EXHIBIT 4.7
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CREDIT AGREEMENT
Dated as of April 30, 2002
among
KELLWOOD COMPANY
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent,
JPMORGAN CHASE BANK,
as Syndication Agent,
US BANK,
and
THE BANK OF NOVA SCOTIA
as Co-Documentation Agents,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.....................................................1
1.02 Other Interpretive Provisions....................................29
1.03 Accounting Terms.................................................29
1.04 Rounding.........................................................30
1.05 References to Agreements and Laws................................30
1.06 Exchange Rates; Currency Equivalents.............................31
1.07 Changes Regarding the euro.......................................31
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Revolving Loans..................................................31
2.02 Borrowings, Conversions and Continuations of Revolving Loans.....32
2.03 Letters of Credit................................................34
2.04 Prepayments......................................................42
2.05 Reduction or Termination of Commitments..........................43
2.06 Repayment of Loans...............................................44
2.07 Interest.........................................................44
2.08 Fees.............................................................44
2.09 Computation of Interest and Fees.................................45
2.10 Evidence of Debt.................................................45
2.11 Payments Generally...............................................45
2.12 Sharing of Payments..............................................48
2.13 Increase in Commitments..........................................48
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes............................................................50
3.02 Illegality.......................................................51
3.03 Inability to Determine Rates.....................................51
3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Offshore Rate Loans................................52
3.05 Funding Losses...................................................52
3.06 Matters Applicable to all Requests for Compensation..............53
3.07 Replacement Lender...............................................53
3.08 Survival.........................................................54
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension...........................54
4.02 Conditions to all Credit Extensions and Conversions
and Continuations..............................................56
TABLE OF CONTENTS
(continued)
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws.........57
5.02 Authorization; No Contravention..................................57
5.03 Governmental and Third-Party Authorization.......................57
5.04 Binding Effect...................................................57
5.05 Financial Statements; No Material Adverse Effect.................58
5.06 Litigation.......................................................58
5.07 No Default.......................................................58
5.08 Ownership of Property; Liens.....................................58
5.09 Environmental Compliance.........................................58
5.10 Insurance........................................................58
5.11 Taxes............................................................59
5.12 ERISA Compliance.................................................59
5.13 Subsidiaries.....................................................59
5.14 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act....................................60
5.15 Disclosure.......................................................60
5.16 Intellectual Property; Licenses, Etc.............................60
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements.............................................61
6.02 Certificates; Other Information..................................61
6.03 Notices..........................................................63
6.04 Payment of Obligations...........................................63
6.05 Preservation of Existence, Etc...................................64
6.06 Maintenance of Properties........................................64
6.07 Maintenance of Insurance.........................................64
6.08 Compliance with Laws and Contractual Obligations.................64
6.09 Books and Records................................................64
6.10 Inspection Rights................................................64
6.11 Compliance with ERISA............................................65
6.12 Environmental Compliance.........................................65
6.13 Use of Proceeds..................................................65
6.14 Subsidiary Subordination Agreement; Notices Regarding
Subsidiaries...................................................65
ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens............................................................66
7.02 Investments......................................................67
7.03 Indebtedness.....................................................68
7.04 Fundamental Changes..............................................69
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TABLE OF CONTENTS
(continued)
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7.05 Dispositions.....................................................69
7.06 Lease Obligations................................................70
7.07 Restricted Payments..............................................70
7.08 ERISA............................................................70
7.09 Change in Nature of Business.....................................70
7.10 Transactions with Affiliates.....................................71
7.11 Burdensome Agreements............................................71
7.12 Use of Proceeds..................................................71
7.13 Financial Covenants..............................................71
7.14 Acquisitions.....................................................72
7.15 Capital Expenditures.............................................72
7.16 Issuance or Sale of Stock by Subsidiaries........................73
7.17 Sale of Stock in Subsidiaries....................................73
7.18 Amendment of Documents...........................................73
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default................................................74
8.02 Remedies Upon Event of Default...................................76
8.03 Application of Funds.............................................76
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of Administrative Agent............77
9.02 Delegation of Duties.............................................78
9.03 Liability of Administrative Agent................................78
9.04 Reliance by Administrative Agent.................................78
9.05 Notice of Default................................................79
9.06 Credit Decision; Disclosure of Information by
Administrative Agent...........................................79
9.07 Indemnification of Administrative Agent..........................80
9.08 Administrative Agent in its Individual Capacity..................80
9.09 Successor Administrative Agent...................................80
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc..................................................81
10.02 Notices and Other Communications; Facsimile Copies...............82
10.03 No Waiver; Cumulative Remedies...................................83
10.04 Attorney Costs, Expenses and Taxes...............................83
10.05 Indemnification by the Borrower; Limitation of Liability.........84
10.06 Payments Set Aside...............................................85
10.07 Successors and Assigns...........................................85
10.08 Confidentiality..................................................88
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TABLE OF CONTENTS
(continued)
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10.09 Set-off..........................................................88
10.10 Interest Rate Limitation.........................................89
10.11 Counterparts.....................................................89
10.12 Integration......................................................89
10.13 Survival of Representations and Warranties.......................89
10.14 Severability.....................................................90
10.15 Tax Forms........................................................90
10.16 Judgment Currency................................................91
10.17 Governing Law....................................................91
10.18 Waiver of Right to Trial by Jury.................................91
10.19 Waiver by Lenders of Negative Pledge Contained in Other
Agreements.....................................................92
iv
Table of Contents
(continued)
SIGNATURES................................................Signature Page - 1
SCHEDULES
1.01 Existing Letters of Credit
1.02 Designated Subsidiaries
2.01 Commitments and Pro Rata Shares
5.06 Litigation
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
5.16 Intellectual Property Matters
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
7.06 Existing Leases
10.02 Offshore and Domestic Lending Offices, Addresses
for Notices
EXHIBITS
FORM OF
A Revolving Loan Notice
B Revolving Loan Note
C Compliance Certificate
D Assignment and Assumption
E Opinion of Counsel
F Borrowing Base Certificate
G Appointment/Revocation of Responsible Officer
H Subordination Agreement
I L/C Account Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of April 30,
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2002, among KELLWOOD COMPANY, a Delaware corporation (the "Borrower"), each
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lender from time to time party hereto (collectively, the "Lenders" and
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individually, a "Lender"), BANK OF AMERICA, N.A., as Administrative Agent,
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JPMORGAN CHASE BANK, as Syndication Agent, and US BANK and THE BANK OF NOVA
SCOTIA, as Co-Documentation Agents.
The Borrower has requested that the Lenders provide a senior
revolving credit facility, and the Lenders are willing to do so on the terms
and conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"ABC Childrenswear Acquisition" means the acquisition of
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substantially all of the capital stock of an enterprise disclosed on a
confidential basis to the Administrative Agent and the Lenders pursuant to
documentation reasonably acceptable to the Administrative Agent, which
acquisition will comply with the requirements set forth in clause (b)(i) of
the definition of "Permitted Acquisitions."
"Acceptance" means written notification by an L/C Issuer, delivered
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to the Borrower within one Business Day of receipt by the L/C Issuer of a
Letter of Credit Application, of its acceptance of a request from the
Borrower for the issuance of a Letter of Credit pursuant to a Letter of
Credit Application; it being understood that the failure to deliver such
written acceptance within the time period specified shall constitute a
refusal of acceptance and an election not to issue such Letter of Credit.
"Accounts" means all of the Borrower's or a Subsidiary's now owned
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or hereafter acquired or arising accounts, as defined in the UCC, including
any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or in
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connection with an Account, chattel paper or general intangibles (including
a payment intangible).
"Acquisition" means the acquisition of (i) a controlling equity
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interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest
at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest, or (ii) assets
of another Person which constitute all or
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substantially all of the assets of such Person or of a line or lines of
business conducted by such Person.
"Acquisition Adjustments" means the adjustments to certain
-----------------------
financial terms and computations more particularly described in Section 1.03(c).
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"Administrative Agent" means Bank of America in its capacity as
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administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means, with respect to any
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currency, the Administrative Agent's address and, as appropriate, account as
set forth on Schedule 10.02 with respect to such currency, or such other
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address or account with respect to such currency as the Administrative Agent
may from time to time notify to the Borrower and the Lenders.
"Affiliate" means, with respect to any Person, another Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Control" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
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A Person shall be deemed to be Controlled by another Person if such other
Person possesses, directly or indirectly, power to vote 10% or more of the
securities having ordinary voting power for the election of directors or
managing general partners.
"Agent-Related Persons" means the Administrative Agent (including
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any successor administrative agent), together with its Affiliates
(including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agents" means the Administrative Agent, the Syndication Agent and
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the Co-Documentation Agents.
"Aggregate Commitments" means, as at the date of determination
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thereof, the sum of all Commitments of all Lenders at such date.
"Agreement" means this Credit Agreement.
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"Applicable L/C Issuer" means, with respect to any Letter of
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Credit, the L/C Issuer which issued or has been requested to issue such
Letter of Credit in accordance with Section 2.03.
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"Applicable Margin" means, from time to time, the following
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percentages per annum, based upon the Leverage Ratio as set forth below:
2
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Applicable Margin Applicable Applicable
for Offshore Rate Applicable Margin Margin for Margin for
Loans and Standby for Commercial Facility Utilization
Tier Leverage Ratio Letters of Credit Letters of Credit Fee Fee
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I Less than or .825% .30% .175% .15%
equal to 1.75 to
1.00
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II Less than or 1.05% .30% .20% .20%
equal to 2.25 to
1.00 but greater
than 1.75 to 1.00
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III Less than or 1.250% .35% .25% .25%
equal to 2.75 to
1.00 but greater
than 2.25 to 1.00
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IV Less than or 1.450% .35% .30% .25%
equal to 3.25 to
1.00 but greater
than 2.75 to 1.00
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V Greater than 1.65% .40% .35% .375%
3.25 to 1.00
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The Applicable Margin shall be established at the end of each
fiscal quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be determined
based upon the computations set forth in the certificate furnished to the
Administrative Agent pursuant to Section 6.01(a) and Section 6.01(b),
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subject to review and approval of such computations by the Administrative
Agent, and shall be effective commencing on the fifth Business Day following
the date such certificate is received until the fifth Business Day following
the date on which a new certificate is delivered or is required to be
delivered, whichever shall first occur. From the Closing Date to the fifth
Business Day following the date the certificate referred to in the preceding
sentence for the fiscal period ended as at the first Determination Date is
delivered or is required to be delivered (whichever shall first occur), the
Applicable Margin shall be Tier III. Notwithstanding the provisions of the
two preceding sentences, if the Borrower shall fail to deliver any such
certificate within the time period required by Section 6.01, then the
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Applicable Margin shall be Tier V from the date such certificate was due
until the fifth Business Day following the date the appropriate certificate
is so delivered.
"Approved Fund" means any Fund that is administered or managed by
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(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as
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sole lead arranger and sole book manager.
"Asset Securitization" means any transaction or series of
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transactions pursuant to which the Borrower or any of its Subsidiaries may
sell, convey or otherwise transfer to a Securitization Entity (in the case
of a transfer by the Borrower or any of its Subsidiaries) or any other
Person (in case of a transfer by a Securitization Entity), or may grant a
security interest in, any accounts receivable (whether now existing or
arising or acquired in the future) of the Borrower or any of
3
its Subsidiaries, and any assets related thereto including, without limitation,
all collateral securing such accounts receivable, all contracts and contract
rights and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets (including
contract rights) which are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable, all of the
foregoing for the purpose of providing working capital financing.
"Assignment and Assumption" means an Assignment and Assumption
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substantially in the form of Exhibit D.
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"Attorney Costs" means and includes all reasonable fees and
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disbursements of any law firm or other external counsel and the allocated
cost of internal legal services and all disbursements of internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of
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any capital lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date
in accordance with GAAP if such lease were accounted for as a capital lease
and (c) in respect of any Asset Securitization, the aggregate amount of
obligations owed to (including the amount of investment in transferred
assets by) Persons other than the Borrower or its Subsidiaries.
"Audited Financial Statements" means the audited consolidated
----------------------------
balance sheet of the Borrower and its Subsidiaries for the fiscal year ended
January 31, 2002, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto.
"Bank of America" means Bank of America, N.A.
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"Base Rate" means for any day a fluctuating rate per annum equal to
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the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by
Bank of America as its "prime rate." Such prime rate is a rate set by Bank
of America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced prime rate. Any change in such prime rate announced
by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
--------------
Rate. All Base Rate Loans shall be denominated in Dollars.
"Borrower" has the meaning set forth in the introductory paragraph
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hereto.
"Borrowing" means a borrowing consisting of simultaneous Revolving
---------
Loans of the same Type, in the same applicable currency and, as to Offshore
Rate Loans, having the same Interest Period made by each of the Lenders
pursuant to Section 2.01.
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4
"Borrowing Base" means, at any time, an amount equal to the sum of
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(i) eighty-five percent (85%) of the Net Amount of Eligible Accounts; plus
----
(ii) sixty percent (60%) of the Value of Eligible Inventory; plus (iii)
----
forty percent (40%) of the Value of Eligible Raw Materials Inventory; it
being understood, however, that the calculation of items (b), (c), (d), (e),
(f) and (i) under the definition of "Eligible Accounts" (including the Net
Amount of Eligible Accounts attributable thereto) and items (f), (g) and (h)
under the definition of "Eligible Inventory" may, where necessary given the
limitations of the operational and accounting practices of the Borrower on
the Closing Date, be made on the basis of good faith estimates or historical
percentages; provided, however, that to the extent the Agent at any time has
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any reasonable basis to believe that any estimate or percentage is
materially incorrect or does not accurately reflect the quantity to be
calculated in any material respect, then the Agent may, upon written notice
to the Borrower, (i) adjust the calculation of the Borrowing Base to the
extent necessary render such estimate or percentage correct and accurate in
its reasonable discretion and/or (ii) perform, or cause to be performed, an
audit of the Accounts and Inventory of the Borrower and its Subsidiaries at
the Borrower's expense.
"Borrowing Base Certificate" means a certificate by a Responsible
--------------------------
Officer of the Borrower, substantially in the form of Exhibit F (or another
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form acceptable to the Administrative Agent) setting forth the calculation
of the Borrowing Base, including a calculation of each component thereof,
all in such detail as shall be reasonably satisfactory to the Administrative
Agent.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks are authorized to close under the Laws of, or
are in fact closed in, the state where the Administrative Agent's Office
with respect to Obligations denominated in Dollars is located and (a) if
such day relates to any Offshore Rate Loan denominated in a currency other
than Dollars or euro, means any such day on which dealings in deposits in
the relevant currency are conducted by and between banks in the London
interbank market or (b) if such day relates to any Offshore Rate Loan
denominated in euro, means a TARGET Business Day.
"Cash Collateralize" means to pledge and deposit with or deliver
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to the Administrative Agent, for the benefit of an L/C Issuer and the
Lenders, as collateral for the L/C Obligations plus all fees accrued or to
be incurred in connection therewith, cash, deposit accounts and all balances
therein, in an amount not less than the sum of such L/C Obligations and fees
and in the applicable currency in which such L/C Obligations are
outstanding, and all proceeds of the foregoing pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the
Applicable L/C Issuer, but otherwise in substantially the form of Exhibit I,
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and to take all such other action as shall be necessary for the
Administrative Agent to have "control" thereof within the meaning of the
Uniform Commercial Code applicable thereto. Derivatives of such term shall
have corresponding meaning. Cash collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America or other
institutions satisfactory to it.
"Change of Control" means, with respect to any Person, an event or
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series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934)
but excluding any employee benefit plan
5
of such person or its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator
of any such plan) (i) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have "beneficial
ownership" of all securities that such person or group has the right
to acquire (such right, an "option right"), whether such right is
------------
exercisable immediately or only after the passage of time), directly
or indirectly, of 30% or more of the equity securities of such Person
entitled to vote for members of the board of directors or
equivalent governing body of such Person on a fully diluted basis
(i.e., taking into account all such securities that such person or
----
group has the right to acquire pursuant to any option right) or
(ii) otherwise has the ability, directly or indirectly, to elect a
majority of the Board of Directors of the Borrower; or
(b) during any period of 24 consecutive months, a majority
of the members of the board of directors or other equivalent
governing body of such Person cease to be composed of individuals
(i) who were members of that board or equivalent governing body on
the first day of such period, or (ii) whose election or nomination
to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that
board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.
"Closing Date" means the first date all the conditions precedent in
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Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in
------------ ------------
the case of Section 4.01(b), waived by the Person entitled to receive the
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applicable payment).
"Code" means the Internal Revenue Code of 1986 and all regulations
----
issued pursuant thereto.
"Co-Documentation Agents" means US Bank and The Bank of Nova Scotia
-----------------------
in their respective capacities as co-documentation agents under any of the
Loan Documents.
"Commercial L/C Sublimit" means an amount equal to the lesser of
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(i) the Dollar Equivalent Amount of Aggregate Commitments and (ii)
$175,000,000. The Commercial L/C Sublimit is part of, and not in addition
to, the Aggregate Commitments.
"Commitment" means, as to each Lender, its obligation to (a) make
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Revolving Loans to the Borrower pursuant to Section 2.01, and (b) purchase
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participations in L/C Obligations, in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.01, as such amount may be increased, reduced or
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adjusted from time to time pursuant to Section 2.13 or otherwise in
------------
accordance with this Agreement.
"Compliance Certificate" means a certificate substantially in the
----------------------
form of Exhibit C.
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"Consolidated EBITDA" means, for any period, for the Borrower and
-------------------
its Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b)
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Consolidated Interest Charges, (c) the amount of taxes, based on or measured
by income, used or included in determining such Consolidated Net Income, (d)
the amount of depreciation and amortization expense deducted in determining
such Consolidated Net Income, and (e) the amount of any extraordinary
charges resulting from the closing of manufacturing and distribution
facilities and termination of licenses incurred during such period to the
extent deducted in computing Consolidated Net Income for such period,
calculated in accordance with GAAP, in each case subject to Acquisition
Adjustments; provided, however, the aggregate amount of all extraordinary
charges which may be included in the calculation of Consolidated EBITDA
under clause (e) shall not exceed $15,000,000 in the aggregate for all
periods for the term of this Agreement.
"Consolidated Funded Indebtedness" means, as of any date of
--------------------------------
determination, for the Borrower and its Subsidiaries on a consolidated
basis, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) Attributable Indebtedness in
respect of capital leases, Synthetic Lease Obligations, and Assets
Securitizations and (c) without duplication, all Contingent Obligations with
respect to Indebtedness of the types specified in subsections (a) and (b)
above of Persons other than the Borrower or any Subsidiary. For all purposes
hereof, the Consolidated Funded Indebtedness of the Borrower or any
Subsidiary shall include the foregoing Indebtedness in (a), (b) and (c)
above of any partnership or joint venture (other than a joint venture that
is itself a corporation or a limited liability company) in which the
Borrower or any Subsidiary is a general partner or joint venturer, unless
such Indebtedness is expressly made non-recourse to the Borrower or such
Subsidiary.
"Consolidated Interest Charges" means, for any period, for the
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Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, debt discount, premium payments, commissions, fees, charges and
related expenses of the Borrower and its Subsidiaries in connection with
Indebtedness (including capitalized interest) or in connection with the
deferred purchase price of assets or incurred with respect to any Permitted
Securitization Transaction, in each case to the extent treated as interest
in accordance with GAAP, (b) the portion of rent expense of the Borrower and
its Subsidiaries with respect to such period under capital leases that is
treated as interest in accordance with GAAP and (c) the amount of payments
in respect of Synthetic Lease Obligations and Asset Securitizations that are
in the nature of interest (including, with respect to Asset Securitizations,
the aggregate discount (net of reserves) from the face value of assets
transferred), subject to Acquisition Adjustments.
"Consolidated Net Income" means, for any period of computation
-----------------------
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income, and (ii) dividends and distributions
made in the ordinary course of their businesses by Persons in which
investment is permitted pursuant to this Agreement and not related to an
extraordinary event), less all operating and non-operating expenses of the
Borrower and its Subsidiaries including taxes on income, all determined on a
consolidated basis in accordance with GAAP and subject to Acquisition
Adjustments; but excluding (for all purposes other than compliance with
Section 7.13(a) hereof) as income: (i) net gains and net losses on the
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sale, conversion or other disposition of capital assets, (ii) net gains and
net losses on the acquisition, retirement, sale or other disposition of
capital stock and other
7
securities of the Borrower or its Subsidiaries, (iii) net gains on the
collection of proceeds of life insurance policies, (iv) any write-up of any
asset, and (v) any other net gain or credit of an extraordinary nature as
determined in accordance with GAAP.
"Consolidated Net Tangible Assets" means, as of any date on which
--------------------------------
the amount thereof is to be determined, the total amount of all assets of
the Borrower and its Subsidiaries (less depreciation, depletion and other
properly deductible valuation reserves) after deducting, without
duplication, the sum of (i) goodwill, patents, trade names, trademarks,
copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, the excess of cost of shares acquired
over book value of related assets and such other assets as are properly
classified as "intangible assets" in accordance with GAAP; and (ii) all
deferred assets and prepaid expenses (except such prepaid taxes that are
properly classified as current assets), including prepaid insurance and
prepaid taxes, determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date of determination,
----------------------
for the Borrower and its Subsidiaries on a consolidated basis, Shareholders'
Equity of the Borrower and its Subsidiaries on that date.
"Contingent Obligation" means, as to any Person, (a) any
---------------------
obligation, contingent or otherwise, of such Person guarantying or having
the economic effect of guarantying any Indebtedness or other obligation
payable or performable by another Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation,
(ii) to purchase or lease property, securities or services for the purpose
of assuring the obligee in respect of such Indebtedness or other obligation
of the payment or performance of such Indebtedness or other obligation,
(iii) to maintain working capital, equity capital or any other financial
statement condition or liquidity or level of income or cash flow of the
primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring or
holding harmless in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part),
or (b) any Lien on any assets of such Person securing any Indebtedness or
other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof,
in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the guarantying Person in good faith.
"Continuation" and "Continue" mean, with respect to any Offshore
------------ --------
Rate Loan, the continuation of such Offshore Rate Loan as an Offshore Rate
Loan in the same available currency on the last day of the Interest Period
for such Loan.
"Contractual Obligation" means, as to any Person, any provision of
----------------------
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
8
"Conversion" and "Convert" mean, with respect to any Revolving
---------- -------
Loan, the conversion of such Revolving Loan from one Type to another Type,
or from one currency to another available currency.
"Cost of Acquisition" means, with respect to any Acquisition, as at
-------------------
the date of entering into any agreement therefor, the sum of the following
---
(without duplication): (i) the value of the capital stock, warrants or
options to acquire capital stock of the Borrower or any Subsidiary to be
transferred in connection therewith, (ii) the amount of any cash and fair
market value of other property (excluding property described in clause (i)
and the unpaid principal amount of any debt instrument) given as
consideration, (iii) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Indebtedness
incurred, assumed or acquired by the Borrower or any Subsidiary in
connection with such Acquisition, (iv) all additional purchase price amounts
in the form of earnouts and other contingent obligations that should be
recorded on the financial statements of the Borrower and its Subsidiaries in
accordance with GAAP, (v) all amounts paid in respect of covenants not to
compete, consulting agreements that should be recorded on financial
statements of the Borrower and its Subsidiaries in accordance with GAAP, and
other affiliated contracts in connection with such Acquisition, (vi) the
aggregate fair market value of all other consideration given by the Borrower
or any Subsidiary in connection with such Acquisition, and (vii)
out-of-pocket transaction costs for the services and expenses of attorneys,
accountants and other consultants incurred in effecting such transaction,
and other similar transaction costs so incurred and capitalized in
accordance with GAAP.
"Credit Extension" means each of the following: (a) a Borrowing
----------------
and (b) an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States
------------------
of America, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of
the United States of America or other applicable jurisdictions from time to
time in effect and affecting the rights of creditors generally.
"Default" means any event or circumstance that, with the giving of
-------
any notice, the passage of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate
------------
or, with respect to Obligations denominated in an Offshore Currency, the
Offshore Base Rate, as applicable, plus (b) 2% per annum; provided, however,
---- -------- -------
that with respect to an Offshore Rate Loan, until the end of the Interest
Period during which the Default Rate is first applicable, the Default Rate
shall be an interest rate equal to the interest rate (including any
Applicable Margin) otherwise applicable to such Loan plus 2% per annum, and
thereafter as set forth in (a) above, in each case to the fullest extent
permitted by applicable Laws.
"Deferred Pension Plan Tax Liability" means the amount of the
-----------------------------------
deferred tax liability of up to $39,000,000 paid by the Borrower in
connection with the termination of the Kellwood Company Pension Plan of the
Borrower.
9
"Designated Subsidiary" means any of the Subsidiaries set forth on
---------------------
Schedule 1.02 hereto and any additional Subsidiaries which the Borrower may
-------------
hereafter designate in writing to the Administrative Agent and the Lenders.
"Disposition" or "Dispose" means the sale, transfer, license or
----------- -------
other disposition (including any sale and leaseback transaction) of any
property by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.
"Dollar" and "$" means lawful money of the United States of
------ -
America.
"Dollar Equivalent Amount" means, at any time, (a) with respect to
------------------------
any amount denominated in Dollars, such amount, and (b) with respect to any
amount denominated in any Offshore Currency, the equivalent amount thereof
in Dollars as determined by the Administrative Agent at such time on the
basis of the Spot Rate (determined in respect of the applicable Revaluation
Date) for the purchase of Dollars with such Offshore Currency.
"Eligible Accounts" means the Accounts of the Borrower and its
-----------------
Subsidiaries other than any Account:
(a) with respect to which more than 90 days have elapsed
since the date of the original invoice therefor or which more than
60 days have elapsed since the original due date;
(b) with respect to which any one or more of the following
events has occurred to the Account Debtor on such Account: the filing
by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under the
bankruptcy, insolvency, or similar laws of the United States, any
state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws
of the United States or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of
claims against, or winding up of affairs of, the Account Debtor; the
sale, assignment, or transfer of all or any material part of the
assets of the Account Debtor; the nonpayment generally by the Account
Debtor of its debts as they become due; or the cessation of the
business of the Account Debtor as a going concern, or fifty percent
(50%) or more of the aggregate Dollar amount of outstanding Accounts
owed at such time by the Account Debtor thereon is classified as
ineligible under clause (a) above;
----------
(c) owed by an Account Debtor which: (i) does not maintain
its chief executive office in the United States of America or Canada
(other than the Province of Newfoundland); or (ii) is not organized
under the laws of the United States of America or Canada or any state
or province thereof; or (iii) is the government of any foreign country
or sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof; except to the extent
that such Account is secured or payable by a letter of credit
satisfactory to the Administrative Agent in its discretion;
(d) owed by an Account Debtor which is an Affiliate or
employee of the Borrower or any Subsidiary;
10
(e) with respect to which either the perfection,
enforceability, or validity of a security interest in such Account
would be governed by or subject to any federal, state, or local
statutory requirements other than those of the UCC;
(f) which represents a sale on a ▇▇▇▇-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other
repurchase or return basis;
(g) which is evidenced by a promissory note or other
instrument or by chattel paper;
(h) which arises out of a sale not made in the ordinary
course of the Borrower's or the applicable Subsidiary's business;
(i) with respect to which the goods giving rise to such
Account have not been shipped and delivered to and accepted by the
Account Debtor or the services giving rise to such Account have not
been performed by the Borrower or a Subsidiary, and, if applicable,
accepted by the Account Debtor, or the Account Debtor revokes its
acceptance of such goods or services;
(j) owed by an Account Debtor whose debt is not rated or is
rated lower than BBB or Baa2 by S&P or ▇▇▇▇▇'▇, respectively, and which
is obligated to the Borrower or any Subsidiary respecting Accounts the
aggregate unpaid balance of which exceeds fifteen percent (15%) of the
aggregate unpaid balance of all Accounts owed to the Borrower or any
Subsidiary at such time by all of the Borrower's and its Subsidiaries'
Account Debtors, but only to the extent of such excess; or
(k) which is subject to a security interest in favor of any
Person other than KFR in connection with the Factoring Program or which
is transferred in connection with any Asset Securitization.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible
Accounts.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
-----------------
Lender; (c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) each Agent and the Required L/C Issuers, and (ii)
unless (A) such Person is taking delivery of an assignment in connection
with physical settlement of a credit derivative transaction or (B) a Default
or Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
--------
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Eligible Inventory" means all Inventory:
------------------
(a) that is owned by the Borrower or its Subsidiaries;
(b) with respect to which the validity, perfection and
enforcement of a security interest would be governed solely by the UCC
and which is not subject to any other Lien whatsoever;
11
(c) that consists of finished goods generally made available
for sale by the Borrower and its Subsidiaries in the ordinary course
of business;
(d) that is in good condition, is merchantable and is salable
at prices approximating at least cost in the normal course of the
Borrower's and its Subsidiaries' business;
(e) that is located inside the United States of America or
Canada;
(f) that, if in-transit from vendors or suppliers, has the
support of a commercial or documentary letter of credit issued by an
established financial institution regularly engaged in the issuance of
such letters of credit; and
(g) that is not placed on consignment.
If any Inventory at any time ceases to be Eligible Inventory, such Inventory
shall promptly be excluded from the calculation of Eligible Inventory.
"Eligible Raw Materials Inventory" means Inventory consisting of
--------------------------------
raw materials which would otherwise constitute Eligible Inventory if it were
finished goods. If any Inventory at any time ceases to be Eligible Raw
Materials Inventory, such Inventory shall promptly be excluded from the
calculation of Eligible Raw Materials Inventory.
"EMU" means the economic and monetary unit in accordance with the
---
Treaty of Rome of 1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, the
Maastricht Treaty of 1992, and the Amsterdam Treaty of 1998, as amended from
time to time.
"EMU Legislation" means legislative measures of the European
---------------
Council (including without limitation European Council regulations) for the
introduction of, changeover to or operation of a single or unified European
currency (whether known as the euro or otherwise), in each case as amended
or supplemented from time to time.
"Environmental Laws" means all Laws relating to environmental
------------------
matters applicable to any property.
"Environmental Liability" means any liability, contingent or
-----------------------
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower directly or
indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment
or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect
to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974
-----
and all regulations issued pursuant thereto.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and
12
Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
-----------
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination
under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate.
"euro" means the single, lawful currency of the Participating
----
Member States introduced in accordance with the EMU Legislation.
"Eurocurrency Reserve Percentage" means, for any day during any
-------------------------------
Interest Period, the reserve percentage (expressed as a decimal, carried out
to five decimal places) in effect on such day, whether or not applicable to
any Lender, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency liabilities").
The Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar
Reserve Percentage. The determination of the Eurodollar Reserve Percentage
by the Administrative Agent shall be conclusive in the absence of manifest
error.
"Event of Default" means any of the events or circumstances
----------------
specified in Article VIII.
------------
"Existing Credit Facility" means that certain Credit Agreement
------------------------
dated as of August 31, 1999 among the Borrower, Bank of America, as
Administrative Agent, Bank of America Securities LLC, as a Lead Arranger,
the other agents party thereto and a syndicate of lenders, as amended.
"Existing Letters of Credit" means those letters of credit issued
--------------------------
and outstanding as of the Closing Date under the Existing Credit Facility
and individually described on Schedule 1.01.
-------------
"Factoring Program" collectively means: (i) the purchase of
-----------------
accounts receivable from time to time by KFR from the Borrower and/or
certain of its Subsidiaries pursuant to various Receivables Purchase and
Sale Agreements dated as of January 31, 2000, as amended or modified from
time to time, and (ii) the performance of collection and other services by
Kellwood Shared Services Inc., for the benefit of KFR pursuant to various
Receivables
13
Collection and Administrative Services Agreements dated as of January 31,
2000, as amended or modified from time to time.
"Federal Funds Rate" means, for any day, the rate per annum equal
------------------
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank on the Business Day
next succeeding such day; provided that (a) if such day is not a Business
--------
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to Bank of America on such day on such transactions
as determined by the Administrative Agent.
"Fixed Charges" means, with respect to Borrower and its
-------------
Subsidiaries for any period, the sum of, without duplication, (i)
---
Consolidated Interest Charges during such period, (ii) the principal amount
of Consolidated Funded Indebtedness scheduled to be due and payable during
such period, and (iii) all Restricted Payments paid during such period, all
determined in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower
---------------------------
and its Subsidiaries for any period of four consecutive fiscal quarters
taken together as one accounting period, the ratio of (i) Consolidated
EBITDA for such period less cash taxes, other than the Deferred Pension Plan
Tax Liability, paid during such period to (ii) Fixed Charges for such
period.
"Foreign Lender" has the meaning specified in Section 10.15(a).
-------------- ----------------
"FRB" means the Board of Governors of the Federal Reserve System of
---
the United States of America.
"Fund" means any Person (other than a natural person) that is (or
----
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"GAAP" means generally accepted accounting principles set forth in
----
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession, that are applicable to the circumstances as of the date of
determination, consistently applied.
"Governmental Authority" means any nation or government, any state
----------------------
or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
14
"Hazardous Materials" means all explosive or radioactive substances
-------------------
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any
nature, the generation, handling, storage, transportation, disposal,
treatment, release, discharge or emission of which is subject to any
Environmental Law.
"Honor Date" has the meaning set forth in Section 2.03(c).
---------- ---------------
"Hong Kong Dollars" means the official legal currency of Hong Kong.
-----------------
"Included Debt" means (i) all Outstanding Amounts, (ii) the
-------------
aggregate principal amount outstanding under the Senior Notes and (iii) the
aggregate principal amount outstanding under all other uncommitted lines of
credit entered into by the Borrower or any Subsidiary.
"Increase Effective Date" has the meaning given to such term in
-----------------------
Section 2.13.
------------
"Indebtedness" means, as to any Person at a particular time, all of
------------
the following, whether or not included as indebtedness or liabilities in
accordance with GAAP:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments;
(b) all direct or Contingent Obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations under any Swap Contract in an amount
equal to the Swap Termination Value thereof;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;
(f) Attributable Indebtedness related to capital leases,
Synthetic Lease Obligations and Asset Securitizations; and
(g) all Contingent Obligations of such Person in respect of
any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited
15
liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such
Person. The amount of any capital lease or Synthetic Lease Obligation as of
any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
"Indenture" means that certain Indenture dated September 30, 1997
---------
by and between The Chase Manhattan Bank, as trustee, and the Borrower, as
amended, supplemented or restated from time to time, pursuant to which
certain debt securities have been issued by the Borrower.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
----------------------- -------------
"Indemnitees" has the meaning set forth in Section 10.05.
----------- -------------
"Interbank Offered Rate" has the meaning therefor set forth in the
----------------------
definition of Offshore Rate.
"Interest Payment Date" means, (a) as to any Offshore Rate Loan,
---------------------
the last day of the relevant Interest Period, any date that such Loan is
prepaid or, with respect to an Offshore Rate Loan, Converted, in whole or in
part, and the Maturity Date; provided, however, that if any Interest Period
-------- -------
for an Offshore Rate Loan exceeds three months, interest shall also be paid
on the Business Day which falls every three months after the beginning of
such Interest Period; and (b) as to any Base Rate Loan, the last Business
Day of each April, July, October and January and the Maturity Date;
provided, further, that interest accruing at the Default Rate shall be
-------- -------
payable from time to time upon demand of Administrative Agent.
"Interest Period" means for each Offshore Rate Loan, initially, the
---------------
period commencing on the date such Offshore Rate Loan is disbursed or (in
the case of any Offshore Rate Loan) on the date any Loan is Continued as or
Converted into an Offshore Rate Loan, and ending, in each case, on the date
which is one, two, three or six months thereafter, as selected by the
Borrower in its Revolving Loan Notice; provided that:
(i) any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next
succeeding Business Day unless, in the case of an Offshore Rate
Loan, such Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the scheduled
Maturity Date.
"Inventory" means all of the Borrower's and its Subsidiaries' now
---------
owned and hereafter acquired inventory, goods and merchandise, wherever
located, to be furnished under any contract
16
of service or held for sale or lease, all returned goods, raw materials,
work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature or description which are used or
consumed in the Borrower's and its Subsidiaries' business or used in
connection with the packing, shipping, advertising, selling or finishing of
such goods, merchandise, and all documents of title or other documents
representing them.
"Investment" means, as to any Person, any acquisition or investment
----------
by such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution to, guaranty of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person, or (c) the purchase or other acquisition (in one transaction
or a series of transactions) of assets of another Person that constitute a
business unit. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment, but
including, when actually invested, subsequent amounts of Investments in the
same Person, whether pursuant to earnouts or other contractual obligations,
or otherwise.
"IP Rights" has the meaning set forth in Section 5.16.
--------- ------------
"IRS" means the United States Internal Revenue Service and any
---
successor governmental agency performing a similar function.
"Japanese Yen" means the official legal currency of Japan.
------------
"KFR" means Kellwood Financial Resources, Inc., a Tennessee
---
corporation and wholly-owned Subsidiary of the Borrower.
"Laws" means, collectively, all international, foreign, Federal,
----
state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
Governmental Authority, in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's
-----------
funding in Dollars of its participation in any L/C Borrowing in accordance
with its Pro Rata Share as set forth in Section 2.03(c).
---------------
"L/C Borrowing" means an extension of credit in Dollars resulting
-------------
from a drawing under any Letter of Credit which has not been reimbursed on
the date when made or refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit,
--------------------
the issuance thereof or extension of the expiry date thereof, or the renewal
or increase of the amount thereof.
17
"L/C Issuer" means the Principal L/C Issuer, JPMorgan Chase Bank,
----------
The Bank of Nova Scotia, US Bank and Bank One, NA and such other Lender
designated as an L/C Issuer pursuant to Section 2.03(l) or Section 9.09, in
--------------- ------------
its respective capacity as issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the
---------------
aggregate undrawn face amount of all outstanding Letters of Credit plus the
----
aggregate of all Unreimbursed Amounts, including all L/C Borrowings,
expressed as a Dollar Equivalent Amount.
"Lender" has the meaning specified in the introductory paragraph
------
hereto and, as the context requires, includes any L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of
--------------
such Lender described as such on Schedule 10.02, or such other office or
--------------
offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder and
----------------
shall include the Existing Letters of Credit. A Letter of Credit may be a
commercial letter of credit or a standby letter of credit.
"Letter of Credit Application" means an application and agreement
----------------------------
for the issuance or amendment of a letter of credit in the form from time to
time in use by an L/C Issuer and any electronic application for a letter of
credit made through an electronic letter of credit system established by an
L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
--------------------------------
prior to the scheduled Maturity Date (or, if such day is not a Business Day,
the next preceding Business Day).
"Leverage Ratio" means, as of any date of determination, for the
--------------
Borrower and its Subsidiaries on a consolidated basis, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA
for the period of the four consecutive fiscal quarters ending on or most
recently ended prior to such date.
"Lien" means any mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable Laws of any
jurisdiction) of or in property securing any obligation to, or a claim by a
Person other than the owner of such property, whether statutory, by contract
or otherwise, including the interest of a purchaser of accounts receivable.
"Loan" means an extension of credit by a Lender to the Borrower
----
under Article II in the form of a Revolving Loan.
----------
"Loan Documents" means this Agreement, each Note, the Subordination
--------------
Agreement, each Request for Credit Extension, each Letter of Credit
Application and each Compliance Certificate, and all other instruments and
documents heretofore or hereafter executed or
18
delivered to or in favor of any Lender or the Administrative Agent in
connection with the Loans made and transactions contemplated by this
Agreement.
"Loan Year" means the 365 (or 366) day period ending on the first
---------
anniversary of the Closing Date and each 365 (or 366) day period following
such date.
"Material Adverse Effect" means (a) a material adverse change in,
-----------------------
or a material adverse effect upon, the operations, business, assets,
properties, condition (financial or otherwise), liabilities (actual or
contingent) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of
the Borrower to pay or perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower of any Loan
Document.
"Material Lease" means any lease providing for aggregate payments
--------------
thereunder in any year in excess of $100,000.
"Material Subsidiary" means: (a) each Subsidiary listed on Schedule
------------------- --------
5.13 hereto which is designated therein as a "Material Subsidiary"; (b) any
----
Subsidiary that the Borrower designates as a "Material Subsidiary" by
updating Schedule 5.13 hereto in a written notice delivered (which may be by
-------------
facsimile transmission) to the Agent from time to time; and (c) any
Subsidiary which is acquired or created or party to a merger or some other
corporate reorganization or otherwise acquires all or substantially all of
the assets of another Person following the Closing Date and meets any of the
following conditions:
(i) the assets of such Subsidiary (valued at the greater of
book or fair market) as at the end of the immediately preceding
fiscal year exceed $1,000,000,
(ii) the aggregate sum of all assets (valued at
the greater of book or fair market) of such Subsidiary, when
combined with the assets of all other Subsidiaries which do not
otherwise qualify as "Material Subsidiaries" under this definition,
exceeds $1,000,000, or
(iii) the portion of Consolidated Net Income of
the Borrower and its Subsidiaries which were contributed by such
Subsidiary during the immediately preceding fiscal year exceeds
$1,000,000.
"Maturity Date" means (a) April 30, 2005, or (b) such earlier date
-------------
upon which the Aggregate Commitments may be terminated in accordance with
the terms hereof.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
-------
thereto.
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the
preceding three calendar years, has made or been obligated to make
contributions.
19
"Net Amount of Eligible Accounts" means, at any time, the gross
-------------------------------
amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any
time issued, owing, granted, outstanding, available or claimed.
"Non-Equity Consideration" means all consideration paid in
------------------------
connection with an Acquisition other than capital stock, warrants or options
to acquire capital stock of the Borrower or any Subsidiary to be transferred
in connection with an Acquisition.
"Notes" means, collectively, the Revolving Loan Notes.
-----
"Obligations" means all advances to, and debts, liabilities,
-----------
obligations, covenants and duties of the Borrower arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by participation or
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest that accrues after the commencement
by or against the Borrower or any Affiliate thereof of any proceeding under
any Debtor Relief Laws naming such Person as the debtor in such proceeding.
"Offshore Base Rate" means, for any day, the rate of interest, plus
------------------
a margin, if any, offered by the Administrative Agent generally with respect
to a specified Offshore Currency for overnight borrowings in the applicable
Offshore Currency.
"Offshore Currency" means each of Japanese Yen, euro, and Hong Kong
-----------------
Dollars and any other freely available currency notified to the
Administrative Agent upon not less than ten (10) Business Days prior written
notice that in the opinion of all the Lenders, in their sole discretion, is
freely traded at such time in offshore interbank foreign exchange markets
and is freely transferable and convertible into Dollars in the United States
currency market; provided, however, selection of the British pounds sterling
or any other currency pursuant to which any lender is required to comply
with the relevant requirements of the Bank of England and the Financial
Services Authority of the United Kingdom as an Offshore Currency shall
require an amendment hereto in form and substance acceptable to the
Administrative Agent and the Required Lenders obligating the Borrower to
compensate the Lenders for additional costs incurred in connection
therewith.
"Offshore Currency Equivalent Amount" means, at any time, (a) with
-----------------------------------
respect to any amount denominated in an Offshore Currency, such amount, and
(b) with respect to any amount denominated in Dollars, the equivalent amount
thereof in the applicable Offshore Currency as determined by the
Administrative Agent at such time on the basis of the Spot Rate (determined
in respect of the applicable Revaluation Date) for the purchase of such
Offshore Currency with Dollars.
"Offshore Currency Loan" means each Revolving Loan denominated in
----------------------
an Offshore Currency.
"Offshore Currency L/C" means Letter of Credit denominated in an
---------------------
Offshore Currency.
20
"Offshore Currency Sublimit" means an amount equal to the lesser of
--------------------------
the Dollar Equivalent Amount of the Aggregate Commitments and $25,000,000.
"Offshore Rate" means for any Interest Period with respect to any
-------------
Offshore Rate Loan, a rate per annum determined by Administrative Agent
pursuant to the following formula:
Interbank Offered Rate
Offshore Rate = --------------------------------------
1.00 - Eurocurrency Reserve Percentage
Where "Interbank Offered Rate" means, for such Interest
----------------------
Period:
(i) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the
page of the Telerate screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement
Rate for deposits in the relevant currency (for delivery on the
first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest
Period, or
(ii) if the rate referenced in the preceding subsection
(i) does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate
determined by Administrative Agent to be the offered rate on such
other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in the
relevant currency (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined
as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(iii) if the rates referenced in the preceding subsections
(i) and (ii) are not available, the rate per annum determined by
the Administrative Agent as the rate of interest at which deposits
in the relevant currency for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the
Offshore Rate Loan being made, Continued or Converted by Bank of
America in its capacity as a Lender and with a term equivalent to
such Interest Period would be offered by Bank of America's London
Branch or London Affiliate to major banks in the applicable
offshore Dollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period.
The determination of the Offshore Rate by the Administrative Agent
shall be conclusive in the absence of manifest error.
"Offshore Rate Loan" means a Revolving Loan bearing interest at a
------------------
rate based on the Offshore Rate and includes all Offshore Currency Loans.
"Organization Documents" means, (a) with respect to any
----------------------
corporation, the certificate or articles of incorporation and the bylaws;
(b) with respect to any limited liability company, the certificate or
articles of formation or organization and operating agreement; and (c) with
respect
21
to any partnership, joint venture, trust or other form of business
entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation with the secretary of state
or other department in the state of its formation and all certificates and
articles issued thereto by such secretary of state or other department, in
each case as amended from time to time.
"Other Taxes" has the meaning therefor set forth in Section 3.01(b).
----------- ---------------
"Outstanding Amount" means (i) with respect to Revolving Loans on
------------------
any date, the Dollar Equivalent Amount of the aggregate outstanding
principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Revolving Loans occurring on such date; and
(ii) with respect to any L/C Obligations on any date, the Dollar Equivalent
Amount of the amount of such L/C Obligations on such date after giving
effect to any L/C Credit Extension occurring on such date and any other
changes in the Dollar Equivalent Amount of the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in
the maximum amount available for drawing under Letters of Credit taking
effect on such date.
"Overnight Rate" means, for any day, (a) with respect to any amount
--------------
denominated in Dollars, the Federal Funds Rate and (b) with respect to any
amount denominated in an Offshore Currency, the rate of interest per annum
at which overnight deposits in the applicable Offshore Currency, in an
amount approximately equal to the amount with respect to which such rate is
being determined, would be offered for such day by a branch or Affiliate of
Bank of America in the applicable interbank market for such currency to
major banks in such interbank market.
"Participating Member State" means each state so described in EMU
--------------------------
Legislation.
"Participant" has the meaning specified in Section 10.07(d).
----------- ----------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Pension Plan" means any "employee pension benefit plan" (as such
------------
term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
that is subject to Title IV of ERISA and is sponsored or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of
a multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five plan years.
"Permitted Acquisition" means (a) the ABC Childrenswear Acquisition
---------------------
and (b) any other Acquisition effected with the consent and approval of the
board of directors or other applicable governing body of the Person being
acquired, and with the duly obtained approval of such shareholders or other
holders of equity or other ownership interest as such Person may be required
to obtain, so long as in the case of clause (b) above (i) immediately prior
to and immediately after the consummation of such Acquisition, no Default or
Event of Default has occurred and is continuing, (ii) substantially all of
the sales and operating profits generated by such Person (or assets) so
acquired or invested are derived from a line or lines of business that are
part of, or complimentary, to the business as then conducted by the Borrower
and its Subsidiaries, (iii) if the Cost of Acquisition for such Acquisition
exceeds $10,000,000, pro forma
22
consolidated historical financial statements of the Borrower and its
Subsidiaries as of the end of the most recent fiscal quarter for the four
fiscal quarters most recently ended giving effect to such Acquisition are
delivered to the Administrative Agent not less than five (5) Business Days
prior to the consummation of such Acquisition, together with a certificate
of a Responsible Officer demonstrating pro forma compliance with Section
-------
7.13 after giving effect to such Acquisition and (iv) if any part of the
----
Cost of Acquisition is paid in Non-Equity Consideration, (A) after giving
pro forma effect to such Acquisition, the Leverage Ratio as of the last day
of the fiscal quarter ended most recently prior to the date of consummation
of such Acquisition shall be less than (1) if such Acquisition is
consummated during the first Loan Year following the Closing Date, 3.20 to
1.00 and (2) if such Acquisition is consummated after the first Loan Year
following the Closing Date, 3.00 to 1.00 and (B) the total Non-Equity
Consideration paid in connection with such Acquisition when aggregated with
the Non-Equity Consideration component of all consideration paid in
connection with all other Permitted Acquisitions consummated during the Loan
Year in which such Acquisition is consummated shall not exceed (1) during
the first Loan Year following the Closing Date, $75,000,000 and (2) during
any Loan Year thereafter, the sum of $75,000,000 plus 50% of the Permitted
Carryover Amount for the immediately prior Loan Year.
"Permitted Capital Stock Repurchase" means repurchases by the
----------------------------------
Borrower of its capital stock for aggregate consideration not in excess of
$3,000,000 in connection with the exercise by employees of options granted
pursuant to incentive stock option plans approved by the Board of Directors
of the Borrower.
"Permitted Carryover Amount" means, for any Loan Year, an amount,
--------------------------
if positive, equal to $75,000,000 less the aggregate amount of all cash paid
as Costs of Acquisition in connection with Permitted Acquisitions
consummated during such Loan Year.
"Permitted Securitization Transaction" means any Asset
------------------------------------
Securitization pursuant to Standard Securitization Undertakings providing
working capital financing on terms that are more favorable to the Borrower
and its Subsidiaries than would otherwise be available at that time;
provided, (i) the Borrower and/or its Subsidiaries enters into such
transaction or series of transactions with a Lender or an Affiliate thereof
or a conduit administered thereby, and (ii) the obligations owed to third
parties (including the net investment of such third parties in the assets
transferred) with respect to such transaction shall not exceed $75,000,000
at any one time.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined
----
in Section 3(3) of ERISA) established by the Borrower or any ERISA
Affiliate.
"Principal L/C Issuer" means Bank of America.
--------------------
"Pro Rata Share" means, with respect to each Lender, the percentage
--------------
(carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender's Commitment, which as of the Closing Date is set
forth opposite the name of such Lender on Schedule 2.01, as such percentage
-------------
may be adjusted as contemplated herein; provided that if the Aggregate
--------
23
Commitments have been terminated at such time, then the Pro Rata Share of
each Lender shall be (x) with respect to the distribution of payments to
such Lender, the percentage (carried out to the ninth decimal place) of the
aggregate Outstanding Amount that is held by such Lender (with the aggregate
amount of each Lender's funded participations in L/C Obligations being
deemed "held" by such Lender for this purpose), and (y) for all other
purposes, determined based on the Pro Rata Share of such Lender immediately
prior to such termination and after giving effect to any subsequent
assignments made pursuant to Section 10.07.
-------------
"Register" has the meaning set forth in Section 10.07(c).
-------- ----------------
"Regulation U" means Regulation U of the FRB.
------------
"Reportable Event" means any of the events set forth in Section
----------------
4043(c) of ERISA, other than events for which the 30-day notice period has
been waived.
"Request for Credit Extension" means (a) with respect to a
----------------------------
Borrowing, Conversion or Continuation of Revolving Loans, a Revolving Loan
Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit
Application.
"Required L/C Issuers" means, as of any date of determination, L/C
--------------------
Issuers having issued Letters of Credit with an aggregate outstanding Dollar
Equivalent Amount available to be drawn thereon of more than 50% of the
aggregate Dollar Equivalent Amount available to be drawn on all outstanding
Letters of Credit of all L/C Issuers.
"Required Lenders" means, as of any date of determination, Lenders
----------------
whose Voting Percentages aggregate more than 50% of the Voting Percentages
of all Lenders.
"Responsible Officer" means, with respect to all certificates and
-------------------
financial matters hereunder, President, Chief Executive Officer, and Chief
Financial Officer of the Borrower (the "Principal Responsible Officers")
and, with respect to all notices (including Requests for Credit Extensions)
and other matters hereunder, any Principal Responsible Officer, the Vice
President Controller, Vice President Treasurer or General Counsel of the
Borrower or any other officer expressly designated by the Board of Directors
of the Borrower (or the appropriate committee thereof) or a Principal
Responsible Officer as a Responsible Officer of the Borrower, as set forth
from time to time in a certificate in the form of Exhibit G. Any document
---------
delivered hereunder that is signed by a Responsible Officer of the Borrower
shall be conclusively presumed to have been authorized by all necessary
corporate and/or other action on the part of the Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf
of the Borrower.
"Restricted Payment" means any dividend or other distribution
------------------
(whether in cash, securities or other property) with respect to any capital
stock or other equity interest of the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such capital
stock or other equity interest or of any option, warrant or other right to
acquire any such capital stock or other equity interest; provided, however,
-------- -------
no Permitted Capital Stock Repurchase shall constitute a Restricted Payment
hereunder.
24
"Revaluation Date" means with respect to Outstanding Amounts
----------------
denominated in an Offshore Currency, each of the following with respect to
such Offshore Currency: (a) the date a Request for Credit Extension is
delivered to the Administrative Agent with respect to each Credit Extension
issued or advanced that results in such Outstanding Amount, (b) each date on
which any such Outstanding Amount is due, (c) the last day of the relevant
Interest Period, any date that such Credit Extension is prepaid or, with
respect to an Offshore Rate Loan, Converted, in whole or in part, and the
Maturity Date, (d) the Honor Date with respect to any Letter of Credit
denominated in an Offshore Currency, (e) each date of an amendment of any
such Letter of Credit denominated in an Offshore Currency having the effect
of increasing the amount thereof, (f) each effective date of renewal of an
Auto-Renewal Letter of Credit pursuant to Section 2.03(b)(iii), (g) any date
--------------------
on which an L/C Borrowing is deemed to have been made with respect to a
Letter of Credit denominated in an Offshore Currency, (h) each Increase
Effective Date and (i) any additional and more frequent dates as
Administrative Agent in its sole discretion may, or at the direction of the
Required Lenders shall, select from time to time.
"Revolving Loan" means a Base Rate Loan or an Offshore Rate Loan
--------------
made to the Borrower by a Lender in accordance with its Pro Rata Share
pursuant to Section 2.01, except as otherwise provided herein.
------------
"Revolving Loan Note" means a promissory note made by the Borrower
-------------------
in favor of a Lender evidencing Revolving Loans made by such Lender,
substantially in the form of Exhibit B.
---------
"Revolving Loan Notice" means a notice of (a) a Borrowing, (b) a
---------------------
Conversion of Revolving Loans, or (c) a Continuation of Revolving Loans as
the same Type and currency, pursuant to Section 2.02(a), which, if in
---------------
writing, shall be substantially in the form of Exhibit A.
---------
"S&P" means Standard & Poor's Ratings Services, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Same Day Funds" means (a) with respect to disbursements and
--------------
payments in Dollars, immediately available funds, and (b) with respect to
disbursements and payments in an Offshore Currency, same day or other funds
as may be determined by the Administrative Agent to be customary in the
place of disbursement or payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"Securitization Entity" means a wholly-owned Subsidiary (or another
---------------------
Person in which the Borrower or any Subsidiary of the Borrower makes an
Investment and to which the Borrower or any Subsidiary of the Borrower
transfers accounts receivable and related assets) that engages in no
activities other than in connection with the financing of accounts
receivable and that is designated by the Board of Directors of the Borrower
(as provided below) as a Securitization Entity, (i) no portion of the
Indebtedness (contingent or otherwise) of which (a) is guaranteed by the
Borrower or any Subsidiary of the Borrower other than pursuant to Standard
Securitization Undertakings, (b) is recourse to or obligates the Borrower or
any Subsidiary of the Borrower in any way other than pursuant to Standard
Securitization
25
Undertakings or (c) subjects any property or asset of the Borrower or any
Subsidiary of the Borrower, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (ii) with which neither the Borrower nor any
Subsidiary of the Borrower has any material contract, agreement, arrangement
or understanding other than on terms no less favorable to the Borrower or
such Subsidiary than those that might be obtained at the time from Persons
that are not Affiliates of the Borrower, other than fees payable in the
ordinary course of business in connection with servicing receivables of such
entity, and (iii) to which neither the Borrower nor any Subsidiary of the
Borrower has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results. Any such designation by the Board of Directors of the Borrower
shall be evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the resolution of the Board of
Directors of the Borrower giving effect to such designation and a
certificate of a Responsible Officer certifying that such designation
complied with the foregoing conditions.
"Senior Notes" means (a) the outstanding senior notes of the
------------
Borrower issued pursuant to the Senior Note Documents and (b) any other
private placement notes issued after the Closing Date by the Borrower to the
extent such notes or the Senior Note Documents pursuant to which such notes
are issued contain terms that limit the ability (i) of the Borrower or any
Subsidiary to create, incur, assume or suffer to exist Liens on Accounts or
Inventory as security for the Obligations or (ii) of any Subsidiary to
guaranty payment or, otherwise incur a Contingent Obligation with respect
to, the Obligations, in each case under clauses (i) and (ii) above, without
providing ratable security or the provision of guaranties, as applicable, to
the holders of such notes.
"Senior Note Documents" means (i) the Kellwood Company $30,000,000
---------------------
10.77% Notes Due 2002 issued pursuant to that certain Note Purchase
Agreement dated December 1, 1987, (ii) the Kellwood Company Note Agreement
Dated December 15, 1989 re: $25,000,000 9.14% Senior Notes, Series A, Due
December 1, 2004; $15,000,000 9.25% Senior Notes, Series B, Due December 1,
2004; $5,000,000 9.08% Senior Notes, Series C, Due December 1, 1999;
$5,000,000 9.03% Senior Notes, Series D, Due December 1, 1998; $5,000,000
9.04% Senior Notes, Series E, Due December 1, 1997; $5,000,000 9.04% Senior
Notes, Series F, Due December 1, 1996, (iii) each of the Kellwood Company
Note Agreements dated July 1, 1993 re: $5,000,000 5.34% Senior Notes, Series
A, Due December 1, 1996; $5,000,000 6.90% Senior Notes, Series B, Due
September 1, 2001; $10,000,000 7.08% Senior Notes, Series C, Due December 1,
2002; $20,000,000 7.30% Senior Notes, Series D, Due December 1, 2003; and
$20,000,000 6.90% Senior Notes, Series E, Due September 1, 2005, and (iv)
each other note purchase agreement or similar document entered into after
the Closing Date by the Borrower for the issuance of Senior Notes. Certain
senior notes referenced in the titles of the documents named above have been
repaid and are no longer outstanding.
"Shareholders' Equity" means, as of any date of determination for
--------------------
the Borrower and its Subsidiaries on a consolidated basis, shareholders'
equity as of that date determined in accordance with GAAP.
"Special Notice Currency" means, at any time, an Offshore Currency,
-----------------------
other than the currency of Japan or of a country that is a member of the
Organization for Economic Cooperation and Development at such time located
in North America or Europe.
26
"Spot Rate" for a currency means the rate quoted by Bank of America
---------
as the spot rate for the purchase by Bank of America of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m., New York time, on the date two Business Days prior
to the date on which the foreign exchange transaction is made.
"Standard Securitization Undertakings" means representations,
------------------------------------
warranties, covenants and indemnities entered into by the Borrower or any
Subsidiary of the Borrower that are reasonably customary in accounts
receivable securitization transactions.
"Standby L/C Sublimit" means an amount equal to the lesser of (i)
--------------------
the Dollar Equivalent Amount of Aggregate Commitments and (ii) $15,000,000.
The Standby L/C Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Subordination Agreement" means the Subordination Agreement
-----------------------
delivered by the Borrower and each of its Subsidiaries (other than KFR) on
the Closing Date in the form of Exhibit H, as from time to time amended,
supplemented or replaced.
"Subsequent Participant" means each country that adopts the euro as
----------------------
its lawful currency after January 1, 1999.
"Subsidiary" of a Person means a corporation, partnership, joint
----------
venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary
voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a "Subsidiary" or to "Subsidiaries"
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
-------------
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity
index swaps or options, bond or bond price or bond index swaps or options or
forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of
the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed
by, any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement,
together with any related schedules, a "Master Agreement"), including any
----------------
such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap
27
Contracts, (a) for any date on or after the date such Swap Contracts have
been closed out and termination value(s) determined in accordance therewith,
such termination value(s), and (b) for any date prior to the date referenced
in clause (a), the amount(s) determined as the ▇▇▇▇-to-market value(s) for
such Swap Contracts, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such
Swap Contracts (which may include any Lender).
"Syndication Agent" means JPMorgan Chase Bank in its capacity as
-----------------
syndication agent under any of the Loan Documents.
"Synthetic Lease Obligation" means the monetary obligation of a
--------------------------
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to
accounting treatment).
"TARGET Business Day" means any day on which the Trans-European
-------------------
Automated Real-time Gross Settlement Express Transfer (TARGET) System (or,
if such clearing system ceases to be operative, such other clearing system
(if any) determined by the Administrative Agent to be a suitable
replacement) is operating.
"Taxes" has the meaning therefor set forth in Section 3.01(a).
----- ---------------
"Threshold Amount" means $5,000,000.
----------------
"Type" means with respect to a Revolving Loan, its character as (i)
----
a Base Rate Loan or (ii) an Offshore Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
--------------------------
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
------------------- ------------------
"Value" means the lesser of cost (on a first-in, first-out basis)
-----
or fair market value.
"Voting Percentage" means, as to any Lender, (a) at any time when
-----------------
the Aggregate Commitments are in effect, such Lender's Pro Rata Share and
(b) at any time after the termination of the Aggregate Commitments, the
percentage (carried out to the ninth decimal place) which (i) the sum of (A)
the Dollar Equivalent Amount of the Outstanding Amount of such Lender's
Revolving Loans, plus (B) such Lender's Pro Rata Share of the Dollar
----
Equivalent Amount of the Outstanding Amount of L/C Obligations, then
comprises of (ii) the Dollar Equivalent Amount of the aggregate Outstanding
Amount of all Loans and L/C Obligations; provided, however, that if any
-------- -------
Lender has failed to fund any portion of the Revolving Loans, participations
in L/C Obligations required to be funded by it hereunder, such Lender's
Voting Percentage shall be deemed to be zero, and the respective Pro Rata
Shares and Voting Percentages of the other Lenders shall be recomputed for
purposes of this definition and the
28
definition of "Required Lenders" without regard to such Lender's Commitment
or the Outstanding Amount of its Revolving Loans and L/C Advances, as the
case may be.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or
in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein" and "hereunder" and words of similar
------ ---------
import when used in any Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the
Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
---------
(iv) The term "documents" includes any and all instruments,
---------
documents, agreements, certificates, notices, reports, financial statements
and other writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the words
---- ------------------
"to" and "until" each mean "to but excluding;" and the word "through" means
-- ----- ---------------- -------
"to and including."
----------------
(d) Each reference to "basis points" or "bps" shall be interpreted
in accordance with the convention that 100 bps = 1.0%.
(e) Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically
or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the
Audited Financial Statements, except as otherwise specifically prescribed
herein.
(b) If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and
either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided that, until so amended, (i) such ratio or
-------- ----
requirement shall continue to be computed in accordance with GAAP prior to
such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other
documents required under this Agreement or as
29
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.
(c) With respect to any Acquisition consummated on or after the
Closing Date, the following shall apply:
(i) For each period of four fiscal quarters of the
Borrower ending next following the date of any Acquisition,
Consolidated EBITDA shall include the results of operations of the
Person or assets so acquired on a historical pro forma basis, and
which amounts may include such adjustments as are permitted under
Regulation S-X of the Securities and Exchange Commission and
reasonably satisfactory to the Administrative Agent;
(ii) For each period of four fiscal quarters of the
Borrower ending next following the date of each Acquisition, Fixed
Charges shall include the Consolidated Interest Charges incurred in
connection with the principal amount of Consolidated Funded
Indebtedness scheduled to be due and payable by, and all Restricted
Payments paid by, the Person or assets so acquired during such
period, which amounts shall be determined on a historical pro forma
basis; provided, however, Consolidated Interest Charges shall be
-------- -------
adjusted on a historical pro forma basis to (i) eliminate interest
expense accrued during such period on any Indebtedness repaid in
connection with such Acquisition and (ii) include interest expense
on any Indebtedness (including Indebtedness hereunder) incurred,
acquired or assumed in connection with such Acquisition
("Incremental Debt") calculated (A) as if all such Incremental Debt
had been incurred as of the first day of such Four-Quarter Period
and (B) at the following interest rates: (I) for all periods
subsequent to the date of the Acquisition and for Incremental Debt
assumed or acquired in the Acquisition and in effect prior to the
date of Acquisition, at the actual rates of interest applicable
thereto, and (II) for all periods prior to the actual incurrence of
such Incremental Debt, equal to the rate of interest actually
applicable to such Incremental Debt hereunder or under other
financing documents applicable thereto as at the end of each
affected period of such four fiscal quarters, as the case may be.
1.04 ROUNDING. Any financial ratios required to be maintained by
the Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one
place more than the number of places by which such ratio is expressed herein
and rounding the result up or down to the nearest number (with a rounding-up
if there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents)
and other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements,
extensions, supplements and other modifications are not prohibited by any
Loan Document; and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
30
1.06 EXCHANGE RATES; CURRENCY EQUIVALENTS.
(a) The Administrative Agent shall determine the Spot Rates as
of each Revaluation Date applicable to any Offshore Currency to be used for
calculating Dollar Equivalent Amounts of Credit Extensions and Outstanding
Amounts denominated in such Offshore Currency. Spot Rates shall become
effective as of such Revaluation Date and shall be the Spot Rates employed
in converting any amounts between the applicable currencies until the next
Revaluation Date to occur. Except for purposes of financial statements
delivered by the Borrower hereunder or calculating financial covenants
hereunder or except as otherwise provided herein, the applicable amount of
any currency for purposes of the Loan Documents shall be such Dollar
Equivalent Amount as so determined by the Administrative Agent.
(b) Wherever in this Agreement in connection with a Borrowing,
Conversion, Continuation or prepayment of a Loan or the issuance of a Letter
of Credit, an amount such as a required minimum or multiple amount is
expressed in Dollars, but such Borrowing, Loan or Letter of Credit is
denominated in an Offshore Currency, such amount shall be the relevant
Offshore Currency Equivalent of such Dollar amount (rounded to the nearest
1,000 units of such Offshore Currency), as determined by the Administrative
Agent.
1.07 CHANGES REGARDING THE EURO.
(a) If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
interbank market for the basis of accrual of interest in respect of the
euro, such expressed basis shall be replaced by such convention or practice
with effect from the date on which such member state adopts the euro as its
lawful currency; provided that if any Borrowing in the currency of such
member state is outstanding immediately prior to such date, such replacement
shall take effect, with respect to such Borrowing, at the end of the then
current Interest Period.
(b) Each provision of this Agreement shall be subject to such
reasonable changes of construction as the Administrative Agent may from time
to time specify to be appropriate to reflect any relevant market conventions
or practices relating to the euro. The Administrative Agent may from time to
time further modify the terms of, and practices contemplated by, this
Agreement with respect to the euro to the extent Administrative Agent
determines, in its reasonable discretion, that such modifications are
necessary or convenient to reflect new laws, regulations, customs or
practices developed in connection with the euro. The Administrative Agent
may effect such modifications, and this Agreement shall be deemed so
amended, without the consent of the Borrower or the Lenders to the extent
such modifications are not materially disadvantageous to the Borrower and
Lenders, upon notice thereto.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 REVOLVING LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make, Convert and Continue Revolving
Loans, in Dollars and in
31
Offshore Currencies to the Borrower from time to time on any Business Day
during the period from the Closing Date to the Maturity Date; provided,
--------
however, that after giving effect to any Borrowing, (a) the Dollar
-------
Equivalent Amount of the aggregate Outstanding Amount of all Loans and L/C
Obligations shall not exceed the Aggregate Commitments, (b) the Dollar
Equivalent Amount of the aggregate Outstanding Amount of the Revolving Loans
of any Lender, plus such Lender's Pro Rata Share of the Dollar Equivalent
----
Amount of the aggregate Outstanding Amount of all L/C Obligations, shall not
exceed such Lender's Commitment, (c) the Dollar Equivalent Amount of the
aggregate Outstanding Amount of all Offshore Currency Loans and L/C
Obligations issued or outstanding in an Offshore Currency shall not exceed
the Offshore Currency Sublimit and (d) the aggregate Dollar Equivalent
Amount of all Included Debt shall not exceed the Borrowing Base calculated
as of the date of the most recently delivered Borrowing Base Certificate.
Within the limits of each Lender's Commitment, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.01,
------------
prepay under Section 2.04, and reborrow under this Section 2.01.
------------ ------------
Revolving Loans may be Base Rate Loans or Offshore Rate Loans, as further
provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF REVOLVING LOANS.
(a) Each Borrowing, each Conversion of Revolving Loans, and each
Continuation of Revolving Loans shall be made upon the Borrower's
irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m., New York time, London time or Tokyo time, as
applicable depending on the applicable currency, (i) three Business Days
prior to the requested date of any Borrowing of, Conversion to or
Continuation of Offshore Rate Loans denominated in Dollars, (ii) four
Business Days prior to the requested date of any Borrowing of or
Continuation of an Offshore Currency Loan, (iii) five Business Days prior to
the requested date of any Borrowing of or Continuation of an Offshore
Currency Loan denominated in any Special Notice Currency, and (iv) on the
requested date of any Borrowing of, or Conversion to, Base Rate Revolving
Loans. Each such telephonic notice must be confirmed promptly by delivery to
the Administrative Agent of a written Revolving Loan Notice, appropriately
completed and signed by a Responsible Officer (unless such Revolving Loan
Notice is being delivered by the Administrative Agent on behalf of an L/C
Issuer pursuant to Section 2.03(c)(i)); provided that the lack of such
------------------ --------
prompt confirmation shall not affect the conclusiveness or binding affect of
such telephonic notice. Except as provided in Sections 2.03(c), each
----------------
Borrowing of, Conversion to or Continuation of Offshore Rate Loans shall be
in a principal amount of the Dollar Equivalent Amount of $5,000,000 or a
whole multiple of the Dollar Equivalent Amount of $1,000,000 in excess
thereof. Each Borrowing of or Conversion to Base Rate Revolving Loans shall
be in a principal amount of the Dollar Equivalent Amount of $500,000 or a
whole multiple of the Dollar Equivalent Amount of $100,000 in excess
thereof. Each Revolving Loan Notice (whether telephonic or written) shall be
substantially in the form of Exhibit A attached hereto. If the Borrower
---------
fails to specify a currency in a Revolving Loan Notice requesting a
Borrowing, then the Revolving Loans so requested shall be made in Dollars.
If the Borrower fails to specify a Type of Revolving Loan in a Revolving
Loan Notice or if the Borrower fails to give a timely notice requesting a
Conversion or Continuation, then the applicable Revolving Loans shall,
subject to the last sentence of this Section 2.02(a), be made or Continued
---------------
as, or Converted to, Base Rate Loans; provided, however that in the case of
-------- -------
a failure to timely request a Continuation of an Offshore Currency Loan,
such Loan shall be Continued as an Offshore Currency Loan in
32
its original currency with an Interest Period of one month. Any such
automatic Conversion to Base Rate Loans, and automatic Continuation of an
Offshore Currency Loan, shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Offshore Rate
Loans. If no timely notice of a Conversion or Continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the
details of any automatic Conversion to Base Rate Loans or Continuation of
Offshore Currency Loans, respectively. If the Borrower requests a Borrowing
of, Conversion to, or Continuation of Offshore Rate Loans in any such
Revolving Loan Notice, whether requested in Dollars or in an Offshore
Currency, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. No Revolving Loan may be
Converted into or Continued as a Revolving Loan denominated in a different
currency than as originally borrowed, but instead must be prepaid in the
original currency of such Loan and reborrowed in such different currency.
(b) Following receipt of a Revolving Loan Notice requesting a
Credit Extension, the Administrative Agent shall promptly notify each Lender
of its Pro Rata Share of the applicable Revolving Loans. Following receipt
of a Revolving Loan Notice requesting a Credit Extension denominated in an
Offshore Currency, the Administrative Agent shall on the next following
Business Day notify each Lender of (i) both the Dollar Equivalent Amount and
the Offshore Currency Equivalent Amount of its Pro Rata Share and (ii) the
aggregate Offshore Currency Equivalent Amount and the Dollar Equivalent
Amount of such Extension of Credit and the applicable Spot Rate used by
Administrative Agent to determine such Dollar Equivalent Amount. In the case
of a Borrowing in Dollars, each Lender shall make the amount of its
Revolving Loan available to the Administrative Agent in Same Day Funds at
the Administrative Agent's Office not later than 1:00 P.M., New York time,
on the Business Day specified in the applicable Revolving Loan Notice. In
the case of a Borrowing in an Offshore Currency, each Lender shall make the
amount of its Pro Rata Share in such Offshore Currency Loan available to the
Administrative Agent in Same Day Funds at the Administrative Agent's Office
not later than 1:00 P.M., London time or Tokyo time, as applicable depending
on the applicable currency, on the Business Day specified in the applicable
Revolving Loan Notice. Upon satisfaction of the applicable conditions set
forth in Section 4.02 (and, if such Borrowing is the initial Credit
------------
Extension, Section 4.01), the Administrative Agent shall make all funds so
------------
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on
the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower.
(c) Except as otherwise provided herein, an Offshore Rate Loan
may be Continued or Converted only on the last day of the Interest Period
for such Offshore Rate Loan. During the existence of a Default or Event of
Default, no Loans may be requested as, Converted into or Continued as
Offshore Rate Loans without the consent of the Required Lenders, and the
Required Lenders may demand that any or all of the then outstanding Offshore
Rate Loans in Dollars be Converted immediately to Base Rate Revolving Loans
and that any or all of the then outstanding Offshore Currency Loans be
prepaid on the last day of the then current Interest Period with respect
thereto.
(d) The Administrative Agent shall promptly notify the Borrower
and the Lenders of the interest rate applicable to any Offshore Rate Loan upon
determination of such interest rate.
33
The determination of the Offshore Rate by the Administrative Agent shall be
conclusive in the absence of manifest error.
(e) After giving effect to all Borrowings, all Conversions of
Revolving Loans from one Type to the other, and all Continuations of
Revolving Loans as the same Type, there shall not be more than ten (10)
Interest Periods in effect with respect to Revolving Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
-------------------------------
(i) Subject to the terms and conditions set forth herein,
(A) the Principal L/C Issuer, and upon Acceptance each other L/C
Issuer, agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.03, (1) from time to time on
------------
any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit
denominated in Dollars or Offshore Currencies for the account of
the Borrower or jointly for the account of the Borrower and a
Designated Subsidiary, and to renew Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to
honor drafts under the Letters of Credit; and (B) the Lenders
severally agree to risk participate in Letters of Credit issued for
the account of the Borrower or jointly for the account of the
Borrower and a Designated Subsidiary; provided that no L/C Issuer
--------
shall be obligated to make any L/C Credit Extension with respect to
any Letter of Credit, and no Lender shall be obligated to risk
participate in any Letter of Credit if as of the date of such L/C
Credit Extension, (u) the Dollar Equivalent Amount of the aggregate
Outstanding Amount of all Loans and L/C Obligations denominated in
an Offshore Currency would exceed the Offshore Currency Sublimit at
any time, (v) the Dollar Equivalent Amount of the aggregate
Outstanding Amount of all L/C Obligations and all Loans would
exceed the Aggregate Commitments, (w) the Dollar Equivalent Amount
of the aggregate Outstanding Amount of the Revolving Loans of any
Lender, plus such Lender's Pro Rata Share of the Dollar Equivalent
----
Amount of the Outstanding Amount of all L/C Obligations, would
exceed such Lender's Commitment, (x) the Dollar Equivalent Amount
of the Outstanding Amount of the L/C Obligations attributable to
commercial Letters of Credit would exceed the Commercial L/C
Sublimit, (y) the Dollar Equivalent Amount of the Outstanding
Amount of all L/C Obligations attributable to standby Letters of
Credit would exceed the Standby L/C Sublimit, or (z) the aggregate
Dollar Equivalent Amount of all Included Debt would exceed the
Borrowing Base calculated as of the date of the most recently
delivered Borrowing Base Certificate. Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or
that have been drawn upon and reimbursed. All Existing Letters of
Credit shall be deemed to have been issued pursuant hereto, and
from and after the Closing Date shall be subject to and governed by
the terms and conditions hereof.
34
(ii) No L/C Issuer shall be under any obligation to issue
any Letter of Credit if:
(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain such L/C Issuer from issuing
such Letter of Credit, or any Law applicable to such L/C
Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or
request that such L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon such L/C Issuer with
respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such L/C Issuer is not
otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon such L/C Issuer any
unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which such L/C Issuer
in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(B) subject to Section 2.03(b)(iii), the expiry
--------------------
date of such requested Letter of Credit would occur more
than twelve months after the date of issuance or last
renewal, unless the Required Lenders have approved such
expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration
Date, unless all the Lenders have approved such expiry
date; or
(D) the issuance of such Letter of Credit would
violate one or more policies of such L/C Issuer.
(iii) No L/C Issuer shall be under any obligation to amend
any Letter of Credit if (A) such L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such
Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
-----------------------------------------------------------
Auto-Renewal Letters of Credit.
------------------------------
(i) Each Letter of Credit shall be issued or amended, as
the case may be, upon (A) the request of the Borrower delivered to
the Principal L/C Issuer (with a copy to the Administrative Agent)
in the form of a Letter of Credit Application and (B) Acceptance by
any L/C Issuer other than the Principal L/C Issuer of any Letter of
Credit Application. Such Letter of Credit Application must be
appropriately completed and signed by a Responsible Officer or
conforming with the electronic letter of credit system of the
Applicable L/C Issuer, as applicable, and must be received by the
Applicable L/C Issuer and the Administrative Agent not later than
(x) 12:00 noon, New York time, at least two Business Days (or such
later date and time as the Applicable L/C Issuer may agree in a
particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be, with
respect to a Letter of Credit denominated in Dollars; provided,
--------
however, that if a request is received via the Applicable L/C
-------
Issuer's
35
electronic letter of credit system on any Business Day, such Letter
of Credit shall be issued on or prior to 5:00 p.m., New York time,
the next succeeding Business Day, and (y) 12:00 noon, London time
or Tokyo time, as applicable depending on the applicable currency,
at least four (4) Business Days (or at such later date and time as
the Applicable L/C Issuer may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be, with respect to a Letter of Credit
denominated in an Offshore Currency. In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the
Applicable L/C Issuer: (A) whether the Letter of Credit is being
requested jointly for the account of the Borrower and a Designated
Subsidiary and, if so, the name of such Designated Subsidiary, (B)
the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (C) the currency thereof (either Dollars
or an Offshore Currency); (D) the expiry date thereof; (E) the name
and address of the beneficiary thereof; (F) the documents to be
presented by such beneficiary in case of any drawing thereunder;
(G) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (H) such other
matters as the Applicable L/C Issuer may require. In the case of a
request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail
satisfactory to the Applicable L/C Issuer (A) the Letter of Credit
to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment;
and (D) such other matters as the Applicable L/C Issuer may
require.
(ii) Promptly after receipt or Acceptance, as applicable,
of any Letter of Credit Application, the Applicable L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the Applicable
L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the Applicable L/C Issuer of confirmation
from the Administrative Agent that the requested issuance or
amendment is permitted under Section 2.03(a)(i) in terms of any
------------------
additional L/C Obligations created thereby, then, subject to the
terms and conditions hereof, the Applicable L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may
be, in each case in accordance with the Applicable L/C Issuer's
usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from
the Applicable L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender's Pro Rata
Share times the amount of such Letter of Credit.
-----
(iii) If the Borrower so requests in any applicable Letter
of Credit Application, the Applicable L/C Issuer may, in its sole
and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an "Auto-Extension Letter of
Credit"); provided that any such Auto-Extension Letter of Credit
must permit the Applicable L/C Issuer to prevent any such extension
at least once in each twelve-month period (commencing with the date
of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the "Nonrenewal Notice
Date") in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. Unless otherwise directed by
the Applicable L/C Issuer, the Borrower shall not
36
be required to make a specific request to the Applicable L/C Issuer
for any such extension. Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but
may not require) the Applicable L/C Issuer to permit the extension
of such Letter of Credit at any time to an expiry date not later
than the Letter of Credit Expiration Date; provided, however, that
-------- -------
the Applicable L/C Issuer shall not permit any such renewal if (A)
the Applicable L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its extended form under the terms
hereof, or (B) it has received notice (which may be by telephone or
in writing) on or before the day that is five (5) Business Days
before the Nonrenewal Notice Date (1) from the Administrative Agent
that the Required Lenders have elected not to permit such renewal
or (2) from the Administrative Agent, any Lender or the Borrower
that one or more of the applicable conditions specified in Section
-------
4.02 is not then satisfied. Notwithstanding anything to the
----
contrary contained herein, the Applicable L/C Issuer shall have no
obligation to permit the extension of any Auto-Extension Letter of
Credit at any time, and in no event shall the expiry date of any
Auto-Extension Letter of Credit after any renewal as described
herein occur after the Letter of Credit Expiration Date, unless all
the Lenders have approved such expiry date.
(iv) Promptly after its delivery of any Letter of Credit
or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the Applicable L/C
Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or
amendment.
(c) Drawings and Reimbursements; Funding of Participations.
------------------------------------------------------
(i) Upon any drawing under any Letter of Credit, the
Applicable L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 11:00 a.m., New York
time, on the date of any payment by the Applicable L/C Issuer under
a Letter of Credit (each such date, an "Honor Date"), the Borrower
----------
shall reimburse the Applicable L/C Issuer in an amount equal to the
amount of such drawing and in the currency (either Dollars or
applicable Offshore Currency) of such drawing. If the Borrower
fails to so reimburse the Applicable L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor
Date, the Dollar Equivalent Amount and, if such drawing was in an
Offshore Currency, the Offshore Currency Equivalent Amount, of the
unreimbursed drawing (the "Unreimbursed Amount"), and such Lender's
-------------------
Pro Rata Share thereof. In such event, the Borrower shall be deemed
to have requested a Borrowing to be disbursed on the Honor Date in
an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 or Section 2.03,
------------ ------------
for the principal amount of Revolving Loans, but subject to the
amount of the unutilized portion of the Aggregate Commitments, the
availability of Offshore Currency Loans if the Unreimbursed Amount
is denominated in an Offshore Currency, and the conditions set
forth in Section 4.02 (other than the delivery of a Revolving Loan
------------
Notice). Any notice given by an L/C Issuer or the Administrative
Agent pursuant to this Section 2.03(c)(i) may be given by telephone
------------------
if immediately confirmed in writing; provided that the lack of such
--------
an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
37
(ii) Each Lender (including the Lender acting as L/C
Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make
------------------
funds available to the Administrative Agent for the account of the
Applicable L/C Issuer at the Administrative Agent's Office in the
Dollar Equivalent Amount equal to its Pro Rata Share of the
Unreimbursed Amount, and in the currency of the drawing resulting
in such Unreimbursed Amount, not later than 2:00 p.m., New York
time, on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Lender that so makes funds available
--------------------
shall be deemed to have made a Base Rate Revolving Loan (or an
Offshore Currency Loan (having a one-month Interest Period) if an
Offshore Currency L/C) to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the
Applicable L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Borrowing because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the
------------
Borrower shall be deemed to have incurred from the Applicable L/C
Issuer an L/C Borrowing in the applicable currency in the Dollar
Equivalent Amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default
Rate. In such event, each Lender's payment to the Administrative
Agent for the account of the Applicable L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its risk
-------------------
participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its risk participation
obligation in such L/C Borrowing under this Section 2.03.
------------
(iv) Until each Lender funds its Revolving Loan or L/C
Advance pursuant to this Section 2.03(c) to reimburse the
---------------
Applicable L/C Issuer for any Unreimbursed Amount drawn under any
Letter of Credit, interest in respect of such Lender's Pro Rata
Share of such amount shall be solely for the account of the
Applicable L/C Issuer.
(v) Each Lender's obligation to make Revolving Loans or
L/C Advances to reimburse the Applicable L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section
-------
2.03(c), shall be absolute and unconditional and shall not be
-------
affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender
may have against the Applicable L/C Issuer, the Borrower or any
other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default or Event of Default, or (C) any other
occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender's obligation to
-------- -------
make Revolving Loans pursuant to this Section 2.03(c) is subject to
---------------
the conditions set forth in Section 4.02. Any such reimbursement
------------
with the proceeds of Revolving Loans or L/C Advances shall not
relieve or otherwise impair the obligation of the Borrower to
reimburse the Applicable L/C Issuer for the amount of any payment
made by the Applicable L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the Applicable L/C Issuer
any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time specified
---------------
in
38
Section 2.03(c)(ii), the Applicable L/C Issuer shall be entitled to
-------------------
recover from such Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from
the date such payment is required to the date on which such payment
is immediately available to the Applicable L/C Issuer at a rate per
annum equal to the applicable Overnight Rate for three (3) Business
Days and thereafter at a rate per annum equal to the Default Rate.
A certificate of the Applicable L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts
owing under this clause (vi) shall be conclusive absent manifest
error.
(d) Repayment of Participations.
---------------------------
(i) At any time after any L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such
Lender's L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the
---------------
account of the Applicable L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), or any
payment of interest thereon, the Administrative Agent will
distribute to such Lender the Dollar Equivalent Amount of its Pro
Rata Share thereof in Dollars. In the event the Unreimbursed Amount
was incurred in an Offshore Currency, the payment received with
respect thereto is in such Offshore Currency, and the Dollar
Equivalent Amount of such payment is less than it would have been
at the date of such Lender's L/C Advance, the Borrower shall remain
liable for payment in Dollars of such deficiency to each Lender
notwithstanding the Borrower's tender of payment in the Offshore
Currency in which the drawing resulting in the L/C Advance was
made.
(ii) If any payment received by the Administrative Agent
for the account of the Applicable L/C Issuer pursuant to Section
-------
2.03(c)(i) in respect of any drawing on any Letter of Credit is
----------
required to be returned (including pursuant to any settlement
entered into by the Administrative Agent in its discretion), each
Lender shall pay to the Administrative Agent in Dollars for the
account of the Applicable L/C Issuer the Dollar Equivalent Amount
of its Pro Rata Share thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum
equal to the applicable Overnight Rate from time to time in effect,
and such payment by each Lender shall be deemed to be its L/C
Advance in such amount pursuant to Section 2.03(c)(iii).
--------------------
(e) Obligations Absolute. The obligation of the Borrower to
--------------------
reimburse the Applicable L/C Issuer for each drawing under each Letter of
Credit, and to repay each L/C Borrowing, shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter
of Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time
against any beneficiary or any transferee of such
39
Letter of Credit (or any Person for whom any such beneficiary or
any such transferee may be acting), the Applicable L/C Issuer or
any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under such Letter of Credit;
(iv) any payment by the Applicable L/C Issuer under such
Letter of Credit against presentation of a draft or certificate
that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the Applicable L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding
under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other
irregularity, the Borrower will, as soon as possible but in any event within
three Business Days' of receipt thereof, notify the Applicable L/C Issuer of
such noncompliance or other irregularity. The Borrower shall be conclusively
deemed to have waived any such claim against the Applicable L/C Issuer and
its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender, the Borrower and each
------------------
Designated Subsidiary agree that, in paying any drawing under a Letter of
Credit, the Applicable L/C Issuer shall not have any responsibility to
obtain any document (other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. Neither the Applicable L/C
Issuer, any Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Applicable L/C Issuer shall be liable to
any Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any
Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided, however, that
-------- -------
this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other
40
agreement. Neither the Applicable L/C Issuer, any Agent-Related Person, nor
any of the respective correspondents, participants or assignees of the
Applicable L/C Issuer, shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(e); provided, however,
--------------- -------- -------
that anything in such clauses to the contrary notwithstanding, the Borrower
may have a claim against the Applicable L/C Issuer, and the Applicable L/C
Issuer may be liable to the Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential, special, punitive or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by
the Applicable L/C Issuer's willful misconduct or gross negligence or the
Applicable L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter
of Credit. In furtherance and not in limitation of the foregoing, the
Applicable L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the Applicable L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent,
---------------
(i) if the Applicable L/C Issuer has honored any full or partial drawing
request under any Letter of Credit and such drawing has resulted in an L/C
Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or
wholly undrawn, the Borrower shall immediately Cash Collateralize the
Outstanding Amount of all L/C Obligations plus the Letter of Credit fees
payable with respect to such Letter of Credit (calculated at the Applicable
Margin then in effect for the period from the date of such cash
collateralization until the expiry date of such Letter of Credit) in the
applicable currency of such Letter of Credit or drawing thereunder.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly
------------------------------
agreed by the Applicable L/C Issuer and the Borrower when a Letter of Credit
is issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the "International Standby Practices 1998"
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance) shall
apply to each standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by
the International Chamber of Commerce (the "ICC") at the time of issuance
---
(including the ICC decision published by the Commission on Banking Technique
and Practice on April 6, 1998 regarding the European single currency (euro))
shall apply to each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
---------------------
Administrative Agent for the account of each Lender in accordance with its
Pro Rata Share a Letter of Credit fee (for each day such Letter of Credit
remains in effect) for each issued Letter of Credit equal to the Applicable
Margin multiplied by the Dollar Equivalent Amount of the actual daily
maximum amount available to be drawn under such Letter of Credit. Such fee
for each Letter of Credit shall be due and payable on the last Business Day
of each April, July, October and January, commencing with the first such
date to occur after the issuance of such Letter of Credit, and on the Letter
of Credit Expiration Date. If there is any change in the Applicable Margin
during any quarter, the
41
actual daily amount of each Letter of Credit shall be computed and
multiplied by the Applicable Margin separately for each period during such
quarter that such Applicable Margin was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable
-----------------------------------------------------------
to L/C Issuers. The Borrower shall pay directly to the Applicable L/C Issuer
--------------
for its own account a fronting fee, separately agreed to with each
Applicable L/C Issuer, with respect to each standby Letter of Credit issued
by it. In addition, the Borrower shall pay directly to the Applicable L/C
Issuer for its own account the negotiated processing fees of the Applicable
L/C Issuer relating to letters of credit as from time to time in effect.
Such fees and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application; Offshore
----------------------------------------------------
Currencies. In the event of any conflict between the terms hereof and the
----------
terms of any Letter of Credit Application, the terms hereof shall control.
(l) Designation of Additional L/C Issuers. By written notice from
-------------------------------------
the Borrower delivered to the Administrative Agent, the Borrower may from
time to time, so long as no Default or Event of Default shall have occurred
and be continuing, designate additional Lenders to act as L/C Issuers
hereunder, provided that (i) each Lender so designated shall have delivered
to the Administrative Agent written notice of its acceptance (which
acceptance may be a part of or delivered separate from the notice of
designation), (ii) such notice of designation and related acceptance shall
be delivered not later than fifteen (15) Business Days prior to the initial
issuance of any Letter of Credit by such designated L/C Issuer (except that
any designation and acceptance delivered on the Closing Date shall be
effective immediately), and (iii) there shall at no time be more than seven
(7) L/C Issuers (including Bank of America or any successor Administrative
Agent, in its capacity as L/C Issuer). Without limiting the provisions of
Section 10.07(h), each L/C Issuer so designated hereunder shall continue in
----------------
such capacity until it shall, by written notice delivered to the
Administrative Agent and the Borrower, terminate its status as L/C Issuer
(which notice shall be effective thirty (30) Business Days following receipt
by the Administrative Agent of such notice and consent or such later date as
may be specified in such notice); provided that no such termination shall be
permitted or effective until all Letters of Credit issued by such L/C Issuer
shall have expired or otherwise terminated and all other L/C Obligations
with respect to Letters of Credit issued by such L/C Issuer shall have been
paid and satisfied in full.
2.04 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay Revolving Loans in whole or
in part without premium or penalty; provided that (i) such notice must be
--------
received by the Administrative Agent not later than 12:00 noon, New York
time, London time or Tokyo time, as applicable, depending on the applicable
currency, (A) three Business Days prior to any date of prepayment of
Offshore Rate Loans denominated in Dollars, (B) four Business Days prior to
any date of prepayment of an Offshore Currency Loan denominated in any
Offshore Currency, (C) five Business Days prior to any date of prepayment of
any Offshore Currency Loan denominated in any Special Notice Currency, and
(D) on the date of prepayment of Base Rate Revolving Loans; (ii) any
prepayment of Offshore Rate Loans shall be in a principal amount of the
Dollar Equivalent Amount of $5,000,000 or a
42
whole multiple of the Dollar Equivalent Amount of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Revolving Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Each such notice shall specify the date and amount of such
prepayment and the Type(s) and Offshore Currencies, if applicable, of
Revolving Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of such Lender's Pro
Rata Share of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment in the same currency as the Revolving
Loan being prepaid, and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of an Offshore
Rate Loan shall be accompanied by all accrued interest thereon, together
with any additional amounts required pursuant to Section 3.05. Each such
------------
prepayment shall be applied to the Revolving Loans of the Lenders in
accordance with their respective Pro Rata Shares.
(b) If for any reason (i) the Dollar Equivalent Amount of the
Outstanding Amount of all Loans and L/C Obligations shall at any time exceed
the Aggregate Commitments then in effect, or (ii) if for any reason the
aggregate Dollar Equivalent Amount of Included Debt shall at any time exceed
the Borrowing Base (determined as of the date of the most recently delivered
Borrowing Base Certificate), the Borrower shall immediately prepay Loans
and/or Cash Collateralize the L/C Obligations, as it shall select, in an
aggregate Dollar Equivalent Amount equal to such excess.
(c) If the Administrative Agent notifies the Borrower at any time
that the Dollar Equivalent Amount of the Outstanding Amount of all Loans and
L/C Obligations denominated in any Offshore Currency at the most recent
Revaluation Date with respect to such Offshore Currency exceeds the Offshore
Currency Sublimit then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations, as it shall select, in
an aggregate Dollar Equivalent Amount equal to such excess.
2.05 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower may,
upon notice to the Administrative Agent, terminate the Aggregate
Commitments, or permanently reduce the Aggregate Commitments to an amount
not less than the then Dollar Equivalent Amount of the aggregate Outstanding
Amount of all Loans and L/C Obligations; provided that (i) any such notice
--------
shall be received by the Administrative Agent not later than 11:00 a.m., New
York time, five Business Days prior to the date of termination or reduction,
and (ii) any such partial reduction shall be in an aggregate amount of
$10,000,000 or any whole multiple of $1,000,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of
reduction or termination of the Aggregate Commitments. Once reduced in
accordance with this Section, the Aggregate Commitments may not be
increased. Any reduction of the Aggregate Commitments shall be applied to
the Commitment of each Lender according to its Pro Rata Share. All facility
and utilization fees accrued until the effective date of any termination of
the Aggregate Commitments shall be paid on the effective date of such
termination.
43
2.06 REPAYMENT OF LOANS. The Borrower shall repay to the Lenders
on the Maturity Date the aggregate principal amount of Revolving Loans
outstanding on such date.
2.07 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Offshore Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Offshore
Rate for such Interest Period plus the Applicable Margin; (ii) each Base
----
Rate Revolving Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Base Rate. Interest on Offshore Currency Loans shall be paid in the Offshore
Currency of such Offshore Currency Loan. Offshore Currency Loans shall
accrue interest only at the applicable Offshore Rate.
(b) If any amount payable by the Borrower under any Loan Document
is not paid when due (without regard to any applicable grace periods), such
amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted
by applicable Law. Furthermore, while any Event of Default exists or after
acceleration, the Borrower shall pay interest on the principal amount of all
outstanding Obligations at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may
be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.
2.08 FEES. In addition to certain fees described in subsections
(i) and (j) of Section 2.03:
------------
(a) Facility Fee. The Borrower shall pay to the Administrative
------------
Agent for the account of each Lender in accordance with its Pro Rata Share,
a facility fee equal to the Applicable Margin times the actual daily amount
of the Aggregate Commitments, regardless of usage. The facility fee shall
accrue at all times from the Closing Date until the Maturity Date and shall
be due and payable quarterly in arrears on the last Business Day of each
April, July, October and January, commencing with the first such date to
occur after the Closing Date, and on the Maturity Date. The facility fee
shall be calculated quarterly in arrears, and if there is any change in the
Applicable Margin during any quarter, the actual daily amount shall be
computed and multiplied by the Applicable Margin separately for each period
during such quarter that such Applicable Margin was in effect. The facility
fee shall accrue at all times, including at any time during which one or
more of the conditions in Article IV is not met.
(b) Utilization Fee. The Borrower shall pay to the Administrative
---------------
Agent for the account of each Lender in accordance with its Pro Rata Share,
a utilization fee equal to the Applicable Margin times the actual daily
Dollar Equivalent Amount of the entire Outstanding Amount of all Loans and
L/C Obligations on each day that such aggregate Outstanding Amount
44
exceeds 33% of the sum of the Aggregate Commitments. The utilization fee
shall be due and payable quarterly in arrears on the last Business Day of
each April, July, October and January, commencing with the first such date
to occur after the Closing Date, and on the Maturity Date. The utilization
fee shall be calculated quarterly in arrears. The utilization fee shall
accrue at all times, including at any time during which one or more of the
conditions in Article IV is not met.
----------
(c) Agency Fees. The Borrower shall pay an agency fee to the
-----------
Administrative Agent for the Administrative Agent's own account, in the
amounts and at the times agreed to between the Borrower and the
Administrative Agent. Such fee shall be fully earned when paid and shall be
nonrefundable for any reason whatsoever.
(d) Lenders' Upfront Fee. On the Closing Date, the Borrower shall
--------------------
pay to the Administrative Agent, for the account of the Lenders in
accordance with their respective Pro Rata Shares, an upfront fee in a
mutually agreeable amount. Such upfront fees are for the credit facilities
committed by the Lenders under this Agreement and are fully earned on the
date paid. The upfront fee paid to each Lender is solely for its own account
and is nonrefundable for any reason whatsoever.
2.09 COMPUTATION OF INTEREST AND FEES. Interest on Base Rate Loans
calculated by reference to the Bank of America prime rate shall be
calculated on the basis of a year of 365 or 366 days, as the case may be,
and the actual number of days elapsed. Computation of all other types of
interest and all fees shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed, which results in a higher yield to
the payee thereof than a method based on a year of 365 or 366 days, or, in
the case of interest in respect of Loans denominated in Offshore Currencies
as to which market practice differs from the foregoing, in accordance with
such market practice as determined by the Administrative Agent. Interest
shall accrue on each Loan for the day on which the Loan is made, and,
subject to Section 2.11(a), shall not accrue on a Loan, or any portion
---------------
thereof, for the day on which the Loan or such portion is paid, provided
--------
that any Loan that is repaid on the same day on which it is made shall bear
interest for one day.
2.10 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between
the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts
and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the
Administrative Agent, such Lender's Loans shall be evidenced by a Revolving
Loan Note in addition to such accounts or records. Each Lender may attach
schedules to its Note(s) and endorse thereon the date, Type (if applicable),
Offshore Currency (if applicable), amount and maturity of the applicable
Loans and payments with respect thereto.
45
(b) In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the
purchases and sales by such Lender of participations in Letters of Credit.
In the event of any conflict between the accounts and records maintained by
the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative
Agent, in the absence of manifest error, shall control.
2.11 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein and except with respect to
principal of and interest on Loans denominated in an Offshore Currency, all
payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is
owed, at the applicable Administrative Agent's Office in Dollars and in Same
Day Funds not later than 12:00 noon, New York time, on the date specified
herein. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder with respect to principal and interest on Loans
denominated in an Offshore Currency shall be made to the Administrative
Agent, for the account of the Lenders, at the applicable Administrative
Agent's Office in such Offshore Currency and in Same Day Funds not later
than such time on the dates specified herein as may be determined by the
Administrative Agent to be necessary for such payment to be credited on such
date in accordance with normal banking procedures in the place of payment.
The Administrative Agent will distribute to each Lender its Pro Rata Share
of such payment in like funds as received by wire transfer to such Lender's
Lending Office on the Business Day such payment is received (or deemed
received, as set forth below). All payments received by the Administrative
Agent (i) after 12:00 noon, New York time, in the case of payments in
Dollars, or (ii) later than the time specified by the Administrative Agent
as provided in the third sentence of this paragraph in the case of payments
in an Offshore Currency, shall in each case be deemed received on the next
succeeding Business Day and any applicable interest or fee shall in each
case continue to accrue.
(b) Subject to the definition of "Interest Period," if any
payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as
the case may be.
(c) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
L/C Borrowings, interest and fees then due hereunder, such funds shall be
applied (i) first, toward costs and expenses (including Attorney Costs and
-----
amounts payable under Article III) incurred by the Administrative Agent and
-----------
each Lender, (ii) second, toward repayment of interest and fees then due
------
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (iii) third,
-----
toward repayment of principal and L/C Borrowings then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of
principal and L/C Borrowings then due to such parties.
(d) Unless the Borrower or any Lender has notified the
Administrative Agent prior to the date any payment is required to be made by
it to the Administrative Agent hereunder, that the
46
Borrower or such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as the
case may be, has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to
the Person entitled thereto. If and to the extent that such payment was not
in fact made to the Administrative Agent in Same Day Funds, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Administrative Agent
the portion of such assumed payment that was made available to such
Lender in Same Day Funds, together with interest thereon in respect
of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date
such amount is repaid to the Administrative Agent in Same Day
Funds, at the applicable Overnight Rate from time to time in
effect; and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Administrative Agent
the amount thereof in Same Day Funds, together with interest
thereon for the period from the date such amount was made available
by the Administrative Agent to the Borrower to the date such amount
is recovered by the Administrative Agent (the "Compensation
------------
Period") at a rate per annum equal to the applicable Overnight Rate
------
from time to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such
Lender's Revolving Loan included in the applicable Borrowing. If
such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent
may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum
equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment or to prejudice any
rights which the Administrative Agent or the Borrower may have
against any Lender as a result of any default by such Lender
hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (d) shall be conclusive,
absent manifest error.
(e) If any Lender makes available to the Administrative Agent
funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the
----------
Borrower by the Administrative Agent because the conditions to the
applicable Credit Extension set forth in Article IV are not satisfied or
----------
waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such
Lender, without interest.
(f) The obligations of the Lenders hereunder to make Revolving
Loans and to fund participations in Letters of Credit are several and not
joint. The failure of any Lender to make any Revolving Loan, including
Offshore Currency Loans, or to fund any participations in Letters of Credit
on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other
47
Lender to so make its Revolving Loan, including Offshore Currency Loans, or
purchase its participations in Letters of Credit.
(g) Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.
2.12 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Revolving Loans
made by it, or the participations in L/C Obligations held by it, any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify
the Administrative Agent of such fact, and (b) purchase from the other
Lenders such participations in the Revolving Loans made by them and/or such
subparticipations in the participations in L/C Obligations held by them, as
the case may be, as shall be necessary to cause such purchasing Lender to
share the excess payment in respect of such Revolving Loans or the
participations, as the case may be, pro rata with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
-------
recovered from the purchasing Lender (including pursuant to any settlement
entered into by the Administrative Agent or any Lender in its discretion),
such purchase shall to that extent be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered, without further interest thereon. The
Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights
of payment (including the right of set-off), but subject to Section 10.09
-------------
with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments. Each Lender that purchases a participation pursuant
to this Section shall from and after such purchase have the right to give
all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to
the same extent as though the purchasing Lender were the original owner of
the Obligations purchased.
2.13 INCREASE IN COMMITMENTS.
(a) Upon delivery of a written request (an "Increased Commitment
Request") to the Administrative Agent (which shall promptly notify the
Lenders), the Borrower may, at any time up to four (4) times after the
Closing Date, request an increase in the Aggregate Commitments in the
minimum amount of $5,000,000 up to an aggregate amount equal to $50,000,000.
At the time of sending an Increased Commitment Request, the Borrower (in
consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be
less than ten Business Days from the date of delivery of such notice to the
Lenders). Each Lender shall notify the Administrative Agent within such time
period whether or not it agrees to increase its Commitment and, if so,
whether by an amount
48
equal to, greater than, or less than its Pro Rata Share of such requested
increase. The aggregate amount of such increases by Lenders in their
Commitments must be at least $5,000,000 for any increase to be effective and
not more than $50,000,000 in the aggregate for all such requests; in the
event the aggregate increase in Commitments requested by all Lenders would
exceed $50,000,000, such increases shall be allocated to all such requested
Lenders proportionately based on the then existing Commitments of all
requesting Lenders. No Lender shall have any obligation to increase its
Commitment. Any Lender not responding within such time period shall be
deemed to have declined to increase its Commitment. The Administrative Agent
shall notify the Borrower and each Lender of the Lenders' responses to each
request made hereunder. To achieve the full amount of a requested increase,
the Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel. Notwithstanding the foregoing, the
Borrower shall not be permitted to deliver an Increased Commitment Request,
and the Aggregate Commitments shall not be increased, if (i) an Event of
Default has occurred and is continuing or would result from the requested
increase in Commitments, (ii) the Borrower would not be in pro forma
compliance with Section 7.13 at any time during the four fiscal quarter
------------
period ending most recently prior to the Increase Effective Date (as defined
below), (iii) the representations and warranties of the Borrower contained
in Article V or in any other Loan Document shall not be true and correct on
---------
and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date, or (iv)
the Borrower shall have elected to reduce the Aggregate Commitments pursuant
to Section 2.05 at any time prior to the Increase Effective Date.
------------
(b) If the Aggregate Commitments are increased in accordance with
this Section, the Administrative Agent and the Borrower shall determine the
effective date (the "Increase Effective Date") and the final allocation of
such increase. The Administrative Agent shall promptly notify the Borrower
and the Lenders of the final allocation of such increase and the Increase
Effective Date. As a condition precedent to such increase, the Borrower
shall deliver to the Administrative Agent a certificate of the Borrower
dated as of the Increase Effective Date (in sufficient copies for each
Lender) signed by a Responsible Officer of the Borrower (i) certifying and
attaching the resolutions adopted by the Borrower approving or consenting to
such increase, and (ii) demonstrating pro forma compliance with Section 7.13
------------
after giving effect to such increase and (iii) certifying that, before and
after giving effect to such increase, the representations and warranties
contained in Article V are true and correct on and as of the Increase
Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date, and no Default or Event of
Default exists. The Borrower shall deliver new or amended Committed Loan
Notes reflecting the increased Commitment of any Lender holding or
requesting a Note. The Administrative Agent shall distribute an amended
Schedule 2.01 (which shall be deemed incorporated into this Agreement), to
-------------
reflect any changes therein resulting from such increase. The Borrower shall
prepay any Revolving Loans outstanding on the Increase Effective Date (and
pay any additional amounts required pursuant to Section 3.05) to the extent
------------
necessary to keep the outstanding Revolving Loans ratable with any revised
Pro Rata Shares arising from any nonratable increase in the Commitments
under this Section.
This Section shall supersede any provisions in Section 10.01 to the
-------------
contrary.
49
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of
the Administrative Agent or any Lender under any Loan Document shall be made
free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, assessments, fees, withholdings
or similar charges, and all liabilities with respect thereto, excluding, in
---------
the case of the Administrative Agent and each Lender, taxes imposed on or
measured by its income, and franchise taxes imposed on it, by the
jurisdiction (or any political subdivision thereof) under the Laws of which
the Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
-----
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender,
(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 and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv)
within 30 days after the date of such payment, the Borrower shall furnish to
the Administrative Agent (which shall forward the same to such Lender) the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present
or future stamp, court or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under
any Loan Document or from the execution, delivery, performance, enforcement
or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes").
-----------
(c) If the Borrower shall be required to deduct or pay any Taxes
or Other Taxes from or in respect of any sum payable under any Loan Document to
the Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at
the time interest is paid, such additional amount that such Lender specifies
is necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section) paid by the Administrative Agent and such
Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability
---------------
(including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case
50
whether or not such Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. Payment under this
subsection (d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefor. Notwithstanding the foregoing,
the Borrower will not be required to pay any additional amounts in respect
of Taxes imposed by the United States federal government to any Lender if
and to the extent the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its obligations
under Section 10.15.
-------------
(e) If the Borrower is required to pay any amount to any Lender
or the Administrative Agent pursuant to subsections (b), (c) or (d) of this
Section 3.01, then such Lender shall use reasonable efforts (consistent with
------------
legal and regulatory restrictions) to change the jurisdiction of its
applicable lending office so as to eliminate any such additional payment by
the Borrower which may thereafter accrue, if such change in the judgment of
such Lender is not otherwise materially disadvantageous to such Lender.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is
unlawful, for such Lender or its applicable Lending Office to make, maintain
or fund Offshore Rate Loans or issue Offshore Currency L/Cs as it would
otherwise be obligated hereunder to make, maintain or fund, or materially
restricts the authority of such Lender to purchase or sell, or to take
deposits of, Dollars or the applicable Offshore Currency in the applicable
offshore interbank market, or to determine or charge interest rates based
upon the Offshore Rate, then, on notice thereof by such Lender to the
Borrower through the Administrative Agent, any obligation existing hereunder
of such Lender to make or Continue Offshore Rate Loans or to Convert Base
Rate Revolving Loans to Offshore Rate Loans or to issue or renew Offshore
Currency L/Cs shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, Convert all Offshore Rate
Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period thereof, if such Lender may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Offshore Rate Loans. Upon any such
prepayment or Conversion, the Borrower shall also pay accrued interest on
the amount so prepaid or Converted. Each Lender agrees to designate a
different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent or
the Required Lenders determine in connection with any request for an
Offshore Rate Loan or a Conversion to or Continuation thereof that (a)
deposits in Dollars or the applicable Offshore Currency are not being
offered to banks in the applicable offshore interbank market for such
currency for the applicable amount and Interest Period of such Offshore Rate
Loan, (b) adequate and reasonable means do not exist for determining the
underlying interest rate for such Offshore Rate Loan, or (c) such underlying
interest rate does not adequately and fairly reflect the cost to the Lenders
of funding such Offshore Rate Loan, the Administrative Agent (following
notice from the Required Lenders if they make such determination) will
promptly notify the Borrower and all Lenders. Thereafter, the obligation of
the Lenders to make or maintain such Offshore Rate Loans shall be suspended
until the Administrative Agent revokes such notice. Upon receipt of such
notice, the
51
Borrower may revoke any pending request for a Borrowing, Conversion or
Continuation of such Offshore Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Borrowing of Base Rate
Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES
ON OFFSHORE RATE LOANS.
(a) If any Lender determines that as a result of the introduction
of or any change in or in the interpretation of any Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Offshore Rate Loans or
(as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a) any
such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the
------------
basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or has its
Lending Office, and (iii) reserve requirements utilized, as to Offshore Rate
Loans, in the determination of the Offshore Rate), then from time to time
upon demand of such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as
will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has
the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect
to capital adequacy and such Lender's desired return on capital), then from
time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost
or expense incurred by it as a result of:
(a) any Continuation, Conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, Continue or
Convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower;
including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such
funds were obtained. The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.
52
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded
------------
each Offshore Rate Loan made by it at the Interbank Offered Rate used in
determining the Offshore Rate for such Loan by a matching deposit or other
borrowing in the applicable offshore interbank market for such currency for
a comparable amount and for a comparable period, whether or not such
Offshore Rate Loan was in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
Notwithstanding anything to the contrary contained in this Article III,
-----------
unless the Lender or the Administrative Agent gives notice to the Borrower
that the Borrower is obligated to pay an amount under this Article III
-----------
within 180 days after the later of (x) the date such Lender incurs the
respective increased costs, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital or (y) the date
such Lender has actual knowledge of its incurrence of the respective
increased costs, loss, expense or liability, reduction in amounts received
or receivable or reduction in return on capital, then such Lender shall only
be entitled to be compensated for such amount by the Borrower to the extent
the respective increased costs, loss, expense or liability, reduction in
amounts received or receivable or reduction in return on capital are
incurred or suffered on or after the date which occurs 180 days prior to
such Lender or the Administrative Agent giving notice to the Borrower as
provided above that the Borrower is obligated to pay the respective amounts
pursuant to this Article III. Such notice of the Administrative Agent or any
-----------
Lender claiming compensation under this Article III shall be conclusive in
-----------
the absence of manifest error. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods.
3.07 REPLACEMENT LENDER.
------------------
(a) If any Lender shall make a claim for compensation from the
Borrower pursuant to Section 3.01 or Section 3.04, the Borrower may, upon
------------ ------------
notice to such Lender and the Administrative Agent, (i) remove such Lender
by terminating such Lender's Commitment or (ii) replace such Lender by
causing such Lender to assign its Commitment (without payment of any
assignment fee) pursuant to Section 10.07(b) to one or more other Lenders or
----------------
Eligible Assignees procured by the Borrower; provided, however, that if the
Borrower elects to exercise such right with respect to any Lender pursuant
to this Section 3.07, it shall be obligated to remove or replace, as the
------------
case may be, all Lenders that have made similar requests for compensation
pursuant to Section 3.01 or 3.04. The Borrower shall (x) pay in full all
------------ ----
principal, interest, fees and other amounts owing to such Lender through the
date of removal or replacement (including any amounts payable pursuant to
Section 3.05), (y) provide appropriate assurances and indemnities (which may
------------
include letters of credit) to an L/C Issuer as it may reasonably require
with respect to any continuing obligation to purchase participation
interests in any L/C Obligations then outstanding, and (z) release such
Lender from its obligations under the Loan Documents. Any Lender being
replaced shall execute and deliver an Assignment and Assumption with respect
to such Lender's Commitment and outstanding Credit Extensions. The
Administrative Agent shall distribute an amended Schedule 2.01, which shall
-------------
be deemed incorporated into this Agreement, to reflect changes in the
identities of the Lenders and adjustments of their respective Commitments
and/or Pro Rata Shares resulting from any such removal or replacement.
53
(b) In order to make all the Lenders' interests in any
outstanding Credit Extensions ratable in accordance with any revised Pro
Rata Shares after giving effect to the removal or replacement of a Lender,
the Borrower shall pay or prepay, if necessary, on the effective date
thereof, all outstanding Revolving Loans of all Lenders, together with any
amounts due under Section 3.05. The Borrower may then request Revolving
------------
Loans from the Lenders in accordance with their revised Pro Rata Shares. The
Borrower may net any payments required hereunder against any funds being
provided by any Lender or Eligible Assignee replacing a terminating Lender.
The effect for purposes of this Agreement shall be the same as if separate
transfers of funds had been made with respect thereto.
(c) This section shall supersede any provision in Section 10.01 or
-------------
10.07 to the contrary.
-----
3.08 SURVIVAL. All of the Borrower's obligations under this Article
-------
III shall survive termination of the Aggregate Commitments and repayment of
---
all Obligations.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:
(a) Unless waived by all the Lenders (or by the Administrative
Agent with respect to immaterial matters or items specified in clause (iii)
or (iv) below with respect to which the Borrower has given assurances
satisfactory to the Administrative Agent that such items shall be delivered
promptly following the Closing Date), the Administrative Agent's receipt of
the following, each of which shall be originals or facsimiles (followed
promptly by originals) unless otherwise specified, each properly executed by
a Responsible Officer, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative
Agent and its legal counsel:
(i) executed counterparts of this Agreement, sufficient
in number for distribution to the Administrative Agent, each Lender
and the Borrower;
(ii) Revolving Loan Notes executed by the Borrower in
favor of each Lender requesting such a Note, each in a principal
amount equal to such Lender's Commitment;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers as the Administrative Agent may require to evidence the
identities of and the authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents;
54
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence that the
Borrower is duly organized or formed, validly existing and in good
standing in its jurisdiction of organization, including certified
copies of its Organization Documents and certificates of good
standing;
(v) a certificate signed by a Responsible Officer or the
Senior Vice President and General Counsel certifying (A) that the
conditions specified in Sections 4.02(a) and (b) have been
---------------- ---
satisfied, (B) that there is no event, circumstance, action, suit,
investigation or proceeding pending or threatened in any court or
before any arbitrator or Governmental Authority since date of the
Audited Financial Statements which has or could be reasonably
expected to have a Material Adverse Effect, and (C) as to the
matters described in Section 4.01(d);
---------------
(vi) an opinion of counsel to the Borrower in form and
substance satisfactory to the Administrative Agent;
(vii) the consolidated financial statements of the
Borrower and its Subsidiaries for the fiscal years ended 1999, 2000
and 2001, including balance sheets, income and cash flow
statements, all audited and opined on by independent certified
public accountants of recognized national standing and prepared in
conformity with GAAP, and such other financial information as the
Administrative Agent may request;
(viii) evidence that the Existing Credit Facility has been
or concurrently with the Closing Date is being terminated, all
indebtedness and obligations of the Borrower incurred thereunder
(other than Existing Letters of Credit) have been, or with the
initial Credit Extension hereunder on the Closing Date will be,
repaid and the Borrower released from all liability thereunder
except such as by their express terms survive such repayment and
termination, and all Liens securing obligations under the Existing
Credit Facility have been or concurrently with the Closing Date are
being released;
(ix) notice of appointment of the initial Responsible
Officer(s);
(x) a Compliance Certificate signed by a Responsible
Officer dated as of the Closing Date demonstrating compliance with
the financial covenants contained in Section 7.13 as of the end of
------------
the fiscal quarter most recently ended prior to the Closing Date;
(xi) evidence of all insurance required by the Loan
Documents;
(xii) an initial Borrowing Base Certificate as of January
31, 2002; and
(xiii) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent, any L/C Issuer or
the Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date
shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall
have paid all Attorney Costs of the Administrative Agent to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute its reasonable estimate
55
of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative
Agent).
(d) In the good faith judgment of the Administrative Agent and the
Lenders, there shall not have occurred or become known to the Administrative
Agent or the Lenders any event, condition, situation or status since the
date of the information contained in the financial and business projections,
budgets, pro forma data and forecasts concerning the Borrower and its
Subsidiaries delivered to the Administrative Agent prior to the Closing Date
that has had or could reasonably be expected to result in a Material Adverse
Effect or which has or could reasonably be expected to adversely affect the
transactions contemplated under the Loan Documents.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS AND CONVERSIONS AND
CONTINUATIONS. The obligation of each Lender to honor any Request for Credit
Extension (other than a Revolving Loan Notice requesting only a Conversion
of Offshore Rate Loans to Base Rate Loans) is subject to the following
conditions precedent:
(a) The representations and warranties of the Borrower contained
in Article V or in any other Loan Documents shall be true and correct on and as
---------
of the date of such Credit Extension, Conversion or Continuation, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such
earlier date.
(b) No Default or Event of Default shall exist, or would result
from such proposed Credit Extension, Conversion or Continuation.
(c) The Administrative Agent and, if applicable, the Applicable
L/C Issuer shall have received a Request for Credit Extension in accordance with
the requirements hereof.
(d) The Administrative Agent shall have received, in form and
substance satisfactory to it, such other assurances, certificates, documents
or consents related to the foregoing as the Administrative Agent or the
Required Lenders reasonably may require.
(e) After giving effect to such Credit Extension, each of the
conditions set forth in Section 2.01(a) through (d) shall be satisfied and
--------------- ---
none of the conditions set forth in Section 2.03(a)(i)(u) through (z) shall
--------------------- ---
be satisfied.
Each Request for Credit Extension submitted by the Borrower shall
be deemed to be a representation and warranty that the conditions specified
in Sections 4.02(a) and (b) have been satisfied on and as of the date of the
---------------- ---
applicable Credit Extension.
56
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent
and the Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. The
Borrower and each Subsidiary (a) is a corporation duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of
its incorporation or organization, (b) has all requisite power and authority
and all governmental licenses, authorizations, consents and approvals to own
its assets, carry on its business and to execute and deliver, and perform
its obligations under, the Loan Documents, (c) is duly qualified and is
licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license, and (d) is in compliance with all
Laws, except in each case referred to in clause (c) or this clause (d), to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Borrower of each Loan Document, have been duly authorized
by all necessary corporate or other organizational action, and do not and
will not (a) contravene the terms of any of the Borrower's or any
Subsidiary's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any
Contractual Obligation to which the Borrower or any Subsidiary is a party or
any order, injunction, writ or decree of any Governmental Authority or
arbitral award to which the Borrower, a Subsidiary or their property is
subject; or (c) violate any Law.
5.03 GOVERNMENTAL AND THIRD-PARTY AUTHORIZATION. No approval,
consent, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Borrower of this Agreement or any other Loan
Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and
delivered by the Borrower. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance
with its terms.
57
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; (ii) fairly present
the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; and (iii) show all
material indebtedness and other liabilities, direct or contingent, of the
Borrower and its Subsidiaries as of the date thereof, including liabilities
for taxes, material commitments and Indebtedness.
(b) Since the date of the Audited Financial Statements, there has
been no event or circumstance that has had or could reasonably be expected
to have a Material Adverse Effect.
5.06 LITIGATION. Except as specifically disclosed in Schedule 5.06,
-------------
there are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of the Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport
to affect or pertain to this Agreement or any other Loan Document, or any of
the transactions contemplated hereby, or (b) if determined adversely, could
reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could be
reasonably expected to have a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, the property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section
-------
7.01.
----
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of
existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Borrower
has reasonably concluded that, except as specifically disclosed in Schedule
--------
5.09, such Environmental Laws and claims could not, individually or in the
----
aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts (after giving effect to any
self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies
engaged in
58
similar businesses and owning similar properties in localities where the
Borrower or its Subsidiaries operate.
5.11 TAXES. The Borrower and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be
filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them
or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the
Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws.
Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto
and, to the best knowledge of the Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification. The Borrower and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect
to any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) Except for the termination of the Kellwood Company Pension
Plan, which occurred on December 7, 2000, no ERISA Event has occurred or is
reasonably expected to occur; (ii) to the knowledge of the Borrower, no
Pension Plan has any Unfunded Pension Liability in excess of the Threshold
Amount; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither the Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.
5.13 SUBSIDIARIES. As of the date hereof, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
--------
5.13 and has no equity investments in any other corporation or entity other
----
than those specifically disclosed in Part (b) of Schedule 5.13.
-------------
59
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) Neither the Borrower nor any Subsidiary is engaged nor will
it engage, principally or as one of its important activities, in the business
of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock; provided, however, the Borrower or its Subsidiaries
-------- -------
may own margin stock in connection with Permitted Acquisitions consummated
through the purchase of stock for such limited period as shall be necessary
to consummate such Permitted Acquisition, but no violation of Regulation U
results therefrom. Following the application of the proceeds of each
Borrowing or drawing under each Letter of Credit, not more than 25% of the
value of the assets (either of the Borrower only or of the Borrower and its
Subsidiaries on a consolidated basis) subject to the provisions of Section
-------
7.01 or Section 7.05 or subject to any restriction contained in any
---- ------------
agreement or instrument between the Borrower and any Lender or any Affiliate
of any Lender relating to Indebtedness and within the scope of Section
-------
8.01(e) will be margin stock.
-------
(b) None of the Borrower, any Person controlling the Borrower, or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, or (ii) is or is required to be
registered as an "investment company" under the Investment Company Act of
1940.
5.15 DISCLOSURE. No statement, information, report, representation,
or warranty made by the Borrower in any Loan Document or furnished to the
Administrative Agent or any Lender by or on behalf of the Borrower or any
Subsidiary in connection with the preparation of any Loan Document contains
any untrue statement of a material fact or omits any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
5.16 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises,
licenses and other intellectual property rights (collectively, "IP Rights")
that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To the
best knowledge of the Borrower, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by the Borrower or any Subsidiary infringes
upon any rights held by any other Person. Except as specifically disclosed
in Schedule 5.16, no claim or litigation regarding any of the foregoing is
-------------
pending or, to the best knowledge of the Borrower, threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the
Borrower, proposed, which, in either case, could reasonably be expected to
have a Material Adverse Effect.
60
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in
the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11)
------------- ---- ---- ----
cause each Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) as soon as available, but in any event within 100 days after
the end of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail, audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with GAAP and shall not be subject to any
qualifications or exceptions as to the scope of the audit or the going
concern status of the Borrower nor to any qualifications and exceptions not
reasonably acceptable to the Required Lenders; and
(b) as soon as available, but in any event within 50 days after
the end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
such fiscal quarter and for the portion of the Borrower's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail
and certified by a Responsible Officer as fairly presenting the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal, recurring year
end audit adjustments and the absence of footnotes.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent certified
---------------
public accountants certifying such financial statements and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default under the financial covenants set forth herein
or, if any such Default or Event of Default shall exist, stating the nature
and status of such event;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance
---------------- ---
Certificate signed by a Responsible Officer;
61
(c) as soon as available, but in any event within 50 days after
the end of each fiscal quarter of the Borrower, a Borrowing Base Certificate as
of the end of the immediately preceding fiscal quarter signed by a
Responsible Officer; provided, however, that in the event that a Default or
an Event of Default has occurred and is continuing, a Borrowing Base
Certificate signed by a Responsible Officer shall also be so delivered at
such additional times as determined by the Administrative Agent;
(d) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a), deliver to the Administrative Agent and
----------------
each Lender, a consolidating summary of business unit sales, operating
income, assets and investments of the Borrower and its Subsidiaries prepared
by a Responsible Officer in form acceptable to the Administrative Agent;
(e) as soon as practical and in any event within 60 days after the
end of each Fiscal Year, deliver to the Administrative Agent and each Lender
a capital and operating expense budget and consolidated financial
projections for the Borrower and its Subsidiaries for the next Fiscal Year,
prepared on a quarterly basis in accordance with GAAP applied on a
Consistent Basis;
(f) promptly after any request by the Administrative Agent, copies
of any detailed audit reports (other than the audited financial statements
referred to in Section 6.01(a) above), management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of the Borrower by independent accountants (collectively,
"Accounting Information") in connection with the accounts or books of the
Borrower or any Subsidiary; provided, however, the Administrative Agent and
the Lenders agree that none of them shall be entitled to rely on such
Accounting Information with respect to any such independent accountants and
such independent accountants shall have no liability to the Administrative
Agent or any Lender as a consequence of their receipt of such Accounting
Information;
(g) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower
may file or be required to file with the Securities and Exchange Commission
under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not
otherwise required to be delivered to the Administrative Agent pursuant
hereto; and
(h) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as the
Administrative Agent, at the request of any Lender, may from time to time
request.
Each document required to be delivered pursuant to Section 6.01(a)
---------------
or (b) or Section 6.02 (e) shall be deemed to have been delivered on the
--- ----------------
date on which the Borrower posts such document on the Borrower's website on
the Internet at the website address listed on Schedule 10.02 hereof, or when
--------------
such document is posted on the Securities and Exchange Commission's website
at ▇▇▇.▇▇▇.▇▇▇ (the "SEC Website") or on an Internet website established by
the Administrative Agent with Intralinks, Inc. or other similarly available
electronic media (each of the foregoing an "Informational Website");
provided that (i) the Borrower shall deliver paper
--------
62
copies of all such documents to the Administrative Agent or any Lender that
requests the Borrower to deliver such paper copies (without impairment of
the effectiveness of any document previously delivered in electronic media
form) until a request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Administrative Agent and
each Lender shall be notified by electronic mail of the applicable
Informational Website and of the posting of each such document. The
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above in this paragraph, and in
any event shall have no responsibility to monitor compliance by the Borrower
with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents. The Borrower shall be responsible for (other than with respect to
the SEC Website) and shall incur all risks associated with (including with
respect to the SEC Website) the security and confidentiality of the
Informational Websites and its information posted thereon.
6.03 NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of any litigation, investigation or proceeding affecting the
Borrower in which the amount involved (excluding amounts covered by
applicable insurance as to which no reservation of rights is in effect)
exceeds the Threshold Amount, or in which injunctive relief or similar
relief is sought, which relief, if granted, could reasonably be expected to
have a Material Adverse Effect;
(d) of the occurrence of any ERISA Event;
(e) of any change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary; and
(f) Each notice pursuant to this Section shall be accompanied by
a statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and
proposes to take with respect thereto. Each notice pursuant to Section
-------
6.03(a) shall describe with particularity any and all provisions of this
-------
Agreement or other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a)
all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves
in accordance with GAAP are being maintained by the Borrower or such
Subsidiary; (b) all lawful
63
claims which, if unpaid, would by law become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. Except in a transaction
permitted by Section 7.04 or 7.05, preserve, renew and maintain in full
------------ ----
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization; take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, and preserve or renew all of its
registered IP Rights, except in each case where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of
its business in good working order and condition, ordinary wear and tear
excepted; and (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts (after giving effect to any
self-insurance compatible with the following standards) as are customarily
carried under similar circumstances by such other Persons and providing for
not less than 30 days prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance.
6.08 COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS. Comply in
all material respects with the requirements of all Laws and Contractual
Obligations applicable to it or to its business or property, except in such
instances in which (i) such requirement of Law or Contractual Obligation is
being contested in good faith by appropriate proceedings diligently
conducted or a bona fide dispute exists with respect thereto; or (ii) the
failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over the Borrower or such Subsidiary, as the
case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrower and at such
reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, that when an Event of Default has occurred and is
-------- -------
continuing the
64
Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at
the expense of the Borrower at any time during normal business hours and
without advance notice.
6.11 COMPLIANCE WITH ERISA. Do, and cause each of its ERISA
Affiliates to do, each of the following: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other Federal or state law; (b) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such qualification;
and (c) make all required contributions to any Plan subject to Section 412
of the Code.
6.12 ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary
shall receive any letter, notice, complaint, order, directive, claim or
citation alleging that any Borrower or any Subsidiary has violated any
Environmental Law, has released any Hazardous Material, or is liable for the
costs of cleaning up, removing, remediating or responding to a release of
Hazardous Materials, the Borrower shall, within the time period permitted
and to the extent required by the applicable Environmental law or the
Governmental Authority responsible for enforcing such Environmental Law,
remove or remedy, or cause the applicable Subsidiary to remove or remedy,
such violation or release or satisfy such liability unless (a) the failure
to remove or remedy such violation or release or to satisfy such liability
would not reasonably be expected to have a Material Adverse Effect, in which
case the Borrower shall notify the Administrative Agent of any decision not
to remove or remedy such violation or release or satisfy such liability and
the basis for any such decision, and at the Administrative Agent's option
and at its request, the Borrower shall provide written documentation of such
decision, or (b) such violation or liability is being contested in good
faith by appropriate proceedings and appropriate reserves therefor are being
maintained in accordance with GAAP.
6.13 USE OF PROCEEDS. Use the proceeds of the Credit Extensions
solely (i) for working capital, capital expenditures, Acquisitions and other
general corporate purposes not in contravention of any Law or of any Loan
Document or (ii) to refinance all indebtedness outstanding under the
Existing Credit Facility.
6.14 SUBSIDIARY SUBORDINATION AGREEMENT; NOTICES REGARDING
SUBSIDIARIES.
(a) Cause each now existing or hereafter acquired or created
Subsidiary (other than KFR) to execute and deliver to the Administrative
Agent a Subordination Agreement.
(b) Promptly from time to time, upon request of the Agent,
deliver to the Agent a written report of any material change in the list of
Subsidiaries set forth on Schedule 5.13(a).
----------------
65
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist, any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
(a) Liens created or arising pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01
-------------
and any renewals or extensions thereof, provided that the property covered
--------
thereby is not increased and any renewal or extension of the obligations
secured or benefited thereby does not increase the maximum outstanding
principal amount of such obligations;
(c) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith and by appropriate proceedings diligently conducted,
if adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts
and leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money in an
aggregate amount not in excess of the Threshold Amount (except to the extent
covered by independent third-party insurance as to which the insurer has
acknowledged in writing its obligation to cover), unless any such judgment
remains undischarged for a period of more than 10 consecutive days during
which execution is not effectively stayed;
66
(i) Liens securing Indebtedness in respect of capital leases,
Synthetic Lease Obligations and purchase money obligations for fixed or
capital assets; provided that (i) such Liens do not at any time encumber any
--------
property other than the property financed by such Indebtedness and (ii) the
Indebtedness secured thereby does not exceed the cost or fair market value,
whichever is lower, of the property being acquired on the date of
acquisition;
(j) Liens on fixed assets acquired in connection with a Permitted
Acquisition so long as such Liens were existing at the time of such
Acquisition by the Borrower or a Subsidiary and were not incurred, extended
or renewed in contemplation of such Acquisition; provided that (i) the Lien
--------
shall attach solely to the property acquired, and (ii) at the time of
acquisition of such fixed assets, the aggregate amount remaining unpaid on
all Indebtedness secured by Liens on such fixed assets whether or not
assumed by the Borrower or a Subsidiary shall not exceed an amount equal to
the lesser of the total purchase price or fair market value at the time of
acquisition of such fixed assets;
(k) Liens on notes or accounts receivable or any rights and claims
associated therewith that are granted pursuant to Permitted Securitization
Transactions or the Factoring Program;
(l) Liens on margin stock (as defined in Regulation U), but only
to the extent that the value of such margin stock would exceed 25% of the
consolidated assets of the Borrower; and
(m) other Liens securing Indebtedness in an aggregate amount of
up to $1,000,000 at any time.
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments other than those permitted by subsections (b)
through (g) that are existing on the date hereof and listed on Schedule
--------
7.02;
----
(b) Investments held by the Borrower or such Subsidiary in the
form of cash equivalents or short-term marketable securities;
(c) advances to officers, directors and employees of the Borrower
and Subsidiaries in an aggregate amount not to exceed $750,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of any Subsidiary in the Borrower or of the
Borrower or any Subsidiary in another Subsidiary;
(e) Investments consisting of extensions of credit in the nature
of accounts receivable or notes receivable arising from the sale or lease of
goods or services in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to
prevent or limit loss;
(f) Investments permitted by Section 7.04;
------------
67
(g) Permitted Acquisitions; and
(h) other Investments consummated after the Closing Date not
exceeding $25,000,000 in the aggregate.
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 7.03 and any refinancings, refundings, renewals or extensions
-------------
thereof; provided that the amount of such Indebtedness is not increased at
--------
the time of such refinancing, refunding, renewal or extension except by an
amount equal to a reasonable premium or other reasonable amount paid, and
fees and expenses reasonably incurred, in connection with such refinancing
and by an amount equal to any existing commitments unutilized thereunder;
(c) Guaranty Obligations of the Borrower or any Subsidiary in
respect of Indebtedness otherwise permitted hereunder of the Borrower or any
wholly-owned Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i)
--------
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated
with liabilities, commitments, investments, assets, or property held or
reasonably anticipated by such Person, or changes in the value of securities
issued by such Person and not for purposes of speculation or taking a
"market view;" and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets
within the limitations set forth in Section 7.01(i);
---------------
(f) Attributable Indebtedness under any Permitted Securitization
Transaction;
(g) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(h) unsecured intercompany Indebtedness for loans and advances
made by the Borrower or any wholly owned Subsidiary other than KFR to the
Borrower or any wholly owned Subsidiary, provided that such intercompany
--------
Indebtedness of the Borrower is subordinated to obligations, liabilities and
undertakings of the holder or owner thereof pursuant to the Subordination
Agreement; and
(i) other unsecured Indebtedness in an aggregate principal amount
at any time outstanding not to exceed the lesser of (i) $150,000,000 or (ii)
15% of Consolidated Net Tangible Assets.
68
7.04 FUNDAMENTAL CHANGES. Merge, consolidate with or into, or
convey, transfer, lease or otherwise Dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default or Event of Default exists or would
result therefrom:
(a) any Subsidiary may merge (i) with the Borrower, provided that
--------
the Borrower shall be the continuing or surviving Person, or (ii) with any
one or more Subsidiaries, provided that when any wholly-owned Subsidiary is
--------
merging with another Subsidiary, the wholly-owned Subsidiary shall be the
continuing or surviving Person, or (iii) with any other Person in connection
with any Permitted Acquisition, provided that the continuing or surviving
--------
Person shall be a wholly-owned Subsidiary; and
(b) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Borrower or to another
Subsidiary; provided that if the seller in such a transaction is a
--------
wholly-owned Subsidiary, then the purchaser must also be a wholly-owned
Subsidiary.
7.05 DISPOSITIONS. Make any Disposition or enter into any
agreement to make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now
owned or hereafter acquired, in the ordinary course of business and having
an aggregate book value less than $5,000,000;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property during any fiscal
year of the Borrower, having a gross book value, as determined in accordance
with GAAP, less than $15,000,000;
(d) other Dispositions of equipment to the extent such equipment
is replaced with equipment of like kind, function and value, provided the
replacement equipment shall be acquired prior to or substantially
contemporaneously with any such disposition and the replacement equipment
shall be free and clear of Liens other than Permitted Liens.
(e) Dispositions of property by any Subsidiary to the Borrower or
to a wholly-owned Subsidiary;
(f) Dispositions by the Borrower and its Subsidiaries of property
pursuant to sale-leaseback transactions, provided that the book value of all
--------
property so Disposed of shall not exceed $25,000,000;
(g) Dispositions permitted by Section 7.04;
------------
(h) non-exclusive licenses of IP Rights in the ordinary course
of business and substantially consistent with past practice for terms not
exceeding five years;
(i) Disposition of Investments permitted under Section 7.02(b) in
---------------
the ordinary course of management of the investment portfolio of the
Borrower and its Subsidiaries;
69
(j) Dispositions by any Subsidiary of all or any substantial part
of its assets to the Borrower or any wholly-owned Subsidiary;
(k) Dispositions of notes or accounts receivable or any rights
and claims associated therewith that are sold pursuant to Permitted
Securitization Transactions or the Factoring Program;
(l) Dispositions of margin stock (as defined in Regulation U) at
fair market value, but only to the extent that the value of such margin
stock would exceed 25% of the consolidated assets of the Borrower; and
(m) Disposition of Accounts owing from a single Account Debtor
in an aggregate amount of up to $750,000.
7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations
for the payment of rent for any property under lease or agreement to lease,
except:
(a) Material Leases in existence on the date hereof, all of which
are listed on Schedule 7.06, and any renewal, extension or refinancing
-------------
thereof, provided that the terms of any such renewal, extension or
--------
refinancing do not result in a reduction of the maturity of such lease, an
increase in lease payments above that available in the applicable market
generally for similar properties, or otherwise be materially disadvantageous
to the Borrower or to the Lenders;
(b) operating leases (other than those constituting Synthetic
Lease Obligations) entered into or assumed by the Borrower or any Subsidiary
after the date hereof in the ordinary course of business;
(c) leases in connection with any sale-leaseback arrangement
permitted by Section 7.05(f); and
---------------
(d) capital leases and Synthetic Lease Obligations provided that
--------
the aggregate amount of Attributable Indebtedness in respect thereof at any
one time outstanding does not result in a violation of the Leverage Ratio in
Section 7.13(c).
---------------
7.07 RESTRICTED PAYMENTS. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to
do so, if immediately after giving effect to such proposed action, a Default
or Event of Default would exist.
7.08 ERISA. At any time engage in a transaction which could be
subject to Section 4069 or 4212(c) of ERISA, or permit any Plan to (a)
engage in any non-exempt "prohibited transaction" (as defined in Section
4975 of the Code); (b) fail to comply with ERISA or any other applicable
Laws; or (c) incur any material "accumulated funding deficiency" (as defined
in Section 302 of ERISA), which, with respect to each event listed above,
could reasonably be expected to have a Material Adverse Effect.
7.09 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by
the Borrower and its Subsidiaries on the date hereof.
70
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of the Borrower, other than (a) the Factoring
Program, (b) a Permitted Securitization Transaction or (c) other
transactions for compensation and upon fair and reasonable terms with
Affiliates that are otherwise permitted hereunder and upon terms no less
favorable to the Borrower or Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person other than an Affiliate.
7.11 BURDENSOME AGREEMENTS. Enter into or maintain any Contractual
Obligation that limits the ability (a) of any Subsidiary to make Restricted
Payments, loans or advances to the Borrower or to otherwise transfer
property to the Borrower, or (b) of the Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on Accounts or Inventory of
such Person, other than (i) negative pledge provisions in any Loan Document,
(ii) negative pledge provisions in any Permitted Securitization Transaction,
(iii) as are contained in the Indenture and the Senior Note Documents, (iv)
negative pledge provisions subject to Section 10.19 and contained in any
-------------
line of credit or other financial arrangement between any Lender and the
Borrower or its Subsidiaries, (v) negative pledge provisions affecting
Accounts or Inventory with an aggregate value of less than $1,000,000 and
(vi) negative pledge provisions applicable to Accounts transferred pursuant
to the Factoring Program or (c) of any Subsidiary to guaranty payment or,
otherwise incur a Contingent Obligation with respect to, the Obligations,
other than (i) limitations thereon contained in any Loan Document, (ii)
limitation thereon contained in any documentation creating a Permitted
Securitization Transaction, (iii) as are contained in the Indenture and the
Senior Note Documents, and (iv) limitations thereon subject to Section 10.19
-------------
which are contained in any line of credit or other financial arrangement
between any Lender and the Borrower or its Subsidiaries.
7.12 USE OF PROCEEDS. Use the proceeds of any Credit Extension in
any manner that would violate the provisions of Regulation U.
7.13 FINANCIAL COVENANTS.
(a) Consolidated Net Worth. Permit Consolidated Net Worth at any
time to be less than the sum of (i) $388,000,000, plus (ii) an amount equal
to 50% of the Consolidated Net Income earned in each fiscal quarter ending
after January 31, 2002 (with no deduction for a net loss in any such fiscal
quarter), plus (iii) an amount equal to 50% of the aggregate increases in
Shareholders' Equity of the Borrower and its Subsidiaries after the date
hereof by reason of the issuance and sale of capital stock of the Borrower
(including upon any conversion of debt securities of the Borrower into such
capital stock and any exercise of outstanding options or warrants) less (iv)
the aggregate amount of all Permitted Capital Stock Repurchases consummated
after the Closing Date.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio at the end of each fiscal quarter during the periods set forth below
to be less than the ratio indicated opposite such period:
71
Period Fixed Charge Coverage Ratio
------ ---------------------------
Closing Date through
October 31, 2002 1.25 to 1.00
November 1, 2002 through
January 31, 2003 1.35 to 1.00
February 1, 2003 through
January 31, 2004 1.40 to 1.00
February 1, 2004
and thereafter 1.50 to 1.00
provided, however, notwithstanding the foregoing, if the ABC Childrenswear
-------- -------
Acquisition shall be consummated on or prior to January 31, 2003, the Fixed
Charge Coverage Ratio (determined on a pro forma basis to give effect to the
ABC Childrenswear Acquisition for all prior periods) shall not be less than
1.40 to 1.00 as of the end of any fiscal quarter for the period from the
date of such consummation through January 31, 2004 and not less than 1.50 to
1.00 as of the end of any fiscal quarter thereafter.
(c) Leverage Ratio. Permit the Leverage Ratio at the end of each
fiscal quarter set forth below to be greater than the ratio indicated
opposite such period:
Fiscal Quarter Leverage Ratio
-------------- --------------
April 30, 2002 3.50 to 1.00
July 31, 2002, October 31, 2002
and January 31, 2003 3.67 to 1.00
April 30, 2003
and thereafter 3.25 to 1.00
provided, however, notwithstanding the foregoing, the Leverage Ratio
-------- -------
(determined on a pro forma basis to give effect to the ABC Childrenswear
Acquisition for all prior periods) shall not be greater than 3.25 to 1.00 as
of the end of any fiscal quarter occurring after the consummation of the ABC
Childrenswear Acquisition.
7.14 ACQUISITIONS. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, other than Permitted Acquisitions.
7.15 CAPITAL EXPENDITURES. Make or become legally obligated to
make expenditures in respect of the purchase or other acquisition of fixed or
capital assets (excluding normal replacements and maintenance which are
properly charged to current operations), except for capital expenditures in
the ordinary course of business not exceeding $30,000,000 in the
72
aggregate for the Borrower and it Subsidiaries during any fiscal year;
provided, however, that so long as no Default or Event of Default has
-------- -------
occurred and is continuing or would result from such expenditure, 50% of any
portion of the $30,000,000 amount not expended in the fiscal year for which
it is permitted above may be carried over for expenditure in the next
following fiscal year; provided further, however, that after consummation of
---------------- -------
the ABC Childrenswear Acquisition, each reference to $30,000,000 in this
Section 7.15 shall be deemed to refer to $35,000,000.
------------
7.16 ISSUANCE OR SALE OF STOCK BY SUBSIDIARIES. The Borrower will
not permit any Subsidiary to issue or sell any shares of capital stock of
any class (including as "capital stock" for the purposes of this Section
-------
7.16, any warrants, rights or options to purchase or otherwise acquire
----
capital stock or other securities exchangeable for or convertible into
capital stock) of such Subsidiary to any Person other than the Borrower or a
wholly-owned Subsidiary, except for the purpose of qualifying directors, or
except in satisfaction of the validly pre-existing preemptive rights of
minority shareholders in connection with the simultaneous issuance of
capital stock to the Borrower and/or a wholly-owned Subsidiary whereby the
Borrower and/or such Wholly-owned Subsidiary maintain their same
proportionate interests in such Subsidiary.
7.17 SALE OF STOCK IN SUBSIDIARIES. The Borrower will not sell,
transfer or otherwise dispose of any shares of capital stock in any
Subsidiary (except to qualify directors) or any Indebtedness of any
Subsidiary, and will not permit any Subsidiary to sell, transfer or
otherwise dispose of (except to the Borrower or a wholly-owned Subsidiary)
any shares of capital stock or any Indebtedness of any other Subsidiary,
unless:
(a) there shall not exist any violation of Sections 7.04
-------------
or 7.05 either immediately prior to, or immediately after giving
----
effect to, such sale, transfer or disposition;
(b) simultaneously with such sale, transfer, or
disposition, all shares of capital stock and all Indebtedness of
such Subsidiary at the time owned by the Borrower and by every
other Subsidiary shall be sold, transferred or disposed of as an
entirety;
(c) the Board of Directors of the Borrower shall have
determined, as evidenced by a resolution thereof, that the
retention of such capital stock and Indebtedness is no longer in
the best interests of the Borrower;
(d) such capital stock and Indebtedness is sold,
transferred or otherwise disposed of to a Person, for fair value
and on terms reasonably deemed by the Board of Directors to be
adequate and satisfactory; and
(e) the Subsidiary being disposed of shall not have any
continuing investment in the Borrower or any other Subsidiary not
being simultaneously disposed of.
7.18 AMENDMENT OF DOCUMENTS. Amend or supplement, or permit to be
amended or supplemented, (a) the Indenture or (b) any Senior Note Document,
in each case in a manner that directly or indirectly accelerates the time of
payment, increases the principal amount of or interest rate applicable to
indebtedness issued, provides for more restrictive terms or otherwise is
adverse to the Administrative Agent or the Lenders.
73
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrower fails to pay (i) when and as
-----------
required to be paid herein, any amount of principal of any Loan, or any L/C
Obligation, or (ii) within three Business Days after the same becomes due
interest on any Loan or on any L/C Obligation, or any facility, utilization
or other fee due hereunder, or (iii) within five days after the same becomes
due, any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe
------------------
any term, covenant or agreement contained in any of Section 6.03, 6.05, 6.10
------------ ---- ----
or 6.13 or Article VII; or
---- -----------
(c) Other Defaults. The Borrower fails to perform or observe any
--------------
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and
such failure continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
------------------------------
certification or statement of fact made or deemed made by or on behalf of
the Borrower herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Material Subsidiary (A)
--------------
fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Contingent Obligation (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement)
of more than the Threshold Amount and such failure shall continue beyond any
period of grace applicable thereto, or (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Contingent
Obligation or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event occurs, the effect of which default
or other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased or redeemed (automatically or otherwise) prior to its stated
maturity, or such Contingent Obligation to become payable or cash collateral
in respect thereof to be demanded, and such failure shall continue beyond
any period of grace applicable thereto; or (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which
the Borrower or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which the Borrower or any Subsidiary is an Affected Party (as
so defined) and, in either event, the Swap
74
Termination Value owed by the Borrower or such Subsidiary as a result
thereof is greater than the Threshold Amount and such occurrence shall
continue beyond any period of grace applicable thereto; or
(f) Insolvency Proceedings, Etc. The Borrower or any of its
----------------------------
Material Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its property; or
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such
Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any
----------------------------------
Material Subsidiary becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is
not released, vacated or fully bonded within 60 days after its issue or
levy; or
(h) Judgments. There is entered against the Borrower or any
---------
Material Subsidiary (i) a final judgment or order for the payment of money
in an aggregate amount exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer does
not dispute coverage), or (ii) any non-monetary final judgment that has, or
could reasonably be expected to have, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor upon
such judgment or order, or (B) there is a period of 30 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension
-----
Plan or Multiemployer Plan which has resulted or could reasonably be expected
to result in liability of the Borrower under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time
----------------------------
after its execution and delivery and for any reason other than the agreement
of all the Lenders or satisfaction in full of all the Obligations, ceases to
be in full force and effect, or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any respect;
or the Borrower denies that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind any
Loan Document; or
(k) Change of Control. There occurs any Change of Control with
-----------------
respect to the Borrower.
75
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders,
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuers to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof) plus
the Letter of Credit fees payable with respect to such Letter of Credit
(calculated at the Applicable Margin then in effect for the period from the
date of such cash collateralization until the expiry date of such Letter of
Credit) in the currency in which such L/C Obligations are outstanding; and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
-------- -------
subsection (f) or (g) of Section 8.01, the obligation of each Lender to make
------------
Loans and any obligation of the L/C Issuers to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrower to
Cash Collateralize the L/C Obligations as aforesaid shall automatically
become effective, in each case without further act of the Administrative
Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become
------------
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section
-------
8.02), any amounts received on account of the Obligations shall be applied
----
by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting
-----
fees, indemnities, expenses and other amounts (including Attorney Costs and
amounts payable under Article III) payable to the Administrative Agent in
-----------
its capacity as such;
Second, to payment of that portion of the Obligations constituting
------
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs and amounts payable under
Article III), ratably among them in proportion to the amounts described in
-----------
this clause Second payable to them;
------
Third, to payment of that portion of the Obligations constituting
-----
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among
the Lenders in proportion to the respective amounts described in this clause
Third payable to them;
-----
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Fourth, to payment of that portion of the Obligations constituting
------
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause Fourth held
------
by them;
Fifth, to the Administrative Agent for the account of the L/C
-----
Issuers, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit;
Sixth, to the Administrative Agent for the payment of all other
-----
amounts due under the Loan Documents; and
Last, the balance, if any, after all of the Obligations have been
----
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
---------------
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
-----
applied to satisfy drawings under such Letters of Credit as they occur. If
any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere herein or in any other Loan
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" herein and in the other Loan Documents
with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
(b) Each L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith until such time (and except for so
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long) as the Administrative Agent may agree at the request of the Required
Lenders to act for an L/C Issuer with respect thereto; provided, however,
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that each L/C Issuer shall have all of the benefits and immunities (i)
provided to the Administrative Agent in this Article IX with respect to any
----------
acts taken or omissions suffered by such L/C Issuer in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters
of Credit as fully as if the term "Administrative Agent" as used in this
Article IX included each L/C Issuer with respect to such acts or omissions,
----------
and (ii) as additionally provided herein with respect to L/C Issuers.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to
advice of counsel and other consultants or experts concerning all matters
pertaining to such duties. The Administrative Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby (except for its own gross negligence
or willful misconduct in connection with its duties expressly set forth
herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by the Borrower
or any officer thereof, contained herein or in any other Loan Document, or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
or any other Loan Document, or for any failure of the Borrower or any other
party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any
Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders or all the
78
Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and
participants. Where this Agreement expressly permits or prohibits an action
unless the Required Lenders otherwise determine, the Administrative Agent
shall, and in all other instances, the Administrative Agent may, but shall
not be required to, initiate any solicitation for the consent or a vote of
the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall
------------
be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event
of Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default." The Administrative Agent will notify the Lenders of
its receipt of any such notice. The Administrative Agent shall take such
action with respect to such Default or Event of Default as may be directed
by the Required Lenders in accordance with Article VIII; provided, however,
------------ -------- -------
that unless and until the Administrative Agent has received any such
direction, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative
Agent hereafter taken, including any consent to and acceptance of any
assignment or review of the affairs of the Borrower or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their
possession. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries, and all applicable bank or other regulatory Laws
relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower hereunder.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of
the Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent herein,
the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other
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information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower or any of
its Affiliates which may come into the possession of any Agent-Related
Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the
obligation of the Borrower to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
-------- -------
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such Person's own
gross negligence or willful misconduct; provided, however, that no action
-------- -------
taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs and the costs and
expenses incurred in connection with the use of Intralinks, Inc. or other
similar information transmission systems in connection with this Agreement)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Administrative Agent is not reimbursed for such
expenses by or on behalf of the Borrower. The undertaking in this Section
shall survive termination of the Aggregate Commitments, the payment of all
Obligations hereunder and the resignation of the Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of
America and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Borrower and its Affiliates as
though Bank of America were not the Administrative Agent or an L/C Issuer
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have
the same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though it were not the Administrative
Agent or an L/C Issuer, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders; provided
--------
that any such resignation by Bank of America shall also constitute its
resignation as an L/C Issuer. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders which successor
administrative agent shall be consented to by the Borrower at all times
other than during the existence of an Event of
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Default (which consent of the Borrower shall not be unreasonably withheld or
delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder,
the Person acting as such successor administrative agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and
an L/C Issuer and the respective terms "Administrative Agent" and an "L/C
Issuer" shall mean such successor administrative agent and Letter of Credit
issuer, and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated and the retiring L/C
Issuer's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring L/C Issuer or any
other Lender, other than the obligation of the successor L/C Issuer to issue
letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
---------- -------------- -----
its benefit as to any actions taken or omitted to be taken by it while it
was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Administrative Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure
by the Borrower therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall, unless
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in writing and signed by each of the Lenders directly affected thereby and
by the Borrower, and acknowledged by the Administrative Agent, do any of the
following:
(a) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02), except for any increase
------------
made in accordance with Section 2.13;
------------
(b) extend or postpone any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iii) of the
proviso below) any fees or other amounts payable
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hereunder or under any other Loan Document; provided, however, that only the
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consent of the Required Lenders shall be necessary to waive any obligation
of the Borrower to pay interest at the Default Rate;
(d) change the percentage of the Aggregate Commitments or of the
aggregate unpaid principal amount of the Loans and L/C Obligations which is
required for the Lenders or any of them to take any action hereunder;
(e) change the Pro Rata Share or Voting Percentage of any Lender,
except for any change resulting from an increase in Commitments pursuant to
Section 2.13; or
------------
(f) amend this Section, or Section 2.12, or any provision herein
------------
providing for consent or other action by all the Lenders;
and, provided further, that (i) no amendment, waiver or consent shall,
-------- -------
unless in writing and signed by each L/C Issuer directly affected thereby in
addition to the Required Lenders or each directly affected Lender, as the
case may be, affect the rights or duties of any L/C Issuer under this
Agreement or any Letter of Credit Application relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition
to the Required Lenders or each directly-affected Lender, as the case may
be, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; and (iii) no amendment, waiver or
consent shall modify the definition of "Change of Control" to lessen the
restrictive effect thereof on the Borrower or modify the definition of
"Eligible Assignee" unless in writing duly signed by Lenders whose Voting
Percentages aggregate more than 66 2/3% of the Voting Percentages of all
Lenders. Notwithstanding anything to the contrary herein, any Lender that
has a Voting Percentage of zero shall not have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the Pro
Rata Share of such Lender may not be increased (except for any increase
resulting from an increase in Commitments pursuant to Section 2.13) without
------------
the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the
address, facsimile number or (subject to subsection (c) below) electronic
mail address specified for notices on Schedule 10.02; or, in the case of the
--------------
Borrower, the Administrative Agent or each L/C Issuer, to such other address
as shall be designated by such party in a notice to the other parties, and
in the case of any other party, to such other address as shall be designated
by such party in a notice to the Borrower, the Administrative Agent and each
L/C Issuer. All such notices and other communications shall be deemed to be
given or made upon the earlier to occur of (i) actual receipt by the
intended recipient and (ii) (A) if delivered by hand or by courier, when
signed for by the intended recipient (which need not be any natural person
to whose attention such communication is directed, in the case of
communications to Persons other than natural Persons); (B) if delivered by
mail, four Business Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile, when sent and receipt has been confirmed by
telephone; and (D) if delivered by
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electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and
-------- -------
other communications to the Administrative Agent and the L/C Issuers
pursuant to Article II shall not be effective until actually received by
----------
such Person. Any notice or other communication permitted to be given, made
or confirmed by telephone hereunder shall be given, made or confirmed by
means of a telephone call to the intended recipient at the number specified
on Schedule 10.02, or to such other number as shall be designated by such
--------------
party in a notice to the Borrower, the Administrative Agent and each L/C
Issuer, it being understood and agreed that a voicemail message shall in no
event be effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
---------------------------------------------------
Documents may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable Law, have
the same force and effect as manually-signed originals and shall be binding
on the Borrower, the Administrative Agent and the Lenders. The
Administrative Agent may also require that any such documents and signatures
be confirmed by a manually-signed original thereof; provided, however, that
-------- -------
the failure to request or deliver the same shall not limit the effectiveness
of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet
------------------------------
and intranet websites may be used only to distribute routine communications,
such as financial statements and other information as provided in Section
-------
6.02, and to distribute Loan Documents for execution by the parties thereto,
----
and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The
--------------------------------------------
Administrative Agent and the Lenders shall be entitled to rely and act upon
any notices (including telephonic Revolving Loan Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The
Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent
may be recorded by the Administrative Agent, and each of the parties hereto
hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein or therein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all reasonable costs and
expenses incurred in connection with the development, due diligence,
preparation, negotiation, syndication and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated
83
hereby or thereby are consummated), and the consummation and administration
of the transactions contemplated hereby and thereby, including all Attorney
Costs and the costs and expenses incurred in connection with the use of
Intralinks, Inc. or other similar information transmission systems in
connection with this Agreement, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies under this Agreement or the other Loan Documents
(including all such costs and expenses incurred during any "workout" or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all
Attorney Costs. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the
Administrative Agent and the cost of independent public accountants and
other outside experts retained by the Administrative Agent or any Lender.
The agreements in this Section shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations.
10.05 INDEMNIFICATION BY THE BORROWER; LIMITATION OF LIABILITY.
Whether or not the transactions contemplated hereby are consummated, the
Borrower shall indemnify and hold harmless each Agent-Related Person, each
Lender and their respective Affiliates, directors, officers, employees,
counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from
-----------
and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including Attorney Costs) of any kind or nature whatsoever
which may at any time be imposed on, incurred by or asserted against any
such Indemnitee in any way relating to or arising out of or in connection
with (a) the execution, delivery, enforcement, performance or administration
of any Loan Document or any other agreement, letter or instrument delivered
in connection with the transactions contemplated thereby or the consummation
of the transactions contemplated thereby, (b) any Commitment, Loan or Letter
of Credit or the use or proposed use of the proceeds therefrom (including
any refusal by the Applicable L/C Issuer to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand
do not strictly comply with the terms of such Letter of Credit), or (c) any
actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any
other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding)
and regardless of whether any Indemnitee is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that such
----------------------- --------
indemnity shall not, as to any Indemnitee, be available to the extent that
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements are determined by a court
of competent jurisdiction to have directly resulted from the gross
negligence or willful misconduct of such Indemnitee and, provided further,
-------- -------
that with respect to indemnity relating to payment of Taxes and Other Taxes,
Section 3.01 shall control. The Borrower agrees that no Indemnitee shall
------------
have any liability (whether direct or indirect, in contract or tort or
otherwise) to it or any of its Subsidiaries, security holders or creditors
as a result for any action taken or not taken by it arising out of, related
to or taken in connection with any Loan Document or the consummation of the
transactions contemplated hereby or the actual or proposed use of Loan or
Letter of Credit proceeds, except to the extent that such liability is found
by a court of competent jurisdiction to have directly resulted from the
gross negligence or willful misconduct of such Indemnitee, and in no event
shall any Indemnitee be liable thereto for
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special, consequential, punitive or indirect damages. Without limitation of
the foregoing, no Indemnitee shall be liable for any damages arising from
the use by others of information or other materials obtained through the
internet, Intralinks or other similarly available electronic media in
connection with the electronic posting of financial statements,
certificates, reports or other information to an Informational Website as
provided for in Section 6.02 hereof. The agreements in this Section shall
------------
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Commitments and the repayment, satisfaction
or discharge of all the other Obligations. All amounts due under this
Section 10.05 shall be payable within ten Business Days after demand
-------------
therefor.
(b) If, for the purposes of obtaining judgment in any court, it
is necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be the Spot
Rate. The obligation of Borrower in respect of any such sum due from it
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
-----------------
other than that in which such sum is denominated in accordance with the
applicable provisions of the Loan Documents (the "Agreement Currency"), be
------------------
discharged only to the extent that Administrative Agent and Lenders can
purchase the amount of the Agreement Currency with the amounts paid by the
Borrower in Judgment Currency. If the amount of the Agreement Currency so
purchased is insufficient, Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the relevant Indemnitees
against such loss. If the amount of the Agreement Currency is greater than
the amount due, Lender agrees to return any excess to the Person who may be
entitled thereto.
10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment to the Administrative Agent or any Lender, or the Administrative
Agent or any Lender exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share of any amount so
recovered from or paid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the applicable Overnight Rate from time to time in effect, in
Dollars in the Dollar Equivalent Amount of such recovery or payment.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided
in
85
subsection (d) of this Section and, to the extent expressly contemplated
hereby, the Indemnitees) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), at the time owing to it);
provided that (i) except in the case of an assignment of the entire
--------
remaining amount of the assigning Lender's Commitment and the Loans at the
time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if a "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$1,000,000 unless each of the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans, and the Commitment assigned,
and (iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c) of
this Section, from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto,
including ceasing to be an L/C Issuer hereunder, if applicable, but shall
continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and
------------- ---- ----
10.05 with respect to facts and circumstances occurring prior to the
-----
effective date of such assignment). Upon request, the Borrower (at its
expense) shall execute and deliver new or replacement Notes to the assigning
Lender and the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
--------
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
86
(d) Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries (each, a "Participant")) in all or a portion of
-----------
such Lender's rights and/or obligations under this Agreement (including all
or a portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations) owing to it); provided that (i) such
--------
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent 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. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such agreement
--------
or instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, waiver or other modification that
would (i) postpone any date upon which any payment of money is scheduled to
be paid to such Participant or (ii) reduce the principal, interest, fees or
other amounts payable to such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
------------- ---- ----
Lender and had acquired its interest by assignment pursuant to subsection
(b) of this Section. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 10.09 as though it were a
-------------
Lender, provided such Participant agrees to be subject to Section 2.12 as
-------- ------------
though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Lender would have
------------ ----
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would be
a Foreign Lender if it were a Lender shall not be entitled to the benefits
of Section 3.01 unless the Borrower is notified of the participation sold to
------------
such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 10.15 as though it were a Lender.
-------------
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Notes, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from
--------
any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.
(g) Notwithstanding anything to the contrary contained herein,
any Lender that is a Fund that invests in bank loans may create a security
interest in all or any portion of the advances owing to it and the Note or
Notes held by it to the trustee for holders of obligations owed, or
securities issued, by such Fund as security for such obligations or
securities, provided that unless and until such trustee actually becomes a
Lender in compliance with the other provisions of this Section 10.07, (i) no
-------------
such pledge shall release the pledging Lender from any of its obligations
under the Loan Documents and (ii) such trustee shall not be entitled to
exercise any of the rights of a Lender under the Loan Documents even though
such trustee may have acquired ownership rights with respect to the pledged
interest through foreclosure or otherwise.
87
(h) Notwithstanding anything to the contrary contained herein,
if at any time any Lender who is also an L/C Issuer assigns all of its
Commitment and Loans pursuant to subsection (b) above (a "Resigning L/C
Issuer"), such Resigning L/C Issuer may, upon 30 days' notice to the
Borrower and the Lenders, resign as an L/C Issuer. Each Resigning L/C Issuer
shall retain all the rights and obligations of an L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as an L/C Issuer and all L/C Obligations with respect thereto
(including the right to require Lenders to make Revolving Loans or fund
participations in the manner set forth in Section 2.03(c)).
---------------
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
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 Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of the
Borrower; (g) with the consent of the Borrower; (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
Borrower; or (i) to the National Association of Insurance Commissioners or
any other similar organization or any nationally recognized rating agency
that requires access to information about a Lender's or its Affiliates'
investment portfolio in connection with ratings issued with respect to such
Lender or its Affiliates. In addition, the Administrative Agent and the
Lenders may disclose the existence of this Agreement and information about
this Agreement (other than specific information delivered to the Agent by
the Borrower) to market data collectors, similar service providers to the
lending industry, and service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this
Agreement, the other Loan Documents, the Commitments, and the Credit
Extensions. For the purposes of this Section, "Information" means all
-----------
information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of
any Event of Default, each Lender is authorized at any time and from time to
time, without prior notice to the Borrower, any such
88
notice being waived by the Borrower to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of the
Borrower against any and all Obligations owing to such Lender, now or
hereafter existing, irrespective of whether or not the Administrative Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency other than that of the deposit account. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender; provided,
--------
however, that the failure to give such notice shall not affect the validity
-------
of such set-off and application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the "Maximum Rate"). If
------------
the Administrative Agent or any Lender shall receive interest in an amount
that exceeds the Maximum Rate, the excess interest shall be applied to the
principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrower. In determining whether the interest contracted for, charged,
or received by the Administrative Agent or a Lender exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated term
of the Obligations.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter. In the event of any conflict
between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control; provided that the
--------
inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Loan Document shall not be deemed a
conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied
upon by the Administrative Agent and each Lender, regardless of any
investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may
have had notice or knowledge of any Default or Event of Default at the time
of any Credit Extension, and shall continue in full force and effect as long
89
as any Loan or any other Obligation shall remain unpaid or unsatisfied or
any Letter of Credit shall remain outstanding.
10.14 SEVERABILITY. Any provision of this Agreement and the other
Loan Documents to which the Borrower is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.15 TAX FORMS. (a) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
-------
Lender") shall deliver to the Administrative Agent, prior to receipt of any
------
payment subject to withholding under the Code (or upon accepting an
assignment of an interest herein), two duly signed completed copies of
either IRS Form W-8BEN or any successor thereto (relating to such Person and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Person by the Borrower pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Person by the Borrower pursuant to this
Agreement) or such other evidence satisfactory to the Borrower and the
Administrative Agent that such Person is entitled to an exemption from, or
reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (i) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is
satisfactory to the Borrower and the Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect
of all payments to be made to such Person by the Borrower pursuant to this
Agreement, (ii) promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (iii) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may
be reasonably necessary (including the re-designation of its Lending Office)
to avoid any requirement of applicable Laws that the Borrower make any
deduction or withholding for taxes from amounts payable to such Person. If
such Person fails to deliver the above forms or other documentation, then
the Administrative Agent may withhold from any interest payment to such
Person an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(b) Upon the request of the Administrative Agent, each Lender that
is a "United States person" within the meaning of Section 7701(a)(30) of the
Code shall deliver to the Administrative Agent two duly signed completed
copies of IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable back-up withholding tax imposed by
the Code, without reduction.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any
tax or other amount from payments made to or for the account of any Lender,
such Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any
90
jurisdiction on the amounts payable to the Administrative Agent under this
Section, and costs and expenses (including Attorney Costs) of the
Administrative Agent. The obligation of the Lenders under this Section shall
survive the termination of the Aggregate Commitments, repayment of all
Obligations and the resignation of the Administrative Agent.
10.16 JUDGMENT CURRENCY. The Borrower, the Administrative Agent and
each Lender hereby agree that if, in the event that a judgment is given, in
relation to any sum due to the Administrative Agent or any Lender hereunder,
in an Offshore Currency (the "Judgment Currency"), the Borrower agrees to
indemnify the Administrative Agent or such Lender, as the case may be, to
the extent that the Dollar Equivalent Amount which could have been purchased
by the Administrative Agent in accordance with normal banking procedures on
the Business Day following receipt of such sum is less than the sum which
could have been so purchased by the Administrative Agent had such purchase
been made on the day on which such judgment was given or, if such day is not
a Business Day, on the Business Day immediately preceding the giving of such
judgment, and if the amount so purchased exceeds the amount which could have
been so purchased had such purchase been made on the day on which such
judgment was given or, if such day is not a Business Day, on the Business
Day immediately preceding such judgment, the Administrative Agent or the
applicable Lender agrees to remit such excess to the Borrower. The
agreements in this Section shall survive payment of all other Obligations.
10.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE
--------
ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ SITTING IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
91
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 WAIVER BY LENDERS OF NEGATIVE PLEDGE CONTAINED IN OTHER
AGREEMENTS. To the extent there exists any provision in any loan agreement,
line of credit or other agreement or instrument (other than the Loan
Documents) by and between any Lender and the Borrower or any Subsidiary that
restricts or would have the effect of restricting the ability of (a) the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on Accounts or Inventory of such Person or (b) any Subsidiary to guaranty
payment or, otherwise incur a Contingent Obligation with respect to, the
Obligations, each Lender hereby waives such provision and the restrictions
contained therein to the extent applicable to creating, incurring, assuming
or suffering to exist any Lien in support of the Obligations or the ability
of any Subsidiary to guaranty payment of, or otherwise incur Contingent
Obligations with respect to, the Obligations. Notwithstanding any provision
of this Agreement or any other Loan Document to the contrary, each Lender
agrees that the waivers and agreements contained in this Section 10.19 shall
-------------
survive the termination of this Agreement and shall be binding upon each
Lender notwithstanding the sale or assignment of any interest hereunder or
such Person ceasing to be a Lender hereunder for any reason.
[Signatures on following pages.]
92
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
KELLWOOD COMPANY
By: /s/ W. ▇▇▇ ▇▇▇▇▇ III
----------------------
Name: W. ▇▇▇ ▇▇▇▇▇ III
Title: Senior Vice President and Chief
Financial Officer
Signature Page - 1
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
Title: Vice President
--------------
JPMORGAN CHASE BANK, as Syndication
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
-------------
Title: Vice President
--------------
US BANK NATIONAL ASSOCIATION, as Co-
Documentation Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
------------
Title: Assistant Vice President
------------------------
THE BANK OF NOVA SCOTIA, as Co-
Documentation Agent
By: /s/ ▇. ▇▇▇▇
------------
Name: ▇. ▇▇▇▇
-------
Title: Assistant Agent
---------------
Signature Page - 2
BANK OF AMERICA, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
Title: Vice President
--------------
Signature Page - 3
JPMORGAN CHASE BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
-------------
Title: Vice President
--------------
Signature Page - 4
U.S. BANK, NATIONAL ASSOCIATION, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
------------
Title: Assistant Vice President
------------------------
Signature Page - ▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as a Lender
By: /s/ ▇. ▇▇▇▇
-----------
Name: ▇. ▇▇▇▇
-------
Title: Assistant Agent
---------------
Signature Page - 6
BANK ONE, NA, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------
Title: First Vice President
--------------------
Signature Page - 7
MIZUHO CORPORATE BANK, LTD., as a Lender
By: /s/ Nobuyasu Fukatsu
--------------------
Name: Nobuyasu Fukatsu
----------------
Title: Senior Vice President
---------------------
Signature Page - 8
THE BANK OF NEW YORK, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Fuiks
--------------------
Title: Vice President
--------------
Signature Page - 9
UMB BANK, N.A., as a Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
-------------
Title: Vice President
--------------
Signature Page - 10
FIRST BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------
Title: Vice President
--------------
Signature Page - 11
ISRAEL DISCOUNT BANK OF NEW YORK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------
Title: Vice President
--------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------
Title: Senior Vice President
---------------------
Signature Page - 12
SCHEDULE 1.01
EXISTING LETTERS OF CREDIT
1
SCHEDULE 1.02
DESIGNATED SUBSIDIARIES
Refer to Schedule 5.13 for a list of subsidiaries, all of which shall
constitute Designated Subsidiaries; except for the following exclusions:
------
▇▇▇▇▇-Ropa, S.A.
AG Distributors
▇▇▇▇ ▇▇, Ltd.
Ivy International Limited
Kellwood Financial Resources, Inc.
Kellwood Shared Services, Inc.
The Kellwood Foundation
Kellwood Haiti, S. A.
XCSI, Inc.
KWD Holdings, Inc.
Altair International, S. A.
J. W. Confecciones A. M., S. A.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc.
Tri-W Corporation
2
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
-----------------------------------------------------------------------------------------------------------
Bank of America, N.A. $ 35,000,000 14.58%
JPMorgan Chase Bank $ 35,000,000 14.58%
US Bank National Association $ 35,000,000 14.58%
The Bank of Nova Scotia $ 35,000,000 14.58%
Bank One, NA $ 25,000,000 10.42%
Mizuho Corporate Bank, Ltd. $ 20,000,000 8.33%
The Bank of New York $ 15,000,000 6.25%
UMB Bank, N.A. $ 15,000,000 6.25%
First Bank $ 15,000,000 6.25%
Israel Discount Bank of New York $ 10,000,000 4.17%
------------ -------
Total $240,000,000 100.000000000%
1
SCHEDULE 5.06
LITIGATION
No Exceptions
1
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
In conjunction with the planned acquisition of ABC Childrenswear, a possible
exposure of approximately $4.5 million may exist. This is a "worst case"
estimate made by our environmental consultants after completion of Phase I
investigations. Phase II investigations are underway at two sites
(comprising $3.5 million of the total "worst case" estimate) in order to
further define and more accurately estimate the exposure. We do not believe
that this exposure will create a Material Adverse Effect on the Borrower.
1
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries.
------------
Attached is a current list of all Kellwood subsidiaries
All entities listed are corporations and indentations in the listing
indicate subsidiary status, e.g., Canadian Recreation Products, Inc. is a
wholly-owned subsidiary of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc., which is a wholly-owned
subsidiary of American Recreation Products, Inc., which is a wholly-owned
subsidiary of Kellwood Company.
Except for National Garments Manufacturing (Pte.) Limited (50% owned); all
------
listed subsidiaries are wholly-owned.
All shares are common stock and no options, warrants, or other rights to
acquire any subsidiary's stock exist.
Part (b). Other Equity Investments.
------------------------
1. National Garments Manufacturing (Pte.) Limited is 50% owned. Winner
Company of Hong Kong is our 50/50 partner.
2. Tri-W Corporation (100% owned by Kellwood) is a 50/50 partner with
▇▇▇▇▇▇▇ One, Inc. in the ownership of Hawthorn Office Park, the
Kellwood headquarters building in St. Louis.
3. Borrower is considering a $10 million loan to a menswear retail chain
and in return Kellwood Menswear will receive a five-year supply
contract. The disclosure of this potential investment is made for
informational purposes only and does not constitute an Investment
permitted under Section 7.02(a) of the Credit Agreement.
1
KELLWOOD COMPANY SUBSIDIARIES
-----------------------------
(04/10/2002)
MATERIAL SUBSIDIARIES ARE UNDERLINED
Date of Formation
-----------------
▇▇▇▇▇-Ropa, S.A. - 100% Owned - Foreign - Mexico - Inactive 01/09/73
American Recreation Products, Inc. - 100% Owned - Domestic - Delaware - Camping Equipment/Garment Mfgs. 08/16/85
----------------------------------
American Recreation Products International, Inc. - 100% Owned - Domestic - Delaware - Camping
Equipment/Garment Mfgs. 03/19/98
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc. - 100% Owned - Foreign - Quebec, Canada - Holding Company 01/26/87
----------------------
Canadian Recreation Products, Inc. - 100% Owned - Foreign - Quebec, Canada - Camping
----------------------------------
Equipment/Garment Mfgs. 01/13/87
▇▇▇▇▇▇▇▇▇▇▇ de Costa Rica, S.A. - 100% Owned - Foreign - Costa Rica - Inactive Unknown
Sierra Designs Acquisition Corporation - 100% Owned - Domestic - Delaware - Camping Equipment/Garment
--------------------------------------
Mfgs. 04/11/94
Biflex International, Inc. - 100% Owned - Domestic - New York
--------------------------
Berlei Hestia Philippines, Inc. - 100% Owned - Foreign - Phillipines
Biflex Sales Corp. - 100% Owned - Domestic - Delaware
Cen-Tex Holdings, Inc. - 100% Owned - Foreign - Panama - Garment Mfgs. (Sportswear) 04/25/83
Dorby Frocks, Ltd. - 100% Owned - Domestic - New York - Garment Mfgs. 10/05/56
------------------
AG Distributors - 100% Owned - Domestic - New Jersey - Inactive 02/06/74
▇▇▇▇ ▇▇, Ltd. - 100% Owned - Domestic - New York - Inactive 09/15/83
Group B Clothing Company - 100% Owned - Domestic - Delaware (Democracy) 08/23/00
------------------------
Halmode Apparel, Inc. - 100% Owned - Domestic - Delaware - Garment Mfgs. 08/08/86
Halmode Apparel (Malaysia) Sdn. Bhd. - 100% Owned - Foreign - Malaysia
Halmode Apparel (Singapore) Pte. Ltd. - 100% Owned - Foreign - Singapore
Ivy International Limited - 100% Owned - Foreign - Hong Kong - Import & Export/Trading
(formerly Latexco) - Inactive 08/11/92
Kellwood Financial Resources, Inc. - 100% Owned - Domestic - Tennessee 12/9/99
----------------------------------
Kellwood Shared Services, Inc. - 100% Owned - Domestic - Delaware 12/6/99
The Kellwood Foundation - 100% Owned - Domestic - Illinois - Charitable Foundation 10/28/65
Kellwood Haiti, S.A. - 100% Owned - Foreign - Haiti - Garment Mfgs. - Inactive 02/07/85
Kellwood Honduras, S.A. - 100% Owned - Foreign - Honduras - Garment Mfgs. (Lingerie) 12/24/91
Kellwood Mexico, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Sportswear) 12/22/97
Koret of California, Inc. - 100% Owned - Domestic - California 2/13/68
-------------------------
MJF Imports, Inc. - 100% Owned - Domestic - New York 6/3/86
New Campaign, Inc. - 100% Owned - Domestic - Delaware 1/27/95
------------------
XCSI, Inc. - 100% Owned - Domestic - Delaware 3/25/98
Koret Hong Kong Limited - 100% Owned - Foreign - Hong Kong
West Coast Apparel, Inc. - 100% Owned - Foreign - British Columbia, Canada 12/4/95
------------------------
West Coast Woollen ▇▇▇▇▇ (1986) Ltd. - 100% Owned - Foreign - British Columbia, Canada 7/7/86
Koret Outlet Stores, Inc. - 100% Owned - Domestic - Delaware 5/4/01
1
KWD Holdings, Inc. - 100% Owned - Domestic - Delaware - Holding Company 04/13/88
------------------
▇▇▇▇ ▇▇ Manufactura, S.A. de C.V. - 100% Owned - Foreign - Mexico
KW Apparel, S.A. de C.V. - 100% Owned - Foreign - El Salvador - Garment Mfgs. (Sportswear) 09/27/95
------------------------
Kellwood Asia Limited - 100% Owned - Foreign - Hong Kong - Holding Company 06/06/72
---------------------
Arden Fabrics Limited - 100% Owned - Foreign - Hong Kong - Trading/Property Investment 05/01/84
Bluet Investment Co. Ltd. - 100% Owned - Foreign - Hong Kong - Holding Company 08/18/78
CEO (Jilin) Garment Company, Ltd. - 100% Owned - Foreign - China - Garment Mfgs. 02/20/93
Diplom Limited - 100% Owned - Foreign - Hong Kong - Garment Mfgs. 01/08/88
Altair Internacional, S.A. - 100% Owned - Foreign - Costa Rica - Garment Mfgs. -
Inactive 04/19/74
▇.▇. Confecciones A.M., S.A. - 100% Owned - Foreign - Costa Rica - Garment Mfgs. -
Inactive 06/20/86
▇▇▇ ▇▇▇▇ and Company Ltd. - 100% Owned - Foreign - Hong Kong - Garment Mfgs. 01/30/70
Smart Shirts Limited - 100% Owned - Foreign - Hong Kong - Holding Company 12/12/69
--------------------
Greenland Garments Limited - 100% Owned - Foreign - Hong Kong - Exporter 10/31/59
National Garments Manufacturing (Pte.) Limited - 50% Owned - Foreign - Singapore -
Garment Mfgs. 07/23/99
P.T. National Garments Bintan - 100% Owned - Foreign - Bintan
SGF (Textiles Processing) Pte. Ltd. - 100% Owned - Foreign - Singapore
P.T. SGF (Indonesia) - 100% Owned - Foreign - Indonesia
Smart Shirts Manufacturers, Limited - 100% Owned - Foreign - Hong Kong -
-----------------------------------
Garment Mfgs. 03/28/56
▇.▇. Garment (Phils.), Inc. - 100% Owned - Foreign - Philippines
▇▇▇▇▇ International Inc. - 100% Owned - Foreign - Philippines
Smart Shirts Manufacturers (Singapore) Ltd. - Foreign - Singapore
------------------------------------------
South Asia Garments Limited - 100% Owned - Foreign - Hong Kong - Exporter 08/28/59
---------------------------
Smart Shirts (Lanka) Limited - 100% Owned - Foreign - Sri Lanka -
Garment Mfgs. 06/16/78
Smart Shirts Trading (Private) Ltd. - 100% Owned - Foreign - Sri Lanka
-----------------------------------
Utex Textiles Limited - 100% Owned - Foreign - Hong Kong 02/24/81
Smart Shirts (Shenzhen) Co., Ltd. - 100% Owned - Foreign - China - Garment Mfgs. 12/30/92
Utex Smart Shirts Garment Manufacturers (Shenzhen) Co., Ltd. - 100% Owned - Foreign -
China
Kellwood del Sureste - 100% Owned - Foreign - Mexico (Sportswear) 09/06/00
Kellwood Manufactura, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Lingerie) 04/21/99
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. - 100% Owned - Foreign - Quebec, Canada - Inactive 09/93
KWD Mexico, S.A. de C.V. - 100% Owned - Foreign - Mexico - Garment Mfgs. (Lingerie) 03/12/99
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ Outlet Stores, Inc. - 100% Owned - Domestic - Delaware - Retail Sales 08/23/90
-----------------------------------------------
Tri-W Corporation - 100% Owned - Domestic - North Carolina - Property Management 09/23/49
-----------------
2
SCHEDULE 5.16
INTELLECTUAL PROPERTY MATTERS
No Exceptions
1
SCHEDULE 7.01
EXISTING LIENS
MATURITY
DEBTOR AMOUNT RATE DATE CREDITOR
---------------------------- ------------------ -------------- -------------- ----------------------
CAPITALIZED LEASES: **
--------------------------------------------------
Kellwood Company 603,180 8.00% ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇
------------------
Total Capitalized Leases $603,180
** NOTE: ALL OF THE CAPITALIZED LEASES ARE SECURED BY THE PROPERTY LEASED
1
SCHEDULE 7.02
EXISTING INVESTMENTS
1. Refer to the items listed in Schedule 5.13 which is incorporated
herein.
2. Cash and Marketable Securities as of March 31, 2002 were $25
million, invested through Bank One.
1
SCHEDULE 7.03
EXISTING INDEBTEDNESS
O/S LINE OF MATURITY
DEBTOR AMOUNT CREDIT DATE CREDITOR
-------------------------------------- ------------------ ------------------ --------------- -----------------
REGIONAL LINES
----------------------------------------------------------
Kellwood Company $0 10,000,000 Banca di Roma
Kellwood Company 0 15,000,000 Banca Nazionale delLavoro
Kellwood Company 0 10,000,000 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Kellwood Company 0 10,000,000 US Bank
Kellwood Company 0 5,000,000 UMB Bank St. Louis
------------------ ------------------
$0 $50,000,000
COMMITTED FACILITIES - LOANS
----------------------------------------------------------
Kellwood Company $0 $350,000,000 8/27/2002 Bank of America - Lead Arranger
Canadian Recreation Products 6,772,000 11,000,000 8/27/2002 The Bank of Nova Scotia
West Coast Apparel 1,866,000 5,000,000 8/27/2002 The Bank of Nova Scotia
------------------
$8,638,000
------------------
Smart Shirts $0 $6,000,000 Bank of America
Smart Shirts 0 6,500,000 BNP
Smart Shirts 0 12,800,000 Chekiang First Bank
Smart Shirts 0 4,500,000 HongKong Bank
National Garment (50%) 500,000 2,650,000 Standard Chartered Bank
------------------ ------------------
$500,000 $32,450,000
▇▇▇▇▇ ▇▇▇▇▇, Inc. $56,000 4/4/2005 Navistar Financial
Kellwood Company 921,647 1/30/2003 IBM
------------------
Total Short Term Debt $10,115,647
COMMITTED FACILITIES - LETTERS OF CREDIT
----------------------------------------------------------
Kellwood Company $58,860,897 $200,000,000 8/27/2002 Bank of America - Lead Arranger
Canadian Recreation Products 1,587,965 11,000,000 8/27/2002 The Bank of Nova Scotia
West Coast Apparel 231,087 5,000,000 8/27/2002 The Bank of Nova Scotia
------------------
$60,679,949
------------------
1
Smart Shirts $1,100,000 $6,000,000 Bank of America
Smart Shirts 0 6,500,000 BNP
Smart Shirts 7,600,000 12,800,000 Chekiang First Bank
Smart Shirts 400,000 4,500,000 HongKong Bank
National Garment (50%) 2,650,000 Standard Chartered Bank
Kellwood Company 3,900,000 3,900,000Stand-By Mizuho (IBJ)
------------------ ------------------
$13,000,000 $36,350,000for W/C
Total Letters of Credit $73,679,949
SENIOR DEBT
----------------------------------------------------------
Kellwood Company $133,281,000 10/15/2017 Public Debentures
Kellwood Company 139,901,000 7/15/2009 Public Senior Notes
Kellwood Company 1,875,000 12/1/2002 Prudential
Kellwood Company 4,286,250 12-01-04 Variable Annuity Life
Kellwood Company 4,286,250 12-01-04 Allstate Life Ins Co.
Kellwood Company 2,857,500 12-01-04 Principal Mutual
Kellwood Company 8,888,890 9-01-05 Teachers Insurance & Annuity
Kellwood Company 5,000,000 12-01-02 Equitable Variable
Kellwood Company 5,000,000 12-01-02 Equitable Assurance
Kellwood Company 10,000,000 12-01-03 Equitable Assurance
Kellwood Company 10,000,000 12-01-03 Principal Mutual
------------------
Total Senior Debt $325,375,890
CAPITALIZED LEASES: *
------------------------------------------------------------
Kellwood Company $603,180 2004 Hawthorn Properties
-----------------
St. Louis, MO
Total Capitalized Leases $603,180
Total Indebtedness** $336,094,717
Total Letters of Credit $73,679,949
* NOTE: ALL OF THE CAPITALIZED LEASES ARE SECURED BY THE PROPERTY LEASED
** NOTE: TOTAL DOES NOT INCLUDE E L/CS
2
SCHEDULE 7.06
EXISTING MATERIAL LEASES
LOCATION 2002 2003 2004 2005 2006 AFTER TOTAL
------------------------------------ -------------- ------------ ------------ ------------ ------------- ---------- -----------
Total Sportswear
------------------------------------
▇▇▇▇▇▇▇▇▇ Associates - Sag Harbor 846,483 141,080 0 0 0 0 987,563
1350 LLC- Slates 270,297 270,297 90,100 0 0 0 630,694
Magnolia Assoc.- NY Tower 45 1,068,132 1,068,132 534,066 0 0 0 2,670,330
ElSalvador/▇▇▇▇ ▇▇▇▇▇▇ San ▇▇▇▇▇▇▇ 117,950 0 0 0 0 0 117,950
One Stop Contracting 837,641 837,641 837,641 837,641 837,641 767,833 4,956,038
1411 Trizechahn Swig LLC 352,830 0 0 0 0 0 352,830
Total Lingerie
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ - ▇▇ 525,434 527,865 560,841 502,323 511,878 42,723 2,671,064
▇▇▇ ▇. ▇▇▇▇▇ - ▇▇ (▇▇▇▇▇▇ Living
Trust) 348,336 348,336 58,056 0 0 0 754,728
▇▇▇▇ ▇. ▇▇▇▇▇ - ▇▇ (▇▇▇ ▇▇▇▇▇▇ ▇▇.) 182,016 182,016 91,008 0 0 0 455,040
Choloma, Honduras, Zip Choloma
Ind. Prk 295,956 295,956 295,956 295,956 0 0 1,183,824
Motul Yucatan, Mexico 468,132 468,132 468,132 156,000 0 0 1,560,396
Biflex - ▇▇▇▇▇ 378,075 378,075 378,075 0 0 0 1,134,225
Total DDDG/Democracy
------------------------------------
▇▇▇▇▇▇ / Brauler 262,000 0 0 0 0 0 262,000
Sweet Sixteen- Santa Monica, CA 200,074 200,074 83,365 0 0 0 483,513
Total Koret
------------------------------------
NY Sales Office 271,000 271,000 287,937 291,325 291,325 704,035 2,116,622
NY Sales Office - Melrose 115,100 115,100 67,142 0 0 0 297,342
Napa Plant 446,329 451,909 479,804 479,804 503,794 2,331,798 4,693,438
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 1,145,028 1,145,028 1,269,488 1,294,380 1,294,380 2,804,490 8,952,794
Chico Distribution Center 1,083,712 363,440 0 0 0 0 1,447,152
Chico Outlet Warehouse 132,000 132,000 132,000 55,000 0 0 451,000
Chico Outlet Warehouse 100,800 33,600 0 0 0 0 134,400
1155 Pineridge-Norfolk VA. 325,000 340,000 355,000 370,000 385,000 1,390,000 3,165,000
New York, NY (15th floor) 192,500 192,500 48,125 0 0 0 433,125
New York, NY (11th floor) 228,000 228,000 76,000 0 0 0 532,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. 548,866 564,548 564,548 329,320 0 0 2,007,283
▇▇▇▇ ▇▇▇▇ ▇▇▇ North 196,224 196,224 196,224 196,224 171,696 0 956,592
Oakridge Store 106,405 53,202 0 0 0 0 159,607
1
Total Dorby Frocks
------------------------------------
▇▇▇ ▇▇▇ ▇▇▇, ▇▇ 427,760 427,760 392,113 0 0 0 1,247,633
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ 207,338 0 0 0 0 0 207,338
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ 240,293 220,268 0 0 0 0 460,561
Total E-N-C
------------------------------------
New York - G. Holding Corp. 108,480 45,200 0 0 0 0 153,680
California Mart 119,940 119,940 119,940 0 0 0 359,820
Total Kellwood New England
------------------------------------
Brockton - Northern Isles 734,400 734,400 795,600 795,600 795,600 795,600 4,651,200
Emme - Sportswear 238,430 0 0 0 0 0 238,430
▇▇▇▇▇ ▇▇▇▇▇ Showroom - Lechar Realty 137,399 125,949 0 0 0 0 263,348
BB / 1411 Trizechahn 366,083 366,083 366,083 366,083 183,042 0 1,647,374
Total Halmode
------------------------------------
Insignia - ▇▇▇ ▇. ▇▇▇▇ (NY, NY) 376,620 387,919 399,445 342,220 0 0 1,506,204
Helmsley Spear - ▇▇▇▇ ▇▇▇▇▇▇▇▇ - NY 605,790 605,790 605,790 353,377 0 0 2,170,747
Total Vintage Blue
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇- ▇▇▇ ▇▇▇▇, ▇▇. 214,107 124,894 0 0 0 0 339,001
Total American Recreation Products
-------------------------------------
New Haven, MO - Chamber of Comm 100,278 33,426 0 0 0 0 133,704
St. Louis, MO - Fernridge Pkwy 346,224 373,440 395,538 400,000 233,333 0 1,748,535
Plattsburg, NY / PARC 380,000 316,667 0 0 0 0 696,667
Olymbec - 8515 Pl. Devonshire 247,603 0 0 0 0 0 247,603
D'Alfen's, Ltd. - Warehouse 178,752 178,752 0 0 0 0 357,504
Total Kellwood Western Region Center
---------------------------------------
The Realty Fund IV - East Temple 2,274,696 2,431,083 2,445,300 2,536,998 2,628,696 2,847,754 15,164,527
The Realty Fund IV - Buildings A & B 432,393 460,173 460,173 268,434 0 0 1,621,173
▇▇▇▇▇▇
------------------------------------
New York, NY Showroom 373,036 436,720 436,720 363,933 0 0 1,610,409
Total Smart Shirts
------------------------------------
Sri Lanka 275,650 304,295 304,295 53,418 53,418 53,418 1,044,494
Hong Kong 264,646 90,075 0 0 0 0 354,721
China 745,280 725,000 691,800 115,260 0 0 2,277,340
Philippines 150,517 155,187 45,083 0 0 0 350,787
2
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
KELLWOOD COMPANY
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department/Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇_▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
BANK OF AMERICA
Administrative Agent's Office and Bank of America's Lending Office
------------------------------------------------------------------
(for payments and Requests for Credit Extensions):
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Account No: 1366212250600
Ref: Kellwood Company
ABA # ▇▇▇▇▇▇▇▇▇
Other Notices as Administrative Agent:
--------------------------------------
Bank of America, N.A.
Agency Management
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, AMO
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
1
▇▇ ▇▇▇▇▇▇ CHASE BANK
Credit Contact Information:
--------------------------
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Operations Contact Information:
------------------------------
▇▇ ▇▇▇▇▇▇ Chase Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Tio, Assistant Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇.▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
L/C Contact Information:
-----------------------
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: klaus.▇.▇▇▇▇▇▇▇.@▇▇▇▇▇.▇▇▇
Wire Transfer Instructions:
--------------------------
▇▇ ▇▇▇▇▇▇ Chase Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA #▇▇▇▇▇▇▇▇▇
Account No.: Commercial Loan Operations #9420
Reference: Kellwood Company
2
U.S. BANK NATIONAL ASSOCIATION
Requests for Credit Extensions:
------------------------------
U.S. Bank National Association
One ▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: ▇▇-▇▇-12MP
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Account No. 00018642160600
Ref: Kellwood Company
ABA# ▇▇▇▇▇▇▇▇▇
Notices (other than Requests for Credit Extensions):
---------------------------------------------------
U.S. Bank National Association
One ▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: ▇▇-▇▇-12MP
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
THE BANK OF NOVA SCOTIA
Credit Contact Information:
--------------------------
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
Operations and L/C Contact Information:
--------------------------------------
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mystro ▇▇▇▇▇▇▇, Loan Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
3
Fed Wire Payment Instructions:
-----------------------------
The Bank of Nova Scotia - New York Agency
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
Account No.: ▇▇▇▇▇▇▇
Account Name: The Bank of Nova Scotia - Atlanta Agency
Reference: Kellwood Company
Attention: Chicago Team
L/C Fed Wire Payment Instructions:
---------------------------------
The Bank of Nova Scotia - New York Agency
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
Account No.: ▇▇▇▇▇▇▇
Account Name: The Bank of ova Scotia - Atlanta Agency
Reference: Kellwood Company
Attention: Chicago Team
BANK ONE, NA
Credit Contact Information:
--------------------------
Bank One, NA
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: IL1-0173
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
4
Wire Transfer Instructions:
--------------------------
Bank One NA
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: IL1-0088
Attn: ▇▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
e:mail: ▇▇▇▇▇▇_▇_▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Account#: 481152860000
Account Name: LS2 Incoming Acct.
Ref: Kellwood Company
ABA # ▇▇▇▇▇▇▇▇▇
MIZUHO CORPORATE BANK, LTD.
Lending Office:
--------------
Mizuho Corporate Bank, Ltd.
95 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Drive, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: 232988 DK
Administrative Contact Information:
----------------------------------
Mizuho Corporate Bank, Ltd.
95 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Drive, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇▇▇▇-▇▇.▇▇▇
Wire Transfer Instructions:
--------------------------
Mizuho Corp Bank Broadway Branch-DKB
ABA #▇▇▇▇▇▇▇▇▇
Account No.: H10-740-014132
Attention: Loan Operations Department
Reference: Kellwood Company
5
Notices (other than Requests for Credit Extensions):
---------------------------------------------------
Mizuho Corporate Bank, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇▇▇▇-▇▇.▇▇▇
THE BANK OF NEW YORK
Lending Office:
--------------
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Wire Transfer Instructions:
--------------------------
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ #▇▇▇▇▇▇▇▇▇
Special Financial Products Department
Account No.: 8033297689
Reference: Kellwood Company
Administrative Contact Information:
----------------------------------
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
6
UMB BANK, NATIONAL ASSOCIATION
Credit Contact Information:
--------------------------
UMB Bank, National Association
#▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇.▇▇▇
Credit Contact Information:
--------------------------
UMB Bank, National Association
#▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇.▇▇▇▇▇▇@▇▇▇.▇▇▇
Operations Contact Information:
------------------------------
UMB Bank, National Association
#▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇-▇▇▇▇▇▇@▇▇▇.▇▇▇
L/C Contact:
-----------
UMB Bank, National Association
#▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇. Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇@▇▇▇.▇▇▇
7
Wire Transfer Instructions:
--------------------------
UMB Bank, National Association
St. Louis, MO (Kansas City, MO)
ABA #▇▇▇▇▇▇▇▇▇
Account No.: 000106002265000
Reference: Kellwood Company
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
FIRST BANK
Credit Contact Information:
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Operations Contact Information:
------------------------------
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
Wire Transfer Instructions:
--------------------------
First Bank
St. Louis, MO
ABA #: ▇▇▇▇▇▇▇▇▇
Account No.: N/A
Reference: Kellwood Company
Attention: ▇▇▇▇ ▇▇▇▇▇
8
ISRAEL DISCOUNT BANK OF NEW YORK
Lending Office:
--------------
Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Wire Transfer Instructions:
--------------------------
Israel Discount Bank of New York
ABA #▇▇▇▇▇▇▇▇▇
Account No.: ▇▇▇▇▇▇▇ 01621 (Accounts Payable - Loan Dept.)
Reference: Kellwood
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Notices (other than Requests for Credit Extensions):
---------------------------------------------------
Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
9
EXHIBIT A
FORM OF REVOLVING LOAN NOTICE
Date: ,
----------- -----
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
April 30, 2002 as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
---------
therein being used herein as therein defined), among Kellwood Company, a
Delaware corporation (the "Borrower"), the Lenders from time to time party
--------
thereto, Bank of America, N.A., as Administrative Agent, JPMorgan Chase
Bank, as Syndication Agent, and US Bank and The Bank of Nova Scotia, as
Co-Documentation Agents.
The undersigned hereby requests (select one):
| | A Borrowing of Loans | | A Conversion of Loans
| | A Continuation of Loans
1. On , 20 (a Business Day).
------------------ --- ---
2. In the amount of (Please denote amount
--------------------
in currency selected below). (Note: Minimum of the Dollar Equivalent Amount of
$5,000,000 and multiples of the Dollar Equivalent Amount of $1,000,000 for
Offshore Rate Loans; minimum of the Dollar Equivalent Amount of $500,000 and
multiples of the Dollar Equivalent Amount of $100,000 for Base Rate Loans,
except for Borrowings used solely to pay Unreimbursed Amounts pursuant to
Section 2.03 of the Agreement).
------------
3. Comprised of: | | Base Rate Loan
| | Offshore Rate Loan
4. For Offshore Rate Loans: with an Interest Period of
months.
----------
5. Currency: | | U.S. Dollars | | Offshore Currency:
| | Euro
| | Japanese Yen
| | Hong Kong Dollars
The Borrowing requested herein complies with the proviso to the
first sentence of Section 2.01 of the Agreement.
------------
A-1
The matters set forth in Section 4.02(a) and (b) are true, correct
-----------------------
and complete as of the date hereof and with respect to the requested Credit
Extension.
KELLWOOD COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
A-2
EXHIBIT B
FORM OF REVOLVING LOAN NOTE
Date: ,
---------- -----
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby
--------
promises to pay to the order of (the
-----------------------------
"Lender"), on the Maturity Date (as defined in the Credit Agreement referred
------
to below) the Lender's Commitment, or such lesser principal amount of
Revolving Loans (as defined in such Credit Agreement) due and payable by the
Borrower to the Lender on the Maturity Date under that certain Credit
Agreement, dated as of April 30, 2002 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein
---------
defined), among the Borrower, the Lenders from time to time party thereto,
Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, as
Syndication Agent, and US Bank and The Bank of Nova Scotia, as
Co-Documentation Agents.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Loan from the date of such Revolving Loan until
such principal amount is paid in full, at such interest rates, and at such
times as are specified in the Agreement. All payments of principal and
interest shall be made to the Administrative Agent for the account of the
Lender in Dollars or the Offshore Currency in which such Revolving Loan was
advanced, in Same Day Funds at the Administrative Agent's Office. If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date
of actual payment (and before as well as after judgment) computed at the
Default Rate.
This Note is one of the Revolving Loan Notes referred to in the
Agreement, is entitled to the benefits thereof and is subject to optional
prepayment in whole or in part as provided therein. Upon the occurrence of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Revolving
Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The
Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Revolving Loans and payments with respect
thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
B-1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
KELLWOOD COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
B-2
REVOLVING LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OUTSTANDING
CURRENCY END OF OR INTEREST PRINCIPAL
TYPE OF IN WHICH AMOUNT OF INTEREST PAID THIS BALANCE THIS
DATE LOAN MADE LOAN MADE LOAN MADE PERIOD DATE DATE NOTATION MADE BY
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B-3
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ,
------------- ---
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
April 30, 2002 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
---------
therein being used herein as therein defined), among Kellwood Company, a
Delaware corporation (the "Borrower"), the Lenders from time to time party
--------
thereto, Bank of America, N.A., as Administrative Agent, JPMorgan Chase
Bank, as Syndication Agent, and US Bank and The Bank of Nova Scotia, as
Co-Documentation Agents.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the of the Borrower,
-------------------------------
and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and
that:
[Use following for fiscal YEAR-END financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
----------
statements required by Section 6.01(a) of the Agreement for the fiscal year
---------------
of the Borrower ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such
section.
[Use following for fiscal QUARTER-END financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial
----------
statements required by Section 6.01(b) of the Agreement for the fiscal
---------------
quarter of the Borrower ended as of the above date. Such financial
statements fairly present the financial condition, results of operations and
cash flows of the Borrower and its Subsidiaries in accordance with GAAP as
at such date and for such period, subject only to normal, recurring year-end
audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of
the Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial
or otherwise) of the Borrower during the accounting period covered by the
attached financial statements.
3. A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
C-1
[select one:]
[to the best knowledge of the undersigned during such fiscal
period, the Borrower performed and observed each covenant and condition of
the Loan Documents applicable to it.]
--or--
[the following covenants or conditions have not been performed or
observed and the following is a list of each such Default or Event of
Default and its nature and status:]
4. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of
----------
this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of , .
------------------------ ---------------
KELLWOOD COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
C-2
SCHEDULE 2
to the Compliance Certificate
I. SECTION 7.02(h) - INVESTMENTS
A. Total Investments made during the fiscal quarter ending on the above date
(the "Determination Date") $
--------
B. Total Investments made from the Closing Date through the fiscal quarter
immediately prior to the fiscal quarter ending on the Determination Date $
--------
C. Sum of I.A. plus I.B. $
--------
REQUIRED: I.C. may not exceed $25,000,000
II. SECTION 7.03(i) - OTHER INDEBTEDNESS
A. Aggregate principal amount of Indebtedness not otherwise permitted under
clauses (a) through (h) of Section 7.03 outstanding on the Determination Date $
--------
B. 15% of Consolidated Net Tangible Assets on the Determination Date
$
--------
REQUIRED: II.A. must not exceed the lesser of (i) $150,000,000 or (ii) II.B.
III. SECTION 7.05 - DISPOSITIONS
A. Aggregate amount of Dispositions of worn out or obsolete property from
the Closing Date to the Determination Date $
--------
B. Aggregate gross book value of equipment or real property disposed of during
the fiscal year in which the Determination Date occurs $
--------
C. Aggregate gross book value of property subject to a sale-leaseback
transaction from the Closing Date to the Determination Date $
--------
D. Aggregate amount of Accounts disposed of from the Closing Date to the
Determination Date $
--------
Required: III.A. may not exceed $5,000,000
III.B. may not exceed $10,000,000
III.C. may not exceed $25,000,000
III.D. may not exceed $750,000
C-3
IV. SECTION 7.13(a) - CONSOLIDATED NET WORTH.
A. Shareholders Equity as of the end of the fiscal quarter ending on the
Determination Date $
--------
B. Consolidated Net Income for the fiscal quarter ending on the Determination
Date $
--------
C. Increase in Shareholders' Equity from issuance and sale of capital stock $
--------
D. Sum of IV.B. and IV.C. multiplied by 50% $
--------
E. Amount of minimum Consolidated Net worth required as of the end of the
fiscal quarter ended prior to the Determination Date $
--------
F. Aggregate amount of Permitted Capital Stock Repurchases from the Closing
Date to the Determination Date $
--------
G. Amount of IV.D. plus IV.E. minus IV.F. $
--------
Required: On the Closing Date IV.A. must be no less than $388,000,000 and on any
Determination Date thereafter IV.A. must be greater than IV.G.
V. SECTION 7.13(b) -FIXED CHARGE COVERAGE RATIO.
A. Consolidated EBITDA for four consecutive fiscal quarters ending on above
date ("Subject Period"):
--------------
1. Consolidated Net Income for Subject Period
(Including $ in Acquisition Adjustments): $
------------ --------
2. Consolidated Interest Charges for Subject Period
(Including $ in Acquisition Adjustments): $
------------ --------
3. Provision for income taxes for Subject Period: $
--------
4. Depreciation expenses for Subject Period: $
--------
5. Amortization expenses for Subject Period: $
--------
6. Add back for plant closings $
--------
7. Consolidated EBITDA (Lines V.A.1 + 2 + 3 + 4 + 5 + 6): $
--------
B. Fixed Charges for Subject Period:
Consolidated Interest Charges (Including
$ in Acquisition Adjustments): $
------------ --------
Principal payable during Subject Period $
--------
Restricted Payments during Subject Period $
--------
TOTAL $
--------
C. Cash taxes (other than Permitted
Pension Plan Liability) for Subject Period: $
--------
C-4
D. Line V.A.7. - Line V.C.: $
--------
E. Fixed Charge Coverage Ratio (Line V.D. / Line V.B.): to 1.00
------
Minimum required: See Section 7.13(b)
VI. SECTION 7.13(c) - LEVERAGE RATIO.
A. Consolidated EBITDA for Subject Period (Line V.A.7. above): $
--------
B. Consolidated Funded Indebtedness at Statement Date: $
--------
C. Leverage Ratio (Line VI.B. / Line VI.A.): to 1.00
------
Maximum permitted: See Section 7.13(c)
C-5
VII. SECTION 7.14 - ACQUISITIONS.
A. Total consideration for all Acquisitions
during the current Loan Year: $
--------
B. Total Non-Equity Consideration for all Acquisitions
during the current Loan Year: $
--------
C. Permitted Carryover Amount from prior Loan Year
(zero for the first Loan Year), multiplied by 50% $
--------
D. Maximum Non-Equity Consideration for current
Loan Year ($75,000,000 + VII.C.) $
--------
REQUIRED: VII.B. must not exceed VII.D.
VIII. SECTION 7.15 - CAPITAL EXPENDITURES (YEAR END ONLY).
A. Capital Expenditures for most recently ended
fiscal year (the "Subject Year"): $
--------
B. Capital Expenditures for the fiscal year immediately
preceding the Subject Year: $
--------
C. Amount carried forward from fiscal year immediately
preceding the Subject Year ($30,000,000* - VIII.B. x 50%) $
--------
D. Maximum permitted Capital Expenditures in Subject
Year ($30,000,000* + VIII.C.) $
--------
REQUIRED: VIII.A. must not exceed VIII.D.
* Read as $35,000,000 if ABC Childrenswear Acquisition has been consummated
C-6
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "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 (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, the
interest in and to all of the Assignor's rights and obligations under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto that represents the amount and percentage interest identified below
of all of the Assignor's outstanding rights and obligations under the
respective facilities identified below (including, without limitation,
Letters of Credit included in such facilities and, to the extent permitted
to be assigned under applicable law, all claims (including, without
limitation, contract claims, tort claims, malpractice claims and all other
claims at law or in equity, including claims under any law governing the
purchase and sale of securities or governing indentures pursuant to which
securities are issued), suits, causes of action and any other right of the
Assignor against any other Person) (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: [which is a
------------------------------
Lender/Affiliate/Approved Fund of
[identify Lender](1)]
3. Borrower(s):
------------------------------
4. Administrative Agent: Bank of America, N.A., as the Administrative
Agent under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of
, 2002, among Kellwood
---------------
Company, the Lenders parties thereto, Bank
of America, N.A., as Administrative
Agent, JPMorgan Chase Bank, as Syndication
Agent,and US Bank and The Bank of
Nova Scotia, as Co-Documentation Agents
---------
(1) Select as applicable.
D-1
6. Assigned Interest:
---------------------------------------------------------------------------------------------------------
Aggregate Amount of Amount of Commitment/Loans Percentage Assigned of
Commitment/Loans for all Lenders* Assigned (2) Commitment/Loans(3)
--------------- -------- -----------------
---------------------------------------------------------------------------------------------------------
$ $ %
---------------- ---------------- --------------
---------------------------------------------------------------------------------------------------------
$ $ %
---------------- ---------------- --------------
---------------------------------------------------------------------------------------------------------
$ $ %
---------------- ---------------- --------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
[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:
---------
(2) 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.
D-2
[Consented to and] (5) Accepted:
BANK OF AMERICA, N.A., as
Administrative Agent, L/C Issuer
By:
------------------------------------
Title:
[Consented to:] (6)
[KELLWOOD COMPANY]
By:
------------------------------------
Title:
---------
(5) To be added only if the consent of the Administrative Agent, L/C
Issuer is required by the terms of the Credit Agreement.
(6) To be added only if the consent of the Borrower and/or other
parties (e.g., L/C Issuer) is required by the terms of the Credit
Agreement.
D-3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
Credit Agreement, dated as of , 2002, among Kellwood Company,
-------------
the Lenders parties thereto, Bank of America, N.A., as Administrative Agent,
JPMorgan Chase Bank, as Syndication Agent, and US Bank and The Bank of
Nova Scotia, as Co-Documentation Agents
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 Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any
Loan Document or (iv) the performance or observance by the Borrower, any of
its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan 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, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 6.01 thereof, as applicable, 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 or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed
by the Assignee; 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 Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender.
D-4
1.3. Assignee's Address for Notices, etc. Attached hereto as
------------------------------------
Schedule 1 is all contact information, address, account and other
administrative information relating to the Assignee.
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 Assignee whether such amounts have accrued prior to or on or after
the Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly
between themselves.
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.
D-5
SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION
ADMINISTRATIVE DETAILS
(Assignee to list names of credit contacts, addresses,
phone and facsimile numbers, electronic mail addresses
and account and payment information)
D-6
EXHIBIT E
FORM OF OPINION OF COUNSEL
April , 2002
--
Bank of America, N.A., as Agent
and Each Lender Party to the Credit
Agreement Referenced Below
Bank of America ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Kellwood Company
----------------
Ladies and Gentlemen:
We have acted as special counsel for Kellwood Company, a
Delaware corporation (the "COMPANY"), in connection with the preparation,
execution and delivery of the Credit Agreement and the other Loan Documents
(hereinafter defined). This opinion is furnished to you pursuant to Section
4.01(a)(vi) of the Credit Agreement. Capitalized terms used herein and not
otherwise defined herein have the meanings provided in the Credit Agreement.
The documents we have examined in rendering this opinion
are solely the following:
(i) The following, collectively called the "LOAN
DOCUMENTS":
(a) the Credit Agreement (the "CREDIT
AGREEMENT"), dated as of the date hereof, among the
Company, the lenders from time to time party thereto (the
"LENDERS"), Bank of America, N.A., as Administrative Agent
(the "AGENT"), Banc of America Securities LLC, a Sole Lead
Arranger and Sole Book Manager, JPMorgan Chase Bank, as
Syndication Agent, US Bank and The Bank of Nova Scotia as
Co-Documentation Agents; and
(b) the Notes, dated as of the date hereof,
issued by the Company and delivered pursuant to the Credit
Agreement;
(c) the Subordination Agreement, dated as of the
date hereof, among the Company, various subsidiaries of
the Company and the Agent.
E-1
(ii) A certificate of the Secretary of the Company
certifying as to and attaching copies of (A) the certificate of
incorporation and by-laws of the Company (the "BASIC DOCUMENTS"),
and (B) resolutions adopted by the Board of Directors of the
Company;
(iii) Copies of those indentures, loan or credit
agreements, leases, guarantees, mortgages, security agreements,
bonds, notes and other agreements or instruments, which have been
certified by the Secretary of the Company as those documents which
affect or purport to affect the Company's right to borrow money or
to undertake and perform its obligations under the Loan Documents
(the "OTHER AGREEMENTS"); and
(iv) A certificate of the Secretary of State of Delaware,
dated April , 2002, attesting to the continued corporate
--
existence and good standing of the Company in that state.
As to factual matters relevant to our opinions expressed
below, we have, without independent investigation, relied upon all of the
foregoing, upon certificates of the officers of the Company and of public
officials, and upon public records.
Based upon and subject to the matters stated herein and
upon such investigation as we have deemed necessary, we are of the opinion
that:
1. The Company is a corporation validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the corporate power to execute,
deliver and perform the terms and provisions of each of the Loan
Documents and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such Loan
Documents.
3. The execution, delivery and performance by the
Company of the Loan Documents, and compliance by the Company with
the terms and provisions thereof, will not (a) violate any
provision of any existing law, statute, rule or regulation
applicable to the Company, (b) result in any breach of, or
constitute a default under, any of the Other Agreements (except
that we express no opinion with respect to compliance with
financial covenants or tests), or (c) result in the creation or
imposition of (or the obligation to create or impose) any Lien
(except for Liens permitted by Section 7.01 of the Credit
Agreement) upon any of the property or assets of the Company
pursuant to the terms of any of the Other Agreements, or (d)
contravene or conflict with the Basic Documents.
4. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with or
exemption by, any governmental or public body or authority, or any
subdivision thereof, (except as may be required to
E-2
be made or obtained by you as a result of your involvement in the
transactions contemplated by the Loan Documents), is required to
authorize, or is required in connection with, the execution and
delivery of any Loan Document by the Company and the performance by
the Company of its obligations thereunder.
5. The Company has duly executed and delivered each of
the Loan Documents and each of such Loan Documents constitutes the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
6. To our knowledge, there are no actions or
proceedings pending or overtly threatened in writing against the
Company before any court, governmental agency or arbitrator which
could affect the legality, validity, binding effect or
enforceability of any of the Loan Documents.
7. The rates of interest to be charged on the
Loans to the Company under the Credit Agreement are not usurious
under the laws of the State of New York.
8. Based on the representations of the Company
contained in the Credit Agreement, the making of the Loans and
issuance of any Letters of Credit do not violate Regulations T, X
or U of the Board of Governors of the Federal Reserve System.
9. A state or federal court located in the State of
New York, if properly presented with the question and applying the
choice of laws rules of the State of New York, would in a properly
reasoned opinion give effect to the provisions of the Loan
Documents providing that the Loan Documents shall be governed by
and construed in accordance with the internal substantive laws of
the State of New York.
10. No documentary, stamp, intangibles, excise or other
tax is payable to any Governmental Authority of the State of New
York in connection with the execution, delivery, enforcement,
recording or filing of any of the Loan Documents, other than court
costs and fees that may be or become payable in connection with the
enforcement of the Loan Documents.
In addition to any assumptions, qualifications and other
matters set forth elsewhere herein, the opinions set forth above are subject
to the following:
(a) For the purposes of this opinion, we have assumed
that all natural persons have legal capacity, all items submitted to us as
originals are authentic and all signatures thereon are genuine, all items
submitted to us as copies conform to the originals and each such original or
copy is complete, and the authenticity of the originals of such copies, and
has been duly executed and delivered by each party (other than the Company)
pursuant to due authorization as such party's legal, valid and binding
obligation, enforceable against such party in accordance with its
E-3
respective terms. As to certain facts material to this opinion which we did
not independent verify, we have relied upon statements and representations
of the Company and its officers and other representatives and of public
officials, including the facts set forth in the Officer's Certificates
attached hereto as Exhibit A.
---------
(b) Our opinion with respect to the legality, validity,
binding effect and enforceability of any document or agreement is subject to
the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar law affecting creditors' rights
generally and to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or
at law); and
(c) We call your attention to the following matters
as to which we express no opinion:
(i) the Company's agreements in the Loan Documents for
payment or reimbursement of costs, fees and expenses or
indemnification for claims, losses or liabilities to the extent any
such provision may be determined by a court or other tribunal to be
in an unreasonable amount, to constitute a penalty or to be
contrary to public policy;
(ii) the Company's agreements in the Loan Documents to
the jurisdiction or venue of a particular court or waiver of jury
trial;
(iii) the ordinances and statutes, the administrative
decisions and orders and the rules and regulations of any
municipality, county or other political subdivision of the State of
New York;
(iv) any of the waivers or remedies contained in the Loan
Documents, whether or not any Loan Document deems any such waiver
or remedy commercially reasonable, if such waivers or remedies are
determined (1) not to be commercially reasonable, (2) to conflict
with mandatory provisions under applicable law, or (3) to be taken
in a manner determined to be unreasonable or not performed in good
faith or with fair dealing or with honesty in-fact; or
(v) certain of the provisions contained in the Loan
Documents may be limited or rendered unenforceable by applicable
laws or judicial decisions governing such provisions or holding
their enforcement to be unreasonable under the then-existing
circumstances, but such laws and judicial decisions do not, in our
opinion, render the Loan Documents invalid as a whole or leave you
without remedies.
Whenever our opinion with respect to the existence or
absence of facts is indicated to be based on our knowledge or awareness, we
are referring solely to the actual knowledge of the particular ▇▇▇▇▇▇▇▇▇,
Will & ▇▇▇▇▇ attorneys who have represented the Company in connection with
the Loan Documents. Except as expressly set forth herein, we have not
undertaken any independent investigation to determine the existence or
absence of such facts
E-4
and no inference as to our knowledge concerning such facts should be drawn
from the fact that such representation has been undertaken by us.
Our opinions expressed herein are limited to the laws of
the State of New York, the General Corporation Law of the State of Delaware
and the federal laws of the United States, and we do not express any opinion
herein concerning any other law.
This opinion is limited to the matters expressly set forth
herein and no opinion is implied or may be inferred beyond the matters
expressly so stated. This opinion is given as of the date hereof and we do
not undertake any liability or responsibility to inform you of any change in
circumstances occurring, or additional information becoming available to us,
after the date hereof which might alter the opinions contained herein.
This opinion may be relied upon by you and by your
successors and assignees. This opinion is furnished solely in connection
with the transactions described above and may not be relied upon by you for
any other purpose or by any person (except as set forth in the immediately
preceding sentence) in any manner or for any purpose.
Very truly yours,
E-5
EXHIBIT F
FORM OF BORROWING BASE CERTIFICATE
BORROWING BASE REPORT
---------------------
For the Fiscal Quarter ending:
note: All amount are shown in thousands of U.S. dollars unless
otherwise indicated.
I, W. ▇▇▇ ▇▇▇▇▇ III, Chief Financial Officer of Kellwood Company,
hereby certify that, to the best of my knowledge and belief, with respect
to that certain Credit Agreement date as of April XX, 2002 among the
Borrower, the Lenders and Bank of America, as Administrative Agent (as
amended, modified, restated or supplemented from time to time, the
"Credit Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference), the figures set forth below are true
and correct.
The amounts reported herein are from the consolidated financial
statements of Kellwood Company and its Subsidiaries for the fiscal
quarter ending on the date set forth above.
ACCOUNTS
--------
1. Accounts net of any reserves for doubtful or uncollectable accounts and
less sales, excise or similar taxes, returns, discounts, claims,
credits and allowances, accrued rebates, offsets and deductions $
------------------
2. (i) Accounts subject to any Lien $
------------------
(ii) Accounts which more than 90 days have elapsed since the date of
the original invoice therefor or which more than 60 days have elapsed
since the original due date. $
------------------
(iii) Accounts owing by an account debtor which is not solvent of is
subject to any bankruptcy or insolvency proceeding or any kind, unless
account debtor is classified as a debtor in possession or with respect
to which 50% or more of the aggregate amount of outstanding Accounts
owing by such account debtor are ineligible under 2(ii) above $
------------------
(iv) Accounts excluded from Eligible Accounts under clauses (d)
through (i) of the definition of "Eligible Accounts" in Section 1.01
of the Credit Agreement. $
------------------
(v) Accounts over the 15% concentration limitation for account debtors
who are unrated or are rated lower than BBB or Baa2 by S&P or ▇▇▇▇▇'▇,
respectively. $
------------------
(vi) Sum of lines (i) through (v) $
------------------
F-1
3. Net Eligible Accounts
(Line 1 less Line 2(vi)) $
------------------
4. Borrowing Base Accounts
(85% of Net Eligible Accounts) $
------------------
RAW MATERIALS INVENTORY*
------------------------
5. Raw materials Inventory (based on a FIFO valuation, consistently
applied) owned by the Borrower and its Subsidiaries less appropriate
reserves determined in accordance with GAAP. $
------------------
6. (i) Raw Materials Inventory subject to any Lien or as to which perfection of a security interest would
not be governed by the UCC; $
------------------
(ii) Raw Materials Inventory outside North America; $
------------------
(iii) Raw Materials Inventory that is not in good condition, is not merchantable or is not salable at
prices approximating at least cost in the normal course of business; $
------------------
(iv) Raw Materials Inventory in-transit from vendors or suppliers, that is not supported by a
commercial or documentary letter of credit; $
------------------
(v) Raw Materials Inventory that is placed on consignment $
------------------
(vi) Total $
------------------
7. Eligible Raw Materials Inventory
(Line 5 less Line 6(vi)) $
------------------
8. Borrowing Base Raw Materials Inventory
(40% of Eligible Raw Materials Inventory) $
------------------
* Without duplication
FINISHED GOODS INVENTORY*
-------------------------
9. Inventory (based on a FIFO valuation, consistently applied) consisting
of all finished goods inventory owned by the Borrower and its
Subsidiaries less appropriate reserves determined in accordance with
GAAP. $
------------------
(i) Inventory subject to any Lien or as to which perfection of a security interest would not be
governed by the UCC; $
------------------
(ii) Inventory outside North America; $
------------------
F-2
(iii) Inventory that is not in good condition, is not merchantable or is not salable at prices
approximating at least cost in the normal course of the Loan Parties' business; $
------------------
(iv) Inventory in-transit from vendors or suppliers, that is not supported by a commercial or
documentary letter of credit; $
------------------
(v) Inventory that is placed on consignment $
------------------
(vi) Total $
------------------
10. Eligible Inventory
(Line 9 less Line 10(vi)) $
------------------
11. Borrowing Base Inventory
(60% of Eligible Accounts Receivable) $
------------------
* Without duplication
DOCUMENTARY LETTERS OF CREDIT
-----------------------------
12. L/C Credit Obligations $
------------------
13. Borrowing Base L/Cs
(60% of L/C Credit Obligations) $
------------------
BORROWING BASE
--------------
14. Borrowing Base assets
(Line 4 plus Line 8 plus Line 11 plus Line 13) $
------------------
15. Senior Notes outstanding $
------------------
16. Adjusted Borrowing Base.
(Line 14 minus Line 15) $
------------------
17. (i) Aggregate amount of outstanding Revolving Loans $
------------------
(ii) Aggregate amount of outstanding Uncommitted Loans $
------------------
(iii) Aggregate amount of outstanding L/C Obligations $
------------------
18. Total deductions from the Borrowing Base assets
(sum of Line 17(i) thru 17(iii)) $
------------------
19. Remaining availability (but not exceeding unused Aggregate Commitments): The difference of Line 16
minus Line 18. $
------------------
F-3
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of , .
----------------- ---------------
KELLWOOD COMPANY
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
F-4
EXHIBIT G
APPOINTMENT/REVOCATION OF RESPONSIBLE OFFICER
Reference is hereby made to the Credit Agreement dated as of April
, 2002 (the "Agreement") among Kellwood Company, a Delaware corporation
---
(the "Borrower"), the Lenders from time to time party thereto, Bank of
--------
America, N.A., as Administrative Agent, JPMorgan Chase Bank, as Syndication
Agent, and US Bank and The Bank of Nova Scotia, as Co-Documentation Agents.
Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Credit Agreement.
The Borrower hereby nominates, constitutes and appoints each
individual named below as an Responsible Officer under the Loan Documents,
and hereby represents and warrants that (i) set forth opposite each such
individual's name is a true and correct statement of such individual's
office (to which such individual has been duly elected or appointed), a
genuine specimen signature of such individual and an address for the giving
of notice, and (ii) each such individual has been duly authorized by the
Borrower to act as Responsible Officer under the Loan Documents:
Name and Address Office Specimen Signature
----------------------------- ----------------- ------------------
Borrower hereby revokes (effective upon receipt hereof by the Agent) the
prior appointment of as an Responsible Officer.
----------------
This the day of , .
--- ------------------ ----
KELLWOOD COMPANY
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
G-1
EXHIBIT H
FORM OF SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated as of April
, 2002, is made by KELLWOOD COMPANY (the "Borrower") and EACH OF THE
---
SUBSIDIARIES OF THE BORROWER signatory hereto or becoming a party hereto
after the date hereof by execution of a Joinder Agreement in the form of
Exhibit A hereto (the "Subordinated Creditors") in favor of BANK OF AMERICA,
---------
N.A., as Administrative Agent (the "Administrative Agent") for each of the
Lenders party to the Credit Agreement defined below. All capitalized terms
not otherwise defined herein shall have the meanings given to such terms in
the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and the Lenders are
party to that certain Credit Agreement of even date herewith (as amended,
supplemented or replaced from time to time, the "Credit Agreement") pursuant
to which the Lenders have made available to the Borrower a revolving credit
facility evidenced by certain promissory notes (as amended, supplemented or
replaced from time to time, being the "Senior Notes"); and
WHEREAS, the Borrower is and may from time to time become indebted
to the Subordinated Creditors as a consequence of intercompany advances,
which indebtedness, along with all indebtedness and other obligations of the
Borrower to the Subordinated Creditors, including interest thereon, and all
other amounts payable in respect thereof or in connection therewith or any
instrument securing any of the foregoing are hereinafter referred to as the
"Subordinated Debt"; and
WHEREAS, the Lenders are unwilling to enter into the Credit
Agreement unless the Borrower and the Subordinated Creditors execute this
Agreement to subordinate the Subordinated Debt to the obligations of the
Borrower to the Administrative Agent and the Lenders.
NOW, THEREFORE, in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Subordinated Creditors and the Borrower hereby
agree as follows:
1. Agreement to Subordinate. (a) Except as provided herein, the
------------------------
Subordinated Creditors and the Borrower agree that, notwithstanding any lien
or interest of the Subordinated Creditors now existing or hereafter arising,
and notwithstanding the time, order or method of attachment, perfection,
filing or recording of any security interest or lien or document related
thereto, the Subordinated Debt is and shall be subordinate in right of
payment to the prior payment in full of all existing or hereafter arising
obligations of the Borrower to the Administrative Agent and the Lenders
under the Credit Agreement and the other Loan Documents (as defined in the
Credit Agreement) whether for principal, interest (including
H-1
without limitation interest accruing after the filing of a petition
initiating any bankruptcy or similar type proceeding whether or not such
interest accrues after the filing of such petition for purposes of the
Bankruptcy Code or is an allowed claim in such proceeding), fees, expenses
or otherwise (such obligations, including any renewals, refinancings or
restructurings thereof, being the "Senior Obligations"). For the purposes of
this Agreement, the Senior Obligations shall not be deemed to have been paid
in full until and unless the Administrative Agent and the Lenders shall have
received payment of all Senior Obligations in full in cash and the Credit
Agreement shall have terminated.
(b) Each Subordinated Creditor further agrees to and does hereby
fully subordinate to the Administrative Agent and the Lenders all liens,
security interests or other rights and interests, whether now existing or
hereafter acquired by any Subordinated Creditor in any assets or property of
the Borrower, whether now owned or hereafter acquired by the Borrower and
all proceeds, including insurance proceeds, of any such assets or property.
So long as the Administrative Agent or any Lender is owed any Senior
Obligation, no Subordinated Creditor will attempt to exercise any collection
rights with respect to, foreclose or otherwise realize on, or take
possession or otherwise deal with, such assets or property. If any
Subordinated Creditor shall foreclose or realize on, or otherwise receive or
come into possession of, any such assets or property in violation of the
terms hereof, it shall promptly deliver such assets or property, or the
proceeds thereof, to the Administrative Agent (such assets or property, and
proceeds thereof, being held in trust by such Subordinated Creditor for the
benefit of the Lenders until such delivery).
(c) Each Subordinated Creditor further agrees that, except for
payments permitted under clause (d) below, it will not ask for, demand, ▇▇▇
for, take or receive from the Borrower, by set off or in any other manner,
the whole, or any part, of any monies owing under any Subordinated Debt, nor
shall any Subordinated Creditor take any action to enforce any rights under
the Subordinated Debt, nor shall it permit to exist in its favor any lien or
security interest securing the Subordinated Debt, unless and until all
Senior Obligations shall have been fully paid with interest.
(d) Notwithstanding any other provision contained herein, so long
as no Default or Event of Default under the Credit Agreement is in existence
(or shall occur after giving effect to any payment then contemplated), the
Borrower may pay, and the Subordinated Creditors may receive, payments of
principal and interest on the Subordinated Debt.
(e) In no event shall any Subordinated Creditor attempt to
accelerate payments due in connection with any Subordinated Debt for so long
as any Senior Obligations have not been paid in full.
2. Default of Senior Obligations. In the event that any Default
-----------------------------
or Event of Default, occurs under the Credit Agreement then, unless and until
such Default or Event of Default shall have been cured (with respect to any
Default) or waived (with respect to any Event of Default) by the Lenders in
accordance with the Credit Agreement or all Senior Obligations shall have
been paid in full, no direct or indirect payment shall be made or agreed to
be made on account of the principal of, or premium, if any, or interest on
any Subordinated Debt, or as a sinking fund
H-2
for Subordinated Debt, or in respect of any redemption, retirement, purchase
or other acquisition of any Subordinated Debt.
3. Bankruptcy Distributions. Each Subordinated Creditor agrees
------------------------
that, in the event of any distribution, division or application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all
or any part of the assets of the Borrower or the proceeds thereof to
creditors of the Borrower upon any indebtedness of the Borrower, by reason
of the liquidation, dissolution or other winding up of the Borrower or the
Borrower's business, or, in the event of any sale, receivership, insolvency
or bankruptcy case or proceeding by or against the Borrower for any relief
under any bankruptcy or insolvency law or laws relating to the relief of
debtors, readjustment of indebtedness, liquidations, reorganizations,
compositions, or extensions, then and in any such event, any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable to any Subordinated Creditor
upon or with respect to any or all the Subordinated Debt shall be paid or
delivered directly to the Administrative Agent for application against the
Senior Obligations, whether due or not due, in a manner which the
Administrative Agent, in its sole discretion, shall determine, until such
Senior Obligations shall have been fully paid with interest. Each
Subordinated Creditor hereby irrevocably authorizes and empowers the
Administrative Agent to ask for, demand, ▇▇▇ for, collect, and receive and
receipt for every such payment or distribution and give acquittance
therefor, and to file claims and proofs of claims and take such other
proceedings in the Administrative Agent's own name or in the name of any
Subordinated Creditor as the Administrative Agent may deem necessary or
advisable for the enforcement of this Agreement and, in connection
therewith, each Subordinated Creditor hereby agrees to grant to the
Administrative Agent such powers of attorney, assignments or other
instruments as may be requested by the Administrative Agent in order to
enable the Administrative Agent to enforce any and all claims upon or with
respect to any or all of the Subordinated Debt and to collect and receive
any and all payments or distributions which may be payable or deliverable at
any time upon or with respect thereto.
4. Receipts by Subordinated Creditors held in Trust. Should any
------------------------------------------------
payment or distribution of security or proceeds thereof be received in
violation of this Agreement by any Subordinated Creditor upon or with
respect to the Subordinated Debt prior to all Senior Obligations being paid
in full, each Subordinated Creditor agrees forthwith to deliver the same to
the Administrative Agent in precisely the form received (except for the
endorsement or assignment of the Subordinated Creditors where the
Administrative Agent, in its sole discretion, deems same to be necessary),
for application against the Senior Obligations, whether due or not due, and
until so delivered, the same shall be held in trust by the Subordinated
Creditors as property of the Administrative Agent. In the event of the
failure of any Subordinated Creditor to make any such endorsement or
assignment, the Administrative Agent, or any of its officers or employees on
behalf of the Administrative Agent, are hereby irrevocably authorized to
make the same.
5. No Assignment of Subordinated Debt. Each Subordinated
----------------------------------
Creditor agrees not to assign or transfer to others any claim such
Subordinated Creditor has or may have against the Borrower at any time the
Senior Obligations have not been paid in full, other than pursuant to a
merger or combination permitted under the Credit Agreement.
H-3
6. Continuing Subordination. This Agreement shall constitute a
------------------------
continuing agreement of subordination, and the Administrative Agent or the
Lenders may continue, without notice to any Subordinated Creditor, to lend
monies, extend credit and make other accommodations to or for the account of
the Borrower on the faith hereof.
7. Certain Agreements of Creditor. Each Subordinated Creditor
------------------------------
agrees that the Administrative Agent and the Lenders, at any time and from
time to time, may enter into such agreement or agreements with the Borrower
as the Administrative Agent and the Lenders may deem proper extending the
time of payment or renewing or otherwise altering the time of payment or
renewing or otherwise altering the terms of any Loan Document or other
instruments evidencing Senior Obligations or any security interest
underlying said Senior Obligations, or may exchange, sell or surrender or
otherwise deal with the Borrower respecting said Senior Obligations, all
without notice to or consent of any Subordinated Creditor and without in any
way impairing or affecting this Agreement.
8. Non-Waiver by Lender. No waiver shall be deemed to be made by
--------------------
the Administrative Agent and the Lenders of any of their rights hereunder
unless the same shall be in a writing duly executed by the Administrative
Agent, and each such waiver, if any, shall be a waiver only with respect to
the specific matter or matters to which the waiver related and shall in no
way impair the rights of the Administrative Agent and the Lenders or the
obligations of the Subordinated Creditors hereunder in any other respect at
any other time.
9. Governing Law. This Subordination Agreement shall be
-------------
governed by and construed in accordance with the laws of the State of New
York.
10. Rights of Subrogation. The Subordinated Creditors agree that
---------------------
no payment or distribution to the Lender pursuant to the provisions of this
Agreement shall entitle the Subordinated Creditors to exercise any rights of
subrogation in respect thereof until the Senior Obligations shall have been
finally paid in full.
11. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement. This Agreement is to be read, construed and applied together
with the Credit Agreement and the other Loan Documents which, taken
together, set forth the complete understanding and agreement of the
Administrative Agent, the Lenders and the Subordinated Creditors with
respect to the matters referred to herein and therein.
12. Successors and Assigns. This Agreement and all obligations of
----------------------
the Subordinated Creditors hereunder shall be binding upon the successors
and assigns of the Subordinated Creditors (including any
debtor-in-possession) and shall, together with the rights and remedies of
the Administrative Agent, for the benefit of the Administrative Agent and
the Lenders, hereunder, inure to the benefit of the Administrative Agent and
the Lenders, all future holders of any instrument evidencing any of the
Senior Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of
H-4
any agreement governing or instrument evidencing the Senior Obligations or
any portion thereof or interest therein shall in any manner impair the
subordination under the Subordination Agreement. No Subordinated Creditor
may assign, sell, hypothecate or otherwise transfer any interest in or
obligation under this Agreement other than pursuant to a merger or
combination permitted under the Credit Agreement.
[SIGNATURES ON FOLLOWING PAGES]
H-5
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be made, executed and delivered individually or by their duly authorized
officers as of the day and year first above written.
SUBSIDIARIES:
American Recreation Products, Inc. ▇▇▇▇▇▇ Hestia Philippines, Inc.
Canadian Recreation Products, Inc. Kellwood Foundation
Sierra Designs Acquisition Corporation KW Apparel, S.A. de C.V.
Biflex International, Inc. Smart Shirts Manufacturers, Limited
Cen-Tex Holdings, Inc.
Dorby Frocks, Ltd
Group B Clothing Company By:
Halmode Apparel, Inc. -----------------------------------------------
Kellwood Shared Services, Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Kellwood Honduras, S.A. Director of each of the four subsidiaries
Kellwood Mexico, S.A. de C.V. listed above
Koret of California, Inc.
MJF Imports, Inc.
New Campaign, Inc.
West Coast Apparel, Inc.
Koret Outlet Stores, Inc.
KWD Holdings, Inc.
▇▇▇▇ ▇▇ Manufactura, S.A. de C.V.
Kellwood Asia Limited
Kellwood del Sureste
Kellwood Manufactura, S.A. de C.V.
KWD Mexico, S.A. de C.V.
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ Outlet Stores, Inc.
Tri-W Corporation
By:
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary of each of the twenty-four
subsidiaries listed above
SUBSIDIARIES
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
By:
---------------------------------------------------------
Name:
-------------------------------------------------------
Title:
-------------------------------------------------------
H-6
ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST WRITTEN ABOVE BY:
KELLWOOD COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
H-7
EXHIBIT A
---------
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of
---------
, 20 is made by and between ,
------------- -- --------------------------
a corporation (the "Subsidiary"), KELLWOOD COMPANY
---------------- ----------
(the "Borrower"), and BANK OF AMERICA, N.A., in its capacity as
--------
Administrative Agent (the "Administrative Agent") under that
certain Credit Agreement (as amended, supplemented or restated from
time to time, the "Credit Agreement"), dated as of April , 2002, by
---------------- ---
and among the Borrower, the Lenders party thereto and the
Administrative Agent. All capitalized terms not otherwise defined
herein shall have the meanings given to such terms in the Credit
Agreement.
WHEREAS, the Subsidiary is required by Section of the
---
Credit Agreement to become a party to the Subordination Agreement;
and
WHEREAS, the Subsidiary will materially benefit from the
credit facilities made available and to be made available to the
Borrower by the Lenders under the Credit Agreement; and
NOW, THEREFORE, the Subsidiary hereby agrees as follows
with the Administrative Agent, for the benefit of the Lenders:
1. JOINDER. The Subsidiary hereby agrees that, by its
-------
execution of this Agreement, the Subsidiary will become a party to
the Subordination Agreement and shall be a "Subordinated Creditor"
for all purposes thereunder.
2. MISCELLANEOUS.
-------------
1.1 SEVERABILITY. Whenever possible, each provision of this
------------
Agreement shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or
the remaining provisions of this Agreement. This Agreement is to be
read, construed and applied together with the Credit Agreement and
the other Loan Documents which, taken together, set forth the
complete understanding and agreement of the Administrative Agent,
the Lenders and the Subsidiary with respect to the matters referred
to herein and therein.
1.2 SUCCESSORS AND ASSIGNS. This Agreement and all obligations
----------------------
of the Subsidiary hereunder shall be binding upon the successors
and assigns of the Subsidiary (including any debtor-in-possession
on behalf of the Subsidiary) and shall, together with the rights
and remedies of the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, hereunder, inure to the
benefit of the Administrative Agent and the Lenders, all future
holders of any instrument evidencing any of the Senior Obligations
and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other
dispositions of
H-8
any agreement governing or instrument evidencing the Senior
Obligations or any portion thereof or interest therein shall in any
manner impair the subordination under the Subordination Agreement.
The Subsidiary may not assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Agreement other
than pursuant to a merger or combination permitted under the Credit
Agreement.
1.3 COUNTERPARTS. This Agreement may be authenticated in any
------------
number of separate counterparts, each of which shall collectively
and separately constitute one and the same agreement. This
Agreement may be authenticated by manual signature, facsimile or,
if approved in writing by the Administrative Agent, electronic
means, all of which shall be equally valid.
1.4 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
-------------
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
1.5 SECTION TITLES. The Section titles contained in this
--------------
Agreement are and shall be without substantive meaning or content
of any kind whatsoever and are not a part of the agreement between
the parties hereto.
[Signature page follows]
H-9
IN WITNESS WHEREOF, the Subsidiary has caused this Agreement to be
duly executed by its authorized officer, and the Administrative Agent, for
the benefit of the Lenders, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
-------------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Acknowledged and accepted:
BANK OF AMERICA, as Administrative Agent
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
H-10
EXHIBIT I
FORM OF LC ACCOUNT AGREEMENT
LC ACCOUNT AGREEMENT
THIS LC ACCOUNT AGREEMENT (the "Agreement") is made and entered
into as of , 200 by and between KELLWOOD COMPANY, a
------------------ -
Delaware corporation (the "Pledgor" or the "Borrower"), and BANK OF AMERICA,
N.A., a national banking association organized and existing under the laws
of the United States, as Administrative Agent (the "Administrative Agent")
for each of the financial institutions (the "Lenders" and collectively with
the Agent, the "Secured Parties") now or hereafter party to the Credit
Agreement (as defined below).
W I T N E S S E T H:
--------------------
WHEREAS, the Secured Parties have agreed to provide to the Borrower
a certain revolving credit facility with a letter of credit sublimit
pursuant to a Credit Agreement dated as of April 30, 2002 among the
Borrower, the Administrative Agent and the Lenders (as from time to time
amended, revised, modified, supplemented, or amended and restated the
"Credit Agreement"); and
WHEREAS, as a condition precedent to the Lenders' obligations to
make the Loans or to issue Letters of Credit, the Pledgor has agreed to
execute and deliver to the Administrative Agent a copy of this Agreement at
such time as the Credit Agreement requires a Letter of Credit to be Cash
Collateralized;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms used in this
-----------
Agreement shall have the following meanings notwithstanding any definition
thereof in the Credit Agreement. Other capitalized terms used but not
defined herein shall have the meanings therefor set forth in the Credit
Agreement.
"Collateral" means (a) all funds, security entitlements, and other
----------
financial assets, property or property rights from time to time on deposit
in, in transit to or credited to the LC Account; (b) all Investments and all
certificates, securities, and instruments from time to time representing or
evidencing such Investments; (c) all notes, certificates of deposit, checks
and other instruments from time to time hereafter delivered to or otherwise
possessed by the Administrative Agent for or on behalf of the Pledgor in
substitution for or in addition to any or all of the Collateral described in
clause (a) or (b) above; (d) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Collateral
described in clause (a), (b) or (c) above; and (e) to the extent not covered
by clauses (a) through (d) above, all proceeds of any or all of the
foregoing Collateral.
I-1
"Investments" means those investments, if any, made by the
-----------
Administrative Agent pursuant to Section 5 hereof.
---------
"LC Account" means the cash collateral account established and
----------
maintained pursuant to Section 2 hereof.
---------
"Secured Obligations" means the Obligations, and all obligations of
-------------------
the Pledgor now or hereafter existing under or in respect of this Agreement
and with respect to all charges, fees, expenses, commissions,
reimbursements, indemnities and other payments related to or in respect of
the obligations contained in this Agreement.
2. LC Account; Cash Collateralization of Letters of Credit.
(i) At any time, in the Administrative Agent's sole
discretion, the Administrative Agent may establish and maintain at
its offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
in its name and under its sole dominion and control, a cash
collateral account designated as Cash LC
-------------------
Account (the "LC Account").
(ii) In the event that the Pledgor delivers to the
Administrative Agent an amount equal to the maximum amount
remaining undrawn or unpaid under any Letters of Credit either (A)
as required pursuant to the Credit Agreement or (B) as otherwise
agreed by the parties hereto to provide cash collateral for the
undrawn amount of any Letter of Credit other than after the
occurrence and during the continuation of an Event of Default, the
Administrative Agent shall deposit such amount into the LC Account
to be held pursuant to the terms of this Agreement. Upon a drawing
under the Letters of Credit in respect of which any amounts
described above have been deposited in the LC Account, the
Administrative Agent shall apply such amounts to reimburse the L/C
Issuers for the amount of such drawing. In the event the Letters of
Credit are canceled or expire or in the event of any reduction in
the maximum amount available at any time for drawing under such
Letters of Credit (the "Maximum Available Amount"), the
Administrative Agent shall apply the amounts then in the LC Account
less the Maximum Available Amount immediately after such
cancellation, expiration or reduction, if any, first, to the cash
-----
collateralization of the Letters of Credit if the Pledgor has
failed to pay all or a portion of the maximum amounts described in
the first sentence of this clause (ii) above, and second, the
------
balance, if any and provided no Default or Event of Default shall
then exist, to the Pledgor or as otherwise required by law;
provided that if a Default or Event of Default has occurred and is
continuing all such amounts shall be retained by the Administrative
Agent as cash collateral for the Secured Obligations.
(iii) Interest and other income received in respect of
Investments of any amounts deposited in the LC Account pursuant to
clause (ii) of this Section 2 shall constitute and be held by the
---------
Administrative Agent as additional Collateral hereunder.
3. PLEDGE; SECURITY FOR SECURED OBLIGATIONS. The Pledgor hereby
----------------------------------------
grants and pledges to the Administrative Agent, for the benefit of the
Secured Parties, a first priority lien and security interest in the
Collateral now existing or hereafter arising or acquired, as collateral
I-2
security for the prompt payment in full when due, whether at stated
maturity, by acceleration or otherwise (including, without limitation, the
payment of interest and other amounts which would accrue and become due but
for the filing of a petition in bankruptcy or the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), of all Secured
Obligations.
4. DELIVERY OF COLLATERAL. The Collateral shall be initially
----------------------
delivered to the Administrative Agent, for the benefit of the Lenders, in
the form of immediately available funds.
5. INVESTING OF AMOUNTS IN THE LC ACCOUNT; AMOUNTS HELD BY THE
-----------------------------------------------------------
ADMINISTRATIVE AGENT. Cash held by the Administrative Agent in the LC
--------------------
Account shall not be invested or reinvested except as provided in this
Section 5.
---------
(i) Subject to the remedies and other rights provided
in Section 11 hereof and provided that the lien and security
----------
interest in favor of the Administrative Agent for the benefit of
the Secured Parties in Collateral remains perfected and of first
priority and so long as no Event of Default shall have occurred and
be continuing, any funds on deposit in the LC Account shall be
invested by the Administrative Agent, solely on the written request
of the Pledgor, in cash equivalents.
(ii) The Administrative Agent shall have no
responsibility and the Pledgor hereby agrees to hold the
Administrative Agent and the Lenders harmless for any loss in the
value of the Collateral resulting from a fluctuation in interest
rates or otherwise.
6. REPRESENTATIONS AND WARRANTIES. In addition to its
------------------------------
representations and warranties made pursuant to Article V of the Credit
---------
Agreement, the Pledgor represents and warrants to the Administrative Agent
(for itself and as agent on behalf of the Lenders), that the following
statements are true, correct and complete:
(i) The Pledgor will be the legal and beneficial owner
of the Collateral free and clear of any Lien except for the lien and
security interest created by this Agreement and Liens permitted
under the Credit Agreement in favor of Governmental Authorities;
(ii) The pledge and assignment of the Collateral pursuant
to this Agreement creates a valid and perfected first priority
security interest in the Collateral, securing the payment of the
Secured Obligations (subject only to the Liens described in Section
-------
6(i)).
----
7. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will not
-------------------------
(a) sell or otherwise dispose of any of the Collateral, except for the sale
of any Investment, all of the proceeds of which (net of transaction fees)
are used to acquire any other Investment constituting Collateral as herein
permitted, or (b) create or permit to exist any Lien upon or with respect to
any of the Collateral, except for the Liens described in Section 6(i).
------------
8. THE ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Upon the
---------------------------------------------------
occurrence and during the continuation of an Event of Default, the Pledgor
hereby appoints the Administrative Agent as its attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Administrative Agent's
reasonable discretion to take any action and to execute any instrument which
the Administrative Agent may reasonably deem necessary or advisable to
accomplish the purposes
I-3
of the Agreement, including, without limitation, to receive, endorse and
collect all instruments made payable to the Pledgor or either of them
representing any payment, dividend, or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same. In
performing its functions and duties under this Agreement, the Administrative
Agent shall act solely for the Secured Parties and the Administrative Agent
has not assumed nor shall be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Pledgor.
9. THE ADMINISTRATIVE AGENT MAY PERFORM. If Pledgor fails to
------------------------------------
perform any agreement contained herein, after notice to Pledgor, the
Administrative Agent may itself perform, or cause performance of, such
agreement, and the expenses of the Administrative Agent incurred in
connection therewith shall be payable by Pledgor under Section 12 hereof.
----------
10. STANDARD OF CARE; NO RESPONSIBILITY FOR CERTAIN MATTERS. In
-------------------------------------------------------
dealing with the Collateral in its possession, the Administrative Agent
shall exercise the same care which it would exercise in dealing with similar
collateral property pledged by others in transactions of a similar nature,
but it shall not be responsible for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Administrative Agent
has or is deemed to have knowledge of such matters, (b) taking any steps to
preserve rights against any parties with respect to any Collateral (other
than steps taken in accordance with the standard of care set forth above),
(c) the collection of any proceeds, (d) any loss resulting from Investments
made or any failure to invest or delay in investing or disposing of any
Collateral, or (e) determining (x) the correctness of any statement or
calculation made by the Pledgor in any written instructions, or (y) whether
any deposit in the LC Account is proper.
11. REMEDIES UPON DEFAULT; APPLICATION OF PROCEEDS. If the
----------------------------------------------
Borrower shall fail to perform any action required hereunder or shall
otherwise breach any term or provision hereof (a "Default" hereunder) which
Default shall not have been waived in accordance with Section 10.01 of the
-------------
Credit Agreement:
(i) The Administrative Agent may and shall at the
request of the Required Lenders exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code (the
"Code") as in effect in the state in which the Collateral is
located at that time, and the Administrative Agent may, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
exchange or broker's board or at any of the Administrative Agent's
offices or elsewhere, for cash, on credit or for future delivery,
and at such price or prices, and upon such other terms as the
Administrative Agent may deem commercially reasonable. Pledgor
agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days' notice to Pledgor of the time and place of
any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. Without limiting the
generality of the foregoing, the Pledgor acknowledges that the
Collateral constituting Investments is of a type customarily sold
on a recognized market and of a type that may threaten to decline
speedily in value. The Administrative Agent shall not be obligated
to make any sale of the Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public
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or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(ii) In addition to the remedies set forth in part (i)
above and subject to the provisions of Section 2(ii) hereof, any
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cash held by the Administrative Agent as Collateral and all cash
proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon all or part of
the Collateral shall be applied (after payment of any amounts
payable to the Administrative Agent pursuant to Section 12 hereof)
----------
by the Administrative Agent to pay the Secured Obligations pursuant
to Section 8.03 of the Credit Agreement.
------------
12. EXPENSES. In addition to any payments of expenses of the
--------
Administrative Agent pursuant to the Credit Agreement or the other Loan
Documents, the Pledgor agrees to pay promptly to the Administrative Agent
all the reasonable costs and expenses, including reasonable attorneys fees
and expenses, which the Administrative Agent may incur in connection with
(a) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (b) the exercise or
enforcement of any of the rights of the Administrative Agent hereunder, or
(c) the failure by the Pledgor to perform or observe any of the provisions
hereof.
13. NO DELAYS; WAIVER, ETC. No delay or failure on the part of
----------------------
the Administrative Agent in exercising, and no course of dealing with
respect to, any power or right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise by the Administrative Agent of any
power or right hereunder preclude other or further exercise thereof or the
exercise of any other power or right. The remedies herein provided are to
the fullest extent permitted by law cumulative and are not exclusive of any
remedies provided by law.
14. AMENDMENTS, ETC. No amendment, modification, termination or
---------------
waiver of any provision of this Agreement, or consent to any departure by
the Pledgor therefrom, shall in any event be effective without the written
concurrence of the Administrative Agent.
15. CONTINUING SECURITY INTEREST; TERMINATION. This Agreement
-----------------------------------------
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until all Secured Obligations (other than
Secured Obligations in the nature of continuing indemnities or expense
reimbursement obligations not yet due and payable) shall have been
indefeasibly paid in full in cash, the commitments or other obligations of
the Administrative Agent or any Lender to make any Loan under the Credit
Agreement shall have expired, the Letters of Credit shall have expired and
the Credit Agreement shall have terminated (the "Facility Termination
Date"), (b) be binding upon Pledgor, its successors and assigns, and (c)
inure to the benefit of the Administrative Agent, the Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c) and subject to the provisions of the
Credit Agreement, any Lender may assign or otherwise transfer any Note held
by it to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to
such Lender herein or otherwise. Upon the indefeasible payment in full in
cash of the Secured Obligations (other than Secured Obligations in the
nature of continuing indemnities or expense reimbursement obligations not
yet due and payable), and the cancellation or expiration of the Letters of
Credit and termination or expiration of all
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commitments and other obligations of the Administrative Agent and any Lender
to make any Loan and the occurrence of the Facility Termination Date, the
Pledgor shall be entitled, subject to the provisions of Section 11 hereof,
----------
to the return, upon its request and at its expense, of such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
16. ENTIRE AGREEMENT. This Agreement, together with the Credit
----------------
Agreement and other Loan Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as
herein contained. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms
hereof. Neither this Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged, canceled, terminated,
or amended orally or in any manner other than in accordance with the terms
of the Credit Agreement.
17. FURTHER ASSURANCES. The Pledgor agrees at its own expense to
------------------
do such further acts and things, and to execute and deliver such additional
conveyances, assignments, financing statements, agreements and instruments,
as the Administrative Agent may at any time reasonably request in connection
with the administration or enforcement of this Agreement or related to the
Collateral or any part thereof or in order better to assure and confirm unto
the Administrative Agent its rights, powers and remedies for the benefit of
the Secured Parties hereunder and pay all charges, expenses and fees the
Administrative Agent may reasonably incur in filing any of such documents
and all taxes relating thereto. The Pledgor hereby consents and agrees that
the issuers of or obligors in respect of the Collateral shall be entitled to
accept the provisions hereof as conclusive evidence of the right of the
Administrative Agent, on behalf of the Secured Parties, to exercise its
rights hereunder with respect to the Collateral, notwithstanding any other
notice or direction to the contrary heretofore or hereafter given by any
Pledgor or any other Person to any of such issuers or obligors. The Pledgor
agrees that a carbon, photographic, photostatic or other reproduction of
this Agreement or a financing statement is sufficient as a financing
statement and may be filed by the Administrative Agent in any filing office.
18. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
-----------------------------
covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and to their respective successors and
assigns, except that the Pledgor shall not be permitted to assign this
Agreement or any interest herein or in the Collateral, or any part thereof,
or otherwise pledge, encumber or grant any option with respect to the
Collateral, or any part thereof, or any cash or property held by the
Administrative Agent as Collateral under this Agreement. All references
herein to the Administrative Agent shall include any successor thereof, each
Lender and any other obligees from time to time of the Obligations.
19. SEVERABILITY. In case any Lien, security interest or other
------------
right of any Secured Party or any provision hereof shall be held to be
invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other Lien, security interest or other
right granted hereby or provision hereof.
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20. COUNTERPARTS. This Agreement may be executed in any number
------------
of counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
21. INDEMNIFICATION. Without limitation of Section 10.05 of the
--------------- -------------
Credit Agreement or any other indemnification provision in any Loan
Document, the Pledgor hereby covenants and agrees to pay, indemnify, and
hold the Secured Parties harmless from and against any and all other
out-of-pocket liabilities, costs, expenses or disbursements of any kind or
nature whatsoever arising in connection with any claim or litigation by any
Person resulting from the execution, delivery, enforcement, performance and
administration of this Agreement or the Loan Documents, or the transactions
contemplated hereby or thereby, or in any respect relating to the Collateral
or any transaction pursuant to which the Pledgor has incurred any Obligation
(all the foregoing, collectively, the "indemnified liabilities"); provided,
--------
however, that the Pledgor shall have no obligation hereunder with respect to
-------
indemnified liabilities which are determined by a court of competent
jurisdiction to have directly resulted from the gross negligence or willful
misconduct of the Administrative Agent or any Lender. The agreements in this
Section 21 shall survive repayment of all Secured Obligations, termination
----------
or expiration of this Agreement and occurrence of the Facility Termination
Date.
22. REMEDIES CUMULATIVE. All remedies hereunder are cumulative
-------------------
and are not exclusive of any other rights and remedies of the Administrative
Agent provided by law or under the Credit Agreement, the other Loan
Documents, or other applicable agreements or instruments. The making of the
Loans to the Borrower pursuant to the Credit Agreement and the extension of
the Loans to the Borrower pursuant to the Credit Agreement shall be
conclusively presumed to have been made or extended, respectively, in
reliance upon the Pledgor's pledge of the Collateral pursuant to the terms
hereof.
23. NOTICES. Any notice required or permitted hereunder shall be
-------
given, (a) with respect to the Pledgor, at the address of the Borrower
indicated in Section 10.02 of the Credit Agreement and (b) with respect to
-------------
the Administrative Agent or a Lender, at the Administrative Agent's address
indicated in Section 10.02 of the Credit Agreement. All such notices shall
-------------
be given and shall be effective as provided in Section 10.02 of the Credit
-------------
Agreement.
24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE
NOTWITHSTANDING ITS EXECUTION AND DELIVERY OUTSIDE SUCH STATE.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Pledgor and the Administrative Agent have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
KELLWOOD COMPANY
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
BANK OF AMERICA, N.A., as Administrative
Agent
By:
-----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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