EXECUTION
EXHIBIT 4-C
-----------
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF AUGUST 18, 1999
Among
HARTMARK CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION
as Managing Agent and
Collateral Agent,
and
THE BANK OF NEW YORK,
BANK OF AMERICA, N.A.,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Agents
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................... 3
1.1 Certain Defined Terms................................................................. 3
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.... 32
1.3 Other Definitional Provisions......................................................... 32
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................................ 33
2.1 Commitments; Loans; Notes............................................................. 33
2.2 Interest on the Loans................................................................. 40
2.3 Fees.................................................................................. 44
2.4 Prepayments and Reductions in Commitments; General Provisions Regarding Payments...... 45
2.5 Use of Proceeds....................................................................... 48
2.6 Special Provisions Governing LIBOR Rate Loans......................................... 48
2.7 Increased Costs; Taxes; Capital Adequacy.............................................. 50
2.8 Obligation of Lenders and Issuing Lender to Mitigate.................................. 54
2.9 Affected Lenders...................................................................... 54
2.10 Existing Loans and Reallocation of Pro Rata Shares.................................... 55
SECTION 3. LETTERS OF CREDIT..................................................................... 57
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein......... 57
3.2 Letter of Credit Fees................................................................. 60
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit................... 61
3.4 Obligations Absolute.................................................................. 64
3.5 Indemnification; Nature of Issuing Lenders' Duties.................................... 65
3.6 Increased Costs and Taxes Relating to Letters of Credit............................... 66
3.7 Existing Letters of Credit; Reallocation of Participations in Letters of Credit....... 67
i
TABLE OF CONTENTS
(continued)
Page
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT............................................. 67
4.1 Conditions to Initial Loans........................................................... 67
4.2 Conditions to All Loans............................................................... 71
4.3 Conditions to Letters of Credit....................................................... 72
4.4 Rollover Borrowings................................................................... 73
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES............................................. 74
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries......... 74
5.2 Authorization of Borrowing, etc....................................................... 75
5.3 Financial Condition................................................................... 76
5.4 No Material Adverse Change; No Restricted Junior Payments............................. 77
5.5 Title to Properties; Liens............................................................ 77
5.6 Litigation; Adverse Facts............................................................. 77
5.7 Payment of Taxes...................................................................... 78
5.8 Performance of Agreements; Materially Adverse Agreements.............................. 78
5.9 Governmental Regulation............................................................... 78
5.10 Securities Activities................................................................. 79
5.11 Employee Benefit Plans................................................................ 79
5.12 Certain Fees.......................................................................... 79
5.13 Environmental Protection.............................................................. 79
5.14 Employee Matters...................................................................... 80
5.15 Solvency.............................................................................. 80
5.16 Inventory............................................................................. 80
5.17 Genuineness of Accounts............................................................... 81
5.18 Representations Concerning Credit and Collection Policy............................... 82
5.19 Representations Concerning Cash Management System..................................... 82
5.20 Intellectual Property................................................................. 82
5.21 Disclosure............................................................................ 83
5.22 Year 2000 Problems.................................................................... 83
ii
TABLE OF CONTENTS
(continued)
Page
SECTION 6. BORROWER'S AFFIRMATIVE COVENANTS...................................................... 83
6.1 Financial Statements and Other Reports................................................ 84
6.2 Corporate Existence, etc.............................................................. 89
6.3 Payment of Taxes and Claims; Tax Consolidation........................................ 89
6.4 Maintenance of Properties; Insurance.................................................. 90
6.5 Inspection; Lender Meeting............................................................ 90
6.6 Compliance with Laws, etc............................................................. 90
6.7 Environmental Matters................................................................. 90
6.8 Borrowing Base Certificates; Operating Reports........................................ 92
6.9 Receivables Reporting; Other Requirements............................................. 92
6.10 Cash Management System................................................................ 94
6.11 Subsidiaries.......................................................................... 96
6.12 Year 2000 Problems.................................................................... 97
6.13 Collateral Access Agreements.......................................................... 97
SECTION 7. BORROWER'S NEGATIVE COVENANTS......................................................... 97
7.1 Indebtedness.......................................................................... 97
7.2 Liens and Related Matters............................................................. 99
7.3 Investments; Joint Ventures........................................................... 101
7.4 Contingent Obligations................................................................ 103
7.5 Restricted Junior Payments............................................................ 104
7.6 Financial Covenants................................................................... 105
7.7 Restriction on Fundamental Changes; Asset Sales....................................... 105
7.8 Consolidated Capital Expenditures..................................................... 107
7.9 Restriction on Leases................................................................. 107
7.10 Sales and Lease-Backs................................................................. 107
7.11 Sale or Discount of Receivables....................................................... 108
7.12 Transactions with Shareholders and Affiliates......................................... 108
7.13 Disposal of Subsidiary Stock.......................................................... 108
7.14 Conduct of Business................................................................... 108
iii
TABLE OF CONTENTS
(continued)
Page
7.15 Amendments of Related Documents; License Agreements................................... 109
7.16 Fiscal Year........................................................................... 110
7.17 Designated Senior Debt................................................................ 110
SECTION 8. EVENTS OF DEFAULT..................................................................... 110
8.1 Failure to Make Payments When Due..................................................... 110
8.2 Default in Other Agreements........................................................... 110
8.3 Breach of Certain Covenants........................................................... 111
8.4 Breach of Warranty.................................................................... 111
8.5 Other Defaults Under Loan Documents................................................... 111
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................................. 111
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.................................... 111
8.8 Judgments and Attachments............................................................. 112
8.9 Dissolution........................................................................... 112
8.10 Employee Benefit Plans................................................................ 112
8.11 Impairment of Collateral; Failure of Security......................................... 112
8.12 Material Adverse Effect............................................................... 113
8.13 Change of Control..................................................................... 113
SECTION 9. AGENT................................................................................. 114
9.1 Appointment........................................................................... 114
9.2 Powers; General Immunity.............................................................. 114
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness... 115
9.4 Right to Indemnity.................................................................... 116
9.5 Payee of Note Treated as Owner........................................................ 116
9.6 Successor Agent and Swing Line Lender................................................. 116
9.7 Collateral Documents.................................................................. 117
SECTION 10. MISCELLANEOUS......................................................................... 118
10.1 Assignments and Participations in Loans and Letters of Credit......................... 118
iv
TABLE OF CONTENTS
(continued)
Page
10.2 Expenses.............................................................................. 120
10.3 Indemnity............................................................................. 120
10.4 Set-Off; Security Interest in Deposit Accounts........................................ 121
10.5 Ratable Sharing....................................................................... 122
10.6 Amendments and Waivers................................................................ 122
10.7 Independence of Covenants............................................................. 123
10.8 Notices............................................................................... 123
10.9 Survival of Representations, Warranties and Agreements................................ 124
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................................. 124
10.11 Marshalling; Payments Set Aside....................................................... 124
10.12 Severability.......................................................................... 124
10.13 Obligations Several; Independent Nature of Lenders' Rights............................ 124
10.14 Headings.............................................................................. 125
10.15 Applicable Law........................................................................ 125
10.16 Successors and Assigns................................................................ 125
10.17 Consent to Jurisdiction and Service of Process........................................ 125
10.18 Waiver of Jury Trial.................................................................. 126
10.19 Confidentiality....................................................................... 126
10.20 Counterparts; Effectiveness........................................................... 127
10.21 Intercompany Note Collateral.......................................................... 127
v
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A REVOLVING NOTE
IV-A FORM OF TRANCHE B REVOLVING NOTE
IV-B FORM OF SWING LINE NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF OPINION OF CREDIT PARTY COUNSEL
VII FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
VIII FORM OF ASSIGNMENT AND ACCEPTANCE
IX GUARANTY
X PLEDGE AND SECURITY AGREEMENT
X-A TRADEMARK SECURITY AGREEMENT
XI FORM OF COLLATERAL ACCESS AGREEMENT
XII FORM OF CASH MANAGEMENT LETTER
XIII FORM OF BORROWING BASE CERTIFICATE
XIV FORM OF INTERCOMPANY NOTE
XV INTERCOMPANY NOTE SECURITY AGREEMENT
XV-A INTERCOMPANY NOTE TRADEMARK AGREEMENT
XVI FORM OF ACKNOWLEDGEMENT AND CONSENT
XVII FORM OF CANADIAN CREDIT AGREEMENT
XVIII FORM OF STOCK PLEDGE AGREEMENT
vi
SCHEDULES
1.1A ELIGIBLE ACCOUNTS
1.1B ELIGIBLE INVENTORY
1.1C EXCLUDED ACCOUNTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.10 LIBOR FUNDING MEMO
5.1 SUBSIDIARIES OF BORROWER; NON-OPERATING SUBSIDIARIES; COLLATERAL MATTERS
5.6 LITIGATION
5.13 ENVIRONMENTAL MATTERS
5.18 CREDIT AND COLLECTION POLICY
5.19 CASH MANAGEMENT SYSTEM
5.20 INTELLECTUAL PROPERTY; LICENSE AGREEMENTS
6.8 OPERATING REPORTS
7.1 EXISTING INDEBTEDNESS
7.2 EXISTING LIENS
7.3 EXISTING INVESTMENTS
vii
EXECUTION
HARTMARX CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of August 18,
1999 and entered into by and among HARTMARX CORPORATION, a Delaware corporation
("Borrower"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital"), as managing
agent for Lenders (in such capacity, including its successors and assigns,
"Managing Agent") and as collateral agent for Lenders (in such capacity,
including its successors and assigns, "Collateral Agent") and THE BANK OF NEW
YORK, BANK OF AMERICA, N.A. and THE FIRST NATIONAL BANK OF CHICAGO, as co-agents
for Lenders (in such capacity, "Co-Agents").
RECITALS
WHEREAS, Borrower and certain financial institutions ("Existing
Lenders") are parties to that certain Credit Agreement dated as of March 23,
1994 (as heretofore amended, supplemented or otherwise modified, the "Existing
Credit Agreement"), pursuant to which Existing Lenders have made certain credit
facilities available to Borrower in accordance with the terms thereof, the
proceeds of which together with other funds available to Borrower were used to
repay and terminate certain credit facilities existing on the Closing Date
(capitalized terms used in these Recitals without definition shall have the
respective meanings assigned in subsection 1.1 hereof) and for working capital
and general corporate purposes;
WHEREAS, each of the direct and indirect wholly-owned Subsidiaries of
Borrower (collectively, together with any direct or indirect wholly-owned
Subsidiaries of Borrower which may hereafter be created or acquired, the
"Guarantors") guaranteed the obligations of Borrower under the Existing Credit
Agreement;
WHEREAS, Borrower and the Guarantors secured their respective
obligations under the Existing Credit Agreement and the other Loan Documents by
granting to Collateral Agent on behalf of Existing Lenders a first priority
security interest in their respective accounts receivable (excluding third-party
credit card receivables which are non-recourse to Borrower or any Guarantor),
inventory, cash, intercompany notes and intangible assets all as set forth in
the Pledge and Security Agreement and the other Collateral Documents;
WHEREAS, Borrower desires that Lenders make an additional $25,000,000
of credit facilities available to Borrower by (i) providing for additional
revolving loans in an aggregate principal amount of $9,000,000 to be added to
and made a part of the Existing Revolving Loans, (ii) providing for an
additional tranche of revolving loans in an aggregate principal amount of
$16,000,000 and (iii) providing for additional swing line loans in an aggregate
principal amount of $5,000,000 to be added to and made a part of the Existing
Swing Line Loans;
WHEREAS, the proceeds of such additional credit facilities will be
used by Borrower to provide for the working capital requirements and other
corporate purposes of Borrower;
WHEREAS, Borrower desires that concurrently herewith, ▇▇▇▇▇▇▇ and
Royal Acquisition enter into the Canadian Credit Agreement pursuant to which the
lenders thereunder shall make available up to $16,000,000 in revolving credit to
▇▇▇▇▇▇▇ and Royal Acquisition to finance, in part, the acquisition of Royal by
Royal Acquisition, to refinance the existing Indebtedness and for working
capital and general corporate purposes;
WHEREAS, the aggregate amount of loans outstanding from time to time
under the Canadian Credit Agreement shall reduce the amount of Revolving Loans
otherwise available for borrowing by Borrower hereunder;
WHEREAS, Lenders have agreed to amend and restate the Existing Credit
Agreement in its entirety for the purposes of (i) providing such additional
credit facilities to Borrower and the Canadian Credit Agreement to ▇▇▇▇▇▇▇ and
Royal Acquisition and (ii) making certain other changes to the provisions of the
Existing Credit Agreement on the terms and the conditions set forth herein,
which amendment and restatement shall become effective upon the satisfaction of
the conditions precedent set forth herein;
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities of the parties
under the Existing Credit Agreement or be deemed to evidence or constitute
repayment of all or any portion of such obligations and liabilities and that
this Agreement amend and restate in its entirety the Existing Credit Agreement
and re-evidence the Obligations of Borrower outstanding thereunder;
WHEREAS, it is the intent of Loan Parties to confirm that all
Obligations of Credit Parties under the other Loan Documents shall continue in
full force and effect and that, from and after the Restatement Effective Date,
all references to the "Credit Agreement" contained therein shall be deemed to
refer to this Agreement; and
WHEREAS, Borrower and the Guarantors desire to continue to secure
their respective obligations hereunder and under the other Loan Documents and
guaranty and secure the obligations of ▇▇▇▇▇▇▇ and Royal Acquisition under the
Canadian Credit Agreement by granting to Collateral Agent on behalf of Lenders a
first priority security interest in their respective accounts receivable
(excluding third party credit card receivables which are non-recourse to
Borrower or any Guarantor), inventory, cash, intercompany notes and intangible
assets all as set forth in the Pledge and Security Agreement and other
Collateral Documents and, in the case of Borrower, pledging its interests in
each of its direct Subsidiaries that are Canadian Subsidiaries; provided that if
any such Canadian Subsidiary is a controlled foreign corporation (as defined in
the Internal Revenue Code) such pledged shares shall not include any shares of
stock in such Canadian Subsidiary in excess of 65% of the voting power of all
classes of capital stock entitled to vote of such Canadian Subsidiary pursuant
to, and as more specifically set forth in, the Stock Pledge Agreement.
2
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders, Managing Agent,
Collateral Agent and Co-Agents hereby agree that on the Restatement Effective
Date the Existing Credit Agreement shall be amended and restated in its entirety
as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"Acceleration" means the declaration (whether automatic, by
notice or otherwise) of all or any portion of the Loans or other Obligations to
be immediately due and payable pursuant to Section 8.
"Account Debtor" means any Person who is or who may become
obligated to Borrower or any of its Subsidiaries under, with respect to, or on
account of, an Account.
"Accounts" means all accounts, accounts receivable, other
receivables and rights to payment of every nature, contract rights, chattel
paper, instruments, documents and notes, whether now owned or hereafter acquired
by Borrower or any of its Subsidiaries and whether or not earned by performance;
provided that, for purposes of subsection 5.17 herein, "Accounts" shall mean
"accounts" as such term is defined in the UCC.
"Acknowledgement and Consent" means the Acknowledgement and
Consent executed and delivered by each Credit Party substantially in the form of
Exhibit XVI annexed hereto pursuant to which each such Person acknowledges and
consents to this Agreement and confirms the continuing effectiveness of each
Loan Document to which it is a party.
"Acquisition" means the acquisition, from a willing seller, by
purchase or otherwise of all or a significant portion of the business, property
or fixed assets of, or stock or other evidence of beneficial ownership of, any
Person other than Borrower; provided that a Joint Venture shall be considered an
Acquisition if it would be included on a consolidated balance sheet or income
statement with Borrower in accordance with GAAP.
"Acquisition Audit" shall have meaning given such term in Section
7.7(v).
"Adjusted LIBOR Rate" means, for any Interest Rate Determination
Date with respect to a LIBOR Rate Loan, the rate per annum obtained by dividing
(i) the offered quotation (rounded upward to the nearest 1/16 of one percent) to
first class banks in the London interbank LIBOR market by Reference Bank for
U.S. dollar deposits of amounts in same day funds comparable to the principal
amount of the LIBOR Rate Loan of Reference Bank for which the Adjusted LIBOR
Rate is then being determined with maturities comparable to the Interest Period
for which such Adjusted LIBOR Rate will apply as of approximately 9:00 A.M. (New
York time) on such Interest Rate Determination Date by (ii) a percentage equal
to 100% minus the stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate
3
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means GE Capital in its capacity as Managing Agent and
Collateral Agent, and The Bank of New York, Bank of America, N.A. and The First
National Bank of Chicago, in their respective capacities as Co-Agents, hereunder
and under the other Loan Documents and also means and includes any successor
Agent appointed pursuant to subsection 9.6.
"Agreement" means this Amended and Restated Credit Agreement
dated as of August 18, 1999.
"Applicable Margin" has the meaning assigned to that term in
subsection 2.2A.
"Asset Sale" means the sale by Borrower or any of its
Subsidiaries to any Person other than Borrower or any of its wholly-owned
Subsidiaries of (i) any of the capital stock of any of their respective
Subsidiaries, (ii) substantially all of the assets of any division or line of
business or product brands of Borrower or any of its Subsidiaries, or (iii) any
other assets (whether tangible or intangible) of Borrower or any of its
Subsidiaries outside of the ordinary course of business; provided that Asset
Sales shall not include the sale in the ordinary course of business by Borrower
or any of its Subsidiaries of any machinery or equipment which is obsolete or no
longer useful in the business of such Person.
"Assignment and Acceptance" means (i) with respect to the period
ending on the Restatement Effective Date, an Assignment and Acceptance entered
into by an Existing Lender and an Eligible Assignee (as defined in the Existing
Credit Agreement), and accepted by Agent substantially in the form of Exhibit
VIII to the Existing Credit Agreement, and (ii) thereafter, an Assignment and
Acceptance entered into by a Lender and an Eligible Assignee, and accepted by
Agent, in substantially the form of Exhibit VIII annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Borrower" has the meaning assigned to that term in the
introduction to this Agreement.
4
"Borrowing Base" shall mean, as of any date of determination, the
sum of (i) 85% of the Dollar value of Eligible Accounts (less such reserves
against such Eligible Accounts as Collateral Agent in its reasonable business
discretion elects to establish) and (ii) 55% of the Dollar value of Eligible
Inventory determined at the lower of cost or market (on a first-in, first-out
basis) (less such reserves against such Eligible Inventory as Collateral Agent
in its reasonable business discretion elects to establish including, without
limitation, reserves for markdowns and shrinkage). Collateral Agent, at any time
shall be entitled to (i) establish and increase or decrease reserves against
Eligible Accounts and Eligible Inventory, (ii) reduce any advance rate set forth
above, or restore such advance rate to any level equal to or below the advance
rate stated above, and (iii) impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in the definitions of "Eligible
Account" and "Eligible Inventory" in each case in the exercise of its reasonable
business discretion. Collateral Agent may, but shall not be required to, rely on
each Borrowing Base Certificate and any other schedules or reports delivered to
Collateral Agent in connection herewith in determining the then eligibility of
Accounts and Inventory. Reliance thereon by Collateral Agent from time to time
shall not be deemed to limit the right of Collateral Agent to revise advance
rates or standards of eligibility as provided herein. Any of the foregoing to
the contrary notwithstanding, the percentage of the Dollar value of Eligible
Accounts and Eligible Inventory which at any time of determination is the
subject of an Acquisition Audit shall, at all times until such Acquisition Audit
is completed to Collateral Agent's satisfaction, be equal to 50% of the
applicable percentage of the Dollar Value of Eligible Accounts and Eligible
Inventory not subject to an Acquisition Audit. Notwithstanding anything to the
contrary contained herein, as long as the Coppley Guaranty remains outstanding
the Borrowing Base shall be reduced in an amount equal to the aggregate
outstanding principal amount of the Coppley Seller Notes.
"Borrowing Base Certificate" means a certificate substantially in
the form of Exhibit XIII annexed hereto delivered by Borrower to Collateral
Agent and Lenders pursuant to subsection 6.8.
"Business Day" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of Connecticut, New York or Illinois
or is a day on which banking institutions located in such states are authorized
or required by law or other governmental action to close, and (ii) with respect
to all notices, determinations, fundings and payments in connection with the
Adjusted LIBOR Rate or any LIBOR Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
"Canadian Credit Agreement" means that certain Credit Agreement
among Coppley and Royal Acquisition, as Borrowers, the Lenders named therein and
General Electric Capital Canada Inc. as agent, substantially in the form of
Exhibit XVII, annexed hereto.
"Canadian Intercompany Usage" means, as of any date of
determination, the sum of (i) the aggregate principal amount of intercompany
loans made by Borrower and its Subsidiaries (other than the Canadian
Subsidiaries) to the Canadian Subsidiaries and (ii) the Letter of Credit Usage
with respect to Letters of Credit issued for, or on behalf of, the Canadian
Subsidiaries or their respective operations.
5
"Canadian Loan Documents" means the Canadian Credit Agreement and
the other "Loan Documents" as defined in the Canadian Credit Agreement.
"Canadian Loans" means "Loans" as defined in the Canadian Credit
Agreement.
"Canadian Subsidiaries" means the collective reference to
Coppley, Royal Acquisition and each other direct or indirect wholly-owned
Subsidiary of Borrower organized under the laws of Canada or any Province
thereof.
"Canadian Utilization" means, as of any date of determination,
the aggregate principal amount of all outstanding Canadian Loans.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within 90 days from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within 90 days from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.;
(iii) commercial paper maturing no more than 90 days from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 from
Standard & Poor's Corporation or at least P-1 from ▇▇▇▇▇'▇ Investors Service,
Inc.; (iv) certificates of deposit or bankers' acceptances maturing within 90
days from the date of acquisition thereof issued by any Lender or any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia having unimpaired capital and surplus of not
less than $500,000,000 (each Lender and each such commercial bank herein called
a "Cash Equivalent Bank"); (v) time deposits having a maturity of 90 days or
less with any Cash Equivalent Bank (whether such deposit is with such Cash
Equivalent Bank or any other Cash Equivalent Bank) and (vi) balances maintained
in Deposit Accounts included in the Cash Management System and in Excluded
Accounts.
"Cash Management Letters" means each of the letter agreements
among Borrower, its Subsidiaries (if applicable), the financial institutions at
which Deposit Accounts are located pursuant to the Cash Management System and
Collateral Agent in each case substantially in the form of Exhibit XII to the
Existing Credit Agreement and Exhibit XII annexed hereto with such changes as
are acceptable to Collateral Agent, pursuant to which Collateral Agent may, in
accordance with subsection 6.10, give notice to such financial institutions to
redirect funds from such Deposit Accounts to the Collection Account.
"Cash Management System" means the system of Deposit Accounts
(other than Excluded Accounts) of Borrower and its Subsidiaries pursuant to
which all Receipts of Borrower
6
and its Subsidiaries are collected and distributed all as described in Schedule
5.19 annexed hereto, as it may be modified from time to time in accordance with
the terms hereof.
"Cash Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"Cash Sweep Period" means any period during which Collateral
Agent is applying Receipts to the payment of Loans and other Obligations in
accordance with subsection 6.10.
"Change of Control" means any of the following events: (i) any
person or any two or more persons acting in concert within the meaning of
Section 13(d) of the Exchange Act is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or
Persons shall be deemed to have beneficial ownership of all shares that any such
Person or Persons has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 40% of the total voting power of equity securities entitled to vote in the
election of directors of the Borrower; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Borrower was approved by a vote of 66-2/3% of the directors
of the Borrower then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office. A Change of Control will be deemed to
have occurred if an event described in any of the foregoing clauses (i) or (ii)
has occurred, regardless of whether one of the events in any of the other
clauses has also occurred.
"CIBC" means Canadian Imperial Bank of Commerce.
"Closing Date" means March 23, 1994, the date on which the
initial Loans were made under the Existing Credit Agreement.
"Co-Agents" has the meaning assigned that term in the
introduction to this Agreement.
"Collateral" shall mean the "Collateral" covered by the Pledge
and Security Agreement and Trademark Assignment, the "Collateral" covered by the
Intercompany Note Security Agreement and Intercompany Note Trademark Assignment
and the "Pledged Collateral" covered by the Stock Pledge Agreement, and any
other property, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Collateral Agent to
secure the Obligations or in favor of Borrower to secure the payment of the
Intercompany Notes.
"Collateral Access Agreements" means any landlord waivers,
landlord confirmations, mortgagee waivers, bailee letters or any similar
acknowledgment agreements of any warehousemen, or processor in possession of
Inventory, in each case substantially in the
7
form of Exhibit XI to the Existing Credit Agreement and Exhibit XI annexed
hereto with such changes thereto as are acceptable to Collateral Agent.
"Collateral Account" means the Collateral Account established by
Borrower pursuant to the Pledge and Security Agreement pursuant to which
Borrower may pledge cash to Collateral Agent to secure the obligations of
Borrower to reimburse Issuing Lender for payments made under one or more Letters
of Credit as provided in Section 8.
"Collateral Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Collateral Documents" shall mean the Pledge and Security
Agreement, the Stock Pledge Agreement, the Trademark Assignment, the Collateral
Access Agreements, the Cash Management Letters, the Collateral Documents (as
defined in the Canadian Credit Agreement), any other security agreements, pledge
agreements, assignments, financing statements or other agreement, document or
certificate pursuant to which Collateral Agent obtains or perfects a security
interest in or Lien on Collateral and the Intercompany Note Security Agreement
and the Intercompany Note Trademark Assignment.
"Collection Account" means the Collection Account maintained by
Collateral Agent pursuant to the Pledge and Security Agreement, pursuant to
which all funds on deposit in the Deposit Accounts included in the Cash
Management System may be directed by Collateral Agent in accordance with
subsection 6.10.
"Commercial Letter of Credit" means any letter of credit,
Existing Letter of Credit or similar instrument issued in each case for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by Borrower or any of its
Subsidiaries in the ordinary course of business of Borrower or such Subsidiary.
"Commercial Paper Rate" means, as of any date of determination,
(i) the most recent published annual new yield on 90-day (or the range of days
including the nearest to 90 days) commercial paper (or the average of such
yields if more than one is published) placed directly by GE Capital or (ii) if
there is no such commercial paper placed directly by GE Capital, the most recent
annual return on 90 day commercial paper (or the average of such yields if more
than one is published) placed by dealers, as quoted either in the Federal
Reserve Rate Report which customarily appears in the Friday issue of the Wall
Street Journal (Eastern edition) under "Money Rates", or, in the event such
report shall not so appear, in such other nationally recognized publication as
Managing Agent may, from time to time, specify to Borrower.
"Commitment" means (i) with respect to the period prior to the
Restatement Effective Date, the Commitment of Existing Lenders to make Loans as
set forth in subsection 2.1A of the Existing Credit Agreement, and (ii)
thereafter, any of the Tranche A Revolving Loan Commitment, Tranche B Revolving
Loan Commitment or Swing Line Loan Commitment, and "Commitments" means such
commitments of all Lenders and Swing Line Lender in the aggregate.
8
"Commitment Termination Date" means the earlier of June 30, 2003
or, July 15, 2001, if the Subordinated Note Refinancing Date shall not have
occurred as of July 15, 2001.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit V annexed hereto delivered to Managing Agent and Lenders by
Borrower pursuant to subsection 6.1(iv).
"Consolidated Adjusted EBITDA" means, for any period, the sum of
the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Cash Interest Expense and, (iii) to the extent utilized in the calculation of
Consolidated Net Income (a) provisions for taxes based on income, (b) total
depreciation expense, (c) total amortization expense, and (d) other non-cash
items reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income (as provided in the definition thereof), all of the
foregoing as determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP.
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries but excluding, however, any expenditures made from the proceeds of
insurance or condemnation awards.
"Consolidated Cash Interest Expense" means, for any period, total
interest expense paid in cash (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Borrower and its Subsidiaries, but excluding, however, any
amounts referred to in subsection 2.3D payable to any Agent or Lenders on or
before the Restatement Effective Date.
"Consolidated Debt Service" means, for any period, the sum,
without duplication, of (i) Consolidated Cash Interest Expense and (ii)
principal payments (constituting amounts which may not be reborrowed) on
Consolidated Total Debt (other than the Obligations and other than principal
payments on the Senior Subordinated Notes made with the proceeds of Refinancing
Indebtedness or the sale of equity securities as permitted hereunder),
including, without limitation, mandatory principal payments in respect of
Capital Leases, all as determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP.
"Consolidated Debt Service Coverage Ratio" means, for any period,
the ratio of (i) the difference for such period between (y) Consolidated
Adjusted EBITDA and (z) Consolidated Capital Expenditures to (ii) the sum of (x)
Consolidated Debt Service plus (y) United States federal income taxes paid
arising from taxable income subsequent to the utilization or expiration of the
operating loss carry forwards in existence on the Restatement Effective Date,
for such period.
9
"Consolidated Leverage Ratio" means as of any date of
determination, the ratio of (i) the average of the outstanding principal amount
of Consolidated Total Debt as of the last day of each fiscal quarter for the
most recently concluded four consecutive fiscal quarter period of Borrower and
its Subsidiaries for which the financial information required to be delivered
hereunder is available to (ii) Consolidated Adjusted EBITDA for such four
consecutive fiscal quarter period.
"Consolidated Net Income" means, for any period, the net income
(or loss) of Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Borrower) in which any other Person (other than
Borrower or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Borrower or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of
Borrower or is merged into or consolidated with Borrower or any of its
Subsidiaries or that Person's assets are acquired by Borrower or any of its
Subsidiaries, (iii) the income of any Subsidiary of Borrower to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any after-
tax gains or losses attributable to Asset Sales (other than Assets Sales for
consideration of $100,000 or less in any one instance or $500,000 or less in the
aggregate for any Fiscal Year) or returned surplus assets of any Pension Plan
and (v) (to the extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net non-cash extraordinary losses.
"Consolidated Net Worth" means, as at any date of determination,
the sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Borrower and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or payable by Borrower and its Subsidiaries
on a consolidated basis during that period under all Operating Leases to which
Borrower or any of its Subsidiaries is a party as lessee.
"Consolidated Total Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Borrower and
its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
10
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence; provided that
Contingent Obligations shall not include intercompany contribution and indemnity
arrangements among Borrower and its Subsidiaries to settle joint obligations of
such entities which are solely for the benefit of such entities and not third
parties. The term "Contingent Obligation" shall also include the liability of a
general partner in respect of the liabilities of a general partnership in which
it is a general partner. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or, if
less, the amount to which such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Coppley" means ▇▇▇▇▇▇▇ Apparel Group Limited, a corporation
amalgamated under the laws of the Province of Ontario, Canada.
"Coppley Acquisition Agreement" means that certain Agreement made
as of November 29, 1998 by and among Keithmoor Limited, a corporation
incorporated under the laws of the Province of Ontario, Canada, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
an individual residing in the City of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Coppley, as
such agreement may heretofore have been or hereafter may be amended,
supplemented or otherwise modified from time to time.
"Coppley Documents" means the Coppley Seller Notes and Coppley
Guaranty and all material agreements delivered with or in connection with the
foregoing, collectively.
"Coppley Guaranty" means the guaranty provided by Borrower for
the Coppley Seller Notes.
"Coppley Seller Notes" means those certain promissory notes
issued by Coppley in connection with the acquisition of The Coppley, ▇▇▇▇▇ and
▇▇▇▇▇▇▇ Limited, a corporation incorporated under the laws of the Province of
Ontario, Canada, by, and its subsequent amalgamation with and into, Coppley, to
Keithmoor Limited, a corporation incorporated under the laws of the Province of
Ontario, Canada, in the aggregate amounts of $2,713,769.00 (Canadian) and
$3,397,900.00 (Canadian) respectively.
11
"Credit and Collection Policy" means, with respect to Borrower
and its Subsidiaries, those credit, collection, customer relations and service
policies, as they currently exist as set forth in Schedule 5.18 hereto, as such
policies may be amended, modified or supplemented from time to time in
accordance with the terms hereof.
"Credit Exposure" means, with respect to any Lender as of any
date of determination the sum of that Lender's Tranche A Revolving Loan Exposure
plus that Lender's Tranche B Revolving Loan Exposure.
"Credit Party" means each of Borrower and each Guarantor.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Borrower or any of
its Subsidiaries against fluctuations in currency values.
"Defaulted Account" means an Account that is written off
Borrower's or one of its Subsidiary's books as uncollectible in accordance with
the Credit and Collection Policy.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Effective Advance Rate" means, as of any date of determination,
the percentage obtained by dividing (i) the aggregate Credit Exposure of all
Lenders by (ii) the aggregate Dollar value of all Accounts and Inventory
(determined at the lower of cost or market on a first-in, first-out basis).
"Eligible Accounts" has the meaning set forth in Schedule 1.1A
annexed hereto.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i) through
(iv) above) that is acceptable to Managing Agent and has agreed to make
Revolving Loans in accordance with the terms hereof and (B) any Lender and any
Affiliate (subject to the following proviso) of any Lender; provided that (y) no
Affiliate of Borrower, and (z) without the consent of Borrower, no Person
engaged in factoring or any Affiliate thereof, shall be an Eligible Assignee (it
being understood that this clause (z) shall not prohibit any original Lender
with
12
factoring Affiliates from being a Lender and holding Commitments hereunder
(including, without limitation, holding any increased Commitment hereunder), but
shall prohibit such factoring Affiliates from becoming Lenders hereunder).
"Eligible Inventory" has the meaning set forth in Schedule 1.1B
annexed hereto.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time during the past
five years, maintained or contributed to by Borrower or any Persons who are or
were, at the relevant time, its ERISA Affiliates and with respect to which the
Borrower could have any liability.
"Environmental Claim" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Borrower, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"Environmental Laws" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Borrower or any of its Subsidiaries or any of their
respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air
Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
(S) 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. (S) 136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S)
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. (S) 11001 et seq.), each as amended or supplemented, and any analogous
future or present local, state and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation which is, or was at the relevant time, a member of a controlled
group of corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which that Person is, or was at the relevant time, a member;
(ii) any trade or business (whether or not incorporated) which is, or was at the
relevant time, a member of a group of trades or businesses under common control
within the
13
meaning of Section 414(c) of the Internal Revenue Code of which that Person is,
or was at any time, a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is, or was at the relevant time, a
member.
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution (other than
contributions that are being contested in good faith and as to which adequate
reserves have been provided for in accordance with GAAP) to a Multiemployer
Plan; (iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Borrower or any of its ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such Pension Plan resulting
in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by
the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which would constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Borrower or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Borrower or any of its ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by Borrower or any of its ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could reasonably be expected to give rise to the
imposition on Borrower or any of its ERISA Affiliates of fines, penalties, taxes
or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer Plan
or the assets thereof, or against Borrower or any of its ERISA Affiliates in
connection with any such Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"ESOP Loan Documents" means (i) that certain Term Loan Agreement
dated as of December 1, 1988 between Hartmarx Employee Stock Ownership Plan
Trust and Wachovia Bank and Trust Company, N.A., as amended and assigned to
Borrower, (ii) Guaranty of
14
Hartmarx Corporation dated as of December 1, 1988, in favor of Wachovia Bank and
Trust Company, N.A., as amended, (iii) documents set forth in (i) and (ii)
herein, as modified, amended, revised, financed and/or refinanced prior to the
Restatement Effective Date, and (iv) any and all amendments, replacements,
refinancings and modifications, from time to time, of the documents set forth in
(i), (ii) and (iii) herein in accordance with the terms hereof.
"Event of Default" means each of the events set forth in Section
8.
"Excess Availability" means as of any date of determination, the
excess of (A) the lesser of (i) the difference between (a) the sum of the
Tranche A Revolving Loan Commitments plus the sum of the Tranche B Revolving
Loan Commitments minus (b) the Canadian Utilization or (ii) the Borrowing Base,
over (B) the sum of the Total Utilization of Tranche A Revolving Commitments
plus the Total Utilization of Tranche B Revolving Commitments.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of Issuing Lender in the New York foreign
exchange market for the purchase by Issuing Lender (by cable transfer) of such
currency in exchange for Dollars at 12:00 noon (New York time) one Business Day
prior to such date (or otherwise in accordance with the normal practice of
Issuing Lender), expressed as a number of units of such currency per one Dollar.
"Excluded Accounts" means the Deposit Accounts described in
Schedule 1.1C annexed hereto.
"Existing ▇▇▇▇▇▇▇ Credit Facility" means that certain Letter of
Credit dated as of August 17, 1998 by and among CIBC and ▇▇▇▇▇▇▇.
"Existing Credit Agreement" has the meaning assigned to that term
in the Recitals to this Agreement.
"Existing EDBs" means, collectively, (A) those certain loan
agreements each dated as of December 1, 1993 (i) between Borrower and the
Indiana Development Finance Authority relating to $7,500,000 in principal amount
of economic development bonds due July 1, 2014 (Michigan City Issue) and (ii)
between Borrower and the City of Des Plaines, Illinois relating to $8,000,000 in
principal amount of economic development bonds due July 1, 2015 (Des Plaines
issue), each bearing a fixed coupon of 7.25% per annum and issued at a discount
to yield 7.50% per annum; (B) that certain Loan Agreement dated September 1,
1987 between Thorngate, Ltd. and the Industrial Development Authority of the
County of Cape Girardeau, Missouri relating to $1,750,000 in principal amount of
industrial development revenue bonds due September 1, 2007; (C) that certain
Loan Agreement dated September 1, 1987 between ▇▇▇▇▇▇ Manufacturing Company and
the Development Authority of ▇▇▇▇▇▇ County relating to $2,500,000 in principal
amount of industrial development revenue bonds due September 1, 2007; and (D)
that certain Lease Agreement dated as of March 9, 1966 (or 1967 in the case of
some copies of the same) between Easton Area Industrial Developers Inc. and
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
15
Inc., as the same has been amended, assigned and assumed prior to the date
hereof, and all mortgages, deeds of trust, guarantees and other agreements
executed in connection therewith.
"Existing Lenders" has the meaning assigned to that term in the
Recitals to this Agreement.
"Existing Letters of Credit" means, collectively, any Letters of
Credit issued under the Existing Credit Agreement which have not been terminated
or cancelled as of the Restatement Effective Date.
"Existing Loans" means, as the context requires, one or more of
the Existing Revolving Loans or Existing Swing Line Loans or any combinations
thereof.
"Existing Notes" means the "Revolving Notes" and the "Swing Line
Note" (as such terms are defined in the Existing Credit Agreement) issued to
Existing Lenders pursuant to the Existing Credit Agreement.
"Existing Revolving Loans" means, with respect to any Existing
Lender, the "Revolving Loans" under, and as defined in, the Existing Credit
Agreement held by such Existing Lender, in the principal amount of such Loans
outstanding immediately prior to the Restatement Effective Date.
"Existing Swing Line Loans" means the "Swing Line Loans" under,
and as defined in, the Existing Credit Agreement held by the Swing Line Lender,
in the principal amount of such Loans outstanding immediately prior to the
Restatement Effective Date.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased or operated or used (for manufacturing,
warehousing, sales or other business operations) by Borrower or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"File Tape" means, as to each day, the various software created
and maintained or otherwise utilized by the Borrower and its Subsidiaries in
accordance with their usual and customary practice and encoded pursuant to the
programming in use by Borrower and its Subsidiaries as of the Closing Date, as
such software may be modified from time to time, with information that includes,
as to Borrower and each Subsidiary, the name, address, telephone number and
account number of each Account Debtor of such Person and the aggregate
outstanding balance, as of such day, of the Accounts owing from each Account
Debtor.
"Financial Standby Letter of Credit" means any Standby Letter of
Credit which is not a Nonfinancial Standby Letter of Credit.
"Fiscal Year" means the fiscal year or fiscal period of Borrower
and its Subsidiaries, as the case may be, ending on or about the last Business
Day of November of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.
"Funding Date" means the date of the funding of a Loan.
16
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GE Capital" has the meaning assigned to that term in the
introduction to this Agreement.
"Governmental Authorization" means any permit, license,
authorization, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"Guarantors" has the meaning assigned that term in the recitals
to this Agreement.
"Guaranty" means the Guaranty executed and delivered by each
Guarantor on the Closing Date, substantially in the form of Exhibit IX to the
Existing Credit Agreement and attached hereto as Exhibit IX, as such Guaranty
may heretofore have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; (ix) pesticides; and (x) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or which may or could pose a hazard
to the health and safety of the owners, occupants or any Persons in the vicinity
of the Facilities.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect
17
thereof or (b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
Contingent Obligations and not Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Index Rate" means, at any time, the higher of (x) the Prime Rate
or (y) the Commercial Paper Rate.
"Index Rate Loans" means Loans bearing interest at rates
determined by reference to the Index Rate as provided in subsection 2.2A.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Borrower and its Subsidiaries as currently
conducted that are material to the financial condition, business or operations
of Borrower and its Subsidiaries, taken as a whole including, without
limitation, any of the foregoing licensed to Borrower or any of its Subsidiaries
by other Persons.
"Intercompany Note Security Agreement" means that certain
Intercompany Note Security Agreement dated as of the Closing Date entered into
between the Guarantors as grantors and Borrower as secured party substantially
in the form of Exhibit XV to the Existing Credit Agreement and attached hereto
as Exhibit XV, as such Intercompany Note Security Agreement may heretofore have
been or hereafter may be amended, restated, supplemented or otherwise modified
from time to time.
"Intercompany Note Trademark Assignment" means that certain
Trademark Security Agreement dated as of the Closing Date entered into between
the Guarantors as grantors and Borrower as secured party in substantially the
form of Exhibit XV-A to the Existing Credit Agreement and attached hereto as
Exhibit XV-A, as such Intercompany Note Trademark Assignment may heretofore have
been or hereafter may be amended, restated, supplemented or otherwise modified
from time to time.
"Intercompany Notes" means the promissory notes dated as of the
Closing Date issued to Borrower by each Guarantor to evidence intercompany
Indebtedness, in substantially the form of Exhibit XIV to the Existing Credit
Agreement, a form of which is attached hereto as Exhibit XIV.
"Interest Payment Date" means (i) with respect to any Index Rate
Loan, each April 1, July 1, October 1 and January 1 of each year, commencing on
the first such date to occur after the Restatement Effective Date, and (ii) with
respect to any LIBOR Rate Loan, the last day of each Interest Period applicable
to such Loan; provided that in the case of each Interest Period of longer than
90 days, "Interest Payment Date" shall also include the date that is 90 days
after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
18
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Borrower or any of its Subsidiaries
against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for
calculating the Adjusted LIBOR Rate for purposes of determining the interest
rate in respect of an Interest Period. The Interest Rate Determination Date
shall be the second Business Day prior to the first day of the related Interest
Period for a LIBOR Rate Loan.
"Interim Advance" has the meaning set forth in subsection
2.1A(iii).
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter.
"Inventory" shall mean any "inventory," as such term is defined
in the UCC, now or hereafter owned or acquired by Borrower or any of its
Subsidiaries, wherever located, and, in any event, including all inventory,
merchandise, goods and other personal property which are held by or on behalf of
Borrower or any of its Subsidiaries for sale or lease or are furnished or are to
be furnished under a contract of service or which constitute raw materials, work
in process, or materials used or consumed or to be used or consumed in
Borrower's or such Subsidiaries', as the case may be, business, or in the
processing, packaging, advertising, promotion, delivery or shipping of the same,
and all finished goods.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a
Subsidiary of Borrower or such Subsidiary, as the case may be), or (ii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Borrower or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"Issuing Lender" means The Bank of New York.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Lender" and "Lenders" means the persons identified as "Lenders"
and listed on the signature pages of this Agreement (and includes Swing Line
Lender and Issuing Lender), together with their successors and permitted assigns
pursuant to subsection 10.1, provided that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that Commitment.
To the extent the context so requires, with respect to the period prior
19
to the Restatement Effective Date the terms "Lender" and "Lenders" shall include
"Lenders" under, and as defined in, the Existing Credit Agreement.
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lender for the account of Borrower pursuant to subsection 3.1 and
includes, without limitation, the Existing Letters of Credit pursuant to
subsection 3.7.
"Letter of Credit Usage" means, as at any date of determination,
the sum of (i) the maximum aggregate undrawn amount which is or at any time
thereafter may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lender and not theretofore reimbursed by Borrower
(whether such reimbursement is out of the proceeds of the Tranche A Revolving
Loans pursuant to subsection 3.3B or otherwise). For purposes of this
definition, any amount described in clause (i) or (ii) of the preceding sentence
which is denominated in a currency other than Dollars shall be valued based on
the applicable Exchange Rate for such currency as of the applicable date of
determination.
"LIBOR Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted LIBOR Rate as provided in subsection
2.2A.
"License Agreements" has the meaning assigned that term in
subsection 5.20.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan Documents" means (i) this Agreement, (ii) the Notes, (iii)
the Letters of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Borrower in favor of Issuing Lender
relating to, the Letters of Credit), (iv) any Interest Rate Agreement consisting
of an interest rate swap permitted pursuant to subsection 7.4(ii)(a) between
Borrower and any Lender or an Affiliate thereof, (v) the Guaranty, (vi) the
Acknowledgement and Consent, (vii) the Collateral Documents and (viii) the
Canadian Loan Documents.
"Loans" means (i) with respect to the period prior to the
Restatement Effective Date, the Existing Loans, and (ii) thereafter, one or more
of the Tranche A Revolving Loans, the Tranche B Revolving Loans or Swing Line
Loans or any combination thereof.
"Managing Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, financial condition or
prospects of Borrower and its Subsidiaries,
20
taken as a whole, or (ii) the material impairment of any of the Collateral or
the impairment of the ability of any Credit Party to perform any of their
material obligations under the Loan Documents, or of any Agent or Lenders to
enforce, the Obligations.
"Multiemployer Plan" means an Employee Benefit Plan that is a
"multiemployer plan", as defined in Section 3(37) of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including,
without limitation, (i) income taxes reasonably estimated to be actually payable
as a result of such Asset Sale within two years of the date of such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) required to be
repaid under the terms thereof as a result of such Asset Sale.
"Non-Operating Subsidiary" means, as of any date of
determination, any Subsidiary of Borrower designated as such on Schedule 5.1
annexed hereto by the Borrower as of the Closing Date (which designation has not
been subsequently revoked by Borrower by written notice to Managing Agent) and
any Subsidiary of Borrower designated as such after the Closing Date in
accordance with subsection 6.11, and with respect to each such Subsidiary
(including each such Subsidiary designated on Schedule 5.1 annexed hereto), each
of the following statements is true: (i) such Subsidiary does not own or hold
any interest in any Account (other than Accounts that are more than 6 months old
as of the Closing Date and rights to payment arising after the Closing Date
resulting from the sale or other disposition of assets (other than Collateral)
permitted hereunder) or any Inventory, (ii) such Subsidiary owns or otherwise
holds an interest in less than 1% of the Collateral, (iii) the increase in the
outstanding principal amount of such Subsidiary's Intercompany Note on and after
the Closing Date shall not exceed $1,750,000, (iv) as of the last day of the
most recent fiscal quarter of Borrower, such Subsidiary accounted for less than
1% of the consolidated revenues or cash flow (calculated for this purpose as
earnings before income taxes, depreciation and amortization, minus capital
expenditures) of Borrower for the twelve month period ending on such date and
(v) as of the last day of the most recent fiscal quarter of Borrower, such
Subsidiary (a) was the owner of less than 1% of the consolidated assets of
Borrower and (b) had a net worth of less than 1% of Consolidated Net Worth;
provided that no such Subsidiary shall constitute a Non-Operating Subsidiary if,
when aggregated with all other Non-Operating Subsidiaries at such time, each of
the foregoing statements would not be true as to Non-Operating Subsidiaries
taken as a whole, substituting in each case for such aggregate test a reference
to "10%" for each reference to "1%" and a reference to "$17,500,000" for the
reference to "$1,750,000" in such statements.
"Nonfinancial Standby Letter of Credit" means any Standby Letter
of Credit issued in support of insurance obligations, workmen's compensation,
judgment bonds, performance bonds and similar non-debt obligations of Borrower
or its Subsidiaries which is classified as a nonfinancial standby letter of
credit by Issuing Lender upon the issuance thereof hereunder; provided that any
such Nonfinancial Standby Letter of Credit shall automatically be deemed to be a
Financial Letter of Credit immediately upon any law, regulation or governmental
official requiring Issuing Lender or any other Lender to designate such
Nonfinancial Standby Letter of Credit (or any credit exposure with respect
thereto) as a financial letter of credit (or exposure with respect to a
financial letter of credit).
21
"Notes" means one or more of the Tranche A Revolving Notes, the
Tranche B Revolving Notes or the Swing Line Notes or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Borrower to Managing Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially
in the form of Exhibit II annexed hereto delivered by Borrower to Managing Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Borrower to
Issuing Lender together with any application that Issuing Lender requires in
accordance with its customary practice for the issuance of letters of credit
pursuant to subsection 3.1B(i) with respect to the proposed issuance of a Letter
of Credit of the type requested.
"Obligations" means all obligations of every nature of each
Credit Party from time to time owed to any Agent, Lenders or any of them under
the Loan Documents, whether for principal, interest, reimbursement of amounts
drawn under Letters of Credit, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by any of its chairman of the
board (if an officer), president, one of its senior vice presidents or chief
financial officer or its vice president, treasurer, controller, or assistant
treasurer (if in each case such officer is also a senior officer of Borrower);
provided that every Officer's Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer making or giving such Officer's Certificate has read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, to the best knowledge of the
signer, such officer has made or has caused to be made such examination or
investigation as is reasonably necessary to enable such officer to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, to the best knowledge of the signer, such
condition has been complied with in all material respects.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"Operating Subsidiaries" means each of the direct or indirect
Subsidiaries of Borrower from time to time in existence, excluding, however, the
Non-Operating Subsidiaries.
"Payment Office" means (i) for funding and payment purposes
Account No. ▇▇-▇▇▇-▇▇▇ in the name of GE Capital CAF Depository at Bankers Trust
Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ no. 021 001 033 and (ii) for
notice of funding and payment purposes, including, without limitation, delivery
of Notices of Borrowing and Notices of
22
Conversion/Continuation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Collateral Analyst -Hartmarx, or, in each case, such other
office as Managing Agent may designate from time to time in writing to Borrower
and each Lender in accordance with subsection 10.8.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA other than Excluded Plans.
"Permitted Encumbrances" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums not
yet 60 days past due and with respect to which no enforcement
action has been taken or which is being contested in good faith,
if such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) Liens consisting of deposit arrangements securing obligations
in connection with banking services of the Borrower and its
Subsidiaries which constitute Cash Equivalents of the type
described in clauses (iv), (v) and (vi) of the definition
thereof;
(vi) deposits or pledges for the purpose of securing an appeal,
stay or discharge in the course of legal proceedings; provided
that such deposits or pledges do not secure judgments
constituting an Event of Default under subsection 8.8;
(vii) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of
Borrower or any of its Subsidiaries;
23
(viii) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar
charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of Borrower or any of
its Subsidiaries;
(ix) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance
that the interest or title of such lessor or sublessor may be
subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance
referred to in the preceding clause (b);
(x) Liens on Inventory and documents of title securing trade
letters of credit permitted pursuant to subsection 7.4(vi)(B);
provided that such Lien attaches only to the Inventory and
documents of title that are the subject of such trade letters of
credit;
(xi) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement; and
(xii) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in
connection with the importation of goods.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"Pledge and Security Agreement" shall mean the Pledge and
Security Agreement executed and delivered by Borrower and the Guarantors on the
Closing Date, in substantially the form of Exhibit X to the Existing Credit
Agreement and attached hereto as Exhibit X, as such Pledge and Security
Agreement may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the rate that Reference Bank announces from
time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Reference Bank, Managing Agent or
any other Lender may make commercial loans or other loans at rates of interest
at, above or below the Prime Rate.
"Pro Rata Share" means, (A) with respect to all payments and
computations relating to the period prior to the Restatement Effective Date with
respect to each Existing Lender, the "Pro Rata Share" of that Lender as defined
in the Existing Credit Agreement and (B) thereafter, (i) with respect to all
payments, computations and other matters relating to the Tranche A Revolving
Loan Commitment or the Tranche A Revolving Loans of any Lender or
24
any Letters of Credit issued or participations therein purchased by any Lender
or any participations in any Swing Line Loans purchased by any Lender, the
percentage obtained by dividing (x) the Tranche A Revolving Loan Exposure of
that Lender by (y) the aggregate Tranche A Revolving Loan Exposure of all
Lenders, (ii) with respect to all payments, computations and other matters
relating to the Tranche B Revolving Loan Commitment or the Tranche B Revolving
Loans of any Lender, the percentage obtained by dividing (x) the Tranche B
Revolving Loan Exposure of that Lender by (y) the aggregate Tranche B Revolving
Loan Exposure of all Lenders and (iii) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the Credit Exposure of that
Lender by (y) the Credit Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for the purposes of
clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
"Receipts" shall mean all cash, Cash Equivalents, checks, notes,
drafts and any items of payment or collection received, by or on behalf of
Borrower or any of its Subsidiaries, or by any officers, employees or agents of
Borrower or any of its Subsidiaries or other Persons acting for or in concert
with Borrower or such Subsidiary to make collections on Borrower's or such
Subsidiary's behalf in connection with or in any way relating to Borrower or
such Subsidiary or the operation of Borrower's or such Subsidiary's business,
including, without limitation, any proceeds received from (i) any sales of, or
loans against, Accounts of Borrower or any of its Subsidiaries (other than the
Loans and Letters of Credit pursuant to this Agreement), (ii) any disposition of
assets or issuance or sale of stock or equity securities by Borrower or any of
its Subsidiaries, (iii) the issuance or sale of Indebtedness by Borrower or any
of its Subsidiaries (other than the Obligations and other Indebtedness permitted
by this Agreement), (iv) insurance policies (other than liability insurance
payable directly or indirectly to a third party) maintained by Borrower or any
of its Subsidiaries, whether or not Collateral Agent is an additional insured or
named as loss payee thereunder and (v) the successful prosecution (including any
settlement) of any claims, actions or other litigation or proceeding by or on
behalf of or against Borrower or any of its Subsidiaries; it being understood
and agreed that nothing contained in this definition shall in any respect be
deemed to permit any transactions by Borrower or any of its Subsidiaries
otherwise restricted or prohibited by this Agreement.
"Reference Bank" means Bankers Trust Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Refinancing Debt Documents" means all material agreements and
instruments relating to Refinancing Indebtedness.
"Refinancing Indebtedness" means unsecured senior, senior
subordinated or subordinated Indebtedness of the Borrower in an aggregate
principal amount of up to $125,000,000, the proceeds of which are used, to
refinance all or a portion of the Senior Subordinated Notes, other Refinancing
Indebtedness and/or repay the Loans to the extent required hereunder, and to pay
fees, penalties, premiums and expenses related to the foregoing, the terms and
conditions of such Indebtedness to be in form and substance satisfactory to
Managing Agent and Requisite Lenders. Without limiting their ability to approve
the terms and conditions of Refinancing Indebtedness as provided above, Managing
Agent and Lenders
25
acknowledge that the following terms of Refinancing Indebtedness are
satisfactory: (i) the cash interest expense incurred by Borrower in connection
with such Refinancing Indebtedness does not exceed 12%, (ii) no principal or
sinking fund payments or redemptions of such Refinancing Indebtedness shall be
required prior to December 31, 2003 and (iii) such Refinancing Indebtedness
contains covenants and defaults that are no more restrictive than those
contained in this Agreement.
"Refinancing Surplus" means, at any time of determination, the
difference (if positive) between (i) the principal amount of all Refinancing
Indebtedness then outstanding minus (ii) the sum of (A) $85,000,000 plus (B) all
prepayment premiums and penalties paid in connection with the repayment or
refinancing of the Senior Subordinated Notes and (C) all out-of-pocket expenses
incurred in connection with the issuance, sale or incurrence of Refinancing
Indebtedness.
"Refunded Swing Line Loans" has the meaning assigned to that term
in subsection 2.1A(iii).
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Documents" means, collectively, (i) the Senior
Subordinated Notes, (ii) the Subordinated Note Indenture, (iii) the Existing
EDBs, (iv) the ESOP Loan Documents, (v) the Coppley Documents and (vi) the
Refinancing Debt Documents.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Requisite Lenders" means either (i) two or more Lenders having
or holding more than 50% of the Credit Exposure of all Lenders or (ii) any one
Lender having or holding 66-2/3% or more of the Credit Exposure of all Lenders.
"Restatement Effective Date" means the date on or before August
18, 1999, on which (i) the conditions precedent to effectiveness set forth in
Section 10.20 shall be satisfied and (ii) the conditions precedent set forth in
subsection 4.1 shall be satisfied or waived in accordance with the terms hereof.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower now or hereafter outstanding, except a dividend payable solely in
shares of stock to the holders of such shares, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Borrower now or hereafter
26
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of Borrower now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness
and (v) any Investment other than an Investment permitted pursuant to subsection
7.3.
"Revolving Loan Commitment" means, the commitment of a Lender to
make or continue Revolving Loans to Borrower pursuant to subsections 2.1A(i) and
2.1A(ii) and "Revolving Loan Commitments" means such commitments of all Lenders
in the aggregate.
"Revolving Loans" means, collectively, the Tranche A Revolving
Loans and the Tranche B Revolving Loans.
"Rollover Borrowing" means a borrowing of Revolving Loans
hereunder by Borrower in accordance with subsection 4.4.
"Rollover Termination Notice" means any notice (which may be
delivered telephonically provided it is confirmed promptly in writing) by
Requisite Lenders to Managing Agent instructing Managing Agent not to permit any
Rollover Borrowings hereunder.
"Royal" means Royal Shirt Company Limited, a corporation
incorporated under the laws of the Province of Ontario, Canada.
"Royal Acquisition" means 1349357 Ontario, Inc., a corporation
incorporated under the laws of the Province of Ontario, Canada.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Senior Subordinated Notes" means those certain 10-7/8% Senior
Subordinated Notes due 2002 in the initial aggregate principal amount of
$100,000,000, issued by Borrower pursuant to the Subordinated Note Indenture.
"Solvent" means, with respect to any Person, that as of the date
of determination (i) the then fair saleable value of the property of such Person
is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in
27
relation to its business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any Existing Letter of Credit,
standby letter of credit or similar instrument issued in each case for the
purpose of supporting (i) Indebtedness of Borrower or any of its Subsidiaries in
respect of industrial revenue or development bonds or financings, (ii) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (iii) the
obligations of third party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third party
insurers, (iv) obligations with respect to Capital Leases or Operating Leases of
Borrower or any of its Subsidiaries, and (v) performance, payment, deposit or
surety obligations of Borrower or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry; provided that Standby Letters of Credit may not be
issued for the purpose of supporting (a) trade payables or (b) Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"Stock Pledge Agreement" means the Stock Pledge Agreement
executed and delivered by Borrower on the Restatement Effective Date,
substantially in the form of Exhibit XVIII annexed hereto, as such Stock Pledge
Agreement may thereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Subordinated Indebtedness" means (i) the Indebtedness of
Borrower evidenced by the Senior Subordinated Notes and (ii) any other
Indebtedness of Borrower (including without limitation any subordinated
Refinancing Indebtedness) subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material terms
in form and substance satisfactory to Managing Agent and Requisite Lenders.
"Subordinated Note Indenture" means that certain Indenture dated
as of March 15, 1994 between Borrower and Bank One Columbus, N.A., as successor
trustee to Bank One Wisconsin Trust Company, N.A., as trustee.
"Subordinated Note Refinancing Date" means the date on which the
outstanding principal amount of the Senior Subordinated Notes are permanently
reduced to $35,000,000 or less as a result of redemptions, refinancings and
other transactions permitted hereunder in accordance with subsection 7.1(xii)
and/or subsection 7.5.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled,
28
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.
"Swing Line Lender" means GE Capital, or any Person serving as a
successor Managing Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Borrower pursuant to subsection 2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Borrower pursuant to subsection 2.1A(iii).
"Swing Line Note" means (i) the promissory note of Borrower
issued pursuant to subsection 2.1D(iii) on the Restatement Effective Date and
(ii) any promissory note issued by Borrower to any successor Agent and Swing
Line Lender pursuant to the last sentence of subsection 9.6B, in each case
substantially in the form of Exhibit IV-B annexed hereto.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by any federal, state or local governmental authority or any political
subdivision or taxing authority thereof, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of a
Lender, its lending office) is located or by any political subdivision or taxing
authority thereof or in which that Person is deemed to be doing business on all
or part of the net income, profits or gains of that Person (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise).
"Third Party Interactives" means all Persons with whom any Credit
Party exchanges data electronically in the ordinary course of business,
including, without limitation, customers, suppliers, third-party vendors,
subcontractors, processors-converters, shippers and warehouseman.
"Total Utilization of Tranche A Revolving Commitments" means, as
at any date of determination, the sum of (i) the aggregate principal amount of
all outstanding Tranche A Loans (other than Tranche A Revolving Loans made for
the purpose of repaying any Refunded Swing Line Loans reimbursing the Issuing
Lender for any amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the Letter of Credit Usage plus (iii) the aggregate principal amount
of all outstanding Swing Line Loans.
"Total Utilization of Tranche B Revolving Commitments" means, as
at any date of determination, the aggregate principal amount of all outstanding
Tranche B Revolving Loans.
"Trademark Assignment" means that certain Trademark Security
Agreement executed and delivered by Borrower and the Guarantors on the Closing
Date in substantially the form of Exhibit X-A to the Existing Credit Agreement
and attached hereto as Exhibit X-A, as
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such Trademark Assignment may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time.
"Tranche A Revolving Loan Commitment" means the commitment of a
Lender to make or continue Tranche A Revolving Loans to Borrower pursuant to
subsection 2.1A(i), and "Tranche A Revolving Loan Commitments" means such
commitments of all Lenders in the aggregate.
"Tranche B Revolving Loan Commitment" means the commitment of a
Lender to make Tranche B Revolving Loans to Borrower pursuant to subsection
2.1A(ii), and "Tranche B Revolving Loan Commitments" means such commitments of
all Lenders in the aggregate.
"Tranche A Revolving Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the termination of the
Tranche A Revolving Loan Commitments, that Lender's Tranche A Revolving Loan
Commitment and (ii) after the termination of the Tranche A Revolving Loan
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Tranche A Revolving Loans of that Lender plus (b) in the event that Lender is an
Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit plus (d) in the case of Swing
Line Lender, the aggregate outstanding principal amount of all Swing Line Loans
(net of any participations therein purchased by other Lenders) plus (e) the
aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"Tranche B Revolving Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the termination of the
Tranche B Revolving Loan Commitments, that Lender's Tranche B Revolving Loan
Commitment and (ii) after the termination of the Tranche B Revolving Loan
Commitments, the aggregate outstanding principal amount of the Tranche B
Revolving Loans of that Lender.
"Tranche A Revolving Loans" means (i) with respect to the period
prior to the Restatement Effective Date, the Existing Revolving Loans and (ii)
thereafter, the Loans made by Lenders to Borrower pursuant to subsection 2.1A(i)
and shall include, without limitation, Tranche A Revolving Loans which are
Rollover Borrowings.
"Tranche B Revolving Loans" means the Loans made by Lenders to
Borrower pursuant to subsection 2.1A(ii) and shall include, without limitation,
Tranche B Revolving Loans which are Rollover Borrowings.
"Tranche A Revolving Notes" means (i) the promissory notes of
Borrower issued pursuant to subsection 2.1D(i) on the Restatement Effective Date
and (ii) any promissory notes issued by Borrower pursuant to the last sentence
of subsection 10.1B(i) in connection with assignments of the Tranche A Revolving
Loan Commitments and Tranche A Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit IV annexed hereto.
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"Tranche B Revolving Notes" means (i) the promissory notes of Borrower
issued pursuant to subsection 2.1D(ii) on the Restatement Effective Date and
(ii) any promissory notes issued by Borrower pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Tranche B Revolving
Loan Commitments and Tranche B Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit IV-A annexed hereto.
"UCC" shall mean the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
"Year 2000 Assessment" means a written assessment of the nature and
extent of the Year 2000 Problems and Year 2000 Date-Sensitive Systems/Components
of the Borrower and its Subsidiaries taken as a whole, including, without
limitation, Year 2000 Problems regarding data exchanges with Third Party
Interactives.
"Year 2000 Corrective Actions" means, as to the Borrower and its
Subsidiaries taken as a whole, all actions necessary to eliminate such Person's
Year 2000 Problems, including, without limitation, computer code enhancements
and revisions, upgrades and replacements of Year 2000 Date-Sensitive
Systems/Components, and coordination of such enhancements, revisions, upgrades
and replacements with Third Party Interactives.
"Year 2000 Corrective Plan" means, with respect to the Borrower and
its Subsidiaries taken as a whole, a comprehensive plan to eliminate all of its
Year 2000 Problems on or before October 31, 1999, including without limitation
(i) computer code enhancements or revisions, (ii) upgrades or replacements of
Year 2000 Date-Sensitive Systems/Components, (iii) test and validation
procedures, (iv) an implementation of time line and budget and (v) designation
of specific employees who will be responsible for planning, coordinating and
implementing each phase or subpart of the Year 2000 Corrective Plan.
"Year 2000 Date-Sensitive Systems/Components" means any system
software, network software, applications software, data base, computer file,
embedded microchip, firmware or hardware that accepts, creates, manipulates,
sorts, sequences, calculates, compares or outputs calendar-related data
accurately; such systems and components shall include, without limitation,
mainframe computers, file server/client systems, computer workstations, routers,
hubs, other network-related hardware, and other computer-related software,
firmware or hardware and information processing and delivery systems of any kind
and telecommunications systems and other communications processors, security
systems, alarms, elevators and HVAC systems.
"Year 2000 Implementation Testing" means, as to the Borrower and its
Subsidiaries taken as a whole, (i) the performance of test and validation
procedures regarding Year 2000 Corrective Actions on a unit basis and on a
systemwide basis; (ii) the performance of test and validation procedures
regarding data exchanges among the Credit Parties' Year 2000 Date-Sensitive
Systems/Components and data exchanges with Third Party Interactives, and (iii)
the design and implementation of additional Year 2000 Corrective Actions, the
need for which has been demonstrated by test and validation procedures.
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"Year 2000 Problems" means, with respect to the Borrower and its
Subsidiaries taken as a whole, limitations on the capacity or readiness of Year
2000 Date-Sensitive Systems/Components to accurately accept, create, manipulate,
sort, sequence, calculate, compare or output calendar date information with
respect to calendar year 1999 or any subsequent calendar year beginning on or
after January 1, 2000 (including leap year computations), including, without
limitation, exchanges of information among Year 2000 Date-Sensitive
Systems/Components of the Borrower and its Subsidiaries taken as a whole and
exchanges of information among the Credit Parties and Year 2000 Date-Sensitive
Systems/Components of Third Party Interactives and functionality of peripheral
interfaces, firmware and embedded microchips.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3. If
any changes in accounting principles from those used in the preparation of the
financial statements referred to in subsection 5.3 are hereafter required or
permitted by the rules, regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions)
and are adopted by the Borrower with the agreement of its independent certified
public accountants and such changes result in a change of the components of the
calculation of any of the definitions, covenants or other provisions referred to
in the immediately preceding sentence, Borrower, Managing Agent and Lenders
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that the criteria for
evaluating financial condition of Borrower and its Subsidiaries shall be the
same after such changes as if such changes had not been made; provided, however,
that no change in GAAP that would affect the components of the calculation of
any of such definitions, covenants or other provisions shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
Managing Agent and Requisite Lenders, to reflect such change in accounting
principles.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. Any reference herein or in any other Loan Document to any agreement,
document or instrument, including, without limitation, this Agreement, the
Notes, the other Loan Documents and the Related Documents and any schedules or
exhibits thereto, unless expressly noted otherwise, shall be a reference to each
such agreement, document or instrument
32
as the same may be amended, restated, supplemented or otherwise modified prior
to the date hereof and from time to time hereafter to the extent permitted
hereunder or under the applicable Loan Document.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans; Notes.
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Loans
permitted to be outstanding from time to time, to make (or continue, as the case
may be) the Tranche A Revolving Loans described in subsection 2.1A(i), the
Tranche B Revolving Loans described in subsection 2.1A(ii) and Swing Line Lender
hereby agrees to make the Swing Line Loans described in subsection 2.1A(iii).
(i) Tranche A Revolving Loans. Each Lender severally agrees to
continue all or a portion of its Existing Revolving Loans and/or to
lend to Borrower from time to time during the period from the
Restatement Effective Date to but excluding the Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Tranche A Revolving Loan Commitments to be
used for the purposes identified in subsection 2.5A all in accordance
with such Lender's Tranche A Revolving Loan Commitment set forth in
Schedule 2.1 annexed hereto. The original amount of each Lender's
Tranche A Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount of the
Tranche A Revolving Loan Commitments is $184,000,000; provided that
the Tranche A Revolving Loan Commitments of Lenders shall be adjusted
to give effect to any assignments of the Tranche A Revolving Loan
Commitments pursuant to subsection 10.1B; and provided, further that
the amount of the Tranche A Revolving Loan Commitments shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4A(ii) and 2.4A(iii). Each Lender's Tranche
A Revolving Loan Commitment shall expire on the Commitment Termination
Date and all Tranche A Revolving Loans and all other amounts owed
hereunder with respect to the Tranche A Revolving Loans and the
Tranche A Revolving Loan Commitments shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(i) may be
repaid and reborrowed to but excluding the Commitment Termination
Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Tranche A Revolving Loans and the Tranche A Revolving Loan
Commitments shall be subject to the limitation that (y) in no event
shall the Total Utilization of Tranche A Revolving Commitments at any
time exceed the lesser of (i) Tranche A Revolving Loan Commitments and
(ii) the Borrowing Base, in each case as then in effect and (z) on and
after the Subordinated Note Refinancing Date until the date that the
Senior Subordinated Notes are repaid in full, in addition to
33
the foregoing limitations Borrower may not request the making of any
Tranche A Revolving Loans that would cause the difference between
Excess Availability and the then outstanding aggregate principal
amount of Senior Subordinated Notes to be less than $15,000,000 (other
than Loans, the proceeds of which, are used immediately to repay all
of the Senior Subordinated Notes in full at maturity).
(ii) Tranche B Revolving Loans. Each Lender severally agrees to lend
to Borrower from time to time during the period from the Restatement
Effective Date to but excluding the Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Tranche B Revolving Loan Commitments to be used for the
purposes identified in subsection 2.5A all in accordance with such
Lender's Tranche B Revolving Loan Commitment set forth in Schedule 2.1
annexed hereto. The original amount of each Lender's Tranche B
Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Tranche B
Revolving Loan Commitments is $16,000,000; provided that the Tranche B
Revolving Loan Commitments of Lenders shall be adjusted to give effect
to any assignments of the Tranche B Revolving Loan Commitments
pursuant to subsection 10.1B; and provided, further (i) the aggregate
amount of Tranche B Revolving Loans available for borrowing hereunder
as of any day of determination shall be reduced by the amount of the
Canadian Utilization as of such date of determination and (ii) that
the amount of the Tranche B Revolving Loan Commitments shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4A(ii) and 2.4A(iii). Each Lender's Tranche
B Revolving Loan Commitment shall expire on the Commitment Termination
Date and all Tranche B Revolving Loans and all other amounts owed
hereunder with respect to the Tranche B Revolving Loans and the
Tranche B Revolving Loan Commitments shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(ii) may be
repaid and reborrowed to but excluding the Commitment Termination
Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Tranche B Revolving Loans and the Tranche B Revolving Loan
Commitments shall be subject to the limitation that (x) no Tranche B
Revolving Loans shall be made or continued to be outstanding at any
time that the aggregate amount of the Tranche A Revolving Loan
Commitments exceeds the Total Utilization of Tranche A Revolving
Commitments, (y) in no event shall the sum of the Total Utilization of
Tranche B Revolving Commitments plus the Total Utilization of Tranche
A Revolving Commitments at any time exceed the lesser of (i) the
Revolving Loan Commitments minus the Canadian Utilization and (ii) the
Borrowing Base, in each case as then in effect and (z) on and after
the Subordinated Note Refinancing Date until the date that the Senior
Subordinated Notes are repaid in full, in addition to the foregoing
limitations Borrower may not request the making of any Tranche B
Revolving Loans that would cause the difference between Excess
Availability and the then outstanding aggregate principal amount of
Senior Subordinated Notes to be less than $15,000,000 (other
34
than Loans, the proceeds of which, are used immediately to repay all
of the Senior Subordinated Notes in full at maturity).
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of
Swing Line Loans permitted to be outstanding from time to time, to
make a portion of the Tranche A Revolving Loan Commitments available
to Borrower from time to time during the period from the Restatement
Effective Date to but excluding the Commitment Termination Date by
making Swing Line Loans to Borrower in an aggregate amount not
exceeding the amount of the Swing Line Loan Commitment to be used for
the purposes identified in subsection 2.5A, notwithstanding the fact
that such Swing Line Loans, when aggregated with Swing Line Lender's
outstanding Tranche A Revolving Loans and Swing Line Lender's Pro Rata
Share of the Letter of Credit Usage then in effect, may exceed Swing
Line Lender's Tranche A Revolving Loan Commitment. The original amount
of the Swing Line Loan Commitment is $20,000,000; provided that the
amount of the Swing Line Loan Commitment is subject to reduction as
provided in clause (b) of the next paragraph. The Swing Line Loan
Commitment shall expire on the Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to
the Swing Line Loans shall be paid in full no later than that date.
Amounts borrowed under this subsection 2.1A(iii) may be repaid and
reborrowed to but excluding the Commitment Termination Date. Without
limiting any of the foregoing, Borrower and Lenders acknowledge and
agree that Swing Line Lender may, in its sole discretion and without
any obligation to do so, make Swing Line Loans (i) from time to time
in an amount sufficient to pay to Managing Agent and Lenders any
principal, interest, fees and expenses required hereunder which are
not paid when due; provided that Borrower shall be deemed to have
submitted an appropriate Notice of Borrowing therefor and the proceeds
of such Swing Line Loan shall not be advanced to Borrower but shall be
paid directly to Managing Agent for application in accordance with the
terms hereof and (ii) at any time upon the request of Borrower and in
the sole discretion of Swing Line Lender (and as long as (i) at least
one Business Day has passed since the occurrence of the most recent
Event of Default of which Lenders have knowledge and (ii) Requisite
Lenders have not given notice to Swing Line Lender not to make Swing
Line Loans hereunder), and in any amount (subject to the limits set
forth in the following paragraph) determined by Swing Line Lender in
its sole discretion (an "Interim Advance") regardless of whether an
Event of Default shall have occurred and be continuing or Borrower
would not be entitled to borrow hereunder upon submission of an
appropriate Notice of Borrowing therefor; provided further that
anything to the contrary in this Agreement and the other Loan
Documents notwithstanding, Swing Line Loans (including, without
limitation, Interim Advances) made pursuant to the preceding sentence
shall constitute Swing Line Loans for all purposes hereunder,
including, without limitation, for purposes of complying with
limitations set by the Tranche A Revolving Loan Commitments and the
Borrowing Base, the making of Refunded Swing Line Loans and the
purchase of participations therein by Lenders in accordance with the
terms hereof.
35
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be
subject to the following limitations in the amounts and during the
periods indicated:
(a) in no event shall the Total Utilization of Tranche A
Revolving Commitments at any time exceed the lesser of (i) the Tranche
A Revolving Loan Commitments and (ii) the Borrowing Base, in each case
as then in effect;
(b) any reduction of the Tranche A Revolving Loan Commitments
made pursuant to subsections 2.4A(ii) or 2.4A(iii) which reduces the
aggregate Tranche A Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall result
in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Tranche A Revolving Loan Commitments,
as so reduced, without any further action on the part of Borrower,
Managing Agent or Swing Line Lender; and
(c) in no event shall the aggregate amount of Swing Line Loans
exceed the Swing Line Commitment as then in effect.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Borrower pursuant to subsection 2.4A(i), Swing Line Lender
may, at any time in its sole and absolute discretion, and, in any
event, shall, on the fifth Business Day after such Swing Line Loan was
made, deliver to Managing Agent (with a copy to Borrower), no later
than 12:00 Noon (New York time) at least one Business Day in advance
of the proposed Funding Date, a notice (which shall be deemed to be a
Notice of Borrowing given by Borrower) requesting Lenders to make
Tranche A Revolving Loans that are Index Rate Loans on such Funding
Date in an amount equal to the amount of such Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is
given which Swing Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (i) the
proceeds of such Tranche A Revolving Loans made by Lenders other than
Swing Line Lender shall be immediately delivered by Managing Agent to
Swing Line Lender (and not to Borrower) and applied to repay a
corresponding portion of the Refunded Swing Line Loans and (ii) on the
day such Tranche A Revolving Loans are made, Swing Line Lender's Pro
Rata Share of the Refunded Swing Line Loans shall be deemed to be paid
with the proceeds of a Tranche A Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid
shall no longer be outstanding as Swing Line Loans and shall no longer
be due under the Swing Line Note of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Tranche A
Revolving Loans and shall be due under the Tranche A Revolving Note of
Swing Line Lender. If any portion of any such amount paid (or deemed
to be paid) to Swing Line Lender should be recovered by or on behalf
of Borrower from Swing Line Lender in bankruptcy, by assignment for
the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Lenders in the manner
contemplated by subsection 10.5.
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If, as a result of any bankruptcy or similar proceeding with respect
to Borrower, Tranche A Revolving Loans are not made pursuant to this
subsection 2.1A(iii) in an amount sufficient to repay any amounts owed
to Swing Line Lender in respect of any outstanding Swing Line Loans,
each Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal
to its Pro Rata Share of the unpaid amount together with accrued
interest thereon. Upon one Business Day's notice from Swing Line
Lender, each Lender shall deliver to Swing Line Lender an amount equal
to its respective participation in same day funds at the office of
Swing Line Lender located at the Payment Office. In order to evidence
such participation each Lender agrees to enter into a participation
agreement at the request of Swing Line Lender in form and substance
reasonably satisfactory to all parties. In the event any Lender fails
to make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall
be entitled to recover such amount on demand from such Lender together
with interest thereon at the Index Rate.
Anything contained herein to the contrary notwithstanding, (i) each
Lender's obligation to make Tranche A Revolving Loans for the purpose
of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional
and shall not be affected by any circumstance, including without
limitation (a) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against Swing Line Lender, Borrower
or any other Person for any reason whatsoever; (b) the occurrence or
continuation of an Event of Default or a Potential Event of Default;
(c) any adverse change in the business, operations, properties,
assets, financial condition or prospects of Borrower or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing; provided that such obligations of each Lender, other than
such obligations with respect to Interim Advances, are subject to the
condition that (X) Swing Line Lender believed in good faith that all
conditions under Section 4 to the making of the applicable Refunded
Swing Line Loans or other unpaid Swing Line Loans, as the case may be,
were satisfied at the time such Refunded Swing Line Loans or unpaid
Swing Line Loans were made, (Y) such Lender had actual knowledge, by
receipt of any notices required to be delivered to Lenders pursuant to
subsection 6.1(ix) or otherwise, that any such condition had not been
satisfied and such Lender failed to notify Swing Line Lender and Agent
in writing that it had no obligation to make Tranche A Revolving Loans
until such condition was satisfied (any such notice to be effective as
of the date of receipt thereof by Swing Line Lender and Managing
Agent), or (Z) the satisfaction of any such condition not satisfied
had been waived by Requisite Lenders prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans were made;
and (ii) Swing Line Lender shall not be obligated to make any Swing
Line Loans if it has elected not
37
to do so after the occurrence and during the continuation of a
Potential Event of Default or Event of Default.
B. Borrowing Mechanics. Loans made on any Funding Date (other than
Tranche A Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded Swing
Line Loans or Loans made pursuant to subsection 3.3B for the purpose of
reimbursing Issuing Lender for the amount of a drawing under a Letter of Credit
issued by it and other than for Revolving Loans which constitute Rollover
Borrowings in accordance with subsection 4.4) shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $1,000,000 in excess of that
amount; provided that (a) Loans made on any Funding Date as LIBOR Rate Loans
with a particular Interest Period shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount and (b)
Swing Line Loans made on any Funding Date (other than Swing Line Loans made in
accordance with the final sentence of the first paragraph of subsection
2.1A(iii)) shall be in an aggregate minimum amount of $100,000 and integral
multiples of $1,000 in excess of that amount. Rollover Borrowings may be in any
amount up to the maximum amount permitted pursuant to subsection 4.4 as of the
applicable Funding Date. Whenever Borrower desires that Swing Line Lender make a
Swing Line Loan, it shall deliver to Managing Agent a Notice of Borrowing no
later than 12:00 Noon (New York time) on the proposed Funding Date which may be
delivered by courier or telecopy. Whenever Borrower desires that Lenders make
Revolving Loans it shall deliver a Notice of Borrowing to Managing Agent which
may be delivered by courier or telecopy no later than 12:00 Noon (New York time)
at least three Business Days in advance of the proposed Funding Date (in the
case of a LIBOR Rate Loan), or at least one Business Day in advance of the
proposed Funding Date (in the case of an Index Rate Loan in excess of
$10,000,000 in the aggregate) or no later than 11:00 A.M. (New York time) on the
proposed Funding Date (in the case of an Index Rate Loan of $10,000,000 or less
in the aggregate and, in such case, Borrower shall concurrently deliver a copy
of such Notice of Borrowing to each Lender which copy may be delivered by
courier or telecopy). Whenever Borrower desires that Lenders make Revolving
Loans constituting Rollover Borrowings, it shall deliver to Managing Agent (and
shall deliver to Lenders concurrently, a copy, which may be delivered by courier
or telecopy), of a Notice of Borrowing (with appropriate insertions) no later
than 11:00 A.M. (New York time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount of Loans requested, (iii) in the case of Swing Line Loans,
Revolving Loans made on the Restatement Effective Date and Revolving Loans which
are Rollover Borrowings, that such Loans shall be Index Rate Loans, (iv) in the
case of Revolving Loans not made on the Restatement Effective Date or which are
not Rollover Borrowings, whether such Loans shall be Index Rate Loans or LIBOR
Rate Loans, and (v) in the case of any Loans requested to be made as LIBOR Rate
Loans, the initial Interest Period requested therefor. Revolving Loans (which
are not Rollover Borrowings) may be continued as or converted into Index Rate
Loans and LIBOR Rate Loans in the manner provided in subsection 2.2D. In lieu of
delivering the above-described Notice of Borrowing, Borrower may give Managing
Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Managing Agent which may be
delivered by courier or telecopy.
38
Neither Managing Agent nor any Lender shall incur any liability to
Borrower in acting upon any telephonic notice referred to above that Managing
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to borrow on behalf of Borrower or for otherwise acting
in good faith under this subsection 2.1B, and upon funding of Loans by Lenders
in accordance with this Agreement pursuant to any such telephonic notice
Borrower shall have effected Loans hereunder.
Borrower shall notify Managing Agent prior to the funding of any Loans
in the event that any of the matters to which Borrower is required to certify in
the applicable Notice of Borrowing is no longer true and correct in any material
respect as of the applicable Funding Date, and the acceptance by Borrower of the
proceeds of any Loans shall constitute a re-certification by Borrower, as of the
applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a LIBOR Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Borrower shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Revolving Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder nor shall the Tranche A Revolving Loan
Commitment or the Tranche B Revolving Loan Commitment of any Lender be increased
or decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Tranche A Revolving Loan or Tranche B Revolving Loan
requested hereunder. Promptly after receipt by Managing Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Managing Agent shall notify each Lender or Swing Line Lender, as the case may
be, of the proposed borrowing. Each Lender shall make the amount of its
Revolving Loan available to Managing Agent, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Managing Agent not later than 2:00
P.M. (New York time) on the applicable Funding Date, in each case in immediately
available funds, at the Payment Office. Except as provided in subsection
2.1(A)(iii) or subsection 3.3B with respect to Tranche A Revolving Loans used to
repay Refunded Swing Line Loans or to reimburse Issuing Lender for the amount of
a drawing under a Letter of Credit issued by it, and except as otherwise
provided in subsection 2.1A(iii) with respect to Swing Line Loans, upon
satisfaction or waiver of the applicable conditions precedent specified in
subsections 4.1 (in the case of Loans made or continued, as the case may be, on
the Restatement Effective Date), 4.2 (in the case of Swing Line Loans and
Revolving Loans which are not Rollover Borrowings) and 4.4 in the case of
Revolving Loans which are Rollover Borrowings, Managing Agent shall make the
proceeds of such Loans available to Borrower on the applicable Funding Date by
causing an amount of same day funds equal to the proceeds of all such Loans
received by Managing Agent from Lenders or Swing Line Lender, as the case may
be, to be credited to such account or accounts of Borrower as Borrower shall
designate from time to time in writing, which shall apply to each Notice of
Borrowing thereafter until further written notice.
39
Unless Managing Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Managing Agent the amount of such Lender's Loan requested on such
Funding Date, Managing Agent may assume that such Lender has made such amount
available to Managing Agent on such Funding Date and Managing Agent may, in its
sole discretion, but shall not be obligated to, make available to Borrower a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Managing Agent by such Lender, Managing Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from such Funding Date until the
date such amount is paid to Managing Agent, at the Index Rate. If such Lender
does not pay such corresponding amount forthwith upon Managing Agent's demand
therefor, Managing Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Managing Agent together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Managing Agent, at the rate payable under this Agreement for Index
Rate Loans. Nothing in this subsection 2.1C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.
D. Notes. Borrower shall execute and deliver on the Restatement
Effective Date (i) to each Lender (or to Managing Agent for that Lender) a
Tranche A Revolving Note substantially in the form of Exhibit IV annexed hereto
to evidence that Lender's Tranche A Revolving Loans, in the principal amount of
that Lender's Tranche A Revolving Loan Commitment and with other appropriate
insertions, (ii) to each Lender (or to Managing Agent for that Lender) a Tranche
B Revolving Note substantially in the form of Exhibit IV-A annexed hereto to
evidence that Lender's Tranche B Revolving Loans, in the principal amount of
that Lender's Tranche B Revolving Loan Commitment and with other appropriate
insertions, and (iii) to Swing Line Lender (or to Managing Agent for Swing Line
Lender) a Swing Line Note substantially in the form of Exhibit IV-B annexed
hereto to evidence Swing Line Lender's Swing Line Loans, in the principal amount
of the Swing Line Loan Commitment and with other appropriate insertions. As
promptly after the Restatement Effective Date as possible each Existing Lender
shall surrender its Existing Notes to Borrower for cancellation or provide an
appropriate indemnity therefor.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.2E
and 2.6, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Index Rate or the Adjusted
LIBOR Rate, as the case may be. Subject to the provisions of subsection 2.7,
each Swing Line Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Index Rate. The applicable basis for
determining the rate of interest with respect to any Revolving Loan shall be
selected by Borrower initially at the time a Notice of Borrowing is given with
respect to such Revolving Loan pursuant to subsection 2.1B. The basis for
determining the interest rate with respect to any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day a Revolving Loan is
outstanding with respect to which notice has not been delivered to Managing
Agent in accordance with the terms of this
40
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Index Rate.
Subject to the provisions of subsections 2.2E and 2.6, the Loans shall bear
interest through maturity as follows:
(i) if an Index Rate Loan, then at the Index Rate plus the Applicable
Margin per annum; or
(ii) if a LIBOR Rate Loan, then at the sum of the Adjusted LIBOR Rate
plus the Applicable Margin per annum.
The "Applicable Margin" for each Index Rate Loan and LIBOR Rate
Loan for any fiscal quarter shall be the percentage which is set forth
below for that type of Loan based upon the Consolidated Leverage Ratio as
of the last day of the most recently reported fiscal quarter of Borrower.
------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin
INDEX RATE LOAN LIBOR RATE LOAN
---------------- ------------------
------------------------------------------------------------------------------
Less than or equal to 3.00:1.00 -0.50% 1.00%
------------------------------------------------------------------------------
Greater than 3.00:1.00 but less than or -0.25% 1.25%
equal to 3.50:1.00
------------------------------------------------------------------------------
Greater than 3.50:1.00 but less than or 0.00% 1.50%
equal to 4.00:1.00
------------------------------------------------------------------------------
Greater than 4.00:1.00 but less than or 0.25% 1.75%
equal to 4.50:1.00
------------------------------------------------------------------------------
Greater than 4.50:1.00 0.50% 2.00%
------------------------------------------------------------------------------
The Applicable Margin shall be adjusted, to the extent required, on
the date of delivery of each Compliance Certificate delivered pursuant to
subsection 6.1(iv), such adjustment to remain in effect until the next date of
delivery of a Compliance Certificate (and related financial information required
at such time pursuant to subsection 6.1) pursuant to subsection 6.1(iv);
provided that with respect to the period from the Restatement Effective Date
through the 180 day anniversary of the Restatement Effective Date, the
Applicable Margin for Revolving Loans made on or after the Restatement Effective
Date shall be 0.00% for the Index Rate Loans and 1.50% for LIBOR Rate Loans;
provided, further, that without limiting any Event of Default or Potential Event
of Default that may result therefrom, in the event Borrower does not deliver any
Compliance Certificate required pursuant to subsection 6.1(iv) by the date
specified therefor, then (i) the Applicable Margin for Index Rate Loans shall
automatically be adjusted to 0.50% and (ii) the Applicable Margin for LIBOR Rate
Loans shall be adjusted to 2.00%, in each case commencing on the date such
Compliance Certificate was required to be delivered and expiring on the actual
date of delivery thereof.
B. Interest Periods. In connection with each LIBOR Rate Loan, Borrower
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such
41
LIBOR Rate Loan, which Interest Period shall be, at Borrower's option, a 30, 60,
90 or 180 day period; provided that:
(i) the initial Interest Period for any LIBOR Rate Loan shall commence
on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a LIBOR Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a LIBOR Rate Loan;
(ii) in the case of immediately successive Interest Periods applicable
to a LIBOR Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day;
(iv) no Interest Period with respect to any portion of the Loans shall
extend beyond the Commitment Termination Date;
(v) there shall be no more than 8 Interest Periods relating to LIBOR
Rate Loans outstanding at any time; and
(vi) in the event Borrower fails to specify an Interest Period for any
LIBOR Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Borrower shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsections 2.2E
and 2.6D, interest on each Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Loan and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Borrower shall have the option (i) to convert at any time all or any part
of its outstanding Loans equal to $5,000,000 and integral multiples of
$1,000,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a LIBOR Rate Loan, to continue all or any
portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a LIBOR Rate Loan; provided, however, that a LIBOR Rate
Loan may only be converted on the expiration date of an Interest Period
applicable thereto; and provided, further that no Loan may be made as or
converted into a Index Rate Loan during the period from December 24 of any year
to and including January 7 of the immediately succeeding year for the purpose of
investing in securities bearing interest at a rate determined by reference to
any other basis for the purpose of arbitrage or speculation.
Borrower shall deliver a Notice of Conversion/Continuation to Managing
Agent no later than 3:00 P.M. (New York time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Index
Rate Loan), and at least three Business
42
Days in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a LIBOR Rate Loan). A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a LIBOR Rate Loan,
the requested Interest Period, and (v) in the case of a conversion to, or a
continuation of a LIBOR Rate Loan, that no Potential Event of Default or Event
of Default has occurred and is continuing. In lieu of delivering the above-
described Notice of Conversion/Continuation, Borrower may give Managing Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/Continuation to
Managing Agent on or before the proposed conversion/continuation date. Promptly
upon receipt by Managing Agent of any Notice of Conversion/Continuation pursuant
to this subsection 2.2D (or telephonic notice in lieu thereof), Managing Agent
shall notify each Lender of the proposed conversion or continuation.
Neither Managing Agent nor any Lender shall incur any liability to
Borrower in acting upon any telephonic notice referred to above that Managing
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to act on behalf of Borrower or for otherwise acting in
good faith under this subsection 2.2D, and upon conversion or continuation of
the applicable basis for determining the interest rate with respect to any Loans
in accordance with this Agreement pursuant to any such telephonic notice
Borrower shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a LIBOR
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of
(i) any Event of Default under subsection 8.1, 8.6 or 8.7 or (ii) any other
Event of Default and upon notice to Borrower from Managing Agent or Requisite
Lenders, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon not paid when due and
any fees and other amounts then due and payable hereunder, shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable upon demand at a
rate that is 2% per annum in excess of the interest rate otherwise payable under
this Agreement with respect to the applicable Loans (or, in the case of any such
fees and other amounts, at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Index Rate Loans);
provided that, in the case of LIBOR Rate Loans, upon the expiration of the
Interest Period in effect at the time any such increase in interest rate is
effective such LIBOR Rate Loans, as the case may be, shall thereupon become
Index Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Index Rate Loans. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely
43
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Managing Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on
the basis of a 360-day year, in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Index Rate Loan being converted
from a LIBOR Rate Loan, the date of conversion of such LIBOR Rate Loan to such
Index Rate Loan, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Index Rate Loan being converted to a LIBOR Rate Loan, the date of
conversion of such Index Rate Loan to such LIBOR Rate Loan shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 Fees.
-----
A. Commitment Fees. Borrower agrees to pay to Managing Agent, (A) for
distribution to each Lender that has a Tranche A Revolving Loan Commitment in
proportion to that Lender's Pro Rata Share, commitment fees for the period from
and including the Restatement Effective Date to and excluding the Commitment
Termination Date equal to the average of the daily excess of the Tranche A
Revolving Loan Commitments over the sum of (i) the aggregate principal amount of
Tranche A Revolving Loans outstanding (but not any Swing Line Loans outstanding)
plus (ii) the Letter of Credit Usage multiplied by 3/8 of 1% per annum, and (B)
for distribution to each Lender that has a Tranche B Revolving Loan Commitment
in proportion to that Lender's Pro Rata Share, commitment fees for the period
from and including the Restatement Effective Date to and excluding the
Commitment Termination Date equal to the average of the daily excess of the
Tranche B Revolving Loan Commitments over the sum of the aggregate principal
amount of Tranche B Revolving Loans outstanding multiplied by 3/8 of 1% per
annum. Each of the above commitment fees shall be calculated on the basis of a
360-day year and the actual number of days elapsed and shall be payable
quarterly in arrears on April 1, July 1, October 1 and January 1 of each year,
commencing on the first such date to occur after the Restatement Effective Date,
and on the Commitment Termination Date.
B. Annual Administrative Fee. Borrower agrees to pay to Managing
Agent an annual administrative fee in the amount of $50,000, payable quarterly
in advance on April 1, July 1, October 1 and January 1 of each year, commencing
on October 1, 1999.
C. Collateral Agent Fee. Borrower agrees to pay to Collateral Agent
an annual collateral agent's fee equal to $50,000 per year, payable quarterly in
advance on April 1, July 1, October 1 and January 1 of each year, commencing on
October 1, 1999.
D. Other Fees. Borrower agrees to pay to each Agent such other fees
in the amounts and at the times separately agreed upon between Borrower and such
Agent.
44
2.4 Prepayments and Reductions in Commitments; General Provisions
-------------------------------------------------------------
Regarding Payments.
-------------------
A. Prepayments and Reductions in Commitments.
(i) Voluntary Prepayments. Borrower may, upon written or telephonic
notice to Agent on or prior to 12:00 Noon (New York time) on the date
of prepayment, which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part in an
aggregate minimum amount of $100,000 and integral multiples of $1,000
in excess of that amount. Borrower may, upon not less than one
Business Day's prior written or telephonic notice, in the case of
Index Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of LIBOR Rate Loans, in each case confirmed in
writing to Managing Agent (which notice Managing Agent will promptly
transmit by telegram, telex or telephone to each Lender), at any time
and from time to time prepay any Loans on any Business Day in whole or
in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount; provided, however,
that a LIBOR Rate Loan may only be prepaid in whole or in part in an
aggregate minimum amount of $5,000,000 and $1,000,000 in excess of
that amount and may only be prepaid prior to the expiration of the
Interest Period applicable thereto upon Borrower's payments of any
amounts owing under subsection 2.6D in connection with such
prepayment. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall become
due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in subsection
2.4A(iv).
(ii) Voluntary Reductions of Commitments. Borrower may, upon not less
than three Business Days' prior written or telephonic notice confirmed
in writing to Managing Agent (which notice Managing Agent will
promptly transmit by telegram, telex or telephone to each Lender), at
any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Commitments in an
amount up to the amount by which the Commitments would otherwise
exceed the Total Utilization of Tranche A Revolving Commitments or the
Total Utilization of Tranche B Revolving Commitments, as the case may
be, at the time of such proposed termination or reduction; provided
that any such partial reduction of the Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount. Borrower's notice to Managing
Agent shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Commitments shall be effective on
the date specified in Borrower's notice and shall reduce the
Commitment of each Lender proportionately to its Pro Rata Share;
provided further that no reduction of the Tranche A Revolving Loan
Commitments shall be permitted until such time as the Tranche B
Revolving Loan Commitments have been reduced to zero.
45
(iii) Mandatory Prepayments and Mandatory Reductions of Commitments.
(a) Prepayments and Reductions from Asset Sales. No later than
the second Business Day following the date of receipt by Borrower or
any of its Subsidiaries of Cash Proceeds of (i) Net Cash Proceeds of
any Asset Sale equal to or greater than $500,000 in the aggregate,
Borrower shall prepay the Loans in an amount equal to the amount of
such Net Cash Proceeds which is the highest integral multiple of
$100,000 and (ii) Net Cash Proceeds of any Asset Sale, the Revolving
Loan Commitments shall be permanently reduced to the extent required
by the proviso set forth below. Concurrently with any prepayment of
the Loans and/or reduction of the Revolving Loan Commitments pursuant
to this subsection 2.4A(iii)(a), Borrower shall deliver to Managing
Agent an Officer's Certificate demonstrating the derivation of the Net
Cash Proceeds of the correlative Asset Sale from the gross sales price
thereof. In the event that Borrower shall, at any time after receipt
of Cash Proceeds of any Asset Sale requiring a prepayment of Loans
and/or a reduction of the Revolving Loan Commitments pursuant to this
subsection 2.4A(iii)(a), determine that the prepayments and/or
reductions of the Loans and/or the Revolving Loan Commitments
previously made in respect of such Asset Sale were in an aggregate
amount less than that required by the terms of this subsection
2.4A(iii)(a), Borrower shall promptly make an additional prepayment of
the Loans, and the Revolving Loan Commitments shall be permanently
reduced, in the manner described above in an amount equal to the
amount of any such deficit, and Borrower shall concurrently therewith
deliver to Managing Agent an Officer's Certificate demonstrating the
derivation of the additional Net Cash Proceeds resulting in such
deficit. Any mandatory prepayments or reductions of the Loans and/or
the Revolving Loan Commitments pursuant to this subsection
2.4A(iii)(a) shall be applied as specified in subsection 2.4A(iv);
provided, however, that the Revolving Loan Commitments shall only be
reduced in an amount equal to the Net Cash Proceeds of an Asset Sale
only to the extent that such amount (or portion thereof) would
otherwise be required to be applied to payment, redemption or
repurchase in respect of the Senior Subordinated Notes.
(b) Prepayments Due to Refinancing Indebtedness. On the date of
receipt by Borrower or any of its Subsidiaries of the proceeds of
Refinancing Indebtedness that results in a Refinancing Surplus in an
amount greater than $0, Borrower shall repay the Loans in an amount
equal to such Refinancing Surplus, as specified in subsection
2.4A(iv). No reduction in the Commitments shall be required in
connection with any such repayment.
(c) Prepayments Due to Reductions or Restrictions of
Commitments. Borrower shall from time to time prepay the Loans to the
extent necessary to comply with the restrictions set forth in
subsections 2.1A(i), (ii) and (iii) with respect to the utilization of
the Tranche A Revolving Loan Commitments, the Tranche B Revolving Loan
Commitments and the Swing Line Loan Commitments, as applicable. Any
such mandatory prepayments shall be applied as specified in subsection
2.4A(iv).
46
(iv) Application of Reduction of Commitments and Prepayments. Any
reduction of the Revolving Loan Commitments pursuant to subsection
2.4A(ii) or (iii) shall be applied to reduce the Tranche A Revolving
Loan Commitments and the Tranche B Revolving Loan Commitments on a pro
rata basis based on the aggregate amount of each such Commitment at
such time. Any prepayment of the Loans shall be applied first to repay
any Swing Line Loans to the full extent thereof and second to repay
Tranche A Revolving Loans and Tranche B Revolving Loans which are
Index Rate Loans on a pro rata basis in accordance with the respective
outstanding principal amounts thereof at such time, to the full extent
thereof, and then to repay Tranche A Revolving Loans and Tranche B
Revolving Loans which are LIBOR Rate Loans on a pro rata basis in
accordance with the respective outstanding principal amounts thereof
at such time, in each case in a manner which minimizes the amount of
any payments required to be made by Borrower pursuant to subsection
2.6D.
B. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrower of
principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in same day funds and without defense, setoff
or counterclaim, free of any restriction or condition, and delivered
to Managing Agent not later than 3:00 P.M. (New York time) on the date
due at its office located at the Payment Office for the account of
Lenders; funds received by Managing Agent after that time on such due
date shall be deemed to have been paid by Borrower on the next
succeeding Business Day. Managing Agent shall disburse to each Lender
and Issuing Lender, as the case may be, the amount of any such payment
made on behalf of such Lender or Issuing Lender, when and as received.
(ii) Application of Payments to Principal and Interest. All payments
in respect of the principal amount of any Loan shall include payment
of accrued interest on the principal amount being repaid or prepaid,
and all such payments shall be applied to the payment of interest
before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Managing Agent shall promptly distribute
to each Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received
by Managing Agent and the commitment fees of such Lender when received
by Managing Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4B(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation
is withdrawn as to any Affected Lender or if any Affected Lender makes
Index Rate Loans in lieu of its Pro Rata Share of any LIBOR Rate
Loans, Managing Agent shall give effect thereto in apportioning
payments received thereafter.
47
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the
payment of interest hereunder or of the commitment fees hereunder, as
the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
the Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of
all Loans evidenced by that Note and all principal payments previously
made thereon and of the date to which interest thereon has been paid;
provided that the failure to make (or any error in the making of) a
notation of any Loan made under such Note shall not limit or otherwise
affect the obligations of Borrower hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such
Note.
2.5 Use of Proceeds.
A. Loans. The proceeds of the Revolving Loans or Swing Line Loans
shall be applied by Borrower for working capital and general corporate purposes,
which may include the making of intercompany loans to any Guarantor pursuant to
its Intercompany Note for its own working capital and general corporate purposes
(including, without limitation, the making of intercompany loans) to the extent
permitted hereunder.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrower or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 Special Provisions Governing LIBOR Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary,
but subject to subsection 6.10B(iii), the following provisions shall govern with
respect to LIBOR Rate Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date,
Managing Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the LIBOR Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Borrower and each
Lender.
B. Inability to Determine Applicable Interest Rate. In the event
that Managing Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Rate Loans, that by reason of
circumstances affecting the interbank LIBOR market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on
48
the basis provided for in the definition of Adjusted LIBOR Rate, Managing Agent
shall on such date give notice (by telecopy or by telephone confirmed in
writing) to Borrower and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted, to LIBOR Rate Loans until such time as
Managing Agent notifies Borrower and Lenders that the circumstances giving rise
to such notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrower with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by
Borrower.
C. Illegality or Impracticability of LIBOR Rate Loans. In the event
that on any date any Lender shall have determined (which determination, absent
manifest error, shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Borrower and Managing
Agent) that the making, maintaining or continuation of its LIBOR Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank LIBOR market, or
the position of such Lender in that market, then, and in any such event, such
Lender shall be an "Affected Lender" and it shall on that day give notice (by
telecopy or by telephone confirmed in writing) to Borrower and Managing Agent of
such determination (which notice Managing Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, LIBOR Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a LIBOR Rate Loan then being
requested by Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) an Index Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding LIBOR Rate Loans (the "Affected Loans"),
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (d) the Affected Loans shall automatically convert into Index Rate
Loans on the date of such termination. Notwithstanding the foregoing, to the
extent a determination by an Affected Lender as described above relates to a
LIBOR Rate Loan then being requested by Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, Borrower shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telecopy or by telephone confirmed in writing) to Managing Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Managing Agent
shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to LIBOR Rate Loans in accordance with the terms of this
Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds
49
borrowed by it to make or carry its LIBOR Rate Loans (after accounting for any
income received by the Lender in connection with its redeployment of such funds)
and any loss, expense or liability sustained by that Lender in connection with
the liquidation or re-employment of such funds) which that Lender may sustain:
(i) if for any reason (other than a default by that Lender) a borrowing of any
LIBOR Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any LIBOR Rate Loan does not occur on a date specified therefor
in a Notice of Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment or conversion of any of its LIBOR Rate
Loans occurs on a date that is not the last day of an Interest Period applicable
to that Loan, (iii) if any prepayment of any of its LIBOR Rate Loans is not made
on any date specified in a notice of prepayment given by Borrower, or (iv) as a
consequence of any other default by Borrower in the repayment of its LIBOR Rate
Loans when required by the terms of this Agreement.
E. Booking of LIBOR Rate Loans. Any Lender may make, carry or
transfer LIBOR Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of LIBOR Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant LIBOR Rate Loans through the purchase of a LIBOR deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted LIBOR Rate in an amount equal to the amount of such LIBOR Rate Loan and
having a maturity comparable to the relevant Interest Period and through the
transfer of such LIBOR deposit from an offshore office of that Lender to a
domestic office of that Lender in the United States of America; provided,
however, that each Lender may fund each of its LIBOR Rate Loans in any manner it
sees fit and the foregoing assumptions shall be utilized only for the purposes
of calculating amounts payable under this subsection 2.6 and under subsection
2.7A.
G. LIBOR Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Borrower may not elect to have a Loan be made or continued (beyond the
applicable Interest Period therefor) as, or converted to, a LIBOR Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrower with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Borrower.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any change after the date hereof in any
law, treaty or governmental rule, regulation or order, or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any
50
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, the
applicable lending office of such Lender (other than any such reserve
or other requirements with respect to LIBOR Rate Loans that are
reflected in the definition of Adjusted LIBOR Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the interbank LIBOR market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrower (with a copy to Managing Agent)
a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. Provided that all documentation,
if any, then required to be delivered by any Lender or Agent pursuant
to subsection 2.7B(iii) has been delivered, all sums payable by
Borrower under this Agreement and the other Loan Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (other than
a Tax on the overall net income of any Lender (for which payment need
not be free and clear but no deduction or withholding shall be made
unless required under applicable law)) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or
51
to which a payment is made by or on behalf of Borrower or by any
federation or organization of which the United States of America or
any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Borrower or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Borrower to Managing Agent or
any Lender under any of the Loan Documents:
(a) Borrower shall notify Managing Agent of any such requirement
or any change in any such requirement as soon as Borrower becomes
aware of it;
(b) Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Borrower) for its own account or (if that liability
is imposed on Managing Agent or such Lender, as the case may be) on
behalf of and in the name of Managing Agent or such Lender;
(c) the sum payable by Borrower to Managing Agent or a Lender in
respect of which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment, Managing
Agent or such Lender, as the case may be, receives on the due date a
net sum equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Borrower shall deliver to Managing Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment and
Acceptance pursuant to which such Lender became a Lender (in the case
of each other Lender) in any such requirement for a deduction,
withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from
that in effect at the date of this Agreement or at the date of such
Assignment and Acceptance, as the case may be, in respect of payments
to such Lender.
(iii) U.S. Tax Certificates. Each Lender that is organized under the
laws of any jurisdiction other than the United States or any state or
other political subdivision thereof shall deliver to Managing Agent
for transmission to Borrower, on or prior to the Restatement Effective
Date (in the case of each Lender listed on the signature pages hereof)
or on the date of the Assignment and Acceptance pursuant
52
to which it becomes a Lender (in the case of each other Lender), and
at such other times as may be necessary in the determination of
Borrower or Managing Agent (each in the reasonable exercise of its
discretion), such certificates, documents or other evidence, properly
completed and duly executed by such Lender (including, without
limitation, Internal Revenue Service Form 1001 or Form 4224 or any
other certificate or statement of exemption required by Treasury
Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any
successor thereto) to establish that such Lender is not subject to
deduction or withholding of United States federal income tax under
Section 1441 or 1442 of the Internal Revenue Code or otherwise (or
under any comparable provisions of any successor statute) with respect
to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Loan Documents. Borrower shall not be
required to pay any additional amount to any such Lender under clause
(c) of subsection 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of the immediately preceding sentence; provided that
if such Lender shall have satisfied such requirements on the
Restatement Effective Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment and
Acceptance pursuant to which it became a Lender (in the case of each
other Lender), nothing in this subsection 2.7B(iii) shall relieve
Borrower of its obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a result of
any change in applicable law, such Lender is no longer properly
entitled to deliver certificates, documents or other evidence at a
subsequent date establishing the fact that such Lender is not subject
to withholding as described in the immediately preceding sentence.
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability of any law, rule or
regulation (or any provision thereof) regarding capital adequacy, or any change
therein or in the interpretation or administration thereof, in each case after
the date hereof, by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitment or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance, then from time to time, within five
Business Days after receipt by Borrower from such Lender of the statement
referred to in the next sentence, Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrower (with a copy to Managing Agent) a written statement, setting forth
in reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
53
2.8 Obligation of Lenders and Issuing Lender to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitment of such Lender or the affected Loans or Letters
of Credit of such Lender or Issuing Lender through another lending or letter of
credit office of such Lender or Issuing Lender, or (ii) take such other measures
as such Lender or Issuing Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6
would be materially reduced and if, as determined by such Lender or Issuing
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Commitment or Loans or Letters of Credit through such other lending or
letter of credit office or in accordance with such other measures, as the case
may be, would not otherwise materially adversely affect such Commitment or Loans
or Letters of Credit or the interests of such Lender or Issuing Lender; provided
that such Lender or Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection 2.8 unless
Borrower agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above; provided further that such Lender or
Issuing Lender shall not be obligated to utilize such lending or letter of
credit office if it determines in its sole discretion that it is economically
disadvantageous to do so. A certificate as to the amount of any such expenses
payable by Borrower pursuant to this subsection 2.8 (setting forth in reasonable
detail the basis for requesting such amount) submitted by such Lender or Issuing
Lender to Borrower (with a copy to Managing Agent) shall be conclusive absent
manifest error.
2.9 Affected Lenders.
If the Borrower is obligated to pay to any Lender any additional
amount under subsections 2.6 or 2.7 hereof (other than subsection 2.6D), and
such Lender is unable or unwilling to mitigate such amounts in accordance with
subsection 2.8, the Borrower may, if no Event of Default or Potential Event of
Default then exists, replace such Lender with an Eligible Assignee acceptable to
the Managing Agent, and such Lender hereby agrees to be so replaced subject to
the following:
(a) The obligations of the Borrower hereunder to the Lender to
be replaced (including such increased or additional costs
incurred by such Lender through the date such Lender is replaced
hereunder) shall be paid in full to such Lender concurrently with
such replacement, together with any amounts which would have been
due to such Lender under subsection 2.6D if such Lender's Loans
had been repaid rather than assigned;
54
(b) The replacement Lender shall be a bank or other financial
institution that is not subject to such increased costs which
caused the Borrower's election to replace any Lender hereunder,
and each such replacement Lender shall execute and deliver to the
Managing Agent an Assignment and Acceptance and such other
documentation satisfactory to the Managing Agent pursuant to
which such replacement Lender is to become a party hereto, with a
Commitment equal to that of the Lender being replaced and shall
make Loans in the aggregate principal amount equal to the
aggregate outstanding principal amount of the Loans of the Lender
being replaced;
(c) Upon such execution of such documents referred to in clause
(b) and repayment of the amount referred to in clause (a), the
replacement Lender shall be a "Lender" with a Commitment as
specified hereinabove and the Lender being replaced shall cease
to be a "Lender" hereunder, except with respect to such
provisions under this Credit Agreement, which expressly survive
the termination of this Agreement as to such replaced Lender;
(d) The Managing Agent shall reasonably cooperate in
effectuating the replacement of any Lender under this subsection
2.9, but at no time shall the Managing Agent be obligated to
initiate any such replacement;
(e) Any Lender replaced under this subsection 2.9 shall be
replaced at the Borrower's sole cost and expense and at no cost
or expense to any Agent or any of the Lenders; and
(f) If Borrower proposes to replace any Lender pursuant to this
subsection 2.9 because the Lender seeks reimbursement under
either subsection 2.6 or 2.7, then it must also replace any other
Lender who seeks similar levels or reimbursement (as a percentage
of such Lender's Commitment) under such subsections; provided
however that if the amount of the Commitment any replacement
Lender is willing to commit to does not exceed the aggregate of
the Commitments of each such Lender seeking such reimbursement,
the Commitment of each such Lender seeking reimbursement shall be
reduced pro rata to the extent of the Commitment of such
replacement Lender.
2.10 Existing Loans and Reallocation of Pro Rata Shares.
A. Continuation of Loans. Notwithstanding anything to the
contrary herein, but subject to the following provisions of this paragraph, as
of the Restatement Effective Date (i) all Existing Swing Line Loans shall be
continued as, and shall be deemed to be, Swing Line Loans hereunder (in the same
corresponding type and amount) and (ii) all Existing Revolving Loans shall be
continued as, and shall be deemed to be, Tranche A Revolving Loans (in a
principal amount equal to the aggregate principal amount of all Existing
Revolving Loans) hereunder, and all such Loans shall be subject to the terms and
provisions of this Agreement; provided that
55
(i) all existing LIBOR Rate Loans (the "Continued LIBOR Rate Loans") shall be
continued as set forth in the Managing Agent's August 16, 1999 memorandum to
Lenders attached hereto as Schedule 2.10 (the "LIBOR Funding Memo") in each case
until the date of expiration of the Interest Period applicable to such Loans
(each such date a "LIBOR Expiration Date") and (ii) all existing Index Rate
Loans shall be allocated as otherwise set forth in Subsection 2.10B.
B. Reallocation of Index Rate Loans. On the Business Day immediately
prior to the Restatement Effective Date, Managing Agent will calculate the
appropriate prospective adjustments to each Lender's Tranche A Revolving
Commitments and Tranche A Revolving Loans to reflect any reallocation of
Existing Revolving Loans which are Index Rate Loans in accordance with the
applicable Pro Rata Shares of the relevant Lenders after giving effect to the
conversion of such Existing Revolving Loans into Tranche A Revolving Loans and
will prior to 2:00 P.M. (New York time) on such date (a) notify each such Lender
and Borrower of the amounts of such reallocation and (b) notify each such Lender
of the amounts, representing the principal amount of such outstanding Tranche A
Revolving Loans which are Index Rate Loans plus accrued and unpaid interest
thereon on the Restatement Effective Date which are required to be made by such
Lender or which shall be repaid to such Lender, which such Lender will either
advance or receive, respectively, as a result of such reallocation and the
assignments pursuant to the next sentence. On the Restatement Effective Date,
each Lender that will have a greater Pro Rata Share with respect to Tranche A
Revolving Loans which are Index Rate Loans upon the Restatement Effective Date
than its applicable Pro Rata Share immediately prior to the Restatement
Effective Date under the Existing Credit Agreement (including any Lender not
party to the Existing Credit Agreement immediately prior to the Restatement
Effective Date) (each a "Purchasing Lender"), without executing an Assignment
and Acceptance, shall be deemed to have automatically purchased assignments, pro
rata from each Lender (in proportion to the amounts to be purchased from such
Lender by all Purchasing Lenders) that will have a smaller Pro Rata Share with
respect to Tranche A Revolving Loans which are Index Rate Loans on the
Restatement Effective Date than its applicable Pro Rata Share immediately prior
to the Restatement Effective Date (including any Existing Lender not party to
this Agreement) under the Existing Credit Agreement (each a "Selling Lender"),
in all such Selling Lenders' rights and obligations under this Agreement and the
other Loan Documents with respect to the Tranche A Revolving Loans which are
Index Rate Loans (collectively, except as set forth below, the "Assigned Rights
and Obligations"), and each Selling Lender shall be deemed to have automatically
assigned and sold such Loans in such amounts to such Purchasing Lenders, so
that, after giving effect to all such assignments, each Lender shall hold its
respective Pro Rata Share as set forth in Schedule 2.1 (as adjusted as required
under the definition of Pro Rata Share) of the Tranche A Revolving Loans which
are Index Rate Loans. Each such purchase hereunder shall be at par for a
purchase price equal to the amount of the purchased Loans principal plus accrued
and unpaid interest thereon and without recourse, representation or warranty,
except that each Selling Lender shall be deemed to represent and warrant to each
Purchasing Lender that the Assigned Rights and Obligations of such Selling
Lender are not subject to any Liens created by that Selling Lender.
Each Purchasing Lender required to make a payment pursuant to any such
assignment shall make the net amount of its required payment available to
Managing Agent, in same day funds, at the Payment Office not later than 12:00
Noon (New York time) on the Restatement Effective Date. Managing Agent shall
distribute on the Restatement Effective Date
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the proceeds of such amounts to the Selling Lenders entitled to receive
payments, pro rata in proportion to the amount each Selling Lender is entitled
to receive, at the primary address set forth below such Selling Lender's name on
the signature pages hereof or at such other address as such Selling Lender may
request in writing to Managing Agent. The purchase of a Tranche A Revolving Loan
by a Lender as set forth in this subsection 2.1E shall be deemed to be the
making of a Tranche A Revolving Loan to Borrower on the date such funds are
transmitted to Managing Agent.
C. LIBOR Rate Loans. All Continued LIBOR Rate Loans shall be deemed
to be Tanche A Revolving Loans and continued by Lenders not in accordance with
the Pro Rata Shares hereunder, but as set forth in the LIBOR Funding Memo until
the applicable LIBOR Expiration Date. Each Continued LIBOR Rate Loan must be
paid in full no later than the applicable LIBOR Expiration Date. No Continued
LIBOR Rate Loans may be further continued or converted for any reason and any
prepayment of such Loans shall be subject to the provisions of this Agreement
otherwise applicable to LIBOR Rate Loans. All payments in respect of the
Continued LIBOR Rate Loans shall be allocated in accordance with the Pro Rata
Shares of Lenders set forth in the LIBOR Funding Memo. Any new LIBOR Rate Loans
hereunder (including, without limitation, any LIBOR Rate Loans borrowed to repay
Continued LIBOR Rate Loans) shall be made in accordance with the Pro Rata Shares
of Lenders hereunder in effect at the time of such borrowing.
D. Maximum Tranche A Loans Prior to Repayment of Continued LIBOR
Rate Loans. Notwithstanding anything in this Agreement to the contrary, the
aggregate amount of Tranche A Loans outstanding hereunder shall not exceed
$155,700,000 until the Business Day after the date that all Continued LIBOR Rate
Loans are paid in full. In no event shall the sum of any Lender's Continued
LIBOR Rate Loans plus all other Tranche A Revolving Loans of that Lender exceed
such Lender's Tranche A Revolving Loan Commitment.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Borrower requesting that
Lenders make Tranche A Revolving Loans pursuant to subsection 2.1A(i) and Swing
Line Lender making Swing Line Loans pursuant to subsection 2.1A(iii), Borrower
may request, in accordance with the provisions of this subsection 3.1, from time
to time during the period from the Restatement Effective Date to but excluding
the Commitment Termination Date, that Issuing Lender issue Letters of Credit for
the account of Borrower (and on behalf of Borrower or any Operating Subsidiary
including any Canadian Subsidiary which is an Operating Subsidiary; provided
that in all cases Borrower shall remain liable hereunder with respect to all
such Letters of Credit issued on behalf of any such Operating Subsidiary) for
the purposes specified in the definitions of Commercial Letters of Credit and
Standby Letters of Credit. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrower herein set
forth, Issuing Lender shall issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Borrower shall not request that
Issuing Lender issue (and Issuing Lender shall not issue):
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(i) (A) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Tranche A Revolving Commitments would exceed
the lesser of (a) the Tranche A Revolving Loan Commitments or (b) the
Borrowing Base, in each case as then in effect and (B) in addition to
the foregoing, any Letter of Credit issued for or on behalf of any
Canadian Subsidiary or its operations if at such time an Event of
Default (as defined in the Canadian Credit Agreement) shall have
occurred and be continuing; provided that Issuing Lender may assume
the foregoing conditions are met to the extent Managing Agent has not
notified Issuing Lender otherwise;
(ii) any Letter of Credit if, after giving effect to such issuance,
(y) the Letter of Credit Usage would exceed $50,000,000 or (z) the
Canadian Intercompany Usage would exceed $12,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the Commitment Termination Date and (b) the
date which is one year from the date of issuance of such Standby
Letter of Credit; provided that the immediately preceding clause (b)
shall not prevent Issuing Lender from agreeing that a Standby Letter
of Credit will automatically be extended for one or more successive
periods not to exceed one year each unless Issuing Lender elects not
to extend for any such additional period; provided, further that
Issuing Lender shall deliver a written notice to Managing Agent
setting forth the last day on which Issuing Lender may give notice
that it will not extend such Standby Letter of Credit (the
"Notification Date" with respect to such Standby Letter of Credit) at
least ten Business Days prior to such Notification Date; and provided,
further that, unless Requisite Lenders otherwise consent, Issuing
Lender shall give notice that it will not extend such Standby Letter
of Credit if it has knowledge that an Event of Default has occurred
and is continuing on such Notification Date;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) 30 days prior to the Commitment
Termination Date and (Y) the date which is 180 days from the date of
issuance of such Commercial Letter of Credit or (b) that is otherwise
unacceptable to Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other than Dollars
if the aggregate Tranche A Revolving Loan Exposure with respect to all
such denominated Letters of Credit would exceed $20,000,000 at such
time.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Borrower desires the issuance of a
Letter of Credit, it shall deliver to Issuing Lender a Notice of
Issuance of Letter of Credit no later than 12:00 Noon (New York time)
at least one Business Day, or such shorter period as may be agreed to
by the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Notice of Issuance of Letter of Credit
shall specify (a) the proposed date of issuance (which shall be a
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Business Day), (b) the face amount of the Letter of Credit, in Dollars
(which amount, in the case of a drawing under a Letter of Credit which
is denominated in a currency other than Dollars, shall be calculated
by reference to the applicable Exchange Rate as quoted by the Issuing
Lender to Borrower in connection with such Letter of Credit), (c) the
expiration date of the Letter of Credit, (d) the name and address of
the beneficiary, and (e) the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a
precise description of any documents and the verbatim text of any
certificates to be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the Letter of Credit,
would require the Issuing Lender to make payment under the Letter of
Credit; provided that the Issuing Lender, in its sole discretion, may
require changes in the text of the proposed Letter of Credit or any
such documents or certificates; and provided, further that no Letter
of Credit shall require payment against a conforming draft to be made
thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such
draft is required to be presented is located) that such draft is
presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day;
provided still further that Issuing Lender shall not be obligated to
issue any Letter of Credit denominated in a foreign currency which in
the judgment of Issuing Lender is not readily and freely available;
provided further that anything to the contrary in this Agreement
notwithstanding; Borrower may, with Issuing Lender's consent,
electronically request the issuance of Letters of Credit by Issuing
Lender, in which such event Borrower shall be deemed for all purposes
hereunder and the other Loan Documents to have delivered a written
Notice of Issuance of Letter of Credit hereunder.
Borrower shall notify the Issuing Lender and Managing Agent prior to
the issuance of any Letter of Credit in the event that any of the
matters to which Borrower is required to certify in the applicable
Notice of Issuance of Letter of Credit is no longer materially true
and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Borrower shall
be deemed to have re-certified, as of the date of such issuance, as to
the matters to which Borrower is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) Notification to Lenders. Promptly after receipt of a Notice of
Issuance of Letter of Credit, (a) Managing Agent shall notify each
Lender of the proposed issuance of such Letter of Credit, and the
amount of such Lender's respective participation therein, determined
in accordance with subsection 3.1C, and (b) Managing Agent shall
deliver to each other Lender a copy of such Notice of Issuance of
Letter of Credit.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures, and upon its issuance of such Letter of Credit the Issuing
Lender shall promptly notify Managing Agent of such issuance,
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which notice shall be accompanied by a copy of such Letter of Credit
(and Managing Agent shall notify each other Lender of such issuance).
(iv) Reports to Lenders. Within 15 days after the end of each month
ending after the Closing Date, so long as any Letter of Credit shall
have been outstanding during such month, Issuing Lender shall deliver
to Managing Agent (and Managing Agent shall deliver to each other
Lender) a report setting forth the average for such month of the daily
maximum amount available to be drawn under the Letters of Credit
issued by Issuing Lender that were outstanding during such month and a
copy of the same shall be delivered to Borrower.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby severally agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and drawings thereunder
in an amount equal to such Lender's Pro Rata Share with respect to the Tranche A
Revolving Loans of the maximum amount which is or at any time may become
available to be drawn thereunder.
3.2 Letter of Credit Fees.
----------------------
Borrower agrees to pay the following amounts to Managing Agent on
behalf of Issuing Lender and Lenders with respect to Letters of Credit issued by
it:
(i) with respect to each Financial Standby Letter of Credit, (a) a
fronting fee equal to 0.25% of the aggregate maximum amount available
to be drawn under such Financial Standby Letter of Credit and (b) a
letter of credit fee equal to the Applicable Margin that would be
applicable to LIBOR Rate Loans made during such period (regardless of
whether LIBOR Rate Loans are in fact made during such period),
changing as and when such Applicable Margin changes, multiplied by the
average daily maximum amount available to be drawn under such
Financial Standby Letter of Credit, in each case payable in arrears on
and through each April 1, July 1, October 1 and January 1 of each year
and computed on the basis of a 360-day year for the actual number of
days elapsed;
(ii) with respect to each Nonfinancial Standby Letter of Credit, (a) a
fronting fee equal to 0.25% of the aggregate maximum amount available
to be drawn under such Nonfinancial Standby Letter of Credit and (b) a
letter of credit fee equal to the Applicable Margin that would be
applicable to LIBOR Rate Loans made during such period (regardless of
whether LIBOR Rate Loans are in fact made during such period),
changing as and when such Applicable Margin changes, less 0.50% per
annum multiplied by the average daily maximum amount available to be
drawn under such Nonfinancial Standby Letter of Credit, in each case
payable in arrears on and through each April 1, July 1, October 1 and
January 1 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
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(iii) with respect to Commercial Letters of Credit, (a) a fronting fee
equal to 0.25% of the aggregate maximum amount available to be drawn
under such Commercial Letter of Credit and (b) a letter of credit fee
equal to 0.50% per annum of the aggregate maximum amount outstanding
for all such Commercial Letters of Credit, in each case payable
monthly in arrears on the tenth Business Day of the immediately
following month; and
(iv) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder (without duplication
of the fees payable under clauses (i) and (ii) above), documentary and
processing charges in accordance with Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or drawing, as the case may be;
provided that upon the occurrence of and during the continuation of (i) any
Event of Default under subsection 8.1, 8.6, or 8.7 or (ii) any other Event of
Default and upon notice to Borrower from Managing Agent or Requisite Lenders the
percentage rate used to calculate fees payable under clause (i)(b), (ii)(b) or
(iii)(b) of this subsection 3.2 shall be increased by two percentage points.
Promptly upon receipt by Managing Agent of any amount described in clause
(i)(b), (ii)(b) or (iii)(b) of this subsection 3.2, Managing Agent shall
distribute to each other Lender its Pro Rata Share of such amount and promptly
upon receipt by Managing Agent of any other amount described in clauses (i)-(iv)
above, Managing Agent shall distribute such amount to Issuing Lender.
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit.
--------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Requests For
Drawings. In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Issuing Lender shall be
responsible only to determine that the documents and certificates required to be
delivered under such Letter of Credit have been delivered and that they comply
on their face with the requirements of such Letter of Credit.
B. Reimbursement by Borrower of Amounts Drawn Under Letters of Credit.
In the event Issuing Lender has determined to honor a request for drawing under
a Letter of Credit issued by it, Issuing Lender shall immediately notify
Borrower and Managing Agent, and Borrower shall reimburse Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate on the date of such drawing) in same day funds equal to the amount of such
drawing; provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Borrower shall have notified Managing Agent and
Issuing Lender prior to 3:00 P.M. (New York time) on the date of such drawing
that Borrower intends to reimburse Issuing Lender for the amount of such drawing
with funds other than the proceeds of Loans, Borrower shall be deemed to have
given a timely Notice of Borrowing to Managing Agent requesting Lenders to
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make Tranche A Revolving Loans that are Index Rate Loans on the Reimbursement
Date in an amount equal to the amount of such drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Tranche A Revolving Loans that are Index
Rate Loans in the amount of such drawing, the proceeds of which shall be applied
directly by Managing Agent to reimburse Issuing Lender for the amount of such
drawing; and provided, further that if for any reason proceeds of Tranche A
Revolving Loans are not received by Issuing Lender on the Reimbursement Date in
an amount in Dollars (which amount, in the case of a drawing under a Letter of
Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate on the date of such
drawing) equal to the amount of such drawing, Borrower shall reimburse Issuing
Lender, on demand, in an amount in same day funds equal to the excess of the
amount of such drawing over the aggregate amount of such Tranche A Revolving
Loans, if any, which are so received. Nothing in this subsection 3.3B shall be
deemed to relieve any Lender from its obligation to make Loans on the terms and
conditions set forth in this Agreement, and Borrower shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Tranche A Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Drawings Under Letters of
Credit.
(i) Payment by Lenders. In the event that Borrower shall fail for any
reason to reimburse Issuing Lender as provided in subsection 3.3B by
the close of business of Issuing Lender on the Reimbursement Date in
an amount (calculated, in the case of a drawing under a Letter of
Credit denominated in a currency other than Dollars, by reference to
the applicable Exchange Rate on the date of such drawing) equal to the
amount of any drawing honored by Issuing Lender under a Letter of
Credit issued by it, Issuing Lender shall promptly notify Managing
Agent and Managing Agent shall promptly notify each other Lender of
the unreimbursed amount of such drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata
Share. Each Lender shall make available to Issuing Lender an amount
equal to its respective participation; in Dollars and in same day
funds, at the office of Issuing Lender specified in such notice, not
later than 12:00 Noon (New York time) on the first business day (under
the laws of the jurisdiction in which such office of Issuing Lender is
located) after the date notified by Issuing Lender. In the event that
any Lender fails to make available to Issuing Lender on such business
day the amount of such Lender's participation in such Letter of Credit
as provided in this subsection 3.3C, Issuing Lender shall be entitled
to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by Issuing Lender for
the correction of errors among banks for three Business Days and
thereafter at the Index Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Lender to recover from Issuing
Lender any amounts made available by such Lender to Issuing Lender
pursuant to this subsection 3.3C in the event that it is determined by
the final judgment of a court of competent jurisdiction that the
payment with respect to a Letter of Credit by Issuing Lender in
respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Lender.
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(ii) Distribution to Lenders of Reimbursements Received From Borrower.
In the event Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by Issuing Lender under a Letter of Credit issued by
it, Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect
to such drawing such other Lender's Pro Rata Share of all payments
subsequently received by Issuing Lender from Borrower in reimbursement
of such drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request.
D. Interest on Amounts Drawn Under Letters of Credit.
(i) Payment of Interest by Borrower. Borrower agrees to pay to Issuing
Lender, with respect to drawings made under any Letters of Credit
issued by it, interest on the amount paid by Issuing Lender in respect
of each such drawing from the date of such drawing to but excluding
the date such amount is reimbursed by Borrower (including any such
reimbursement out of the proceeds of Loans pursuant to subsection
3.3B) at a rate equal to (a) for the period from the date of such
drawing to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Loans that are Index Rate
Loans or, if higher, LIBOR Rate Loans and (b) thereafter, a rate which
is 2% per annum in excess of the rate of interest otherwise payable
under this Agreement with respect to Loans that are Index Rate Loans
or, if higher, LIBOR Rate Loans. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 360-day year
for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i), (a) Issuing Lender shall distribute to each other
Lender, out of the interest received by Issuing Lender in respect of
the period from the date of the applicable drawing under a Letter of
Credit issued by Issuing Lender to but excluding the date on which
Issuing Lender is reimbursed for the amount of such drawing (including
any such reimbursement out of the proceeds of Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been made under such
Letter of Credit, and (b) in the event Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of such drawing, Issuing Lender shall distribute to each
other Lender which has paid all amounts payable by it under subsection
3.3C(i) with respect to such drawing such other Lender's Pro Rata
Share of any interest received by Issuing Lender in respect of that
portion of such drawing so reimbursed by other Lenders for the period
from the
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date on which Issuing Lender was so reimbursed by other Lenders to and
including the date on which such portion of such drawing is reimbursed
by Borrower. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 Obligations Absolute.
---------------------
The obligation of Borrower to reimburse Issuing Lender for drawings
made under the Letters of Credit issued by it and to repay any Loans made by
Lenders pursuant to subsection 3.3B and the obligations of Lenders under
subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Borrower or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), Issuing Lender or other Lender or any
other Person or, in the case of a Lender, against Borrower, whether in
connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between Borrower or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured);
(iii) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Issuing Lender under any Letter of Credit against
presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Borrower or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
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provided, in each case, that payment by Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of Issuing Lender or its officers, employees or agents under the
circumstances in question (as determined by a final judgment of a court of
competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
---------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Borrower hereby agrees to protect, indemnify, pay and save
harmless Issuing Lender and its officers, employees or agents from and against
any and all claims, demands, liabilities, damages, losses, and reasonable costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel) which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of Issuing Lender or its officers, employees or agents as determined by a final
judgment of a court of competent jurisdiction or (b) subject to the following
clause (ii), the wrongful dishonor by Issuing Lender of a proper demand for
payment made under any Letter of Credit issued by it or (ii) the failure of
Issuing Lender to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Borrower and Issuing
Lender, Borrower assumes all risks of the acts and omissions of, or misuse of
the Letters of Credit issued by Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such 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; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Lender, including
without limitation any Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by Issuing Lender under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put Issuing Lender under any resulting
liability to Borrower.
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Notwithstanding anything to the contrary contained in this subsection
3.5, Borrower shall retain any and all rights it may have against Issuing Lender
and its officers, employees or agents for any liability arising solely out of
the gross negligence or willful misconduct of Issuing Lender or its officers,
employees or agents, as determined by a final judgment of a court of competent
jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
--------------------------------------------------------
Without limiting the provision of subsection 2.7, in the event that
Issuing Lender or any Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any change after the date hereof in any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by Issuing Lender or any Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not having the
force of law):
(i) subjects Issuing Lender or such Lender (or its applicable lending
or letter of credit office) to any additional Tax (other than any Tax
on the overall net income of Issuing Lender or such Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being
imposed on or suffered by Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any Letters of Credit issued by
Issuing Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition on or affecting Issuing Lender or
such Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to Issuing Lender
or such Lender of agreeing to issue, issuing or maintaining any Letter of Credit
or agreeing to purchase, purchasing or maintaining any participation therein or
to reduce any amount received or receivable by Issuing Lender or such Lender (or
its applicable lending or letter of credit office) with respect thereto; then,
in any case, Borrower shall promptly pay to Issuing Lender or such Lender, upon
receipt of the statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate Issuing Lender or such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Issuing Lender or such Lender shall deliver to Borrower a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to Issuing Lender or such Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
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3.7 Existing Letters of Credit; Reallocation of Participations in Letters
of Credit.
Notwithstanding anything to the contrary herein, but subject to the
following provisions of this paragraph, as of the Restatement Effective Date all
Existing Letters of Credit shall be continued as, and shall be deemed to be,
Letters of Credit issued hereunder, and shall be subject to the terms and
provisions of this Agreement. On the Restatement Effective Date, each Lender
that will have a greater Pro Rata Share with respect to Letters of Credit upon
the Restatement Effective Date than its applicable Pro Rata Share immediately
prior to the Restatement Effective Date under the Existing Credit Agreement
(including any Lender not party to the Existing Credit Agreement immediately
prior to the Restatement Effective Date) (each a "LOC Purchasing Lender"),
without executing an Assignment and Acceptance, shall be deemed to have
automatically purchased assignments, pro rata from each Lender (in proportion to
the amounts to be purchased from such Lender by all LOC Purchasing Lenders) that
will have a smaller Pro Rata Share with respect to Letters of Credit on the
Restatement Effective Date than its applicable Pro Rata Share immediately prior
to the Restatement Effective Date (including any Existing Lender not party to
this Agreement) under the Existing Credit Agreement (each a "LOC Selling
Lender"), in all such LOC Selling Lenders' rights and obligations under this
Agreement and the other Loan Documents with respect to the Letters of Credit
(collectively, except as set forth below, the "LOC Assigned Rights and
Obligations"), and each LOC Selling Lender shall be deemed to have automatically
assigned and sold such Letters of Credit in such amounts to such LOC Purchasing
Lenders, so that, after giving effect to all such assignments, each Lender shall
hold its respective Pro Rata Share as set forth in Schedule 2.1 (as adjusted as
required under the definition of Pro Rata Share) of the Letters of Credit. Each
such purchase shall be without recourse, representation or warranty, except that
each LOC Selling Lender shall be deemed to represent and warrant to each LOC
Purchasing Lender that the LOC Assigned Rights and Obligations of such LOC
Selling Lender are not subject to any Liens created by that LOC Selling Lender.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The effectiveness of this Agreement and the obligations of Lenders to
make (or continue, as the case may be) Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Initial Loans.
This Agreement shall become effective only upon, and the obligations
of Lenders to make (or continue, as the case may be) any Loans to be made on the
Restatement Effective Date are, in addition to the conditions precedent
specified in subsection 4.2, subject to prior or concurrent satisfaction of the
following conditions:
A. Borrower and Guarantor Documents. On or before the Restatement
Effective Date, Borrower and each Guarantor shall deliver or cause to be
delivered to Lenders (or to Managing Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Restatement Effective
Date:
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(i) Certified copies of its Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State
of the State of its incorporation and each other state in which it is
qualified as a foreign corporation to do business, each dated a recent
date prior to the Restatement Effective Date;
(ii) Copies of its Bylaws, certified as of the Restatement Effective
Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party, certified as of the
Restatement Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of its officers executing
this Agreement and the other Loan Documents;
(v) Executed originals of this Agreement, the Notes (duly executed in
accordance with subsection 2.1D, drawn to the order of each Lender and
Swing Line Lender as applicable, and with appropriate insertions) and
the other Loan Documents; and
(vi) Such other documents as any Agent, Issuing Lender or Swing Line
Lender may reasonably request.
B. Canadian Credit Agreement. Coppley and Royal Acquisition shall
have executed and delivered the Canadian Credit Agreement and the Canadian
Credit Agreement shall be in full force and effect and the Existing Coppley
Credit Facility shall have been repaid in full and terminated in accordance with
the Canadian Credit Agreement and Managing Agent shall have received an
Officer's Certificate from Borrower, dated as of the Restatement Effective Date,
to such effect.
C. Security Interests. To the extent not previously satisfied
pursuant to the Existing Credit Agreement, each Credit Party shall have taken or
caused to be taken (and Collateral Agent shall have received satisfactory
evidence thereof) such actions in such a manner so that Collateral Agent has (or
shall have upon the filing of the financing statements and trademark assignments
delivered to Collateral Agent on the Restatement Effective Date) a valid and
perfected first priority security interest (subject to the Liens permitted
hereunder) as of such date in the entire Collateral located in the United States
(to the extent required by the Pledge and Security Agreement, the Stock Pledge
Agreement and Collateral Documents related thereto) and Borrower shall have (or
shall have upon the filing of the financing statements and trademark assignments
delivered to Collateral Agent on the Restatement Effective Date) a valid and
perfected second priority security interest (subject to the Liens permitted
hereunder) in the entire Collateral located in the United States (to the extent
required by the Intercompany Note Security Agreement and the Collateral
Documents related thereto). Such actions shall include, without limitation, (i)
delivery of appropriate Lien, judgment and tax searches as Managing Agent shall
request in all applicable jurisdictions for the Credit Parties in form and
substance satisfactory to
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇) delivery to Collateral Agent of certificates (which
certificates shall be accompanied by irrevocable undated stock powers, duly
endorsed in blank and otherwise satisfactory in form and substance to Collateral
Agent) representing all capital stock pledged pursuant to the Stock Pledge
Agreement, (iii) to the extent not previously satisfied pursuant to the Existing
Credit Agreement, delivery to Collateral Agent of the Intercompany Notes duly
endorsed in blank, all in form and substance satisfactory to Collateral Agent
and delivery to Collateral Agent of all other instruments (duly endorsed where
appropriate) evidencing the Collateral, (iv) to the extent not previously
satisfied pursuant to the Existing Credit Agreement, filing of Uniform
Commercial Code financing statements and/or amendments and the Trademark
Assignment, as to the Collateral for all jurisdictions as Managing Agent shall
request as may be necessary or desirable to perfect Lenders' security interests
in the Collateral, (v) to the extent not previously satisfied pursuant to the
Existing Credit Agreement, delivery to Collateral Agent of Collateral Access
Agreements for all Inventory locations (other than to the extent Collateral
Agent shall have otherwise consented in its sole discretion) and (vi) delivery
of all other evidence reasonably satisfactory to Collateral Agent that all other
filings, recordings and other actions Collateral Agent deems necessary or
advisable to establish, preserve and perfect the first priority Liens granted to
Collateral Agent on behalf of Lenders and the Liens granted to Borrower shall
have been made or provided for.
D. Cash Management System. To the extent not previously satisfied
pursuant to the Existing Credit Agreement, the Cash Management System shall be
in place in form and substance satisfactory to Managing Agent, and (other than
to the extent Collateral Agent shall have otherwise consented in its sole
discretion) Collateral Agent shall have received Cash Management Letters from
each financial institution at which a Deposit Account (other than an Excluded
Account) is located (which shall, in any event, include all Cash Management
Letters for all such Deposit Accounts located at any Lender or its Affiliates)
pursuant to the Cash Management System, all in form and substance satisfactory
to Collateral Agent.
E. Acknowledgement and Consent of Loan Parties. On or before the
Restatement Effective Date each Credit Party shall have executed and delivered
an Acknowledgement and Consent to Lenders (or to Managing Agent with sufficient
originally executed copies for each Lender and its counsel).
F. Reallocation Amounts. Managing Agent shall have received from
each Purchasing Lender the net amount of its payment required pursuant to
subsection 2.10.
G. Evidence of Insurance. Collateral Agent shall have received an
Officer's Certificate of Borrower setting forth a schedule of insurance with
respect to each of the insurance policies required to be maintained hereunder,
and Collateral Agent shall be satisfied that the nature and scope of these
insurance policies meet the requirements of subsection 6.4 each such insurance
policy shall name Collateral Agent on behalf of Lenders as loss payee and/or
additional insured, as appropriate, and Collateral Agent shall have received an
original certificate of insurance from or on behalf of the issuer of each such
policy.
H. No Event of Default under Existing Credit Agreement. As of the
Restatement Effective Date, no "Event of Default" or "Potential Event of
Default" under and as defined in this Agreement or the Existing Credit Agreement
shall have occurred and be
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continuing and Managing Agent shall have received an Officer's Certificate from
Borrower, dated as of the Restatement Effective Date, to such effect.
I. Continuation of Existing Loans Payment of Accrued Interest and
Fees Under Existing Credit Agreement. Anything contained in the Existing Credit
Agreement to the contrary notwithstanding, (i) on the Restatement Effective
Date, Borrower shall continue all Existing Loans as Loans (in each case in the
same type and amount), and Existing Letters of Credit as Letters of Credit,
under and subject to this Agreement and in accordance with subsections 2.10 and
3.7, (ii) Borrower shall have paid to Managing Agent, for distribution (as
appropriate) to Existing Lenders, all accrued and unpaid interest with respect
to all Existing Loans as of the Restatement Effective Date, and (iii) Borrower
shall have paid to Managing Agent, for distribution (as appropriate) to Existing
Lenders, all commitment fees, facility fees and Letter of Credit fees which are
accrued and unpaid as of the Restatement Effective Date under subsection 2.3 of
the Existing Credit Agreement.
J. Year 2000 Assessment and Year 2000 Corrective Plan. Borrower
shall have delivered a Year 2000 Assessment and a Year 2000 Corrective Plan to
the Managing Agent, in each case in form and substance satisfactory to Managing
Agent.
K. Delivery of Financial Condition Certificate. On or before the
making (or continuing, as the case may be) of the initial Loans, each of
Borrower and each Operating Subsidiary shall have delivered a financial
condition certificate, in form and substance satisfactory to Managing Agent
demonstrating that, after giving effect to the consummation of the transactions
on the Restatement Effective Date (including incurrence of the Obligations) each
Operating Subsidiary is Solvent.
L. Opinions of Credit Party's Counsel. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of ▇▇▇▇▇▇ & Coff, counsel for the Credit Parties, in
form and substance satisfactory to Managing Agent and its counsel, dated as of
the Restatement Effective Date and setting forth substantially the matters in
the opinions designated in Exhibit VI annexed hereto and as to such other
matters as Managing Agent acting on behalf of Lenders may reasonably request,
(ii) general counsel for the Credit Parties not covered by the opinion of ▇▇▇▇▇▇
& Coff, setting forth substantially the matters in the opinions designated in
Exhibit VI annexed hereto with respect to such Credit Parties and Collateral
Documents and as to such other matters as Managing Agent, acting on behalf of
Lenders, may reasonably request and (iii) evidence satisfactory to Managing
Agent that each Credit Party has requested each such counsel to deliver such
opinions to Lenders.
M. Opinions of Managing Agent's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Managing Agent, dated as of the Restatement
Effective Date, substantially in the form of Exhibit VII annexed hereto and as
to such other matters as Managing Agent acting on behalf of Lenders may
reasonably request.
N. Expenses. Borrower shall have paid to Managing Agent for
distribution as appropriate, all reimbursable costs and expenses incurred
through the Restatement Effective Date in accordance with subsection 10.2.
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O. Fees. Borrower shall have paid to Managing Agent, for
distribution (as appropriate) to Managing Agent and Lenders, the fees payable on
the Restatement Effective Date referred to in subsection 2.3.
P. No Material Adverse Effect. Since November 30, 1998, no Material
Adverse Effect (in the sole opinion of Managing Agent) shall have occurred.
Q. Representations and Warranties; Performance of Agreements.
Borrower shall have delivered to Managing Agent an Officer's Certificate, in
form and substance satisfactory to Managing Agent, to the effect that the
representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Restatement Effective Date to
the same extent as though made on and as of that date and that Borrower shall
have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Restatement Effective Date except as otherwise disclosed to and
agreed to in writing by Managing Agent and Requisite Lenders.
R. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by Managing
Agent, acting on behalf of Lenders, and its counsel in accordance with this
subsection 4.1 shall be satisfactory in form and substance to Managing Agent and
such counsel, and Managing Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Managing Agent
may reasonably request.
4.2 Conditions to All Loans.
Subject to subsection 4.4 with respect to Rollover Borrowings and
subsection 2.1A(iii) with respect to Swing Line Loans, the obligations of each
Lender to make Loans on each Funding Date are subject to the following further
conditions precedent (other than with respect to the conversions of outstanding
LIBOR Rate Loans to Index Rate Loans which shall be subject to the conditions
precedent set forth in subsection 4.2B(iii) and (iv) below):
A. Managing Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, a copy of an
originally executed Notice of Borrowing, in each case signed by the chairman,
chief executive officer, president, executive vice president, senior vice
president, chief financial officer, chief accounting officer, the treasurer or
the controller of Borrower or by any executive officer of Borrower designated by
any of the above-described officers on behalf of Borrower in a writing delivered
to Managing Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an
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earlier date, in which case such representations and warranties shall
have been true, correct and complete in all material respects on and
as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential
Event of Default;
(iii) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain such Lender
from making the Loans to be made by it on that Funding Date;
(iv) The making of the Loans requested on such Funding Date shall not
violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System;
(v) There shall not be pending or, to the knowledge of Borrower,
threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Borrower or any of its
Subsidiaries or any property of Borrower or any of its Subsidiaries
that has not been disclosed by Borrower in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding
Loans (or, in the case of the initial Loans, made or continued on the
Restatement Effective Date, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Agent or of Requisite Lenders, would be expected to have a Material
Adverse Effect; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this
Agreement or the making of Loans hereunder; and
(vi) The making of the Loans shall not cause Borrower to violate any
of the restrictions set forth in subsections 2.1A(i), (ii) and (iii)
with respect to the utilization of the Commitments.
4.3 Conditions to Letters of Credit.
--------------------------------
The issuance of any Letter of Credit hereunder is subject to the following
conditions precedent:
A. On or before the date of issuance of such Letter of Credit, Issuing
Lender and Managing Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer, the treasurer or the controller of Borrower or by any executive officer
of Borrower designated by any of the above-described officers on behalf of
Borrower in a writing delivered to Issuing Lender and Managing Agent, together
with all other
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information specified in subsection 3.1B(i) and such other documents or
information as Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit.
B. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
4.4 Rollover Borrowings.
--------------------
The obligations of each Lender to make Revolving Loans constituting
Rollover Borrowings on each Funding Date are subject only to the following
conditions precedent:
A. Managing Agent shall have received on or before that Funding Date
in accordance with subsection 2.1B a copy of an originally executed Notice of
Borrowing therefor, in each case signed by the chairman, chief executive
officer, president, executive vice president, senior vice president, chief
financial officer, chief accounting officer, the treasurer or controller of
Borrower or by any executive office of Borrower designated by any of the above-
described officers on behalf of Borrower in a writing delivered to Managing
Agent.
B. Collateral Agent shall have received such information as it shall
request in order to confirm the Borrowing Base as of such Funding Date and the
Effective Advance Rate as of such Funding Date.
C. As of that Funding Date, each of the following conditions shall be
satisfied:
(i) The Managing Agent shall not have received a Rollover Termination
Notice (either telephonically or in writing) as of that Funding Date;
(ii) The Funding Date shall be during a Cash Sweep Period and at a
time that Borrower is unable to otherwise borrow Loans hereunder in
accordance with subsection 4.2;
(iii) The Revolving Loans requested by such Notice of Borrowing shall
be Index Rate Loans only;
(iv) The amount of the Revolving Loans requested shall not exceed the
lesser of (a) the sum of (y) aggregate amount of Receipts applied to
repay outstanding Revolving Loans on that Funding Date in accordance
with subsection 6.10 and (z) the amount of Receipts so applied since
the earlier of the last Funding Date of a Rollover Borrowing hereunder
and the date that is 5 Business Days prior to the current Funding Date
or (b) such other amount that will not cause the Total Utilization of
Tranche A Revolving Commitments plus the Total Utilization of Tranche
B Revolving Commitments at any time to exceed the lesser of (y) the
Revolving Loan Commitments minus the Canadian Utilization and (z) the
Borrowing Base, in each case as then in effect; provided that in no
event shall the amount of such Revolving Loans requested be an amount
that would cause the
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Effective Advance Rate to increase as of such Funding Date over the
amount of the Effective Advance Rate as in effect at the close of
business for Collateral Agent on the last Business Day of the week
preceding such Funding Date;
(v) No event shall have occurred and be continuing or result from the
consummation of the Rollover Borrowing contemplated by such Notice of
Borrowing, that would constitute a (a) Potential Event of Default
under subsections 8.1 or (or other than with respect to a Non-
Operating Subsidiary) 8.6 or (b) an Event of Default;
(vi) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain such Lender
from making the Revolving Loans to be made it on that Funding Date;
(vii) The making of the Revolving Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation T, Regulation U, Regulation X and the Board of Governors of
the Federal Reserve System; and
(viii) The representations and warranties contained in subsection
5.15 shall be true, correct and complete in all material respects on
and as of that Funding Date to the same extent as if made on and as of
that date.
SECTION 5.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
(or continue, as the case may be) the Loans, to induce Issuing Lender to issue
Letters of Credit (or continue the Existing Letters of Credit hereunder, as the
case may be) and to induce other Lenders to purchase participations therein,
Borrower represents and warrants to each Lender, on the date of this Agreement,
on each Funding Date and on the date of issuance of each Letter of Credit, that
the following statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Credit Party is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation except for Subsidiaries of Borrower, which after the
Restatement Effective Date, may not be in good standing if such failure has not
had and will not have a Material Adverse Effect or result in any Lien not
permitted hereunder. Each Credit Party has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents and
Related Documents to which it is a party, to carry out the transactions
contemplated thereby and, in the case of Borrower, to issue and pay the Notes.
B. Qualification and Good Standing. Each Credit Party is qualified to do
business and is in good standing in every jurisdiction necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a Material Adverse
Effect or result in any Lien not permitted hereunder.
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C. Conduct of Business. Borrower and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
D. Subsidiaries. All of the Subsidiaries of Borrower as of the
Restatement Effective Date and the Non-Operating Subsidiaries as of the
Restatement Effective Date are identified in Part One of Schedule 5.1 annexed
hereto. The capital stock of each of the Subsidiaries of Borrower identified in
Part One of Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such capital stock constitutes Margin
Stock. Part One of Schedule 5.1 annexed hereto correctly sets forth the
ownership interest of Borrower in each of its Subsidiaries identified therein as
of the Restatement Effective Date. Each of the statements contained in the
definition of Non-Operating Subsidiary are true with respect to each Non-
Operating Subsidiary and with respect to Non-Operating Subsidiaries taken as a
whole.
E. Collateral Matters. Other than as may be supplemented by written
notices delivered to Collateral Agent pursuant to the Pledge and Security
Agreement:
(i) the chief executive office and principal place of business of
each Credit Party is as set forth in Part Two of Schedule 5.1 annexed
hereto;
(ii) the office where each Credit Party keeps its records concerning
Accounts and all originals of all chattel paper which evidence any
Accounts are located at the addresses specified for such Credit Party
in Part Three of Schedule 5.1 annexed hereto;
(iii) all Inventory of each Credit Party is located on the premises
specified for such Credit Party on Part Four of Schedule 5.1 annexed
hereto (or is in transit thereto) and except as specified in Part Four
of Schedule 5.1 annexed hereto, no such Inventory is stored with a
bailee, warehouseman or similar party;
(iv) other than as set forth in Part Five of Schedule 5.1 annexed
hereto, no Credit Party does any business under any fictitious
business names or tradenames or has done business under any fictitious
business names or tradenames during the five years preceding the
Closing Date.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and Related Documents and the issuance, delivery and payment
of the Notes have been duly authorized by all necessary corporate action on the
part of each applicable Credit Party.
B. No Conflict. The execution, delivery and performance by each Credit
Party of the Loan Documents and the Related Documents, the issuance, delivery
and payment of the Notes (in the case of Borrower) and the consummation of the
transactions contemplated by the Loan Documents and Related Documents do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Borrower or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Borrower or any of its Subsidiaries or
any
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order, judgment or decree of any court or other agency of government binding
on Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach
of (excluding, however, Accounts or general intangibles of Borrower or its
Subsidiaries which by their terms purport to prohibit the assignment thereof
without the consent of the Account Debtor in respect thereof, except as the same
may be rendered ineffective by applicable law) or constitute (with due notice or
lapse of time or both) a default under any material Contractual Obligation of
Borrower or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Borrower or any
of its Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Agent on behalf of Lenders or in favor of Borrower, in the
case of the Intercompany Note Security Agreement and the Intercompany Note
Trademark Assignment), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Borrower
or any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Restatement Effective Date and disclosed in writing to
Lenders.
C. Governmental Consents. The execution, delivery and performance by each
Credit Party of the Loan Documents and Related Documents, the issuance, delivery
and payment of the Notes and the consummation of the transactions contemplated
by the Loan Documents and Related Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body and other than filings expressly contemplated by the Loan Documents.
D. Binding Obligation. Each of the Loan Documents and Related Documents
has been duly executed and delivered by each Credit Party party thereto and is
the legally valid and binding obligation of such Credit Party, enforceable
against such Credit Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by general equitable
principles whether enforcement is sought in equity or at law.
E. Valid Issuance of Senior Subordinated Notes. Borrower has the
corporate power and authority to issue the Senior Subordinated Notes. The Senior
Subordinated Notes are the legally valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by general
equitable principles whether enforcement is sought in equity or at law. The
Loans, Letters of Credit and all other Obligations hereunder are and will be
within the definition of "Senior Debt" included in such provisions and are the
only liabilities that constitute "Designated Senior Debt" (as defined in the
Subordinated Note Indenture). The Senior Subordinated Notes either (a) have been
registered or qualified under applicable federal and state securities laws or
(b) are exempt from registration thereunder.
5.3 Financial Condition.
Borrower has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Borrower and its Subsidiaries as at November 30, 1998 and the
related consolidated statements of income, stockholders' equity and cash flows
of Borrower and its Subsidiaries for the Fiscal Year then
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ended and (ii) the unaudited consolidated and consolidating balance sheets of
Borrower and its Subsidiaries as at June 30, 1999 and the related unaudited
consolidated and consolidating statements of income and consolidated cash flows
of Borrower and its Subsidiaries for the seven months then ended. All such
statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated and, where applicable, consolidating
basis) of the entities described in such financial statements as at the
respective dates thereof and the results of operations and cash flows (on a
consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended, subject, in the case of
any such unaudited financial statements, to changes resulting from audit and
normal year-end adjustments. Borrower does not (and will not following the
funding of the initial Loans made or continued on the Restatement Effective
Date) have any Contingent Obligation, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, financial condition or prospects of Borrower or any of its
Subsidiaries.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since November 30, 1998, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
7.5.
5.5 Title to Properties; Liens.
Borrower and its Subsidiaries have good, sufficient and legal title to all
of their respective properties and assets reflected in the financial statements
referred to in subsection 5.3 or in the most recent financial statements
delivered pursuant to subsection 6.1, except for assets disposed of since the
date of such financial statements in the ordinary course of business or, after
the Restatement Effective Date, as otherwise permitted under subsection 7.7 and
except for imperfections of title which individually or in the aggregate would
not have a Material Adverse Effect. Except as permitted by this Agreement, all
such properties and assets are free and clear of Liens.
5.6 Litigation; Adverse Facts.
Except as set forth in Schedule 5.6 annexed hereto, there is no action,
suit, proceeding, arbitration or governmental investigation (whether or not
purportedly on behalf of Borrower or any of its Subsidiaries) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Borrower, threatened against or
affecting Borrower or any of its Subsidiaries or any property of Borrower or any
of its Subsidiaries that has had, or could reasonably be expected to result in,
a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is (i)
in violation of any applicable law that has had, or could reasonably be expected
to result in, a Material Adverse Effect or (ii) subject to or in default with
respect to any final judgment, writ, injunction, decree, rule or regulation of
any
77
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that
has had, or could reasonably be expected to result in, a Material Adverse
Effect. There are no labor controversies pending, or to the knowledge of
Borrower threatened, which has had, or could reasonably be expected to result
in, a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes, assessments, fees and other governmental
charges upon Borrower and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable except for nonmaterial state and local tax returns
which Borrower reasonably believes are not required to be filed because of
jurisdictional or other limitations and the nonfiling of which would not result
in a Material Adverse Effect or a Lien on any Collateral not permitted by
subsection 7.2. Borrower knows of no proposed tax assessment against Borrower or
any of its Subsidiaries which is not being actively contested by Borrower or
such Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its material Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except in any case where the consequences,
direct or indirect, of such default or defaults, if any, would not have a
Material Adverse Effect.
B. Neither Borrower nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect.
5.9 Governmental Regulation.
Neither Borrower nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act (to the extent applicable to the transactions
contemplated hereby) or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which in any case may limit its ability
to incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
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5.10 Securities Activities.
Neither Borrower nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
A. Borrower and each of its ERISA Affiliates are in substantial
compliance with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan.
B. No ERISA Event has occurred with respect to which Borrower has any
outstanding liability and no such ERISA Event is reasonably expected to occur.
C. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $1,000,000.
D. As of the date hereof, the Multiemployer Plans that are defined
benefit plans subject to Subtitle E of Title IV of ERISA are (i) the Cotton
Garment Fund of the Amalgamated Insurance Fund, and (ii) the ILGWU National
Retirement Fund.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Borrower
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees claiming by, through or under any Credit Party alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of Borrower and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in
the Facilities (to the best knowledge of Borrower to the extent of
Facilities not currently owned, operated or used by Borrower or its
Subsidiaries)) comply in all material respects with all Environmental
Laws except where the failure to comply could not reasonably be
expected to have a Material Adverse Effect;
(ii) Borrower and each of its Subsidiaries have obtained all
Governmental Authorizations under Environmental Laws necessary to
their respective operations, and Borrower and each of its Subsidiaries
are in compliance with all
79
material terms and conditions of such Governmental Authorizations
except where the failure to so obtain or comply, as the case may be,
could not reasonably be expected to have a Material Adverse Effect;
(iii) to the best of Borrower's knowledge, none of the operations of
Borrower or any of its Subsidiaries is the subject of any federal or
state investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location which could
reasonably be expected to have a Material Adverse Effect;
(iv) none of the operations of Borrower or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging the
violation of or liability under any Environmental Laws which could
reasonably be expected to have a Material Adverse Effect;
(v) neither Borrower nor any of its Subsidiaries has received any
notice that it is or may be liable as the result of any Release of any
Hazardous Materials by Borrower or any of its Subsidiaries if the same
could reasonably be expected to have a Material Adverse Effect;
(vi) no underground storage tanks or surface impoundments are on or at
any Facility; and
(vii) as of the Restatement Effective Date any information that would
be required to be disclosed hereunder at such time pursuant to
subsection 6.7 if such provisions were in effect prior to such date
has been set forth on Schedule 5.13 annexed hereto.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Borrower or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
Borrower and each Operating Subsidiary is and, upon the incurrence of
any Obligations by Borrower on any date on which this representation is made,
will be, Solvent.
5.16 Inventory.
Except as disclosed in the information provided to Collateral Agent by
Borrower under subsection 6.8 or otherwise disclosed to Collateral Agent in
writing, with respect to all Inventory:
(a) Collateral Agent may rely upon all statements, warranties, or
representations made in any Borrowing Base Certificate or other written
report regarding Inventory delivered hereunder by Borrower in determining
which items of Inventory are to be deemed Eligible Inventory;
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(b) No such Inventory is subject to any Lien whatsoever, except for
Liens of Collateral Agent hereunder and Permitted Encumbrances; and
(c) No such Inventory has been consigned to any Person (other than
consignment by a Credit Party to another Credit Party).
5.17 Genuineness of Accounts.
Except as disclosed to Collateral Agent in the information provided to
Managing Agent under subsection 6.8 or otherwise disclosed to Collateral Agent
in writing, with respect to Accounts of Borrower and each Operating Subsidiary
as of the date of such information and as disclosed therein (either specifically
or by their exclusion from Eligible Accounts):
(a) Collateral Agent may rely upon all statements, warranties or
representations made in any Borrowing Base Certificate or other report
regarding Accounts delivered hereunder by Borrower in determining
which Accounts are to be deemed Eligible Accounts;
(b) All such Accounts are genuine, are in all material respects what
they purport to be, are not evidenced by a judgment, and are not
evidenced by more than one, if any, executed original instrument,
which original has been delivered or made available to Collateral
Agent and Borrower has no knowledge of any fact or circumstance that
would impair the validity or collectibility thereof including, without
limitation, any setoffs, counterclaims or disputes (except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditor's rights generally or by general equitable principles whether
enforcement is sought in equity or at law).
(c) All such Accounts arise from bona fide transactions completed
substantially in accordance with the terms and provisions contained in
any documents related thereto and no such Account has been assigned
(other than delinquent Accounts assigned for collection or as
otherwise permitted by subsection 7.11) or pledged to any other Person
other than Collateral Agent;
(d) The amounts of the face values shown on any Borrowing Base
Certificate or other report regarding Accounts delivered hereunder and
all invoices and statements delivered to Collateral Agent with respect
to any such Account are actually and absolutely owing to Borrower or
such Operating Subsidiaries, as the case may be (except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditor's rights generally or by general equitable principles whether
enforcement is sought in equity or at law), and are not contingent for
any reason, other than discounts or allowances allowed by such
Borrower in the ordinary course of business for prompt payment or
volume purchases, all of which discounts or allowances have been made
in conformity with the applicable Credit and Collection Policy or
otherwise disclosed to Collateral Agent;
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(e) Borrower has no knowledge that any Account Debtor did not have
the capacity to contract at the time any contract or other document
giving rise to such Account was executed;
(f) The goods giving rise to any such Account are not, and were not
at the time of the sale thereof, subject to any Lien, claim,
encumbrance or security interest, except for Permitted Encumbrances,
Liens in favor of carriers of the goods in the ordinary course of
Borrower's or such Operating Subsidiaries' business and Liens in favor
of Collateral Agent; and
(g) None of the Accounts is or, prior to becoming a Defaulted
Account, will be, evidenced by (i) an "instrument" (as defined in the
UCC) or (ii) "chattel paper" (as defined in the UCC).
5.18 Representations Concerning Credit and Collection Policy.
The summary of the Credit and Collection Policy attached hereto as
Schedule 5.18 is accurate and complete in all material respects as of the
Restatement Effective Date and does not omit to state any material fact
necessary to make the statements set forth therein not misleading. There has
been no change to the Credit and Collection Policy since the Restatement
Effective Date except such changes as have been disclosed to Managing Agent in
writing and approved by Managing Agent.
5.19 Representations Concerning Cash Management System.
The summary of the Cash Management System attached hereto as Schedule 5.19
is accurate and complete in all material respects as of the Restatement
Effective Date and does not omit to state any material fact necessary to make
the statements set forth therein not misleading. Neither Borrower nor any of its
Subsidiaries owns any Deposit Account which is not described in Schedule 5.19
and Schedule 1.1C or otherwise permitted pursuant to subsections 6.10 or 7.3 or
as otherwise permitted pursuant to this Agreement. There has been no change to
the Cash Management System (other than as permitted by subsection 6.10) since
the Restatement Effective Date except such changes as have been disclosed to
Managing Agent in writing and approved by Managing Agent. Except as set forth on
Schedule 5.19, a Cash Management Letter covering each Deposit Account (other
than Excluded Accounts) included in the Cash Management System has been
delivered to Collateral Agent.
5.20 Intellectual Property
A. The Credit Parties own, or are licensed to use or otherwise have the
lawful right to use, the Intellectual Property and all such registered
Intellectual Property is fully protected and duly and properly registered, filed
or issued in the appropriate office and jurisdictions for such registrations,
filing or issuances. All registered Intellectual Property and the Credit Party
holding rights therein is described in Schedule 5.20 annexed hereto. Each of the
license agreements (together with any such agreements entered into after the
Restatement Effective Date, the "License Agreements") pursuant to which any
Credit Party has rights to use material Intellectual Property as of the
Restatement Effective Date is set forth in Schedule 5.20 annexed hereto. Each
Credit Party is in compliance with the material terms of each License
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Agreement to which it is a party and each such License Agreement is in full
force and effect the failure of which would result in a Material Adverse Effect
or an Event of Default hereunder.
B. No material claim has been asserted by any Person with respect to
the use of any such Intellectual Property, or challenging or questioning the
validity or effectiveness of any such Intellectual Property which could
reasonably be expected to result in a Material Adverse Effect. To Borrower's
knowledge, the use of such Intellectual Property by each Credit Party does not
infringe on the rights of any Person, subject to such claims and infringements
as do not, in the aggregate, give rise to any liabilities on the part of any
Credit Party that could reasonably be expected to result in a Material Adverse
Effect. The consummation of the transactions contemplated by this Agreement will
not in any material manner or to any material extent impair the ownership of (or
the license to use, as the case may be) any of such Intellectual Property by any
Credit Party.
5.21 Disclosure.
No representation or warranty of Borrower or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Borrower or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Borrower, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Borrower to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There is no fact known (or which should upon the
reasonable exercise of diligence be known) to Borrower (other than matters of a
general economic nature) that has had, or could reasonably be expected to result
in, a Material Adverse Effect and that has not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.22 Year 2000 Problems.
The Credit Parties have completed a Year 2000 Assessment and a Year 2000
Corrective Plan, copies of which have been delivered to Managing Agent.
SECTION 6.
BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as the Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other
Obligations and the cancellation, expiration or cash collateralization in
accordance with the terms hereof of all Letters of Credit, unless Requisite
Lenders shall otherwise give prior written consent, Borrower shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this
Section 6.
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6.1 Financial Statements and Other Reports.
Borrower will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrower will deliver to Managing Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event within
30 days after the end of each month ending after the Restatement
Effective Date, (a) for each month other than the last month of each
fiscal quarter and each Fiscal Year, the consolidated and
consolidating balance sheets and consolidated statement of income of
Borrower and its Subsidiaries as at the end of such month and
consolidated and consolidating statements of income and consolidated
statement of cash flows of Borrower and its Subsidiaries for the
period from the beginning of the then current Fiscal Year to the end
of such month, setting forth, in the case of such consolidated
financial statements, in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to subsection
6.1(xiii), to the extent prepared on a monthly basis, all in
reasonable detail and certified by the chief financial officer, chief
accounting officer, controller or treasurer of Borrower that they
fairly present the financial condition of Borrower and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b)
a report on all Intercompany Note transactions for each day in such
month as customarily prepared by Borrower.
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of the first three fiscal
quarters of each Fiscal Year, the consolidated and consolidating
balance sheets and consolidated statement of income of Borrower and
its Subsidiaries as at the end of such fiscal quarter and the
consolidating statements of income and consolidated statement of cash
flows of Borrower and its Subsidiaries for the period from the
beginning of the then current Fiscal Year to the end of such fiscal
quarter, setting forth, in the case of such consolidated financial
statements, in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to subsection
6.1(xiii), all in reasonable detail and certified by the chief
financial officer, chief accounting officer, controller or treasurer
of Borrower that they fairly present the financial condition of
Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments;
(iii) Year-End Financials: as soon as available and in any event (y)
within 45 days after the end of each Fiscal Year (but, in any event,
not sooner than the same is released by Borrower to the public) a
preliminary statement of income for such
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Fiscal Year and (z) within 90 days after the end of each Fiscal Year,
(a) the consolidated and consolidating balance sheets of Borrower and
its Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income, and consolidated
statement of stockholders' equity and cash flows of Borrower and its
Subsidiaries for such Fiscal Year, setting forth, in the case of such
consolidated financial statements, in comparative form the
corresponding figures for the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast delivered pursuant to subsection 6.1(xiii) for the Fiscal
Year covered by such financial statements, all in reasonable detail
and certified by the chief financial officer, chief accounting
officer, controller or treasurer of Borrower that they fairly present
the financial condition of Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and their cash
flows for the periods indicated and (b) in the case of such
consolidated financial statements, a report thereon of
PricewaterhouseCoopers LLP or other independent certified public
accountants of recognized national standing selected by Borrower and
reasonably satisfactory to Managing Agent, which report shall be
unqualified, shall express no doubts about the ability of Borrower and
its Subsidiaries to continue as a going concern, and shall state that
such consolidated financial statements fairly present the consolidated
financial position of Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP (except as otherwise
disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of Borrower and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of Borrower (y) stating that the signer has reviewed the
terms of this Agreement and has made, or caused to be made under such
officer's supervision, a review in reasonable detail of the
transactions and condition of Borrower and its Subsidiaries during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signer does not have knowledge of the
existence as at the date of such Officer's Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Borrower has taken, is taking and proposes to take with respect
thereto and (z) confirming in reasonable detail to the extent of
information available, that the Non-Operating Subsidiaries at such
time and for such period, both individually and in the aggregate,
qualify as Non-Operating Subsidiaries pursuant to each element of the
definition thereof; and (b) a Compliance Certificate demonstrating in
reasonable detail compliance for such applicable accounting periods
with the restrictions contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation
of the audited financial
85
statements referred to in subsection 5.3, the consolidated financial
statements of Borrower and its Subsidiaries delivered pursuant to
subdivisions (ii) or (iii) of this subsection 6.1 will differ in any
material respect from the consolidated financial statements that would
have been delivered pursuant to such subdivisions had no such change
in accounting principles and policies been made, then (a) together
with the first delivery of financial statements pursuant to
subdivision (ii) or (iii) of this subsection 6.1 following such
change, consolidated financial statements of Borrower and its
Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding
the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (ii) or (iii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Borrower setting forth the differences
which would have resulted in the calculation of the covenants set
forth in Section 7 if such financial statements had been prepared
without giving effect to such change.
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Borrower and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the
terms of this Agreement and the other Loan Documents as they relate to
accounting matters and (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and,
if such a condition or event has come to their attention, specifying
the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination;
(vii) Accountants' Reports: copies of all reports submitted to
Borrower by independent certified public accountants in connection
with each annual, interim or special audit of the financial statements
of Borrower and its Subsidiaries made by such accountants, including,
without limitation, any comment letter submitted by such accountants
to management in connection with their annual audit shall be made
available for review by Managing Agent promptly after its request
therefor;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices
and proxy statements sent or made available generally by Borrower to
its security holders or by any Subsidiary of Borrower generally to its
security holders other than Borrower or another Subsidiary of
Borrower, (b) all regular and periodic reports and all effective
registration statements (other than on Form S-8 or a similar form) and
effective prospectuses, if any, filed by Borrower or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made
available generally by Borrower or any of its Subsidiaries to the
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public concerning material developments in the business of Borrower or
any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any executive or senior
officer of Borrower obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default (in
either case under this Agreement and as such terms are defined in the
Canadian Credit Agreement), or becoming aware that any Lender (or any
lender under the Canadian Credit Agreement) has given any notice
(other than to Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default (in either case
under this Agreement and as such terms are defined in the Canadian
Credit Agreement), (b) that any Person has given any notice to
Borrower or any of its Subsidiaries or taken any other action with
respect to a claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or event required
to be disclosed in a current report filed by Borrower with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6
of such Form as in effect on the date hereof) concurrently with the
filing of such Form 8-K by Borrower or (d) of the occurrence of any
event or change that has caused or evidences, either in any case or in
the aggregate, a Material Adverse Effect, an Officer's Certificate
specifying the nature and period of existence of such condition, event
or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential
Event of Default (in either case under this Agreement and as such
terms are defined in the Canadian Credit Agreement), default, event or
condition, and what action Borrower has taken, is taking and proposes
to take with respect thereto;
(x) Litigation or Other Proceedings: promptly upon any executive or
senior officer of Borrower obtaining knowledge of (X) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Borrower or any of its Subsidiaries
or any property of Borrower or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Borrower to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) has a reasonable possibility of giving rise to an Event of
Default or a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrower to enable Lenders and their counsel
to evaluate such matters;
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(xi) ERISA Events: promptly upon an executive or senior officer of
Borrower becoming aware (a) of the occurrence of or notice of a
forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Borrower or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto and (b) of the complete or partial withdrawal by any
employer (within the meaning of Section 4203 or 4205 of ERISA) from
the Clothing Retirement Fund of the Amalgamated Insurance Fund, a
written notice containing such information concerning the identity of
the employer and the magnitude of the withdrawal liability of which
any officer of Borrower is aware;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Borrower or any of its Subsidiaries with the Internal
Revenue Service with respect to each Pension Plan; (b) all notices
received by Borrower or any of its Subsidiaries from a Multiemployer
Plan sponsor concerning an ERISA Event; and (c) such other documents
or governmental reports or filings relating to any Employee Benefit
Plan as Agent shall reasonably request; provided that upon Managing
Agent's request, Borrower shall submit promptly to each Multiemployer
Plan identified by Managing Agent a request (together with payment of
any reasonable charges therefor) for an estimate of the withdrawal
liability Borrower or any of its ERISA Affiliates would incur upon a
complete withdrawal (within the meaning of Section 4203 of ERISA) from
such Multiemployer Plan and for a copy of the actuarial valuation and
review and a report on employer withdrawal liability regularly
prepared for such Multiemployer Plan, and shall provide copies of the
information and materials supplied by each such Multiemployer Plan in
response to such submission;
(xiii) Financial Plans: as soon as available and, in any event, by
January 31 of each Fiscal Year, final copies of, a consolidating plan
and financial forecast for such Fiscal Year on a month by month basis
and a consolidated plan and financial forecast on an annual basis for
each remaining Fiscal Year through the Commitment Termination Date,
including without limitation (a) forecasted consolidated and, if
applicable, consolidating balance sheets and forecasted consolidated
and, if applicable, consolidating statements of income and
consolidated cash flows of Borrower and its Subsidiaries for each such
Fiscal Year, together with pro forma Compliance Certificates with
respect to the covenants set forth in subsection 7.6 for each such
Fiscal Year and an explanation of the material assumptions on which
such forecasts are based, (b) forecasted consolidated and
consolidating statements of income and consolidated cash flows of
Borrower and its Subsidiaries for each month of the first such Fiscal
Year, together with an explanation of the material assumptions on
which such forecasts are based and (c) such other information and
projections as any Lender may reasonably request;
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(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory
to Collateral Agent outlining all material insurance coverage
maintained as of the date of such report by Borrower and its
Subsidiaries and all material insurance coverage planned to be
maintained by Borrower and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Borrower or any of its
Subsidiaries or by independent consultants, with respect to
environmental matters at any Facility or an Environmental Claim which
could result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness (but in any
event no earlier than such information is generally made public),
written notice of any change in the Board of Directors of Borrower;
and
(xvii) Other Information: with reasonable promptness, such other
information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by any
Agent or any Lender.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Borrower will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all rights and franchises material to its
business, except where the failure to maintain the same could not reasonably be
expected to have a Material Adverse Effect.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Borrower will, and will cause each of its Subsidiaries to, pay
all taxes (except for nonmaterial state and local taxes which Borrower
reasonably believes are not required to be paid because of jurisdictional or
other limitations and the non-payment of which would not result in a Material
Adverse Effect or a Lien on any Collateral other than Liens permitted under
subsection 7.2), assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. Borrower will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Borrower or any of its Subsidiaries).
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6.4 Maintenance of Properties; Insurance.
Borrower will, and will cause each of its Subsidiaries to, take all
reasonable action to maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Borrower and its Subsidiaries (including,
without limitation, Intellectual Property) and from time to time will make or
cause to be made all reasonably necessary repairs, renewals and replacements
thereof. Borrower will maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to its properties and
business and the properties and businesses of its Subsidiaries against loss or
damage consistent with the policies and programs in effect as of the Restatement
Effective Date and of the kinds customarily carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses; provided that Borrower and its Subsidiaries may maintain workers
compensation self insurance programs and such other additional self insurance
programs as are customary for their size and industry and as are established and
administered in accordance with prudent business practices. Each such policy of
insurance shall name Collateral Agent for the benefit of Lenders as an
additional insured and/or as the loss payee thereunder as appropriate and shall
provide for at least 10 days prior written notice to Collateral Agent of any
modification or cancellation of such policy.
6.5 Inspection; Lender Meeting.
Borrower shall, and shall cause each of its Subsidiaries to, permit
any authorized representatives designated by any Lender to visit and inspect any
of the properties of Borrower or any of its Subsidiaries, including its and
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Borrower
may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours
and as often as Borrower and such Lender may reasonably agree. Without in any
way limiting the foregoing, Borrower will, upon the request of Agent or
Requisite Lenders, participate in a meeting of Managing Agent and Lenders once
during each Fiscal Year to be held at Borrower's corporate offices (or such
other location as may be agreed to by Borrower and Managing Agent) at such time
as may be agreed to by Borrower and Managing Agent, but in any case, as long as
no Event of Default or Potential Event of Default shall have occurred and be
continuing, no sooner that 15 days after Borrower's annual meeting of
stockholders.
6.6 Compliance with Laws, etc.
Borrower shall, and shall cause each of its Subsidiaries to, comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority, noncompliance with which could reasonably be
expected to cause a Material Adverse Effect.
6.7 Environmental Matters.
A. Borrower shall, and shall cause each of its Subsidiaries to
comply with all Environmental Laws and Governmental Authorizations in all
material respects including,
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without limitation, with respect to the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or about any
Facility, noncompliance with which could reasonably be expected to result in a
Material Adverse Effect.
B. Borrower agrees that Managing Agent may, from time to time upon
its determination in its reasonable discretion that events or conditions exist
that could reasonably be expected to result in material environmental related
liability for any Lender in respect of this Agreement or Borrower or any of its
Subsidiaries, retain, at Borrower's expense, an independent professional
consultant to review any report relating to Hazardous Materials prepared by or
for Borrower and to conduct its own investigation of any Facility then owned,
leased, operated or used by Borrower or any of its Subsidiaries, and Borrower
agrees to use reasonable commercial efforts to obtain permission for Managing
Agent's professional consultant to conduct its own investigation of any Facility
then owned, leased, operated or used by Borrower or any of its Subsidiaries, all
upon reasonable notice, during normal business hours and as often as may be
reasonably requested. Borrower hereby grants to Managing Agent and its agents,
employees, consultants and contractors the right to enter into or on to the
Facilities currently owned, leased, operated or used by Borrower or any of its
Subsidiaries to perform such tests on such property as are reasonably necessary
to conduct such a review and/or investigation. Any such investigation of any
Facility shall be conducted, to the extent reasonably practicable, so as not to
interfere with the ongoing operations at any such Facility or to cause any
damage or loss to any property at such Facility. Agents and Lenders shall have
no duty to disclose or discuss any information produced by such reviews or
investigations with Borrower or any of its Subsidiaries.
C. Borrower shall, promptly upon any senior or executive officer
obtaining knowledge thereof, advise Lenders in writing and in reasonable detail
of any:
(i) Release of any Hazardous Materials required to be reported to any
governmental agency under applicable Environmental Laws;
(ii) Environmental Claim that could reasonably be expected to result
in a Material Adverse Effect;
(iii) notice to Borrower or any Subsidiary of any material violation
of any Environmental Laws or any letter or request for information
under Section 104 of the Comprehensive Environmental Response,
Compensation or Liability Act (42 U.S.C. (S) 9604);
(iv) material outstanding written order or agreement with any
governmental authority or private party relating to (a) any
Environmental Laws or (b) any Environmental Claims, in each case to
the extent that the subject matter thereof could reasonably be
expected to result in a Material Adverse Effect;
(v) commencement of any judicial or administrative proceeding
alleging, or any request for information that indicates that any
governmental agency is investigating, a violation by Borrower or any
Subsidiary of any Environmental Laws that could reasonably be expected
to result in a Material Adverse Effect; or
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(vi) action by Borrower or any of its Subsidiaries, including the
acquisition of any assets or the commencement of any business, that
could reasonably be expected to result in any Environmental Claims
that could have a Material Adverse Effect.
D. Borrower shall, at its own expense, provide copies of such
documents or information in the possession of Borrower or its Subsidiaries as
Managing Agent may reasonably request in relation to any matters disclosed
pursuant to this subsection 6.7.
6.8 Borrowing Base Certificates; Operating Reports.
(i) Borrowing Base Certificates. Borrower shall deliver to Collateral
Agent (with a copy to Lenders promptly thereafter), a Borrowing Base
Certificate on the fifteenth day of each month.
(ii) Operating Reports. Borrower shall deliver to Collateral Agent,
form and detail satisfactory to Collateral Agent, each operating
report listed on Schedule 6.8, in the manner described on such
schedule, and each other operating report reasonably requested by
Collateral Agent;
(iii) Collection Reports. Upon request of Collateral Agent, Borrower
shall make available to Collateral Agent copies of deposit slips for
each deposit, reasonably detailed information regarding the
application of proceeds and such other information regarding receipts,
expenditures and deposit account balances as Collateral Agent may
reasonably request and as Borrower and its Subsidiaries maintain from
time to time in accordance with its customary practice;
(iv) Inventory Reports.
(a) At least two times in each Fiscal Year, Borrower shall, at
its expense, conduct, and permit Collateral Agent to monitor, a
comprehensive detailed count of and evaluation of at least 80% of all
Inventory in accordance with Borrower's usual and customary practices
for such count and evaluation; provided that at least once per year
Borrower shall, at its expense, have its independent certified public
accountants oversee such count and evaluation in accordance with
standard audit procedures.
(b) Collateral Agent, in its reasonable discretion (and not
more frequently than twice each 12 month period, at Borrower's expense
and if more frequently, at Collateral Agent's expense), may review or
have an outside consultant selected by Collateral Agent review, upon
reasonable notice and at reasonable times, the quality and amount of
Inventory.
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6.9 Receivables Reporting; Other Requirements.
Borrower shall and shall cause each of its Subsidiaries (as applicable) to:
A. Conversion of File Tapes. Upon notice from Collateral Agent at
any time, in its reasonable discretion, cooperate with the Collateral
Agent in connection with the writing and development of a conversion
program (such program to be held by Collateral Agent) in respect of
the File Tapes.
B. Servicing Programs. Upon notice from Collateral Agent at any time
upon and during the continuance of an Event of Default, deliver to
Collateral Agent all computer software, programs and related materials
necessary or advisable to permit the collection of the Accounts by a
servicer other than Borrower or such Subsidiary, through the use of
computer hardware and systems software compatible with that used by
Borrower and its Subsidiaries, and from time to time thereafter,
promptly upon the development thereof, any amended or newly instituted
programs or related materials, in each case to the extent that such
delivery would not violate the terms thereof; provided Borrower shall
use its best efforts to obtain any required consents for such
delivery.
C. File Tapes. Create File Tapes consistent with Borrower's usual
and customary practices, but, in any event, at least on a weekly
basis, reflecting all transactions with respect to Accounts on such
day and, upon notice from Collateral Agent at any time, in its
reasonable discretion, deliver to a storage facility to which
Collateral Agent shall have access, as soon as available and in any
event within one day after the date on which a File Tape is created,
an original or a duplicate copy of such File Tape. Maintain
satisfactory disaster recovery procedures with respect to File Tapes
and all software and hardware necessary for the servicing and
collection of the Accounts consistent with Borrower's usual and
customary practices.
D. Existing Servicing Contracts. Maintain any existing arrangements
between Borrower and its Subsidiaries and any other Person relating to
the servicing and collection of the Accounts, such arrangements, with
such modifications, changes and replacements as Borrower may make from
time to time upon notice to Collateral Agent and consistent with the
Credit and Collection Policy, and in all cases subject to Collateral
Agent's rights under the Loan Documents, to remain in effect until the
earlier of (i) the satisfaction in full of the Obligations and (ii)
the collection of all Accounts to the satisfaction of Collateral
Agent.
E. Successor Servicer. In the event that the existing servicing
arrangements for the Accounts are not at any time reasonably
satisfactory to Collateral Agent, Borrower or its applicable
Subsidiary shall terminate such servicing arrangements and obtain a
nationally recognized successor servicer approved by Collateral Agent
to continue servicing the Accounts (upon such terms and for such fee
as shall be approved in writing by Collateral Agent) in accordance
with the Credit and Collection Policy.
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6.10 Cash Management System.
A. Cash Management System. Borrower and its Subsidiaries shall
continue to maintain the Cash Management System as in effect on the Restatement
Effective Date; provided that Borrower and its Subsidiaries may open and close
Deposit Accounts and make other changes to the Cash Management System in the
ordinary course of business upon notice to Collateral Agent and as long as (i)
no Event of Default or Potential Event of Default has occurred and is continuing
or would result therefrom, (ii) such changes, either individually or in the
aggregate are not adverse to any Agent or any Lender (in its capacity as a
Lender) or impair any rights of Collateral Agent under the Collateral Documents
and (iii) all Receipts of Borrower and its Subsidiaries continue to be collected
and distributed pursuant to procedures subject to Cash Management Letters at all
times.
B. Collateral Agent Rights. Managing Agent may (and shall upon
Requisite Lender's direction), at any time that an Event of Default shall have
occurred and be continuing, deliver notice under the Cash Management Letter to
each of the financial institutions party thereto, requiring that all funds on
deposit in the Deposit Accounts of Borrower and its Subsidiaries (other than
Excluded Accounts) be transferred on a daily basis to the Collection Account (it
being understood that funds may be transferred through intermediary accounts in
the Cash Management System subject to Cash Management Letters prior to ultimate
transfer to the Collection Account), and upon such notice and thereafter,
without limiting any other provision of this Agreement or the other Loan
Documents, Borrower agrees to perform and comply and to cause each of its
Subsidiaries to perform and comply with the following covenants and agreements:
(i) Receipts shall be received and held by Borrower and each of its
Subsidiaries and any of their respective officers, employees, agents
or other Persons acting for or in concert with any Credit Party to
make collections for or on behalf of any Credit Party ("Collecting
Agents"), in trust for Collateral Agent as Collateral. Notwithstanding
any other provision of this Agreement or any other Loan Document, all
Receipts shall be paid by the obligor thereon into the Deposit
Accounts subject to the Cash Management System. On a daily basis, each
Credit Party, or any Collecting Agent, shall deposit or shall cause to
be deposited, all Receipts into Deposit Accounts included in the Cash
Management System and subject to Cash Management Letters on or before
the first Business Day following receipt thereof after receipt in the
applicable lockbox or accounting office of such Credit Party, and as
soon as practical in the case of Receipts received in any other manner
(it being understood that the foregoing does not limit each Credit
Party's obligation to instruct all obligors to make payments into
lockboxes).
(ii) Except to the extent otherwise provided herein, upon deposit in
the Collection Account, any Receipts consisting of cash or wire or
electronic transfers in immediately available funds shall be applied
by Collateral Agent to the Loans and other Obligations as set forth in
Subsection 6.10B(iii); provided that upon and during the continuance
of an Event of Default (other than an Event of Default under
subsections 8.1, 8.6 or 8.7) or upon any other event or condition
(including,
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without limitation, delivery of a Rollover Termination Notice) which
prohibits Rollover Borrowings hereunder, the first $1,000,000 of such
Receipts received in the Collection Account after such Event of
Default or other such event or condition shall not be applied to the
Loans and other Obligations but shall be returned to Borrower by
Collateral Agent and thereafter all Receipts shall be applied as set
forth in subsection 6.10B(iii).
(iii) Any payments received by Collateral Agent under this subsection
6.10 shall be applied in the following order unless Collateral Agent
otherwise elects: (i) any due and payable fees, expenses or other
charges in respect of the Obligations; (ii) any due and payable
interest payments on the Loans (with application to Swing Line Loans
first, Tranche B Revolving Loans, second and Tranche A Revolving Loans
third); (iii) principal payments on the Loans whether or not due and
payable (with application to Swing Line Loans first, Tranche B
Revolving Loans second and Tranche A Revolving Loans third); and (iv)
other due and payable Obligations or to collateralize Letters of
Credit to the extent required hereunder; provided, however, that
principal and interest on any LIBOR Rate Loans shall not be required
to be paid to the extent that any such payment will result in the
incurrence of any increased costs pursuant to subsection 2.6, as long
as at such time, no Event of Default or Potential Event of Default
shall have occurred or be continuing and Borrower would be entitled to
borrow LIBOR Rate Loans hereunder upon submission of an appropriate
Notice of Borrowing therefor; provided further that to the extent that
Borrower is not able to borrow LIBOR Rate Loans at such time as set
forth above, any such amounts shall be applied to pay outstanding
LIBOR Rate Loans in accordance with this subsection 6.10 but, unless
an Acceleration shall have occurred, Borrower shall not be required to
pay any increased costs pursuant to subsection 2.6 which may result
therefrom.
(iv) Each Credit Party irrevocably makes, constitutes and appoints
Collateral Agent, and all Persons designated by Collateral Agent for
that purpose, at any time, as such Credit Party's true and lawful
attorney and agent-in-fact to endorse Borrower's name on any checks,
notes, drafts or any other form of payment relating to Collateral or
Receipts or proceeds of Collateral or Receipts that come into
Collateral Agent's possession or under Collateral Agent's control;
provided, however, that such appointment by such Credit Party of
Collateral Agent as such Credit Party's attorney-in-fact shall in no
case impose upon Collateral Agent any obligation or duty to take any
actions on behalf of such Credit Party or any fiduciary obligations
with respect to such Credit Party.
(v) At all times, each Credit Party shall continue to deposit all
Receipts in the Collection Account and, after application of such
amounts against the Obligations in the order set forth in clause (iii)
above, Collateral Agent shall remit to Borrower the net amount of such
Receipts; it being understood and agreed that if an Event of Default
shall have occurred and be continuing and there shall be outstanding
any Letters of Credit, Collateral Agent shall only remit that amount
to Borrower as exceeds the amounts of immediately available funds in
the
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Collection Account equal to the aggregate outstanding Letter of Credit
Usage as of the date of determination, with such remaining amounts
equal to the aggregate outstanding Letter of Credit Usage in
immediately available funds to be deposited into the Collateral
Account to be administered as provided in the Pledge and Security
Agreement.
6.11 Subsidiaries.
A. Additional Subsidiaries. If Borrower acquires or creates any
direct or indirect interest in any Person constituting an additional direct or
indirect Subsidiary of Borrower after the Restatement Effective Date, Borrower
shall, concurrently with acquiring or creating such interest, cause such
Subsidiary to (i) issue an Intercompany Note to Borrower (and Borrower shall
endorse and deliver such Intercompany Note to Collateral Agent in accordance
with the Pledge and Security Agreement), (ii) guaranty the Obligations and
secure such Guaranty and its obligations under its Intercompany Note by
executing and delivering a counterpart to the Guaranty, Pledge and Security
Agreement, Trademark Assignment, Intercompany Note Security Agreement,
Intercompany Note Trademark Assignment and each other Loan Document to which all
Guarantors are a party at such time, (iii) execute and deliver, to the extent
applicable, Cash Management Letters and Collateral Access Agreements and (iv)
execute and deliver such other Collateral Documents, and take such other
actions, as may be necessary or desirable or as Collateral Agent may request, to
grant valid and perfected security interests in the property of such Subsidiary
constituting Collateral under the Pledge and Security Agreement and the
Intercompany Note Security Agreement; provided, however, that nothing in this
subsection 6.11A shall be construed to permit Borrower or any of its
Subsidiaries to acquire or create any interest in any Person that is not
otherwise permitted pursuant to the terms of this Agreement. If requested by
Collateral Agent or Requisite Lenders, Borrower shall cause an opinion or
opinions of counsel to be delivered to Agents and Lenders covering the matters
set forth in this subsection 6.11A and otherwise in form and substance
reasonably satisfactory to Collateral Agent or Requisite Lenders, as the case
may be.
B. Non-Operating Subsidiaries. Borrower acknowledges and agrees that
(i) no Subsidiary of Borrower (other than those designated as a Non-Operating
Subsidiary as of the Closing Date on Schedule 5.1 annexed hereto), including,
without limitation, any Subsidiary acquired or created after the Closing Date,
shall constitute, or be designated as, a Non-Operating Subsidiary without the
prior written consent of Collateral Agent and Requisite Lenders and (ii) any
Non-Operating Subsidiary, whether existing as of the Closing Date or designated
as such thereafter in accordance with the preceding clause (i), shall continue
as a Non-Operating Subsidiary only for as long as it qualifies as such in
accordance with the definition of Non-Operating Subsidiary (both individually
and in the aggregate with all other Non-Operating Subsidiaries) and any such
Non-Operating Subsidiary shall immediately and without any notice or other
action constitute an Operating Subsidiary for all purposes hereunder and the
other Loan Documents upon any failure to so qualify; provided that without
limiting any of the foregoing, Borrower shall promptly notify Collateral Agent
in the event any Non-Operating Subsidiary no longer qualifies as such under the
definition thereof. Without limiting the foregoing, Borrower may, by written
notice to Collateral Agent, designate any Non-Operating Subsidiary to be an
Operating Subsidiary, and thereafter such Subsidiary shall be an Operating
Subsidiary for all purposes hereunder, and shall not later be designated a Non-
Operating Subsidiary hereunder
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(even if it would otherwise qualify under the definition of Non-Operating
Subsidiary) without the prior written consent of Collateral Agent and Requisite
Lenders; provided, further, that anything in this Agreement to the contrary
notwithstanding, upon and during a Potential Event of Default under subsection
8.6 with respect to any Non-Operating Subsidiary, neither Borrower nor any of
its Subsidiaries shall in any manner advance, transfer, contribute, invest or
otherwise convey any funds to or on behalf of such Non-Operating Subsidiary at
any time that Rollover Borrowings are permitted hereunder.
6.12 Year 2000 Problems.
On or before October 31, 1999, each Credit Party shall eliminate all
Year 2000 Problems, except where the failure to correct the same could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.
6.13 Collateral Access Agreements.
In the event that any conditions to the effectiveness of this
Agreement set forth in subsection 4.1C(vi) are not satisfied as of the
Restatement Effective Date with the consent of Collateral Agent (which consent
shall be deemed given by the funding of the initial Loans hereunder with such
conditions remaining unsatisfied), the Inventory locations for which Collateral
Access Agreements were not delivered as of the Restatement Effective Date (the
"Remaining Locations") shall not be excluded from the Borrowing Base solely as a
result of the non-delivery of a Collateral Access Agreement therefor, but
Collateral Agent shall reserve from availability under the Borrowing Base an
amount equal to the aggregate of three months rent for all Remaining Locations
for which a Collateral Access Agreement has not been delivered as of such date,
rounded to the next highest multiple of $1,000,000).
SECTION 7.
BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation, expiration or cash collateralization
in accordance with the terms hereof of all Letters of Credit, unless Requisite
Lenders shall otherwise give prior written consent, Borrower shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
7.
7.1 Indebtedness.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Borrower may become and remain liable with respect to the
Obligations and with respect to Indebtedness described in Schedule 7.1
annexed hereto;
(ii) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured
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obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Borrower and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of Capital Leases; provided that
such Capital Leases are permitted under the terms of subsection 7.9;
(iv) (A) Guarantors may become and remain liable with respect to
Indebtedness to Borrower; provided that (a) all such intercompany
Indebtedness shall be evidenced by the Intercompany Notes and secured
by a second-priority security interest in the Collateral pursuant to
the Collateral Documents, (b) all such intercompany Indebtedness shall
be subordinated in right of payment to the payment in full of the
Obligations, and (c) any payment by any Guarantor under the Guaranty
shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Guarantor to Borrower (B)
Borrower may become and remain liable with respect to Indebtedness to
Guarantors and (C) the Canadian Subsidiaries may become and remain
liable with respect to Indebtedness to each other and to Borrower;
provided that, notwithstanding anything to the contrary contained
herein, the Canadian Subsidiaries shall not become or remain liable
with respect to Indebtedness to Borrower (x) in an aggregate
principal amount at any time outstanding that would cause the Canadian
Intercompany Usage to exceed $12,000,000 (and it is hereby
acknowledged and agreed that the proceeds of such Indebtedness should
not be used for any purposes other than for the Canadian Subsidiaries'
general corporate purposes) or (y) if, after giving effect to the
incurrence of such Indebtedness, Excess Availability as of the date of
such incurrence is not in excess of $15,000,000 or (z) if, as of the
date of incurrence of such Indebtedness, an Event of Default (as
defined in the Canadian Credit Agreement) shall have occurred and be
continuing unless the proceeds of such Indebtedness are to be used to
cure such an Event of Default (as defined in the Canadian Credit
Agreement).
(v) Borrower and its Subsidiaries, as applicable, may remain liable
with respect to the Existing EDBs;
(vi) Borrower and its Subsidiaries may become and remain liable with
respect to other unsecured Indebtedness in an aggregate principal
amount not to exceed $32,000,000 at any time outstanding;
(vii) Borrower and its Subsidiaries may become and remain liable with
respect to purchase money Indebtedness in aggregate principal amount
not to exceed $10,000,000 at any time outstanding; provided that the
assets securing such Indebtedness are not included in the Collateral
and are limited solely to the assets purchased with the proceeds of
such Indebtedness;
(viii) Indebtedness of one Operating Subsidiary (the "Transferee
Subsidiary") to another Operating Subsidiary (the "Transferor
Subsidiary") representing the
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unpaid purchase price of non-cash assets transferred by the Transferor
Subsidiary to the Transferee Subsidiary that is not prohibited under
subsection 7.7;
(ix) Borrower may become and remain liable in respect of the ESOP Loan
Documents;
(x) Borrower may remain liable in respect of the Senior Subordinated
Notes;
(xi) The Canadian Subsidiaries may become and remain liable with
respect to the Indebtedness outstanding (x) under the Canadian Credit
Agreement; provided that the aggregate principal amount of such
Indebtedness shall not exceed $16,000,000 at any time outstanding (and
it is hereby acknowledged and agreed that the proceeds of such
Indebtedness should not be used for any purposes other than (i) to
repay and terminate the Existing Coppley Credit Facility and (ii) for
the Canadian Subsidiaries' general corporate purposes and as otherwise
permitted pursuant to the Canadian Credit Agreement) and (y) under the
Coppley Seller Notes; provided (i) the Coppley Seller Notes shall be
subordinated to the Obligations in form and substance satisfactory to
Managing Agent and (ii) the aggregate principal amount of such
Indebtedness shall not exceed $6,111,669 (Canadian) (as such amount
may be adjusted pursuant to Section 3.3 of the Coppley Acquisition
Agreement) at any time outstanding; and
(xii) Borrower and its Subsidiaries may incur and remain liable with
respect to Refinancing Indebtedness in an aggregate principal amount
not in excess of $125,000,000 with the prior written consent of
Managing Agent and Requisite Lenders; provided that after giving
effect to the incurrence of such Refinancing Indebtedness, the
difference between Excess Availability and the aggregate principal
amount of the then outstanding Senior Subordinated Notes shall not be
less than $15,000,000 as of the date of such incurrence and, on a pro
forma basis, as of the last day of each of the preceding four fiscal
quarters ending prior to such date of incurrence (assuming that the
"Revolving Loan Commitment" under, and as defined in, the Existing
Credit Agreement was $200,000,000); provided further that any
Refinancing Surplus shall be applied as required by subsection 2.4A
(iii) (b).
7.2 Liens and Related Matters.
A. Prohibition on Liens. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute (other than for precautionary notice filings in
connection with transactions permitted hereunder such as leases, consignments
and the sale of accounts which do not evidence Liens securing Indebtedness or
other obligations, except:
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(i) Permitted Encumbrances;
(ii) Liens created pursuant to the Collateral Documents;
(iii) Other Liens securing Indebtedness permitted pursuant to
subsection 7.1(vii);
(iv) Liens in existence as of the Restatement Effective Date as set
forth in Schedule 7.2 annexed hereto;
(v) Liens arising in connection with the deposit of Cash or securities
with the trustee for the holders of the Senior Subordinated Notes in
connection with any redemption or repurchase by Borrower of Senior
Subordinated Notes permitted by subsection 7.5; provided that any such
Lien only attaches to the cash or securities so deposited;
(vi) Liens existing on the property of a Person immediately prior to
such Person becoming a Subsidiary or being consolidated with or merged
into Borrower or any of its Subsidiaries or its becoming a Subsidiary
of Borrower, or Liens existing on any property acquired by Borrower or
any of its Subsidiaries at the time such is so acquired; provided that
(i) no such Lien was created or assumed in contemplation of such
consolidation, merger or acquisition or such Person becoming a
Subsidiary of Borrower, whether as security of the payment of any
consideration due in connection with such transaction or otherwise,
(ii) each such Lien shall only cover the acquired property and, if
required by the terms of the instrument originally creating such Lien,
property which is an improvement to or is required for specific use in
connection with such acquired property, and (iii) no such Lien shall
encumber property constituting Collateral; and
(vii) Liens on the property of the Canadian Subsidiaries securing (a)
the Coppley Seller Notes; provided that such Liens shall be subject to
(x) the Liens in favor of Collateral Agent securing ▇▇▇▇▇▇▇'▇
obligations under the Guaranty and (y) the Lien in favor of Borrower
(which shall have been assigned to Collateral Agent) securing the
Canadian Subsidiaries' obligations to Borrower with respect to any
intercompany loan made by Borrower to the Canadian Subsidiaries
pursuant to subsection 7.1(iv), and (b) the obligations under the
Canadian Credit Agreement.
B. Equitable Lien in Favor of Lenders. If Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
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C. No Further Negative Pledges. Other than as provided herein and
the other Loan Documents, (i) with respect to specific property encumbered to
secure payment of particular Indebtedness or other obligations or to be sold
pursuant to an executed agreement with respect to an Asset Sale, (ii)
restrictions with respect to a Subsidiary and its Subsidiaries pursuant to an
agreement relating to any Indebtedness issued by such Subsidiary on or prior to
the date on which such Subsidiary became a Subsidiary or was acquired by the
Company or any of its Subsidiaries (other than Indebtedness issued as
consideration in, or to provide any funds utilized to consummate, the
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by the Borrower) and (iii) customary non-assignment provisions
contained in licenses, leases and other agreements, neither Borrower nor any of
its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets in favor of
Collateral Agent or otherwise in respect of the Obligations, whether now owned
or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Borrower or Other
Subsidiaries. Except as provided herein and in the other Loan Documents and the
Refinancing Debt Documents, Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Borrower or any other Subsidiary
of Borrower, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Borrower or any other Subsidiary of Borrower, (iii) make loans or advances to
Borrower or any other Subsidiary of Borrower, or (iv) transfer any of its
property or assets to Borrower or any other Subsidiary of Borrower except as
otherwise provided in subsection 7.2C, in each case other than restrictions with
respect to a Subsidiary pursuant to an agreement relating to any Indebtedness
issued by such Subsidiary on or prior to the date which such Subsidiary became a
Subsidiary or was acquired by Borrower or any of its Subsidiaries (other than
Indebtedness issued in contemplation of such event or as consideration in, or to
provide any funds utilized to consummate, the transactions pursuant to which
such Subsidiary became a Subsidiary or was acquired by the Borrower).
7.3 Investments; Joint Ventures.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Borrower and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Borrower may make intercompany loans to the extent permitted
under subsection 7.1(iv) and Subsidiaries of Borrower may make
intercompany loans to the extent permitted by subsection 7.1; provided
that (x) the aggregate principal amount of intercompany loans made by
Borrower to the Canadian Subsidiaries shall not exceed $12,000,000 at
any time outstanding (and it is hereby acknowledged and agreed that
the proceeds of such Indebtedness should not be used for any purposes
other than for the Canadian Subsidiaries' general corporate purposes);
(y) Borrower may not make intercompany loans to the Canadian
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Subsidiaries if after giving effect to the incurrence of such loans
Excess Availability as of the date of such incurrence is not in excess
of $15,000,000; and (z) Subsidiaries of Borrower that are not Canadian
Subsidiaries shall not make any intercompany loans to the Canadian
Subsidiaries or any of their Subsidiaries;
(iii) Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(iv) Investments existing as of the Restatement Effective Date as set
forth in Schedule 7.3 annexed hereto;
(v) Borrower and its Subsidiaries may make and own Investments in
notes and other instruments, as the same may be amended, restated,
replaced or otherwise modified, held by Borrower or any of its
Subsidiaries in connection with (A) the sale or other disposition of
any assets prior to the date of this Agreement and Asset Sales
permitted pursuant to the terms of this Agreement, and (B) with any
trade debt due to Borrower or any of its Subsidiaries or the
settlement of any delinquent or defaulted accounts or notes
receivable;
(vi) Borrower and its Subsidiaries may maintain deposit accounts as
cash collateral with any Person providing cash management services to
Borrower and its Subsidiaries;
(vii) Borrower and its Subsidiaries may make investments in Joint
Ventures not constituting Acquisitions; provided that, the aggregate
of such Investments does not exceed $7,500,000 at any time (whether in
the form of cash or fair market value of property contributed to such
ventures or distributed in respect of such acquisitions); provided
that Excess Availability both as of the date of such Investment (after
giving effect to such Investment assuming that (A) the "Revolving Loan
Commitment" under, and as defined in, the Existing Credit Agreement
was $200,000,000 at all times prior to the Restatement Effective Date
and (B) if Borrower has refinanced the Senior Subordinated Notes at
the time of determination, Borrower had had any Refinancing Surplus
available to it at all times prior to the date of determination) and
for the last day of each of the four fiscal quarters ending prior to
such date of Investment, shall not be less than $15,000,000 and prior
to such Investment Managing Agent shall have received an Officer's
Certificate of Borrower, in form and substance satisfactory to
Managing Agent, confirming such Excess Availability in reasonable
detail as of such date and for such dates;
(viii) Borrower and its Subsidiaries may make and own deposits
maintained as cash collateral by any Person providing processing
services with respect to credit card transactions;
(ix) Borrower and its Subsidiaries may make and own Investments
permitted by subsection 7.5; and
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(x) Borrower may make (A) equity Investments in Operating Subsidiaries
for purpose of maintaining the Solvency of any such Subsidiary and (B)
other equity Investments in its Subsidiaries in an aggregate amount
not to exceed $3,500,000 for all such Subsidiaries; provided that the
aggregate amount of Borrower's equity Investment in the Canadian
Subsidiaries shall not exceed $7,000,000.
7.4 Contingent Obligations.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of the Obligations,
including the Guaranty and the Letters of Credit;
(ii) Borrower may become and remain liable with respect to Contingent
Obligations under (a) one or more Interest Rate Agreements consisting
of interest rate swaps with respect to Indebtedness, in an aggregate
notional principal amount of not more than $100,000,000, which
Interest Rate Agreements shall have the effect of establishing a
maximum interest rate of not more than the then existing three-year
yield on United States Treasury obligations plus 5.00% per annum with
respect to such notional principal amount, (b) other Interest Rate
Agreements (including interest rate cap agreements and interest rate
collar agreements) and (c) forward Currency Agreements entered into
solely for purposes of hedging against currency fluctuations relating
to product purchases or sales and licensing revenue.
(iii) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(iv) Borrower may become and remain liable with respect to the ESOP
Loan Documents;
(v) guaranties of Existing EDBs by Borrower or Subsidiaries of
Borrower in existence on the Closing Date;
(vi) Borrower and its Subsidiaries may become and remain liable for
reimbursement obligations in connection with (A) surety, appeal,
tender, performance and other bonds procured by the Borrower and its
Subsidiaries in the ordinary course of business and (B) trade letters
of credit procured by Borrower and its Subsidiaries in the ordinary
course of business on or after the date when Commercial Letters of
Credit cannot be issued hereunder in accordance with subsection
3.1A(iv);
(vii) Contingent Obligations of a Person existing immediately prior
to such Person becoming a Subsidiary of Borrower or any of its
Subsidiaries; provided
103
that no such Contingent Obligation shall have been created or assumed
in contemplation of such Person becoming a Subsidiary;
(viii) Borrower and its Subsidiaries may guaranty (A) Operating
Leases and Capital Leases permitted pursuant to subsection 7.9, (B)
the obligations of Borrower's Subsidiaries under the Canadian Credit
Agreement, and (C) license fee obligations of its Subsidiaries
incurred in the ordinary course of business; provided that the Person
incurring such Contingent Obligation would be permitted to incur the
direct obligation hereunder;
(ix) Borrower may become and remain liable with respect to (A) the
Coppley Guaranty; provided that notwithstanding anything to the
contrary contained in this Agreement, the aggregate principal amount
of such Contingent Obligations shall not at any time exceed the
aggregate amount of the Coppley Seller Notes as permitted hereunder
and (B) a guaranty provided by Borrower for the benefit of the seller
of Royal in connection with the acquisition of Royal by Royal
Acquisition; provided that notwithstanding anything to the contrary
contained in this Agreement, the aggregate principal amount of such
Contingent Obligation shall not at any time exceed the lesser of (y)
the aggregate amount of any seller notes issued to the seller of Royal
in connection with the acquisition of Royal by Royal Acquisition and
(z) $2,250,000 (Canadian); and
(x) Borrower and its Subsidiaries may incur Contingent Obligations in
respect of Refinancing Indebtedness with the prior written consent of
Managing Agent and Requisite Lenders.
7.5 Restricted Junior Payments.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that as long as no Event of Default or
Potential Event of Default has occurred and is continuing, or would result
therefrom, Borrower may (i) make Restricted Junior Payments of a type described
in clauses (i), (iii) or (v) of the definition thereof (provided that in the
case of Investments included in clause (v) of the definition of Restricted
Junior Payments, all liability, risk or other exposure with respect to any such
Investment is limited solely to the loss of the amount so invested) of
$12,500,000 in an aggregate cumulative amount for any four consecutive fiscal
quarter period, (ii) make regularly scheduled interest payments on the Senior
Subordinated Notes; (iii) redeem or repurchase the Senior Subordinated Notes in
an aggregate principal amount not to exceed $25,000,000 with the proceeds of
equity or equity rights having terms no more favorable to the holder thereof
(including, without limitation, terms concerning default, payment and
redemption) than the terms of the Senior Subordinated Notes or as may otherwise
be approved by Requisite Lenders; (iv) redeem any rights to purchase capital
stock of Borrower which rights were issued pursuant to the Rights Agreement,
dated as of December 6, 1995, as amended, between Borrower and First Bank of
Chicago Trust Company of New York, as rights agent, for an amount not to exceed
on a per right basis the redemption price of such right as of the Closing Date,
as adjusted for stock dividends and similar transactions; (v) purchase, redeem,
acquire, cancel or otherwise retire for value shares of capital stock of
Borrower, options on any
104
such shares or related stock appreciation rights or similar securities (any of
the foregoing being a "Borrower Stock Purchase") held by officers or employees
or former officers or employees (or their estates or beneficiaries under their
estates) or by any employee benefit plan, upon death, disability, retirement or
termination of employment or pursuant to the terms of any employee benefit plan
approved by the Board of Directors of Borrower or a committee thereof or under
any other agreement approved by such Board of Directors or a committee thereof
under which such shares of stock or related rights were issued; provided,
however, that the aggregate cash consideration paid for such purchase,
redemption, acquisition, cancellation or other retirement of such shares of
capital stock or related rights after the Closing Date shall not exceed
$2,500,000 in the aggregate for any Fiscal Year or $1,000,000 in the aggregate
payable to any individual in any Fiscal Year; (vi) repay the Senior Subordinated
Notes with the proceeds of Refinancing Indebtedness; and (vii) in addition to
transactions permitted by clauses (iii), (v) and (vi) above, use cash on hand to
redeem or repurchase the Senior Subordinated Notes, the Refinancing Indebtedness
and/or make Borrower Stock Purchases; provided that Excess Availability both as
of the date of such redemption and repurchase (after giving effect to such
redemption and repurchase and assuming that (A) the "Revolving Loan Commitment"
under, and as defined in, the Existing Credit Agreement was $200,000,000 at all
times prior to the Restatement Effective Date and (B) if Borrower has refinanced
the Senior Subordinated Notes at the time of determination, Borrower had had any
Refinancing Surplus available to it at all times prior to the date of
determination) and for the last day of each of the four fiscal quarters ending
prior to such date of redemption and repurchase, shall not be less than
$15,000,000 and prior to such redemption or repurchase Managing Agent shall have
received an Officer's Certificate of Borrower, in form and substance
satisfactory to Managing Agent, confirming such Excess Availability in
reasonable detail as of such date and for such dates.
7.6 Financial Covenants.
A. Minimum Consolidated Debt Service Coverage Ratio. Borrower shall
not permit the Consolidated Debt Service Coverage Ratio for any four consecutive
fiscal quarter period ending as of the last day of any fiscal quarter of
Borrower to be less than 1.50:1.00.
B. Maximum Consolidated Leverage Ratio. Borrower shall not permit
the Consolidated Leverage Ratio for any four consecutive fiscal quarter period
ending as of the last day of any fiscal quarter of Borrower to exceed 5.50:1.00.
7.7 Restriction on Fundamental Changes; Asset Sales.
Borrower shall not, and shall not permit any of its Subsidiaries to,
change its legal form, or enter into any transaction of merger or consolidation,
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), make any Asset Sale or otherwise convey, sell, lease, sub-lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business, property or fixed
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person, except:
(i) any Subsidiary of Borrower may be merged with or into Borrower or
any other Subsidiary of Borrower, or be liquidated, wound up or
dissolved, or all or
105
any substantial part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Borrower or any other
Subsidiary of Borrower; provided that, in the case of such a merger
with Borrower, Borrower shall be the continuing or surviving
corporation;
(ii) Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iii) subject to subsection 7.13, Borrower and its Subsidiaries may
sell or otherwise dispose of assets in transactions that do not
constitute Asset Sales; provided that the consideration received for
such assets shall be in an amount at least equal to the fair market
value thereof;
(iv) Borrower and its Subsidiaries may make Asset Sales of (A) assets
having a fair market value not in excess of $5,000,000 in the
aggregate during any Fiscal Year; provided that (x) the consideration
received for such assets shall be in an amount at least equal to the
fair market value thereof and (y) at least 75% of the total
consideration received shall be Cash or Cash Equivalents or the
assumption of Indebtedness of the Borrower or such Subsidiary or other
obligations relating to such assets and release from all liability on
the Indebtedness or other obligations assumed and (B) for the fair
market value thereof, all or substantially all of the assets or stock
of any Subsidiary of the Borrower which is or has been a Subsidiary of
the Borrower prior to the date hereof, the revenues of which are
derived primarily from the direct retail sale of apparel; provided
further that the proceeds of all such Asset Sales shall be applied as
required by subsection 2.4A(iii)(a); and
(v) Borrower and its Operating Subsidiaries may make an Acquisition
if:
(A) no Event of Default or Potential Event of Default has
occurred and is continuing, or would result therefrom;
(B) the acquired business is in the same line of business as
Borrower;
(C) after giving effect to such Acquisition, (i) in the case of
an Acquisition by the Borrower or any Operating Subsidiary (other than
a Canadian Subsidiary) the aggregate of all Acquisitions made by
Borrower and the Operating Subsidiaries (other than the Canadian
Subsidiaries) during the twenty-four month period prior to the date of
such Acquisition (without giving effect to any Acquisitions completed
prior to the Restatement Effective Date) does not exceed $40,000,000
and (ii) in the case of an Acquisition by a Canadian Subsidiary, the
aggregate of all Acquisitions made by the Canadian Subsidiaries during
the forty-eight month period prior to the date of such Acquisition
(without giving effect to any Acquisitions completed prior to the
Restatement Effective Date or the Acquisition of Royal) does not
exceed $3,000,000;
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(D) Managing Agent shall have received an Officer's Certificate
from Borrower, in form and substance satisfactory to Managing Agent,
demonstrating in reasonable detail that after giving effect to such
Acquisition, the projected Excess Availability shall not be less than
$15,000,000 on any day during the one-year period beginning on the
date of such Acquisition; and
(E) Lender shall receive a fully perfected first priority
security interest in the Collateral of the acquired business and all
provisions of subsection 6.11 applicable to such Acquisition shall
have been satisfied.
On or before the 90th day following the consummation of any such
Acquisition, Collateral Agent (and/or outside consultants selected by
Collateral Agent) shall, at Borrower's expense, conduct a
comprehensive audit, testing and review (an "Acquisition Audit") of
all Eligible Accounts and Eligible Inventory to be included in the
Borrowing Base which are the subject of such Acquisition and such
audit, testing and review with respect to such other Collateral which
is the subject of such Acquisition may be conducted in Collateral
Agent's discretion.
7.8 Consolidated Capital Expenditures.
Borrower shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year in an aggregate
amount in excess of $25,000,000.
7.9 Restriction on Leases.
Borrower shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany leases between
Borrower and its wholly-owned Subsidiaries), unless, immediately after giving
effect to the incurrence of liability with respect to such lease, (i) the
Consolidated Rental Payments at the time in effect during the then current
Fiscal Year shall not exceed $33,000,000 and (ii) the aggregate payments
applicable to principal with respect to Capital Leases at the time in effect
during the then current Fiscal Year shall not exceed $5,000,000.
7.10 Sales and Lease-Backs.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Borrower
or any of its Subsidiaries) or (ii) which Borrower or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Borrower or any of its Subsidiaries
to any Person (other than Borrower or any of its Subsidiaries) in connection
with such lease; unless, in each case, such sale and leaseback transaction would
otherwise be permitted hereunder as both an Asset Sale and an Operating Lease.
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7.11 Sale or Discount of Receivables.
Other than as may be permitted pursuant to subsection 7.7, Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, sell with recourse, or discount or otherwise sell for less than the
face value thereof, any of its notes or accounts receivable except for purposes
of collection in accordance with the Credit and Collection Policy.
7.12 Transactions with Shareholders and Affiliates.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Borrower or with any Affiliate of Borrower or of
any such holder unless (i) the terms of such business, transaction or series of
transactions are (a) set forth in writing and (b) as favorable to the Borrower
or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in arm's-length
dealings with an unrelated third person and (ii) the Board of Directors of
Borrower or such Subsidiary has, by resolution, determined in good faith that
such business or transaction or series of transactions meets the criteria set
forth in (i)(b) above; provided that the foregoing restriction shall not apply
to (i) any transaction between Borrower and any of its Operating Subsidiaries or
between any of its Operating Subsidiaries, (ii) reasonable and customary fees,
advances and other payments paid to members of the Boards of Directors of
Borrower and its Subsidiaries or (iii) Restricted Junior Payments permitted
pursuant to subsection 7.5.
7.13 Disposal of Subsidiary Stock.
Other than as permitted by subsections 7.2 and 7.7, Borrower shall
not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities
of any of its Subsidiaries, except to qualify directors if required by
applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Borrower, another Subsidiary of
Borrower, or to qualify directors if required by applicable law.
7.14 Conduct of Business.
From and after the Restatement Effective Date, Borrower shall not, and
shall not permit any of its Subsidiaries to, engage in any business other than
(i) the businesses engaged in by Borrower and its Subsidiaries on the
Restatement Effective Date and similar or related businesses and in
substantially in the same fields of enterprise and lines of business as are
presently conducted, including businesses related thereto; provided that all
such business and transactions of Borrower and its Subsidiaries with non-
Affiliates shall be conducted on an arms length basis consistent with prevailing
market conditions and (ii) such other lines of business as may be consented to
by Requisite Lenders;
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7.15 Amendments of Related Documents; License Agreements.
A. Subordinated Indebtedness; ESOP Loan Documents. Borrower shall not,
and shall not permit any of its Subsidiaries to, amend or otherwise change the
terms of any Subordinated Indebtedness, the Refinancing Debt Documents or the
ESOP Loan Documents, or make any payment consistent with an amendment thereof or
change thereto, if the effect of such amendment or change is to increase the
interest rate on such Subordinated Indebtedness, the Refinancing Indebtedness,
or the Indebtedness under the ESOP Loan Documents (to an amount greater than
that disclosed to the Managing Agent prior to the Closing Date), change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate, cure or reduce the effect on Borrower
of any such event of default), change the redemption, prepayment or defeasance
provisions thereof, change, in the case of the Subordinated Indebtedness, the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness, the
Refinancing Indebtedness or Indebtedness under the ESOP Loan Documents (or a
trustee or other representative on their behalf) which would be adverse to
Borrower or Lenders (and other than, in the case of the ESOP Loan Documents,
changes to events of default and conditions thereto that would be more adverse
to Borrower or Lenders than those contained in the Subordinated Note Indenture
(exclusive of the subordination provisions contained in such indenture)).
B. Other Related Documents. No Credit Party will agree to any material
amendment to, or waive any of its material rights under, any of the Related
Documents other than those referred to in subsection 7.15A (other than
amendments or waivers which individually, or together with all other amendments,
waivers or changes made, would not be adverse to any Credit Party or any Agent
or any Lender) without, in each case, obtaining the written consent of Requisite
Lenders to such amendment or waiver.
C. License Agreements; Intellectual Property Rights. No Credit Party
shall license or grant any right to use any Intellectual Property to any Person
or agree to any material amendment to, or waive any of its material rights
under, any License Agreement if such license, grant, amendment or waiver
(individually or in the aggregate) would limit or impair any of the rights of
Collateral Agent to use, or realize its interest in, any Intellectual Property
or other Collateral in accordance with the terms of the Collateral Documents;
provided that Borrower may terminate, sell or otherwise dispose of any License
Agreement upon notice to Collateral Agent provided that such termination will
not result in an Event of Default or Potential Event of Default hereunder and
all Inventory which can no longer be sold bearing the ▇▇▇▇ of the Intellectual
Property thereunder is excluded from the Borrowing Base or the Borrowing Base is
adjusted to reflect the extent to which such Inventory can still be sold without
bearing such ▇▇▇▇. Borrower shall deliver to Collateral Agent a copy of any such
license or grant within 30 days of the date of the underlying agreement in
respect thereof. Borrower shall deliver to Collateral Agent a copy of any
modification to existing License Agreements, and a copy of each new License
Agreement entered into promptly upon the execution thereof.
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7.16 Fiscal Year
Borrower shall not change its Fiscal Year-end from on or about
November 30.
7.17 Designated Senior Debt.
Anything in the Loan Documents or the Related Documents to the
contrary notwithstanding, in no event shall Borrower permit any Indebtedness or
Contingent Obligations other than the Obligations to constitute or be designated
as "Designated Senior Debt" (as that term is defined in the Subordinated Note
Indenture).
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
Failure to pay any installment of principal of or interest on any Loan
when due, whether at stated maturity, by acceleration, by notice of prepayment
or otherwise; failure to pay when due any amount payable to Issuing Lender in
reimbursement of any drawing under a Letter of Credit; or failure to pay within
three days of the date due any other amount due under this Agreement; or
8.2 Default in Other Agreements.
(i) Failure of Borrower or any of its Subsidiaries to pay when due (a)
any principal of or interest on any Indebtedness (other than Indebtedness
referred to in subsection 8.1 and Indebtedness under the Canadian Credit
Agreement) in an individual principal amount of $3,000,000 or more or any items
of Indebtedness with an aggregate principal amount of $3,000,000 or more or (b)
any Contingent Obligation in an individual principal amount of $3,000,000 or
more or any Contingent Obligations with an aggregate principal amount of
$3,000,000 or more, in each case beyond the end of any grace period provided
therefor; or (ii) breach or default by Borrower or any of its Subsidiaries with
respect to any other material term of (a) any evidence of any Indebtedness
(other than Indebtedness under the Canadian Credit Agreement) in an individual
principal amount of $3,000,000 or more or any items of Indebtedness with an
aggregate principal amount of $3,000,000 or more or any Contingent Obligation in
an individual principal amount of $3,000,000 or more or any Contingent
Obligations with an aggregate principal amount of $3,000,000 or more or (b) any
loan agreement, mortgage, indenture or other agreement relating to such
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or (iii) breach or default by
Borrower or any of its Subsidiaries under the Senior Subordinated Notes or the
Subordinated Note Indenture or any of the Refinancing Debt Documents; or (iv)
failure of any Credit Party to pay when due, whether at stated maturity, by
acceleration, notice of prepayment or otherwise, any amount under or in respect
of the Canadian
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Credit Agreement (in each case, after giving effect to any applicable grace,
cure or waiver period); or
8.3 Breach of Certain Covenants.
Failure of Borrower to perform or comply with any term or condition
contained in subsections 2.4A(iii), 2.5, 6.2 (with respect to the maintenance of
corporate existence of Borrower or any Subsidiary), 6.8(i) or 6.10 or Section 7
of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Borrower or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Borrower or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
Borrower shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an executive or senior officer of Borrower becoming aware of such default
or (ii) receipt by Borrower of notice from any Agent or any Lender of such
default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Borrower or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Borrower or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Borrower or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Borrower or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Borrower or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Borrower or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other
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applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Borrower or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Borrower or any of its Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Directors of Borrower or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 (in either case
not adequately covered by insurance by a solvent and unaffiliated insurance
company which has not disputed or denied coverage) shall be entered or filed
against Borrower or any of its Subsidiaries or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Borrower or any
of its Subsidiaries decreeing the dissolution or split up of Borrower or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Borrower or any of its ERISA Affiliates in excess of $5,000,000 in any Fiscal
Year during the term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $5,000,000; or
8.11 Impairment of Collateral; Failure of Security.
(a) A judgment creditor of any Credit Party or of any other Person
shall obtain possession of any substantial portion of the Collateral by any
means, including, without limitation, levy, distraint, replevin or self-help,
(b) any of the Collateral Documents shall cease for any reason to be in full
force and effect, or any party thereto shall purport to disavow its respective
obligations thereunder or shall declare that it does not have any further
obligations thereunder or shall contest the validity or enforceability thereof
or Collateral Agent shall cease to have a valid and perfected first priority
security interest in any Collateral therein (to the extent required by the
Collateral Documents), or (d) Collateral Agent's security interests or Liens on
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the Collateral under the Collateral Documents shall become otherwise impaired or
unenforceable; or
8.12 Material Adverse Effect.
Any event or change shall occur that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect; or
8.13 Change of Control.
Any Change of Control shall occur;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrower, and the obligation of each Lender to make any Loan, the
obligation of Issuing Lender to issue any Letter of Credit and the right of
Issuing Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Agent shall, upon the written request of Requisite Lenders, by
written notice to Borrower, declare all or any portion of the amounts described
in clauses (a) through (c) above to be, and the same shall forthwith become,
immediately due and payable, and the obligation of each Lender to make any Loan,
the obligation of Issuing Lender to issue any Letter of Credit and the right of
Issuing Lender to issue any Letter of Credit hereunder shall thereupon
terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i) to purchase participations in
any unreimbursed Letters of Credit or the obligations of Lenders to purchase
participations in any unpaid Swing Line Loans as provided in subsection
2.1A(iii).
Any amounts described in clause (b) above, when received by Agent,
shall be held by Agent pursuant to the terms of the Collateral Account Agreement
and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an Acceleration pursuant to such paragraph
Borrower shall pay all arrears of interest and all payments on account of
principal which shall have become due otherwise than as a result of such
Acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of Acceleration) shall be remedied or waived pursuant to
subsection 10.6, then Requisite Lenders, by written notice to Borrower, may at
their option rescind and annul such Acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are
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intended merely to bind Lenders to a decision which may be made at the election
of Requisite Lenders and are not intended to benefit Borrower and do not grant
Borrower the right to require Lenders to rescind or annul any Acceleration
hereunder, even if the conditions set forth herein are met.
SECTION 9.
AGENT
9.1 Appointment.
GE Capital is hereby appointed Managing Agent and Collateral Agent,
and The Bank of New York, Bank of America, N.A. and The First National Bank of
Chicago, are each hereby appointed Co-Agent, hereunder and under the other Loan
Documents and each Lender hereby authorizes each such Agent to act as its agent
in accordance with the terms of this Agreement and the other Loan Documents.
Each Agent agrees to act upon the express conditions contained in this Agreement
and the other Loan Documents, as applicable. The provisions of this Section 9
are solely for the benefit of Agents and Lenders and Borrower shall have no
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, each Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Borrower or any of its Subsidiaries.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers hereunder
and under the other Loan Documents as are specifically delegated to such Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents and
it may perform such duties by or through its agents or employees. No Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. Anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, no Co-Agent shall have any duties or responsibilities
hereunder or under the other Loan Documents other than its duties and
responsibilities as a Lender hereunder and thereunder.
B. No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports or certificates or any
other documents furnished or made by any Agent to Lenders or by or on behalf of
Borrower or any of its Subsidiaries to any Agent or any Lender in connection
with the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Borrower
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or any of its Subsidiaries or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding, no Agent
shall have any liability arising from confirmations of the amount of outstanding
Loans or the Letter of Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither any Agent nor any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by such Agent under or in connection with any of the Loan Documents
except to the extent caused by such Agent's gross negligence or willful
misconduct. If any Agent shall request instructions from Lenders with respect to
any act or action (including the failure to take an action) in connection with
this Agreement or any of the other Loan Documents, such Agent shall be entitled
to refrain from such act or taking such action unless and until such Agent shall
have received instructions from Requisite Lenders. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Borrower and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of any Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders. Each Agent
shall be entitled to refrain from exercising any power, discretion or authority
vested in it under this Agreement or any of the other Loan Documents unless and
until it has obtained the instructions of Requisite Lenders.
D. Agent Entitled to Act as Lender. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity. Each Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking, trust, financial
advisory or other business with Borrower or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made
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and shall continue to make its own appraisal of the creditworthiness of
Borrower. No Agent shall have any duty or responsibility, either initially or on
a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Borrower, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as Agent in any way relating
to or arising out of this Agreement or the other Loan Documents; provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct. If any indemnity furnished to any Agent for any purpose shall, in
the opinion of such Agent, be insufficient or become impaired, Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
9.5 Payee of Note Treated as Owner.
Each Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until an Assignment and Acceptance
effecting the assignment or transfer thereof shall have been accepted by
Managing Agent as provided in subsection 10.1B(iii). Any request, authority or
consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee or assignee of that Note or of
any Note or Notes issued in exchange therefor.
9.6 Successor Agent and Swing Line Lender.
A. Successor Agent. Any Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and Borrower, and any Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrower and such Agent and signed by
Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Borrower, to appoint a successor Agent. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent and the retiring or removed Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
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B. Successor Swing Line Lender. Any resignation or removal of Managing
Agent pursuant to subsection 9.6A shall also constitute the resignation or
removal of GE Capital or its successor as Swing Line Lender and any successor
Managing Agent appointed pursuant to subsection 9.6A shall, upon its acceptance
of such appointment, become the successor Swing Line Lender for all purposes
hereunder. In such event (i) Borrower shall prepay any outstanding Swing Line
Loans made by the retiring or removed Managing Agent in its capacity as Swing
Line Lender, (ii) upon such prepayment, the retiring or removed Managing Agent
and Swing Line Lender shall surrender the Swing Line Note held by it to Borrower
for cancellation, and (iii) Borrower shall issue a new Swing Line Note to the
successor Managing Agent and Swing Line Lender substantially in the form of
Exhibit IV-A annexed hereto, in the principal amount of the Swing Line
Commitment then in effect and with other appropriate insertions.
9.7 Collateral Documents.
A. Collateral Agent. Each Lender hereby further authorizes Collateral
Agent to enter into the Collateral Documents as secured party on behalf of and
for the benefit of Lenders and agrees to be bound by the terms of the Collateral
Documents; provided that Collateral Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any provision contained in the
Collateral Documents without the prior consent of Requisite Lenders; provided
further, that anything in this Agreement or the other Loan Documents to the
contrary notwithstanding:
(i) The Collateral Agent is authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon
the Collateral granted pursuant to the Collateral Documents.
(ii) The Lenders irrevocably authorize the Collateral Agent, at its
option and in its discretion, to release any Lien granted to or held
by the Collateral Agent upon any Collateral (a) upon termination of
the Commitments and payment in full of the Loans and all other
Obligations payable under this Agreement and under any other Loan
Document; (b) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted hereunder;
(c) constituting property in which Borrower or any Subsidiary of
Borrower owned no interest at the time the Lien was granted or at any
time thereafter; (d) consisting of an instrument evidencing
Indebtedness if the Indebtedness evidenced thereby has been paid in
full; or (e) if otherwise approved, authorized or ratified in writing
by Requisite Lenders, subject to Subsection 10.6. Upon request by the
Collateral Agent at any time, Lenders will confirm in writing the
Collateral Agent's authority to release particular types or items of
Collateral pursuant to this subsection 9.7.
B. Lender Action. Anything contained in any of the Loan Documents to
the contrary notwithstanding, each Lender agrees that no Lender shall have any
right individually to realize upon any of the Collateral under the Collateral
Documents (including without limitation through the exercise of a right of set-
off against call deposits of such Lender in which any funds
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on deposit in the Collateral Documents may from time to time be invested), it
being understood and agreed that all rights and remedies under the Collateral
Documents may be exercised solely by Collateral Agent for the benefit of Lenders
in accordance with the terms thereof.
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. Subject to the provisions of this subsection 10.1, each
Lender shall have the right at any time to (i) sell, assign, transfer or
negotiate to any Eligible Assignee, or (ii) sell participations to any Person
in, all or any part of its Commitment or any Loan or Loans made by it or its
Letters of Credit or participations therein or any other interest herein or in
any other Obligations owed to it; provided that no such assignment or
participation shall, without the consent of Borrower, require Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such assignment or participation under the securities laws of any state.
Except as otherwise provided in this subsection 10.1, no Lender shall, as
between Borrower and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
any granting of participations in, all or any part of its Commitment or the
Loans, the Letters of Credit or participations therein or the other Obligations
owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Lender's Commitment, Loan,
Letter of Credit or participation therein or other Obligation may (a)
be assigned in any amount (of a constant and not a varying percentage)
to another Lender, or to an Affiliate of the assigning Lender or
another Lender, with the giving of notice to Borrower and Managing
Agent or (b) be assigned in an aggregate amount (of a constant and not
a varying percentage) of not less than $5,000,000 (or such lesser
amount as shall constitute the aggregate amount of the Commitment,
Loans, Letters of Credit and participations therein and other
Obligations of the assigning Lender) to any other Eligible Assignee
with the giving of notice to Borrower and Managing Agent and with the
consent of Managing Agent (such consent not to be unreasonably
withheld). To the extent of any such assignment in accordance with
either clause (a) or (b) above and upon execution and delivery of an
Assignment and Acceptance with respect thereto as provided below, the
assigning Lender shall be relieved of its obligations with respect to
its Commitment, Loans, Letters of Credit or participations therein or
other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Managing Agent, for
its acceptance, an Assignment and Acceptance, together with a
processing fee of $2,500 and such certificates, documents or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment and
Acceptance may be required to deliver to Managing Agent pursuant to
subsection 2.7B(iii). Upon such execution, delivery and acceptance,
from and after the effective date specified in such Assignment and
Acceptance, (y) the assignee thereunder shall be a party
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hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, shall
have the rights and obligations of a Lender hereunder and (z) the
assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, new Notes
shall, upon surrender of the assigning Lender's Note, be issued to the
assignee and to the assigning Lender, substantially in the form of
Exhibit IV, Exhibit IV-A or Exhibit IV-B annexed hereto, as the case
may be, with appropriate insertions, to reflect the new Commitments of
the assignee and the assigning Lender.
(ii) Acceptance by Managing Agent. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the
processing fee referred to in subsection 10.1B(i) and any
certificates, documents or other evidence with respect to United
States federal income tax withholding matters that such assignee may
be required to deliver to Managing Agent pursuant to subsection
2.7B(iii), Managing Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit VIII hereto
and if Managing Agent has consented to the assignment evidenced
thereby, to the extent such consent is required pursuant to subsection
10B(i), (a) accept such Assignment and Acceptance by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Managing Agent to such assignment)
and (b) give prompt notice thereof to Borrower (with a copy of such
Assignment and Acceptance) and each other Agent. Managing Agent shall
maintain a copy of each Assignment and Acceptance delivered to and
accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan allocated to such
participation, (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation or (iii) the
release of all or any substantial portion of the Collateral, and all amounts
payable by Borrower hereunder (including without limitation amounts payable to
such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if
such Lender had not sold such participation. Borrower and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Borrower to the
participant and (b) the participant shall be considered to be a "Lender";
provided that no Person shall be eligible to be a
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participant hereunder if such Person would not be an Eligible Assignee pursuant
to the terms of the final proviso of the definition of Eligible Assignee.
D. Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender and its Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank. No Lender shall, as between Borrower and such Lender,
be relieved of any of its obligations hereunder as a result of any such
assignment and pledge.
E. Information. Each Lender may furnish any information concerning
Borrower and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly upon Borrower's receipt of
reasonably detailed invoices and statements therefor (i) all the actual and
reasonable costs and expenses of preparation of the Loan Documents; (ii) all the
costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions requested by Lenders as to any legal matters arising
hereunder) and of Borrower's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Managing Agent and
Collateral Agent in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans and any consents, amendments,
waivers or other modifications hereto or thereto and any other documents or
matters requested by Borrower; (iv) all other actual and reasonable costs and
expenses incurred by Managing Agent in connection with the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; and (v) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees and costs
of settlement, incurred by any Agent and Lenders in enforcing any Obligations of
or in collecting any payments due from Borrower hereunder or under the other
Loan Documents by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 Indemnity.
In addition (but without duplication) to the payment of expenses
pursuant to subsection 10.2, whether or not the transactions contemplated hereby
shall be consummated, Borrower agrees to defend, indemnify, pay and hold
harmless Agents and Lenders, and the officers, directors, employees, agents and
affiliates of, Agents and Lenders (collectively called the "Indemnitees") from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or
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nature whatsoever (including without limitation the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby (including without limitation Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds of any of
the Loans or the issuance of Letters of Credit hereunder or the use or intended
use of any of the Letters of Credit) or the statements contained in the
commitment letter delivered by any Lender to Borrower with respect thereto, but
excluding, however any of the foregoing arising from disputes solely between or
among Lenders and Agents (collectively called the "Indemnified Liabilities");
provided that Borrower shall not have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of that
Indemnitee (or its officers, agents or employees) as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Borrower at any time or
from time to time, without notice to Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Borrower against and
on account of the obligations and liabilities of Borrower to that Lender under
this Agreement, the Notes, the Letters of Credit and participations therein,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Notes, the Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Borrower hereby further grants to each
Agent and each Lender a security interest in all deposits and accounts
maintained with such Agent or such Lender as security for the Obligations.
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10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Loan Documents (excluding, for this
purpose, the Canadian Loan Documents) or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due
and owing to that Lender hereunder or under the other Loan Documents (excluding,
for this purpose, the Canadian Loan Documents) (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
each Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations without recourse except as
provided below (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Borrower expressly consents to
the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Borrower to that holder
with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
10.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: (i) increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; (ii) increases the maximum
amount of Letters of Credit; (iii) changes any Lender's Pro Rata Share; (iv)
changes in any manner the percentage constituting "Requisite Lenders"; (v)
provides for the release of all or any substantial portion of the Collateral;
(vi) changes in any manner any provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of all Lenders; (vii) postpones
the scheduled final maturity date of any of the Loans; (viii) postpones the date
on which any interest or any fees are payable; (ix) decreases the interest rate
borne by any of the Loans (other than any waiver of any increase in the interest
rate applicable to any of the Loans pursuant to subsection 2.2E) or the amount
of any fees payable hereunder; (x) increases the maximum duration of Interest
Periods permitted hereunder; (xi) reduces the amount or postpones the due date
of any amount payable in respect of, or extends the required expiration date of,
any Letter of Credit; (xii) changes in any manner the obligations of Lenders
relating to the purchase of participations in Letters of Credit; (xiii) changes
in any manner the provisions contained in
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subsection 7.17, 8.1 or this subsection 10.6; or (xiv) increases the stated
advance rates for Accounts or Inventory set forth in the definition of Borrowing
Base, shall be effective only if evidenced by a writing signed by or on behalf
of all Lenders. In addition, (i) any amendment, modification, termination or
waiver of any of the provisions contained in Section 4 shall be effective only
if evidenced by a writing signed by or on behalf of Managing Agent and Requisite
Lenders, (ii) no amendment, modification, termination or waiver of any provision
of Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of an Agent shall be effective
without the written concurrence of such Agent and any other Agent affected
thereby, (iii) no amendment, modification, termination or waiver of any
provision of subsection 2.1A(iii) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans shall be
effective without the written concurrence of Swing Line Lender and (iv) no
amendment, modification, termination or waiver of any provision of Section 3 or
any provision of this Agreement related to Letters of Credit shall be effective
without the written concurrence of Issuing Lender. Managing Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Borrower,
on Borrower.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to any Agent shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or (i) as to Borrower and Agent, such other address as shall be
designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Agent.
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10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in subsections 2.6D, 2.7, 10.2
and 10.3 and the agreements of Lenders set forth in subsections 9.2C, 9.4, 10.3,
10.5 and 10.19 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrower makes a
payment or payments to any Agent or Lenders (or to an Agent for the benefit of
Lenders), or any Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitment of any other Lender hereunder.
Nothing
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contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO COMMON LAW CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH
OBLIGATION. Borrower designates and appoints Prentice Hall Corporation System,
Inc., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and such other Persons as
may hereafter be selected by Borrower irrevocably agreeing in writing to so
serve, as its agent to receive on its behalf service of all process in any such
proceedings in any such court, such service being hereby acknowledged by
Borrower to be effective and binding service in every respect. A copy of any
such process so served shall be mailed by registered mail to Borrower at its
address provided in subsection 10.8; provided that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such
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process. If any agent appointed by Borrower refuses to accept service, Borrower
hereby agrees that service of process sufficient for personal jurisdiction in
any action against Borrower in the State of New York may be made by registered
or certified mail, return receipt requested, to Borrower at its address provided
in subsection 10.8, and Borrower hereby acknowledges that such service shall be
effective and binding in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against Borrower in the courts of any other
jurisdiction.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
10.19 Confidentiality.
Each Agent and each Lender agrees that it will hold and keep
confidential any non-public information from time to time supplied by Borrower
or any of its Subsidiaries, which has been identified as confidential, pursuant
to the terms of this Agreement or the Loan Documents in accordance with such
Agent's and such Lender's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, and in all cases, in a manner consistent with which such Agent and
such Lender protects its own non-public confidential information, it being
understood and agreed by Borrower that Agents and Lenders may make disclosures
to: (i) the extent required by law, to any governmental agency or
representative thereof or pursuant to legal process; provided that, unless
specifically prohibited by applicable law or court order, each Agent and each
Lender shall notify Borrower of any request by any governmental agency or
representative for disclosure of any such non-public information prior to the
disclosure of such information; (ii) counsel to any Agent or any Lender or to
any such respective parties' accountants or other advisors; (iii) bank
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examiners and auditors; (iv) any other Lender; (v) an Eligible Assignee of any
Lender, that agrees in writing to be bound by the terms and provisions of this
subsection 10.19; or (vi) the extent that such information becomes public other
than as a result of a breach of this subsection 10.19. It is understood and
agreed that in no event shall any Agent or any Lender be obligated or required
to return any materials furnished by Borrower or any Subsidiary, and it is
further understood and agreed that this subsection 10.19 supersedes any prior
confidentiality arrangements between Borrower and any Agent and any Lender
regarding the transactions contemplated hereby. Each Agent and each Lender agree
that the terms and provisions of this subsection 10.19 shall survive the payment
of the Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement and the Loan Documents.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
It is the intention of each of the parties hereto that the Existing
Credit Agreement be amended and restated so as to preserve the perfection and
priority of all security interests securing indebtedness under the Existing
Credit Agreement and the other Loan Documents and that all indebtedness and
obligations of Borrower hereunder and thereunder shall be secured by the
Collateral Documents and that this Agreement shall not constitute a novation of
the obligations and liabilities existing under the Existing Credit Agreement or
be deemed to evidence or constitute repayment of all or any portion of any such
obligations or liabilities. The parties hereto further acknowledge and agree
that this Agreement constitutes an amendment of the Existing Credit Agreement
made under the terms of subsection 10.6 thereof.
This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Managing Agent of written or telephonic notification of such execution and
authorization of delivery thereof; provided that, unless and until all of the
conditions set forth in subsection 4.1 have been satisfied or waived in
accordance with subsection 10.6 of the Existing Credit Agreement, the Existing
Credit Agreement shall remain in full force and effect without giving effect to
the amendments set forth herein, all as if this Agreement had never been
executed and delivered.
10.21 Intercompany Note Collateral.
A. Priority of Liens and Enforcement. Borrower hereby acknowledges and
agrees that all of its rights and interests as a secured party under the
Intercompany Note Security Agreement, the Intercompany Trademark Assignment and
the Collateral Documents related thereto have been assigned as Collateral to
Collateral Agent pursuant to the Pledge and Security Agreement and hereby
further acknowledges and agrees that Collateral Agent shall not have any duty or
obligation to follow any instructions or requests of Borrower as a secured party
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thereunder and Borrower's sole rights under the Intercompany Note Security
Agreement, the Intercompany Trademark Assignment and the Collateral Documents
related thereto shall be to receive the proceeds of any Collateral received
thereunder after payment in full in cash of all Obligations in accordance with
the terms of the Loan Documents; provided further, that anything in this
Agreement or the other Loan Documents to the contrary notwithstanding:
(i) Collateral Agent is authorized on behalf of Borrower, without the
necessity of any notice to or further consent from Borrower, from time
to time to take any action permitted by the Collateral Documents with
respect to any Collateral (as defined in the Intercompany Note
Security Agreement, the "Junior Collateral") or the Collateral
Documents related thereto in its sole discretion.
(ii) Borrower irrevocably authorize the Collateral Agent, at its
option and in its sole discretion, to release any Lien granted to or
held by the Collateral Agent upon any Junior Collateral.
(iii) Borrower agrees that Borrower shall not, until the Obligations
are paid in full in cash in accordance with the terms of the Loan
Documents, have any right individually to realize upon any of the
Junior Collateral under the Collateral Documents (including without
limitation through the exercise of a right of set-off), it being
understood and agreed that all rights and remedies under the
Collateral Documents may be exercised solely by Collateral Agent for
the benefit of Lenders in accordance with the terms hereof and
thereof.
(iv) Notwithstanding the date, manner or order of perfection or
recording of the security interests and Liens granted pursuant to the
Collateral Documents, and notwithstanding any provisions of the UCC,
of any applicable law or decision, or of the Loan Documents, or
whether Borrower or Collateral Agent holds possession of all or any
part of the Collateral, all right, title and interest of Borrower as a
secured party in and to any Collateral (collectively, the "Junior
Lien") is junior and subordinate to all rights and interests of Agents
and Lenders therein, and that the priorities, subordinations and
distribution arrangements specified in this Section 10.21 and the
other provisions of this Section 10.21 with respect to any Collateral
are expressly intended to be effective regardless of the avoidability
or non-perfection of the security interests and Liens held by
Collateral Agent in such Collateral, and in the event the security
interests or Liens held by Collateral Agent in any Collateral is
judicially determined to be unperfected or is avoided for any reason,
then the priorities, subordinations and distribution arrangements
provided for in this Section 10.21, shall as to the parties to this
Agreement, remain effective as to such Collateral. Borrower agrees
that it will not challenge the legality, validity, enforceability or
priority of the Obligations or the legality, validity, enforceability,
perfection or priority of the Liens granted pursuant to the Collateral
Documents as set forth herein or the rights of any secured party
thereunder.
(v) Until the indefeasible cash payment in full of all Obligations in
accordance with the terms of the Loan Documents:
128
(a) No payment of, or other distribution in respect of, all or any
part of the Junior Lien or any claim secured thereby may be made to
Borrower other than payments permitted pursuant to subsection 10.21B.
(b) Borrower shall not seek to collect or enforce, by litigation,
set-off or otherwise, or make any demand for payment of, any claim
secured by the Junior Lien, all such rights being assigned to the
Collateral Agent pursuant to the Loan Documents.
(c) Borrower shall not exercise any remedy or commence, prosecute,
or participate in any action, whether private, judicial, equitable,
administrative, or otherwise, including without limitation the
commencement or initiation of any bankruptcy proceeding, against any
Credit Party or any of its assets to enforce any rights under or in
respect of the Junior Lien, including, without limitation, any right
to foreclose upon any Collateral, all such rights being assigned to
the Collateral Agent pursuant to the Loan Documents.
(d) In order to enable Collateral Agent to enforce its rights
hereunder in any bankruptcy proceeding, Collateral Agent is hereby
irrevocably authorized and empowered in its sole and absolute
discretion to make and present for and on behalf of Borrower such
proofs of claim against any Credit Party on account of the Junior Lien
as Collateral Agent may deem expedient or proper and to vote such
proofs of claim and to receive and collect any and all payments or
disbursements made thereon in whatever form the same may be paid or
issued and to apply the same on account of any Obligations in
accordance with the provisions of the Loan Documents.
(e) In the event of any bankruptcy proceeding against any Credit
Party, Borrower may not exercise any right or remedy with respect to
the Junior Lien that otherwise might be available to Borrower,
including, without limitation:
(1) any right to adequate protection under (SS) 361, 362, 363
or (S) 364 (including without limitation (S) 364(d)) of the
Bankruptcy Code;
(2) any right to relief from the automatic stay under (S) 362(d)
of the Bankruptcy Code;
(3) any right to object to the treatment provided under
(S) 1129(b) of the Bankruptcy Code to any claim secured by such
Collateral (other than in respect of a plan of reorganization that
(x) is acceptable to Collateral Agent in its sole discretion or (y)
provides for the indefeasible cash payment in full, upon the
effective date of such plan, of all Obligations in accordance with
the terms of the Loan Documents); and
(4) any right to file any motion, complaint, objection, response
or answer or other pleading seeking to assert, protect, enforce or
value any interest in any Collateral or any right to be heard on any
matter with
129
respect to the Collateral (including, without limitation, any sale,
transfer or disposition thereof).
(f) Borrower hereby collaterally assigns the Junior Lien to
Collateral Agent and appoints Collateral Agent as attorney-in-fact for
Borrower to take any such steps hereinabove mentioned with full power
of substitution in the premises, and further agrees to execute and
deliver any further assignments or other instruments which may be
necessary or expedient in order to enable Collateral Agent to enforce
any and all such claims, and to collect any and all payments or
disbursements which may be made at any time on account of all or any
of the Junior Lien.
If Borrower, in violation of the provisions herein set forth shall commence,
prosecute or participate in any suit, action, case or proceeding against any
Credit Party, such Credit Party may interpose as a defense or plea the
applicable provisions of this Agreement, and Collateral Agent may intervene and
interpose such defense or plea in its own name or in the name of the Credit
Party, and shall, in any event, have standing to restrain the enforcement of the
obligations of such Credit Party in its own name or in the name of the Credit
Party in the same suit, action, case or proceeding or in any independent suit,
action, case or proceeding. Borrower waives presentment, protest, notice,
demand or action or delinquency in respect of the Collateral or any part
thereof, including, without limitation, any right to require Collateral Agent or
any other Person with respect to any Collateral or any part thereof, or
otherwise to enforce payment thereof or recovery thereunder and waives any right
it may have at law or otherwise to require Collateral Agent to act in a
commercially reasonable manner or to marshal any assets or Collateral in favor
of Borrower, any Credit Party, or any other Person or against or in payment of
any of all of the Obligations. With respect to any subrogation claims, Borrower
hereby waives, releases and discharges any and all rights, claims, causes of
action, liabilities, claims and demands, in law or equity, which Borrower has
had, now has, or may in the future have, arising out of or relating directly or
indirectly to the taking or not taking of any act, or proceeding or not
proceeding with any action which Collateral Agent may take pursuant to the terms
of the Loan Documents or any other documents or with respect to any effort to
collect in respect of the Obligations. To the extent that any Credit Party
makes any payment on the Obligations which is subsequently invalidated, declared
to be fraudulent or preferential, set aside or is required to be repaid to a
trustee, receiver or any other party under any bankruptcy proceeding or
otherwise (such payment being hereinafter referred to as a "Voided Payment")
then, to the extent of such Voided Payment, that portion of the Obligations
which had previously been satisfied by such Voided Payment shall be revived and
continue in full force and effect as if such Voided Payment had never been made
and, until the full amount of such Voided Payment is fully and finally restored
to Lenders the provisions of this Section 10.21 shall be in full force and
effect with respect to the Junior Lien and the Collateral. In the event that,
notwithstanding the foregoing provisions prohibiting such payment or
distribution, Borrower shall receive any payment under or in respect of the
Junior Lien or Collateral or any claim secured thereby at a time when such
payment or distribution is prohibited by this Section 10.21 and before the
principal, interest and all other amounts constituting Obligations are
indefeasibly paid in full in cash in accordance with the terms of the Loan
Documents, then and in such event such payment or distribution shall be received
and held in trust for Collateral Agent on behalf of Lenders and shall be paid
over or
130
delivered to Collateral Agent on behalf of Lenders, to the extent necessary to
pay in full in cash, in accordance with the terms of the Loan Documents the
principal, interest and all other amounts of such Obligations after giving
effect to any concurrent payment or distribution to Collateral Agent on behalf
of Lenders in respect of the Obligations.
B. Payment Under Intercompany Notes. Anything in this Agreement to the
contrary notwithstanding, but subject to Section 15 of the Pledge and Security
Agreement, as long as Collateral Agent has not elected to exercise its rights
pursuant to Section 15(b) of the Pledge and Security Agreement, Borrower may
receive payments in respect of the Intercompany Notes from time to time in the
ordinary course of its business consistent with past practice.
[Remainder of page intentionally left blank.]
131
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
HARTMARX CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President and Chief
Financial Officer
With a copy to: General Counsel
S-1
LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually, as Managing Agent and as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Duly Authorized Signatory
Notice Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Hartmarx Account Manager
S-2
THE BANK OF NEW YORK,
Individually, as Co-Agent and as Issuing Lender for the
Letters of Credit
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
S-3
BANK OF AMERICA, N.A.
Individually and as Co-Agent
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
S-4
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
One First National Plaza
Suite IL10364
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Midwest Corporate Credit
S-5
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
S-6
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
S-7
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
S-8
FLEET BUSINESS CREDIT CORPORATION (F/K/A
SANWA BUSINESS CREDIT CORPORATION)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
S-9