governmental agency, or (iv) in connection with
any legal action to which such Lender is a party arising out of the transactions
contemplated by the Credit Agreement. The opinions expressed herein are as of
the date hereof, and I make no undertaking to supplement such opinions as facts
and circumstances come to my attention or changes in law occur which could
affect such opinions.
Very truly yours,
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
General Counsel
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EXHIBIT C-2
(Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP)
December 15, 2005
To the Lenders party to the
Credit Agreement referred to below
and JPMorgan Chase Bank, N.A., as Agent
Ladies and Gentlemen:
We have acted as special counsel to Movado Group, Inc., a New York
corporation (the "Parent"), MGI Luxury Group S.A., a corporation organized under
the laws of Switzerland ("MGI"), and Movado Watch Company SA, a corporation
organized under the laws of Switzerland ("Movado S.A." and, together with MGI,
the "Borrowers" and, together with MGI and the Parent, the "Principal Parties"),
in connection with the Credit Agreement (the "Credit Agreement") dated as of the
date hereof, among the Parent, the Borrowers, the financial institutions listed
on the signature pages of the Credit Agreement (the "Lenders") and JPMorgan
Chase Bank, N.A., as Administrative Agent (the "Agent Bank"). This opinion is
being furnished to you at the request of the Parent as provided by Section
4.1(h) of the Credit Agreement. Capitalized terms used and not otherwise defined
have the respective meanings given those terms in the Credit Agreement.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents, each dated as of the date of this letter (collectively, the
"Documents"):
1. the Credit Agreement;
2. the Notes issued on the date hereof; and
3. the Parent Guarantee by the Parent in favor of the Lenders and
the Agent Bank (the "Parent Guarantee").
In our examination of the documents referred to above, we have
assumed, without independent investigation, the genuineness of all signatures,
the legal capacity of all individuals who have executed any of the documents
reviewed by us, the authenticity of all documents (including the Documents)
submitted to us as originals, the conformity to the originals of all documents
submitted to us as certified, photostatic, reproduced or conformed copies of
valid existing agreements or other documents, the authenticity of the latter
documents and that the statements regarding matters of fact in the certificates,
records, agreements, instruments and documents that we have examined are
accurate and complete. We have also assumed, without independent investigation,
the enforceability of the Documents against each party other than the Principal
Parties.
In addition, in the case of each Principal Party, we have assumed,
without independent investigation, that (i) such Principal Party is validly
existing and in good standing under the laws of its jurisdiction of
organization, (ii) such Principal Party has all necessary corporate power and
authority to execute, deliver and perform its obligations under each Document to
which it is a party, (iii) the execution, delivery and performance of each
Document have been duly authorized by all necessary corporate action and do not
violate its charter or other organizational documents or the laws of its
jurisdiction of organization (except New York law)
-2-
and (iv) each Document has been duly executed and delivered by it under the laws
of its jurisdiction of organization.
Based upon the foregoing, and subject to the assumptions, exceptions,
and qualifications stated below, we are of the opinion that:
1. Each Document to which any Principal Party is a party is a legal,
valid and binding obligation of such Principal Party, enforceable against such
Principal Party in accordance with its terms.
2. The execution and delivery by each Principal Party of each of the
Documents to which it is a party and the performance by such Principal Party of
its obligations under the Documents do not violate or result in a breach of or
default under any Covered Law (as defined below).
3. No authorizations or approvals of, and no filings with, any
governmental or regulatory authority or agency are necessary under any Covered
Law for the execution, delivery or performance by any Principal Party of the
Documents to which it is a party.
This opinion is subject to the following assumptions, exceptions and
qualifications:
(a) The enforceability of the Documents may be: (i) subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally; and (ii)
subject to general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(b) We express no opinion as to: (i) the enforceability of any
provisions in the Parent Guarantee and Section 11.19 of the Credit Agreement
(the "Guarantees") purporting to preserve and maintain the liability of any
party to the Guarantees
-3-
despite the fact that the guarantied debt is unenforceable due to illegality;
(ii) the enforceability of any provisions contained in the Documents that
purport to establish (or may be construed to establish) evidentiary standards;
(iii) the enforceability of forum selection clauses in the federal courts; (iv)
the enforceability of any provisions contained in the Documents that purport to
relinquish a Principal Party's right to a trial by jury or to waive immunity; or
(v) judgment currency clauses to the extent they are inconsistent with Section
27(b) of the N.Y. Judiciary Law.
(c) We express no opinion as to the effect of the application of
Section 11.19(e) of the Credit Agreement on the Obligations of the Borrowers.
This opinion is limited to the laws of the State of New York and the
federal laws of the United States of America that, in each case, in our
experience, are normally applicable to credit transactions of the type
contemplated by the Credit Agreement (collectively, the "Covered Laws"). We wish
to point out that we express no opinion with respect to any federal or state
income tax law, including Section 422 of the American Jobs Creation Act of 2004,
as amended. This opinion is rendered only with respect to the laws, and the
rules, regulations and orders under those laws, that are currently in effect.
This opinion is furnished by us solely for your benefit in connection
with the transactions referred to in the Credit Agreement and may not be
circulated to, or relied upon by, any other Person, except that it may be
circulated to any prospective Lender in accordance with the Credit Agreement and
may be relied upon by any Person who, in the future, becomes a Lender; provided
that each Lender may provide a copy of this opinion (i) to bank examiners and
other regulatory authorities should they so request or in connection with their
normal examination, (ii) to the professional advisers of any Lender, (iii)
pursuant to an order or legal process of any court or governmental agency, or
(iv) in connection with any legal action to
-4-
which such Lender is a party arising out of the transactions contemplated by the
Credit Agreement.
Very truly yours,
▇▇▇▇, WEISS, RIFKIND, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP
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EXHIBIT C-3
(Form of Opinion of Swiss Counsel to the Borrowers)
BY E-MAIL - BY COURIER
The Lenders party to the Agreement
referred to below and
JPMorgan Chase Bank, N.A. as Agent
December 15, 2005 ▇▇▇ - FIC
309164 - ▇▇▇ - 000038.doc
MOVADO WATCH COMPANY AND MGI LUXURY GROUP S. A. AS BORROWERS - MOVADO GROUP
INC. AS PARENT - CREDIT AGREEMENT
Ladies and Gentlemen
We have acted as special Swiss counsel to MGI Luxury Group S.A. and Movado
Watch Company SA (the BORROWERS) in connection with the Credit Agreement
dated as of the date hereof (the AGREEMENT) between the Borrowers, Movado
Group, Inc. (the PARENT), JPMorgan Chase Bank, N.A., as Administrative
Agent, as Swingline Bank and as Issuing Bank (the AGENT), and the Lenders
specified therein. As such counsel, we have been requested to give our
opinion as to certain legal matters relating to the Agreement.
Capitalized terms used herein shall have the meaning attributed to them in
the Agreement unless otherwise defined herein.
I. BASIS OF OPINION
This opinion is confined to and given on the basis of the laws of
Switzerland in force at the date hereof as currently applied by the Swiss
courts. In the absence of explicit statutory law or established case law,
we base our opinion solely on our independent professional judgement. This
opinion is also confined to:
(i) the matters stated herein and is not to be read as extending, by
implication or otherwise, to any agreement or document referred to in
the Agreement (other than listed below) or any other matter; and
(ii) the documents listed below.
For purposes of this opinion we have not conducted any due diligence or
similar investigation as to factual circumstances, which are or may be
referred to in the documents below, and we express no opinion as to the
accuracy of representations and warranties of facts set out in such
documents or the factual background assumed therein.
For the purpose of giving this opinion, we have only examined originals or
copies of the following documents (collectively the DOCUMENTS):
(i) execution copy of the Agreement dated December 15, 2005;
(ii) copies of the articles of incorporation (Statuten) of each of
- MGI Luxury Group S.A., dated as of November 22, 2005;
- Movado Watch Company SA, dated as of February 4, 2004;
(collectively the ARTICLES);
(iii) copies of certified excerpts from the relevant Registers of Commerce
for each of the following Borrowers:
- from the Register of Commerce of the Canton of Berne for MGI
Luxury Group S.A., dated as of December 9, 2005;
- from the Register of Commerce of the Canton of Solothurn for
Movado Watch Company SA, dated as of December 9, 2005;
(collectively the EXCERPTS);
(iv) a copy of the resolution of the board of directors of each of
- MGI Luxury Group S.A., dated as of December 15, 2005;
- Movado Watch Company SA, dated as of December 15, 2005;
(collectively the BOARD RESOLUTIONS); and
(v) a copy of the resolution of the shareholders meeting of each of
- MGI Luxury Group S.A., dated as of December 15, 2005;
- Movado Watch Company SA, dated as of December 15, 2005;
(collectively the SHAREHOLDERS' RESOLUTIONS),
No documents have been reviewed by us in connection with this opinion other
than those listed above. Accordingly, we shall limit our opinion to the
above Documents and their legal implications on the Agreement under Swiss
law.
In this opinion, Swiss legal concepts are expressed in English terms and
not in their original language. These concepts may not be identical to the
concepts described by the same English terms as they exist under the laws
of other jurisdictions.
II. ASSUMPTIONS
In rendering the opinion below, we have assumed:
(a) the conformity to the original Documents of all Documents produced to
us as copies, fax copies or via e-mail, and that the original was
executed in the manner appearing on the copy;
(b) the genuineness and authenticity of the signatures on all original
Documents or copies thereof which we have examined, and the accuracy
of all factual information contained in, or material statements given
in connection with, the Documents;
(c) the Agreement is within the capacity and power of, and has been
validly authorized, executed and delivered by and is binding on all
parties thereto other than the Borrowers;
-2-
(d) the performance by all parties to the Agreement of all obligations by
which they are respectively bound under the Agreement and the
compliance of all the parties to the Agreement with all matters of
validity and enforceability under any law other than the laws of
Switzerland;
(e) that the Agreement will be valid, binding and enforceable under the
law of the State of New York by which it is expressed to be governed
and that the choice of the law of the State of New York and of the
jurisdiction of the New York state or United States federal courts
provided in the Agreement is valid under the law of the State of New
York;
(f) that as far as any obligation under the Agreement is required to be
performed in any jurisdiction outside of Switzerland, its performance
will not be illegal or unenforceable by virtue of the laws of such
jurisdiction;
(g) that, except as expressly opined upon herein, all representations and
warranties made by any one of the parties of the Agreement are true
and accurate;
(h) that the Excerpts and the Articles are correct, complete and
up-to-date;
(i) that all parties entered into the Agreement for bona fide commercial
reasons and on arm's length terms, and that none of the directors or
officers of the respective party has or had a conflict of interest
with such party in respect of the Documents that would preclude him
from validly representing (or granting a power of attorney in respect
of the Documents for) the respective party;
(j) that the Board Resolutions and Shareholders' Resolutions (i) have been
duly resolved in meetings duly convened and otherwise in the manner
set forth therein, and (ii) have not been rescinded or amended and are
in full force and effect.
III. OPINION
Based on the foregoing and subject to the qualifications set out below, we
are of the opinion that as of the date hereof:
1. Each of the Borrowers is a corporation duly incorporated and validly
existing under the laws of Switzerland with all requisite corporate
power and authority to own its properties and to carry on its business
as presently conducted.
2. Each of the Borrowers has the corporate power to enter into the
Agreement, and the Agreement has been duly authorized by each of the
Borrowers.
3. The execution, delivery and performance by the Borrowers of the
Agreement do not violate any provision of the Articles or any laws of
Switzerland applicable to the Borrowers.
4. The obligations under the Agreement will constitute direct and
unsubordinated obligations of the Borrowers and will at least rank
pari passu with any other unsecured, unsubordinated obligations of the
Borrowers (whether actual or contingent) outstanding from time to
time, subject to any statutory preferences under applicable law.
5. The choice of the law of the State of New York as the governing law of
the Agreement is a valid choice of law under the laws of Switzerland
and in any action brought before a court of competent jurisdiction in
Switzerland, the law of the State of New York would be recognized and
applied by such court to all issues for which under the conflict of
laws rules of Switzerland the proper or governing law of a contract is
applicable provided, however, that a Swiss court would apply
procedural rules.
-3-
6. The submission by the Borrowers to the jurisdiction of the New York
state courts and the United States federal courts contained in the
Agreement is valid and legally binding on the Borrowers under the laws
of Switzerland.
7. The courts of Switzerland will recognise as valid, and will enforce,
any final and non-appealable civil judgment for a monetary claim
obtained in a New York state court or a United States federal court
against the Borrowers.
8. The designation by the Borrowers of Corporation Service Company as
agent to receive service of process in New York state or United States
federal courts on their behalf is valid and binding under the laws of
Switzerland, as long as Corporation Service Company is properly acting
as agent for service of process and its mandate has not been revoked.
9. The Borrowers are not required by law in relation to any sums payable
under the Agreement or the payment of fees by the Borrowers to the
Agent to make, or cause to be made, any deduction or withholding for
or on account of any taxes imposed or levied by or on behalf of
Switzerland or any political subdivision or any taxing authority
thereof or therein.
10. No Swiss stamp duty on the issuance of securities (Emissions abgabe)
and no Swiss stamp duty on the turnover of securities (Umsatzabgabe)
will be payable to any governmental authority of Switzerland in
connection with the execution and delivery of the Agreement and the
making available of the facility in accordance therewith.
11. No Swiss Obligor has any immunity from suit or proceedings or the
enforcement of any judgment (whether on the grounds of sovereign
immunity or otherwise) under the laws of Switzerland.
12. To ensure the validity and enforceability or admissibility in evidence
of the Agreement, it is not necessary that the Agreement be approved,
authorized, filed or recorded with any governmental, administrative or
other authority or court in Switzerland.
13. It is not necessary under Swiss law (i) in order to be entitled the
full access as plaintiff to the courts of competent jurisdiction of
Switzerland or any political subdivision thereof for the enforcement
of any right, power or remedy accorded in, under or in connection with
the Agreement, or (ii) by reason only of the execution, delivery or
performance of the Agreement, that any of the Lenders or the Agent
should be licensed, qualified or entitled to carry on business in
Switzerland.
14. None of the Lenders or the Agent will be deemed to be resident,
domiciled or carrying on business in Switzerland by reason only of the
execution, delivery, performance and/or enforcement of the Agreement.
IV. QUALIFICATIONS
The above opinions are subject to the following qualifications:
(a) We are members of the Zurich bar and do not hold ourselves to be
experts in any laws other than the laws of Switzerland. Accordingly,
we are opining herein as to Swiss law only and we express no opinion
with respect to the applicability thereto, or the effect thereon, of
the laws of any other jurisdiction.
(b) Where we refer to enforceability, we only express an opinion as to
enforceability under the rules of procedure applicable in Switzerland.
Enforceability of the Agreement may be limited by applicable
bankruptcy, insolvency, reorganisation or similar laws affecting
creditors and secured parties in general (including, without
limitation, provisions relating to voidable preferences), laws or
equitable principles of general application (including, but not
limited to, the abuse of rights
-4-
(Rechtsmissbrauch) and the principle of good faith (Grundsatz ▇▇▇ ▇▇▇▇
und Glauben)), and public policy, as defined in Art. 17-19 of the
Swiss Private International Law Act of December 18, 1987, as amended
(the PRIVATE INTERNATIONAL LAW ACT).
Enforcement before the courts of Switzerland will in any event be subject
to:
(i) the nature of the remedies available in the Swiss courts (and
nothing in this opinion must be taken as indicating that specific
performance (other than for the payment of a sum of money) or
injunctive relief would be available as remedies for the
enforcement of such obligations); and
(ii) the acceptance of such courts of jurisdiction and the power of
such courts to stay proceedings if concurrent proceedings are
being brought elsewhere.
(c) Claims may become barred under statutes of limitation or prescription,
or may be or become subject to available defences such as set-off,
counterclaim, misrepresentation, material error, duress or fraud.
Further, limitations may apply with respect to any indemnification and
contribution undertakings by the Borrowers if a court considers any
act of the indemnified person as wilful or negligent, and an
obligation to pay an amount may be unenforceable if the amount is held
to constitute an excessive penalty (such as exemplary or punitive
damages).
(d) The enforceability in Switzerland of a foreign judgment rendered
against any Swiss Obligor is subject to the limitations set forth in
(x) the Convention on Jurisdiction and Enforcement of Judgements in
Civil and Commercial Matters of September 16, 1988 (the LUGANO
CONVENTION), (y) such other international treaties under which
Switzerland is bound, and (z) the Private International Law Act. In
particular, and without limitation to the foregoing, a judgment
rendered by a foreign court may only be enforced in Switzerland if:
(i) (in case of (y) and (z) and, in certain exceptional cases, (x))
the foreign court had jurisdiction;
(ii) the judgment of such foreign court has become final and
non-appealable, or, in the case of (x), has become enforceable at
an earlier stage;
(iii) the court procedures leading to the judgment followed the
principles of due process of law, including proper service of
process; and
(iv) the judgment of the foreign court on its merits does not violate
Swiss law principles of public policy.
In addition, enforceability of a judgment by a non-Swiss court in
Switzerland may be limited if the Company can demonstrate that it was
not effectively served with process.
(e) Enforcement claim or court judgment under Swiss debt collection or
bankruptcy proceedings may only be made in Swiss francs and the
foreign currency amount must accordingly be converted into Swiss
francs at the rate obtained, with respect to the enforcing creditor,
on (i) the date of instituting the enforcement proceedings or (ii) the
date of the filing for the continuation of the bankruptcy procedure
(Fortsetzungsbegehren) and, with respect to non-enforcing creditors,
at the rate obtained at the time of the adjudication of bankruptcy
(Konkurseroffnung).
(f) Section 3.5 of the Agreement (Tax gross-up) provides for the gross-up
of payments to the extent withholding tax is imposed on payments of a
Swiss Obligor pursuant to the terms of the Agreement. This obligation
may violate Article 14 of the Swiss Federal Withholding Tax Act of
October 13, 1965 (the WITHHOLDING TAX ACT) which stipulates that (i)
Swiss withholding tax (Verrechnungssteuer) to be withheld from any
payment must be charged to the recipient of the
-5-
payment, and (ii) contradictory agreements are null and void as to
this issue. The Swiss Federal Tax Administration proclaimed that
gross-up provisions are compliant with Article 14 of the Withholding
Tax Act if (i) the obligor promises a minimum interest rate in the
interest rate clause of the agreement which, under the condition of
imposition of Swiss withholding tax, is to be adjusted in
correspondence with the tax withheld, (ii) and, hence, Swiss
withholding tax indeed is calculated on the basis of the grossed-up
net amount received by the creditor, (iii) the obligor promises the
creditor to provide sufficient documentation potentially enabling the
creditor to recover Swiss withholding tax, and (iv) the parties could
in good faith assume at the time of entering into the agreement that
payments under the agreement were not subject to Swiss withholding
tax. A Swiss court ruling on the validity or enforceability of the
said gross-up provisions will, however, not be bound by the Swiss
Federal Tax Administration's interpretation of Article 14 of the
Withholding Tax Act.
(g) The opinions set forth in Sections III. 9. and III. 10. above are
subject to the qualification that the Borrowers at all times comply
with the ten and twenty non-bank rules pursuant to the present
practice of the Swiss Federal Tax Administration.
(h) The enforcement of any guarantee, indemnity or other obligation of any
Swiss Obligor for, or with respect to, any obligation of any other
obligor may be limited to the freely disposable shareholders' equity
of such Swiss Obligor. Such freely disposable shareholder equity shall
be determined in accordance with Swiss law and Swiss accounting
principles and shall correspond to the amount of the relevant Swiss
Obligor's total shareholder equity less the total of (i) its aggregate
share capital and (ii) its statutory reserves (including reserves for
its own shares and revaluations as well as paid-in capital surplus) at
the time of the start of the proceedings for enforcement. In addition,
Swiss withholding tax of 35 percent may be levied on payments under a
guarantee, indemnity or other obligation by a Swiss Obligor for, or
with respect to, any obligation of any other obligor if the Swiss
Federal Tax Administration deems such payment a dividend or similar
distribution.
(i) We express no opinion as to the validity, binding effect and
enforceability of the irrevocability of any power of attorney or
appointment of an agent if such power of attorney or appointment has
been revoked.
(k) Further, we express no opinion as to banking regulatory matters or as
to any commercial, accounting, calculating, auditing or other
non-legal matter. Except as expressed in opinions III. 9. and III. 10.
above, we express no opinion as to tax matters.
(l) A determination, calculation or certificate as to any matter may be
held by a Swiss court not to be final, conclusive or binding if such
determination, calculation or certification were shown to have an
unreasonable, incorrect or arbitrary basis or not to have been given
or made in good faith.
* * *
We have issued this opinion as of the date hereof and we assume no
obligation to advise you of any changes that are made or brought to our
attention hereafter.
This opinion may be relied upon by you in your respective capacity set
forth in the Agreement in connection with the matters set forth herein.
Without our prior written consent, it may not be furnished or quoted to
other persons, and it may not be relied upon by you, in any other capacity
or for any other purpose. No other person may rely on this opinion for any
purpose. You are requested not to give copies to third parties or otherwise
make the contents of this opinion public without our prior written consent;
provided that each Lender may provide a copy of this opinion (i) to bank
examiners and other regulatory authorities should they so request or in
connection with their normal examination, (ii) to the professional advisers
of any Lender, (iii) pursuant to an order or legal process of any court or
governmental agency, or (iv) in connection with any legal action to which
such Lender is a party arising out of the transactions contemplated by the
Credit Agreement.
-6-
This opinion is governed by and shall be construed in accordance with the
laws of Switzerland. We confirm our understanding that all disputes arising
out of or in connection with this opinion shall be subject to the exclusive
jurisdiction by the District Court of Zurich, Switzerland.
Sincerely yours,
HOMBURGER RECHTSANWALTE
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EXHIBIT D
PARENT GUARANTEE
REFERENCE IS HEREBY MADE to the Credit Agreement dated as of December
15, 2005 (which, as the same has heretofore been or may hereafter be amended
from time to time, will be called herein the "Credit Agreement") among Movado
Watch Company SA ("MWC"), MGI Luxury Group S.A. ("Luxury"), Movado Group, Inc.,
a New York corporation (the "Parent"), the Lenders party thereto, and JPMorgan
Chase Bank, N.A., as Administrative Agent. All capitalized terms used herein and
not defined shall have the respective meanings ascribed to them in the Credit
Agreement.
WHEREAS, the Credit Agreement provides for the extension of credit by
the Lenders (all of which, together with the Administrative Agent, will be
called herein the "Creditors") to MWC and to Luxury (the "Borrowers"); and
WHEREAS, all the obligations and liabilities (whether now existing or
hereafter arising) of either or both of the Borrowers to any or all of the
Creditors under the Credit Agreement or any of the other Facility Documents
(whether for principal, interest, fees, reimbursement obligations,
indemnification obligations, costs of enforcement or otherwise) will be called
herein the "Obligations"; and
WHEREAS, the Parent expects to obtain substantial economic benefit
from the extension of credit by the Creditors to the Borrowers under the Credit
Agreement; and
WHEREAS, the execution and delivery of this Parent Guarantee by the
Parent is required pursuant to the terms of the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Creditors to
extend credit to the Borrowers under the Facility Documents, the Parent hereby
agrees with the Creditors as follows:
1. The Parent hereby unconditionally guarantees to the Creditors that
each Borrower will promptly pay, perform and observe all the Obligations of such
Borrower, and that all sums stated to be payable in, or which become payable
under, the Facility Documents by either or both of the Borrowers will be
promptly paid in full when due, whether at stated maturity or earlier by reason
of acceleration or otherwise, and, in the case of one or more extensions of time
of payment or performance or renewals of any Obligation, that the same will be
promptly paid or performed (as the case may be) when due according to such
extension or renewal, whether at stated maturity or earlier by reason of
acceleration or otherwise, irrespective of the validity, regularity, or
enforceability of any of the Facility Documents or any of the Obligations and
irrespective of any present or future law or order of any government (whether of
right or in fact and whether the Creditors shall have consented thereto) or of
any agency thereof purporting to reduce, amend, restructure or otherwise affect
any Obligation of the Borrowers or other obligor or to vary the terms of
payment.
2. The Parent agrees that, as among the Parent and the Creditors, the
Obligations may be declared to be due and payable for purposes of this Parent
Guarantee notwithstanding any stay, injunction or other prohibition which may
prevent, delay or vitiate any such declaration as against either or both of the
Borrowers and that, in the event of any such declaration (or attempted
declaration), such Obligations (whether or not due and payable by either or both
of the Borrowers) shall forthwith become due and payable by the Parent for
purposes of this Parent Guarantee. The Parent further guarantees that all
payments made by the Parent to the Creditors of any Obligation will, when made,
be final and agrees that if any such payment is recovered from, or repaid by,
any Creditor in whole or in part in any bankruptcy, insolvency or similar
proceeding instituted by or against either or both of the Borrowers, this Parent
Guarantee shall continue to be fully applicable to such Obligation to the same
extent as though the payment so recovered or repaid had never been originally
made on such Obligation.
3. This Parent Guarantee is a guaranty of payment and not of
collection only and shall apply to all Obligations whenever arising.
4. The Parent hereby consents that from time to time, without notice
to or further consent of the Parent, the payment, performance or observance of
any or all of the Obligations may be waived or the time of payment or
performance thereof extended or accelerated, or renewed in whole or in part, or
the terms of the Facility Documents or any part thereof may be changed
(including, without limitation, an increase or decrease in the Total Revolving
Credit Commitment or any Lender's Revolving Credit Commitment or rate of
interest thereon) and any collateral therefor may be exchanged, surrendered or
otherwise dealt with as the Creditors may determine, and any of the acts
mentioned in the Facility Documents may be done, all without affecting the
liability of the Parent hereunder. The Parent hereby waives presentment of any
instrument, demand of payment, protest and notice of non-payment or protest
thereof or of any exchange, sale, surrender or other handling or disposition of
such collateral, and any requirement that any Creditor exhaust any right, power
or remedy or proceed against either or both of the Borrowers under the Facility
Documents or against any other person under any other guaranty of, or security
for, any of the Obligations. The Parent hereby further waives any defense
whatsoever which might constitute a defense available to, or discharge of,
either or both of the Borrowers or a guarantor. No payment by the Parent
pursuant to any provision hereunder shall entitle the Parent, by subrogation to
the rights of any Creditor or otherwise, to any payment by either or both of the
Borrowers (or out of the property of either or both of the Borrowers) except
after payment in full of all sums (including interest, costs and expenses) which
may be or become payable by such Borrower to the Creditors at any time or from
time to time.
5. This Parent Guarantee shall be a continuing guaranty, and any other
guarantor, and any other party liable upon or in respect of any Obligation
hereby guaranteed, may be released without affecting the liability of the Parent
hereunder. The liability of the Parent hereunder shall be joint and several with
the liability of any other guarantor or other party upon or in respect of the
Obligations.
6. Any Creditor may assign its rights and powers hereunder, with all
or any of the Obligations, and, in the event of such assignment, the assignee
hereof or of such rights and powers, shall have the same rights and remedies as
if originally named herein. The Parent may not assign or transfer any of its
rights or obligations under this Parent Guarantee without the
-2-
written approval of all the Lenders (and any such assignment or transfer that is
attempted without such consent shall be void).
7. Notice of acceptance of this Parent Guarantee and of the incurring
of any and all of the Obligations of either or both of the Borrowers pursuant to
the Facility Documents is hereby waived. This Parent Guarantee and all rights,
obligations and liabilities arising hereunder shall be governed by and construed
according to the law of the State of New York. Unless the context otherwise
requires, all terms used herein which are defined in the Uniform Commercial Code
shall have the meanings therein stated.
8. The Parent agrees that, in addition to (and without limitation of)
any right of setoff, banker's lien or counterclaim any Creditor may otherwise
have, each of the Creditors shall be entitled, at its option, to set off and
apply balances (general or special, time or demand, provisional or final) held
by it for account of the Parent at any of its offices in dollars or in any other
currency, against any amounts owing hereunder that are not paid when due
(regardless of whether such balances are then due to the Parent), in which case
it shall promptly notify the Parent thereof; provided, however, that any failure
to give such notice shall not affect the validity thereof.
9. No provision of this Parent Guarantee may be modified or waived
without the prior written consent of the Administrative Agent and the Required
Lenders (or, to the extent required by the Credit Agreement, all Lenders).
10. Without limiting the rights of any Creditor under any other
agreement, any financial accommodation (including, without limitation, interest
accruing at the agreed to contract rate after the commencement of any
bankruptcy, reorganization or similar proceeding) extended by the Parent to or
for the account of either or both of the Borrowers, or in respect of which
either or both of the Borrowers may be liable to the Parent in any capacity, is
hereby subordinated to all the Obligations payable by such Borrower, and such
financial accommodation of the Parent to either or both of the Borrowers, if the
Administrative Agent so requests, shall be collected, enforced and received by
the Parent as trustee for the Creditors and be paid over to the Administrative
Agent on account of the Obligations payable by such Borrower but without
reducing or affecting in any manner the liability of the Parent, under the other
provisions of this Parent Guarantee.
11. The Parent hereby irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Parent Guarantee, and the Parent
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Parent irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the Parent
at its address specified on the signature page hereof. The Parent agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this paragraph shall affect the rights of the
Creditors to serve legal process in any other manner permitted by law or affect
the rights of the Creditors to bring any action or proceeding against the Parent
or any of its property in the courts of any other jurisdiction. To the extent
that the Parent has or hereafter may acquire
-3-
any immunity from jurisdiction of any court or from any legal process (whether
from service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Parent hereby irrevocably waives such immunity in respect of its Obligations
under this Parent Guarantee. The Parent hereby expressly waives any and every
right to a trial by jury in any action on or related to this Parent Guarantee,
the Obligations or the enforcement of either or all of the same, and does
further expressly waive any and every right to interpose any counterclaim in any
such action or proceeding. To the extent permitted by applicable law, the Parent
shall not assert, and the Parent hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Parent Guarantee, any other Facility
Document or any agreement or instrument contemplated hereby or thereby, any Loan
or the use of the proceeds thereof. The Parent agrees to reimburse the Creditors
on demand for all reasonable and documented costs, expenses, and charges
(including, without limitation, reasonable and documented attorneys' fees)
incurred by the Administrative Agent or the Lenders in connection with any
enforcement of this Parent Guarantee.
12. The rights, powers and remedies granted to the Creditors herein
shall be cumulative and in addition to any rights, powers and remedies to which
the Creditors may be entitled either by operation of law or pursuant to the
Facility Documents or any other document or instrument delivered or from time to
time to be delivered to the Administrative Agent or any Lender in connection
with the Facility Documents.
13. When all Obligations shall have been paid in full (other than
contingent obligations that survive the termination of the Credit Agreement) and
the Commitments and L/C Exposures of all the Lenders under the Credit Agreement
shall have expired or been terminated, the obligations of the Parent under this
Parent Guarantee shall terminate; provided that, thereafter the obligations of
the Parent hereunder shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of any of the Borrowers in respect of
the Obligations guaranteed hereunder is rescinded or must be otherwise restored
by any holder of such Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Parent agrees that it will
indemnify the Administrative Agent and each other Creditor on demand for all
reasonable and documented costs and expenses (including, without limitation,
reasonable and documented fees and expenses of counsel) incurred by the
Administrative Agent or any other Creditor in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
-4-
IN WITNESS WHEREOF, the Parent has caused this Parent Guarantee to be
duly executed by its proper officer this ___ day of December, 2005.
MOVADO GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address of Parent:
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-5-
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below, (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any guarantees
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of [identify
Lender](1)]
3. Borrower(s): Movado Watch Company SA and MGI Luxury S.A.
4. Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative
agent under the Credit Agreement
----------
(1) Select as applicable.
5. Credit Agreement: Credit Agreement dated as of December 15, 2005 among
Movado Watch Company SA, MGI Luxury S.A., Movado
Group, Inc., the Lenders parties thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent
6. Assigned Interest:
Aggregate Amount
of Amount of Percentage Assigned
Facility Commitment/Loans Commitment/ of
Assigned(2) for all Lenders* Loans Assigned* Commitment/Loans(3)
----------- ---------------- --------------- -------------------
CHF_____________ CHF____________ _____%
CHF_____________ CHF____________ _____%
CHF_____________ CHF____________ _____%
[7. Trade Date: ______________](4)
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
---------------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
---------------------------------
[Consented to and](5) Accepted:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By
----------------------------------
Title:
------------------------------
----------
(2) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.
"Revolving Credit Commitment," etc.)
* Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(4) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
(5) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
-2-
[Consented to:](6)
MOVADO GROUP, INC.
By
----------------------------------
Title:
------------------------------
----------
(6) To be added only if the consent of the Borrowers is required by the terms
of the Credit Agreement.
-3-
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Facility Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Facility Documents or any collateral thereunder, (iii) the financial condition
of the Parent, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Facility Document or (iv) the performance or
observance by the Parent, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Facility Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, and
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to or in connection with the
Credit Agreement, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent, the Assignor or any other Lender; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Facility Documents,
and (ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Facility Documents are required to be performed by it
as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
-2-
SCHEDULE I
Lenders and Revolving Credit Commitments
Lender's Revolving
Name of Lender Credit Commitment (CHF)
-------------- -----------------------
JPMorgan Chase Bank, N.A. CHF 25,200,000
Bank of America, N.A., London CHF 21,600,000
The Bank of New York CHF 21,600,000
Citibank, N.A., London Branch CHF 21,600,000
TOTAL CHF 90,000,000
SCHEDULE II
APPLICABLE RATES
Average Debt Coverage Ratio Loan Spread Commitment Fee Rate
--------------------------- ----------- -------------------
Category 1
Less than or equal to 1.50 0.50% 0.10%
Category 2
Greater than 1.50, but less
than or equal to 2.0 0.625% 0.125%
Category 3
Greater than 2.0, but less
than or equal to 2.5 0.75% 0.15%
Category 4
Greater than 2.5 0.875% 0.20%
SCHEDULE III
Subsidiaries of Movado Group, Inc. (Section 5.9)
SUBSIDIARIES
Bermuda:
MGI International, Ltd.
California:
North American Watch Service Corporation
Canada:
Movado Group of Canada, Inc.
Delaware:
Movado International, Ltd.
Movado LLC
Movado Group Delaware Holdings Corporation
France:
Swiss Wave Europe SA
Germany:
Movado Deutschland G.m.b.H.
Concord Deutschland G.m.b.H.
MGI Luxury Group GmbH
Hong Kong:
Swissam Ltd.
Swissam Products Ltd.
Japan:
MGI Japan Co. Ltd.
New Jersey:
EWC Marketing Corp.
Movado Retail Group, Inc.
Singapore:
Swissam Pte. Ltd.
Switzerland:
Concord Watch Company S.A.
Movado Watch Company SA
MGI Luxury Group SA
SA de l'Immeuble, rue de la Paix ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
MGI Luxury Group UK Limited
All issued and outstanding shares of each of the foregoing Subsidiaries are
wholly owned, directly or indirectly, by the Parent, except for statutorily
required directors qualifying shares in the case of the Hong Kong and Swiss
Subsidiaries.
-2-
SCHEDULE IV
Credit Arrangements (Section 5.10)
MOVADO GROUP, INC
BANK CREDIT LINE AND OUTSTANDING BALANCES
OCTOBER 31, 2005
SCHEDULE IV
DOMESTIC CREDIT LINE
-------- ---------------
WORKING CAPITAL LINES (1)
JPMORGAN CHASE $ 37,000,000
BANK OF AMERICA $ 20,000,000
BANK OF NEW YORK $ 5,000,000
--------------
$ 62,000,000
==============
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (AS AGENT) $ 50,000,000
--------------
TOTAL DOMESTIC LINES $ 112,000,000
==============
FOREIGN SWISS SUBSIDIARIES
UBS (2) CHF 8,000,000
LONG TERM REVOLVER
▇▇ ▇▇▇▇▇▇ CHASE LONDON (AS AGENT) CHF 90,000,000
--------------
TOTAL FOREIGN LINES CHF 98,000,000
==============
OTHER FACILITY
PRUDENTIAL PRIVATE SHELF $ 40,000,000
AMOUNT DRAWN $ (20,000,000)
--------------
REMAINING AVAILABLE $ 20,000,000
==============
NOTES:
(1) WORKING CAPITAL LINES TO REMAIN THE SAME POST CLOSING
(2) FOREIGN LINES ARE MULTI-CURRENCY CREDIT FACILITY
MOVADO GROUP, INC.
OUSTANDING LETTERS OF CREDIT
OCTOBER 31, 2005
SCHEDULE IV
BANK FACE AMOUNT HOLDER/ DESCRIPTION
---- ------------- ---------------------------
JPMORGAN CHASE A $ 49,560.00 RENT DEPOSIT
JPMORGAN CHASE B $ 228,248.55 RENT DEPOSIT
JPMORGAN CHASE C $ 78,900.00 RENT DEPOSIT
JPMORGAN CHASE D $ 100,000.00 RENT DEPOSIT
JPMORGAN CHASE E $ 15,000.00 CREDIT CARD PROCESSING FEES
JPMORGAN CHASE F $ 50,000.00 RENT DEPOSIT
JPMORGAN CHASE G $ 126,936.00 CANADIAN PAYROLL
JPMORGAN CHASE H $ 87,500.00 RENT DEPOSIT
JPMORGAN CHASE I $ 110,000.00 RENT DEPOSIT
JPMORGAN CHASE J $ 80,000.00 RENT DEPOSIT
JPMORGAN CHASE K $ 260,000.00 RENT DEPOSIT
-------------
$1,186,144.55
=============
NOTES:
(a) Grand Canal Shops- Las Vegas Boutique
(b) Forsgate Industrial Complex- Moonachie
(c) RCPI- Rock Center
(d) RCPI- Rock Center
(e) Shoppers Card- Private Label Credit Cards
(f) Stony Point Associates, LLC
(g) Original face value is CND 150,000 which equates to USD $126,936 at 1.1817
exchange rate
(h) Tampa West Shore Assco (Store #522)
(i) LA Cienga Partners (Store #527)
(j) Taubamna Cherry Creek (Store #528)
(k) Short Hills (Store #502)
-2-
MOVADO GROUP, INC
SCHEDULE OF CAPITAL LEASES & OTHER LONG TERM OBLIGATIONS
OCTOBER 31, 2005
SCHEDULE IV
CAPITAL LEASES- DOMESTIC & FOREIGN LEASE TOTAL OUTSTANDING BALANCE
NO CAPITAL LEASES EXIST
FOREIGN GUARANTEES
LEGAL ENTITY COMMITTED CUSTOMER_NAME / BENEFICIARY CCY AMOUNT NATURE BANK
---------------------- -------------------------------------- --- ------- --------- -------------
Customs. Administration Douanes
MGI Luxury Group SA - Division Ebel Suisse - ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ 200,000 Guarantee UBS
Berne
MGI Luxury Group SA - Division ▇▇ ▇▇▇▇ employee house. Wooders & Mrs CHF 19,050 Guarantee Credit Suisse
Adatte
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇ 500,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇ 600,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇ 500,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇ 500,000 Guarantee UBS
2001 Neuchatel
MGI Luxury Group SA - Division Concord ▇▇▇▇▇▇ Handelskammer,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇ CHF 500,000 Guarantee UBS
MGI Luxury Group SA - Division Concord SAH CHF 200,000 Guarantee UBS
Customs: Administration Douanes
MGI Luxury Group SA - Division Concord Suisse - ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ 150,000 Guarantee UBS
Berne
Movado Watch Company ▇▇ ▇▇▇ ▇▇▇▇▇▇ EUR 620,000 Guarantee UBS
MGI Luxury Group UK Ltd Customs GBP 0 Guarantee Natwest
MGI Luxury Group Gmbh Bayer. Versorgungskammer EUR 25,000 Guarantee Dresdner
MGI Luxury Group Gmbh NRG Deutschland GmbH EUR 50,000 Guarantee Dresdner
MGI Luxury Group Gmbh LHS Deutschland GmbH EUR 30,759 Guarantee Dresdner
MOVADO GROUP, INC.
OUTSTANDING LIENS
SCHEDULE IV
RELATED
SECURED PARTY DEBTOR FILING RECORD UCC-1
FILING NAME NAME JURISDICTION DATE FILE # FILE # DESCRIPTION
------ ------------------- ------------------ ------------ ---------- --------------- ------- --------------------------
(A) UCC1 Citicorp vendor Movado Group, Inc. NY SOS 06/13/2002 138602 Filed for notification of
Finance, Inc. Lease #3440240 Canon
CLC1150 copier
UCC1 IBM Credit Movado Group, Inc. NY SOS 07/12/2002 161990 Equipment together with
Corporation related software as more
fully described under the
IBM Credit LLC supplements
#088624: IBM Equipment
Type: all additions,
attachments, accessories,
accessions & upgrades
thereto & any & all
substitutions,
replacements or exchanges
for any such item of
equipment or software &
any & all proceeds of any
of the foregoing
including, w/o
limitations, payments
under insurance or any
indemnity or warranty
relating to loss or damage
to such equipment
UCC1 IBM Credit LLC Movado Group, Inc. NY SOS 01/02/2004 20040102000513 All of the following
equipment together with
all related software,
whether now owned or
hereafter acquired &
wherever located as more
fully described under IBM
Credit LLC Supplement(s)
#B20075. IBM Equipment
Type: 9991 V42288 999G
9SSR
UCC1 Citicorp Vendor Movado Group, Inc. NY SOS 06/01/2004 200406015441229 Filed for notification of
Finance, Inc. Lease #3440241 Canon
CLC4000 copier Colorpass
Z6000
UCC1 Pitney ▇▇▇▇▇ Movado Group, Inc. NY SOS 06/01/2004 200407015547580 All equipment of whatever
Credit Corporation nature manufactured, sold,
distributed or financed by
Secured party & Pitney
▇▇▇▇▇ Inc. & its
subsidiaries, & all
proceeds therefrom,
accessories, additions &
attachments thereto &
replacements therefor
UCC1 IBM Credit LLC Movado Group, Inc. NY SOS 04/04/2005 200504045283164 All of the following
equipment together with
all related software,
whether now owned or
hereafter acquired &
wherever located as more
fully described under IBM
Credit LLC Supplement(s)
#C26430. IBM Equipment
Type: 3580 3581 9406 9992
9994 999G 9BPP 9SSR
UCC1 IBM Credit LLC Movado Group, Inc. NY SOS 04/04/2005 200504045287009 Exact collateral
description as
200504045283164
RELATED
SECURED PARTY DEBTOR FILING RECORD UCC-1
FILING NAME NAME JURISDICTION DATE FILE # FILE # DESCRIPTION
------ ------------------- ------------------ ------------ ---------- --------------- ------- --------------------------
UCC1 CIT Communications Movado Group, Inc. NY SOS 09/23/2005 200509235841156 Equipment leased under
Finance Corporation Lease No.M105613 including
but not limited to Avaya
Inc. S8500 Media Server
W/Gateway & Definity BCS,
& all attachments,
accessions, additions,
substitutions, products,
replacements, & rentals
and a right to use license
for any software related
to any of the foregoing &
proceeds therefrom
(b) Liens in favor of JPMorgan Chase Bank, N.A. ("Chase"), in connection with
the Promissory Note, dated as of December 13, 2005, between Chase and
Movado Group, Inc.
(c) Liens in favor of Bank of America, N.A. ("BoA") in connection with the
Amended and Restated Promissory Note, dated as of December 12, 2005,
between BoA and Movado Group, Inc.
(d) Liens in favor of The Bank of New York ("BoNY") in connection with the
Amended and Restated Master Promissory Note (Negotiated Rate), dated as of
June 30, 2005, between BoNY and Movado Group, Inc.
-2-
SCHEDULE V
Environmental Matters (Section 5.12)
Acetone, Denatured Alcohol, Clear Ammonia, Sodium Cyanide, ▇▇▇▇▇▇▇▇ Solvent
(#8052-41-3) and VM&P Naphta (#8032-32-4) are stored by Parent at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ in accordance with applicable Environmental Laws.
-3-
SCHEDULE VI
Affiliate Transactions (Section 7.9)
The section on "Certain Relationships and Related Transactions" contained in the
Parent's Proxy, filed on June 16, 2005 with the Securities and Exchange
Commission, is herein incorporated by reference.