CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of October 1, 1996 (this "Agreement"), by
and among THE DESIGNS/OLS PARTNERSHIP, a partnership having its principal place
of business at ▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Partnership"),
DESIGNS, INC. a Delaware corporation having its principal place of business at
▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Designs") and LEVI'S ONLY STORES,
INC., a Delaware corporation having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("LOS"; LOS and Designs being hereinafter
sometimes referred to collectively as the "Lenders"), and Designs as agent for
the Lenders (in such capacity, the "Agent").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Partnership, the Lenders and the Agent hereby
agree as follows:
ARTICLE 1
DEFINITIONS AND RELATED MATTERS
1.1 Definitions. The terms defined in the caption to this Agreement
shall have the respective meanings set forth therein, and the following terms
have the following respective meanings for the purposes of this Agreement:
"Account" means any right of the Partnership to payment for goods
sold or leased or for services rendered not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance.
"Administrative Services Agreement" means that certain Administrative
Services Agreement dated January 28, 1995 between Designs and the Partnership,
as it may hereafter be amended or restated.
"Affiliate" means, with respect to any Person, (i) any other Person
that directly or indirectly through one or more intermediaries, controls such
Person or (ii) any other Person which is controlled by or is under common
control with such Person. As used in this definition, "control" means
possession, directly or indirectly of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agency Agreement" means that certain Agency and Intercreditor
Agreement of even date herewith among the Lenders, the Agent and the
Partnership, as it may hereafter be amended or restated.
"Authorized Person" means any person authorized to request Credit
Advances on behalf of the Partnership by any resolution or other appropriate
evidence of authority which has been furnished to the Agent and that is
reasonably satisfactory to the Agent in form and substance. Initially,
Authorized Persons shall be those persons listed on Schedule 1.1 hereto.
"Business Day" means any day that is not a Saturday or Sunday, or a
public holiday under the law of the United States of America or The
Commonwealth of Massachusetts as applicable to a national banking association.
"Capital Lease Obligations" means the obligations to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
real and/or personal property which obligations are required to be classified
and accounted for as a capital lease on the Partnership's balance sheet under
GAAP (including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board) and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
- 2 -
determined in accordance with GAAP (including such Statement No. 13).
"Commitment" means, as to any Lender, the respective obligations of
such Lender to make Credit Advances from time to time in an aggregate principal
amount at any one time outstanding up to but not exceeding the amounts set
forth below such Lender's name in the following table:
Designs LOS Total
Commitment Commitment Commitment
Credit Advances $3,500,000 $1,500,000 $5,000,000
"Credit Advance" has the meaning given that term in Section 2.1.
"Credit Request" has the meaning given that term in Section 2.6.
"Current Fiscal Year" means the fiscal year of the Partnership ending
February 1, 1997.
"Cut-Off Date" means the day immediately preceding the Termination
Date.
"Default" means any Event of Default and any event that would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Dollars" or "$" means United States Dollars.
- 3 -
"Eligible Investments" means any or all of the following:
(a) marketable direct full faith and credit obligations of, or
marketable obligations guaranteed by, the United States of America;
provided that such securities, as a group, may not, on the date of
determination, have a remaining weighted average maturity of more than
five years;
(b) marketable direct full faith and credit obligations of
States of the United States or of political subdivisions or agencies;
provided that such securities, as a group, may not, on the date of
determination, have a remaining weighted average maturity of more than
five years; and provided, further, that such obligations carry a rating
of "A" or better by a Rating Service;
(c) publicly issued bonds or debentures which have a remaining
maturity at the time of purchase of no more than five years issued by a
corporation (other than the Partnership or an Affiliate thereof),
organized under the laws of a State of the United States or the District
of Columbia; provided, that such obligations carry a rating of "A" or
better by a Rating Service;
(d) open market commercial paper of any corporation (other than
the Partnership or an Affiliate thereof) incorporated under the laws of
the United States of America or any State thereof or the District of
Columbia rated not less than "P-2" or "A-2" or its equivalent by a Rating
Service and maturing within 270 days after the date on which such
commercial paper is purchased;
- 4 -
(e) certificates of deposit and bankers acceptances maturing
within one year after the acquisition thereof issued by any commercial
bank organized under the laws of the United States of America or of any
political subdivision thereof the long term obligations of which are rated
"A" or better by a Rating Service;
(f) Eurodollar certificates of deposit maturing within one year
after the acquisition thereof issued by any commercial bank having
combined capital, surplus and undivided profits of at least $1 billion;
(g) repurchase agreements, having terms of less than one year,
for government obligations of the type described in (a) or (b) above, with
a commercial bank or trust company meeting the requirements of clause (e)
above;
(h) publicly issued collateralized mortgage obligations which
have a remaining maturity at the time of purchase of no more than five
years; provided, that such obligations carry a rating of "A" or better by
a Rating Service;
(i) tax-exempt bonds or notes which have a remaining maturity
at the time of purchase of no more than five years issued by any State of
the United States or the District of Columbia, or any political
subdivision thereof; provided, that such obligations carry a rating of "A"
or better by a Rating Service; and
(j) interests in any fund or other pooled "open-end" investment
vehicle which (i) is a registered investment company under the Investment
- 5 -
Company Act of 1940, as amended and (ii) invests principally in
obligations of any of the types described in clauses (a) through (i)
above.
"Event of Default" has the meaning given that term in Section 6.1.
"GAAP" means generally accepted accounting principles consistently
applied.
"Guarantee" by any Person means any obligation of such Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person that would be classified as a liability on the balance sheet of
such other Person in accordance with GAAP, and, without limiting the generality
of the foregoing, any obligation, direct or indirect, of such other Person (a)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other liability (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness or other liability of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Indebtedness" means, with respect to the Partnership, all
liabilities or obligations, contingent or otherwise, that, in accordance with
GAAP, should be classified as liabilities, including, without limitation:
- 6 -
(i) all liabilities and obligations for borrowed money
(whether by loan or by the issuance and sale of notes, bonds or other debt
securities); or
(ii) all liabilities and obligations incurred for the
deferred purchase price of property or services under any contract or
commitment, whether or not in writing, and not subject to cancellation
without penalty or other expense (except for trade indebtedness incurred
in the ordinary course of business which is not connected with the
borrowing of money); or
(iii) all liabilities and obligations secured by (or for
which the creditor has an existing right, contingent or otherwise, to be
secured by) any mortgage, pledge, security interest or other lien, charge
or encumbrance upon or with respect to its property or assets (including,
without limitation, Accounts), whether or not the Partnership has
otherwise assumed or become liable for the payment of such liabilities or
obligations; and
(iv) all Capital Lease Obligations.
"Inventory" means inventory of the Partnership held for sale at
retail under any trademark of (i) Levi ▇▇▇▇▇▇▇ and Co., Inc. or any other
nationally recognized brand name acceptable to the Lenders, or (ii) the
Partnership.
"Investment" has the meaning given that term in Section 5.2(f).
"Lien" means with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
- 7 -
For purposes of this Agreement, the Partnership shall be deemed to own subject
to a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset. The purchase and sale rights
under the governing documents for the Partnership shall not constitute a Lien.
"Loan Documents" means this Agreement, the Notes and the Agency
Agreement.
"Next Fiscal Year" means the fiscal year of the Partnership
commencing February 2, 1997.
"Note" has the meaning given that term in Section 2.4.
"Obligations" means any and all liabilities, obligations and
undertakings of the Partnership to either Lender, of every kind and
description, direct or indirect, absolute or contingent, primary or secondary,
due or to become due, sole, joint or several, secured or unsecured, now
existing or hereafter arising under this Agreement or under any other Loan
Document.
"Outstanding Credit Advances" means, as of any date, the unpaid
aggregate principal amount of all Credit Advances on such date.
"Participation Agreement" means that certain Participation Agreement
among Designs JV Corp., Designs, Inc., LDJV Inc., LOS, Levi ▇▇▇▇▇▇▇ & Co. and
Levi ▇▇▇▇▇▇▇ Associates Inc. dated as of January 28, 1995, as it may hereafter
be amended or restated.
- 8 -
"Partnership Agreement" means that certain Partnership Agreement
between LDJV Inc. and Designs JV Corp. dated as of January 28, 1995, as it may
hereafter be amended or restated.
"Person" means an individual, corporation, partnership, joint
venture, trust or unincorporated organization, entity or enterprise, or a
government or any agency or political subdivision thereof.
"Post-Default Rate" means, in respect of any principal of any Credit
Advance or any other amount payable by the Partnership under this Agreement
which is not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period commencing on the due date until
such amount is paid in full equal to the sum of 2% per annum plus the Prime
Rate.
"Prime Rate" means the lower of (a) the annual rate of interest
announced by BayBank, N.A. (or its successors) from time to time at its
principal office as its "prime rate" (which may or may not be the lowest rate
available from BayBank, N.A. at a given time), and (b) the prime rate or base
rate on corporate loans at large United States money center commercial banks as
published in The Wall Street Journal or, if publication of such rate shall be
suspended or terminated, the annual rate of interest, determined daily and
expressed as a percentage, from time to time announced by one of the five
largest banking institutions having their principal office in New York, New
York and selected by the Agent at the time such publication is suspended or
terminated. Each change in the Prime Rate shall be effective for the purposes
of this Agreement and the Notes on and as of the date such change becomes
effective.
- 9 -
"Principal Office" means the office of the Agent identified in
Section 7.3.
"Prior Fiscal Year" means the fiscal year of the Partnership ended
February 3, 1996.
"Rating Service" means either or both of ▇▇▇▇▇'▇ Investors Service,
Inc. or Standard & Poor's Corporation.
"Relevant Asset" has the meaning given that term in Section 5.2(e)
"Restricted Payment" means, with respect to the Partnership, any
distribution to its partners, whether of cash or other property, other than
cash distributions pursuant to Subsection 9.3(b) of the Partnership Agreement
intended to enable the partners of the Partnership and their Affiliates to
pay certain taxes.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Termination Date" has the meaning given that term in Section 2.2(a).
1.2 Interpretation. (a) words of the masculine gender include
correlative words of the feminine and neuter genders.
- 10 -
(b) Unless the context shall otherwise indicate, words importing the
singular include the plural and vice versa.
(c) Articles and Sections referred to by number mean the
corresponding Articles and Sections of this Agreement. References to Schedules
and Exhibits are to the Schedules and Exhibits hereto.
(d) The terms "hereby", "hereof", "hereto", "herein", "hereunder"
and any similar terms as used in this Agreement, refer to this Agreement as a
whole unless otherwise expressly stated.
(e) The table of contents and the headings of Articles and Sections
are for convenience of reference only and do not limit, define or otherwise
affect the scope or content of any provision hereof.
1.3 Accounting Terms and Determinations.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP; provided that if any
change in GAAP in itself materially affects the calculation of any financial
covenant in this Agreement, the Partnership may by notice to each Lender, or
any Lender may by notice to the Partnership, require that such covenant
thereafter be calculated in accordance with GAAP as in effect, and applied by
the Partnership, immediately before such change in GAAP occurs. If such notice
is given, the compliance certificates delivered pursuant to Schedule 5.3, if
any, after such change occurs shall be accompanied by reconciliations of the
- 11 -
difference between the calculation set forth therein and a calculation made in
accordance with GAAP as in effect from time to time after such change occurs.
ARTICLE 2
CREDIT ADVANCES; THE AGENT
2.1 The Credit Advances. Each Lender severally agrees, on the terms
of this Agreement, to make advances ("Credit Advances") from time to time from
the date hereof to and including the Cut-Off Date, in the respective aggregate
principal amounts at any one time outstanding not to exceed its Commitment.
2.2 Termination of Commitments. The Commitments shall terminate on
September 30, 1997 (the "Termination Date") unless earlier terminated pursuant
to the provisions of this Agreement.
2.3 Mutual Obligations. The failure of any Lender to make any
Credit Advance to be made by it on the date specified therefor shall relieve
the other Lender of its obligation to make its Credit Advance on such date, but
no Lender shall be responsible for such failure of the other Lender.
2.4 Notes. The Credit Advances made by each Lender shall be
evidenced by a single revolving credit note of the Partnership (each a "Note",
and collectively, the "Notes") in substantially the form of Exhibit A hereto
(and otherwise duly completed) payable to the order of such Lender in a
principal amount equal to such Lender's Commitment. The Partnership shall
deliver the Notes to the Lenders as provided in Section 3.1. All Credit
Advances, repayments thereof, and payments of interest shall be recorded by
each Lender in its books and records kept by it in the normal course of its
- 12 -
business, and such books and records shall be conclusive as to the matters
stated therein in the absence of manifest error.
2.5 Use of Proceeds. The proceeds of the Credit Advances shall be
used by the Partnership to cover seasonal inventory purchases and for no other
purpose. In no event shall the proceeds of any Credit Advance be used for any
capital expenditures.
2.6 Borrowings. The Partnership shall give the Agent notice of each
borrowing to be made hereunder by a written request (a "Credit Request") to the
Agent in accordance with Section 2.14 hereof. The Agent shall inform each of
the Lenders of its receipt of a Credit Request. Promptly thereafter, each of
the Lenders shall give the Agent notice of a date (not more than five (5)
Business Days after the date of the Partnership's Credit Request) on which such
Lender shall make available the amount of the Credit Advance to be made by it,
and the Agent shall advise the Partnership of the date on which such amounts
will be available from both Lenders. Each Credit Request shall be signed by
two Authorized Persons, one of which shall be General Manager of the
Partnership, and shall be in the form of Exhibit B. Not later than 11:30 A.M.
Boston time on the date so specified by the Agent for each such Credit Advance,
subject to Section 5.1(h), each Lender shall make available the amount of the
Credit Advance to be made by it on such date by sending by wire transfer the
amount thereof in immediately available funds to the Partnership's account
designated in Section 7.3(c).
2.7 Prepayments. The Partnership may prepay Credit Advances at any
time or from time to time, provided that the Partnership shall give the Agent
notice of each such prepayment as provided in Section 2.14. Credit Advances
- 13 -
prepaid pursuant to this Section 2.7 may be reborrowed in accordance with the
terms and conditions of this Agreement.
2.8 Repayment of Credit Advances. The Credit Advances shall mature
on the Termination Date.
2.9 Interest. (a) The Partnership shall pay to the Agent for the
account of each Lender interest on the unpaid principal amount of each Credit
Advance made by such Lender for the period commencing on the date of such
Credit Advance to but excluding the date such Credit Advance is paid in full
at a rate per annum equal to the Prime Rate.
Notwithstanding the foregoing, the Partnership shall pay to the Agent for
the account of each Lender interest at the applicable Post-Default Rate on any
principal of any Credit Advance made by such Lender and on any other amount
payable by the Partnership hereunder to or for the account of such Lender (but,
if such amount is interest, only to the extent legally enforceable), which
shall not be paid in full when due (whether at stated maturity, by acceleration
or otherwise), for the period commencing on the due date thereof until the same
is paid in full. Accrued interest on each Credit Advance shall be payable (i)
on the last day of each calendar month during the term hereof and (ii) in any
event, upon the payment or prepayment thereof, but only on the principal so
paid or prepaid or converted; provided that interest payable at the Post-
Default Rate shall be payable from time to time on demand of either Lender.
(b) Nothing in this Agreement shall require the payment of any
interest, expense or other charge by the Partnership which, when combined with
all other interest, expenses and charges directly or indirectly paid by the
Partnership or imposed by any party as a condition to the extension of credit,
- 14 -
shall exceed the highest lawful rate permissible under any applicable law. If,
but for this provision, this Agreement would require any payment in excess of
any such highest lawful rate, this Agreement shall automatically be considered
amended so that all interest, charges, expenses and other payments required
under this Agreement or so imposed, both individually and in the aggregate,
shall be equal to, but no greater than, the highest lawful rate.
2.10 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Partnership
hereunder and under the Notes shall be made in Dollars and in immediately
available funds to the Agent at a bank account designated from time to time by
the Agent, not later than 10:00 A.M. Eastern time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). The
Partnership shall, at the time of making each payment hereunder or under any
Note, specify to the Agent the Credit Advances or other amounts payable by the
Partnership hereunder to which such payment is to be applied (and in the event
that it fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may apply such payment for the benefit of Lenders as it
may elect in its sole discretion, but subject to the other terms and conditions
of this Agreement). Each payment received by the Agent hereunder or under a
Note for the account of any Lender shall be paid promptly to such Lender, in
immediately available funds. If the due date of any payment hereunder or under
any Note would otherwise fall on a day which is not a Business Day, such date
shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension.
2.11 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
- 15 -
made by the Lenders pro rata according to the Lenders' respective percentages
of the Commitments and (b) each payment by the Partnership of principal of or
interest on Credit Advances shall be made to the Agent for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
such Credit Advances held by the Lenders.
2.12 Computations. Interest hereunder and under the Notes shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable.
2.13 Minimum and Maximum Amounts. Each borrowing and prepayment of
principal of Credit Advances shall be in an aggregate principal amount equal to
$50,000 or a larger multiple thereof; provided that (i) any borrowing of Credit
Advances under the Commitments may be in the aggregate amount of the unused
portion of the Commitments and (ii) any payment or prepayment in full of the
Credit Advances may be in the aggregate outstanding principal amount thereof.
2.14 Certain Notices. Notices to the Agent of borrowings and
prepayments of Credit Advances and shall be effective only if received in
writing by the Agent not later than 2:00 p.m. Eastern time at least five (5)
Business Days prior to the date that is the date of the relevant borrowing
and/or prepayment. Each such notice of borrowing shall specify the amount of
the Credit Advances to be borrowed or prepaid and the date of borrowing or
prepayment (which shall be a Business Day).
2.15 The Agent. The Agent shall have all such rights and obligations
as are set forth in the Agency Agreement and this Agreement.
- 16 -
ARTICLE 3
CONDITIONS OF CREDIT ADVANCES
3.1 Closing Requirements. The obligation of the Lenders to make
their initial Credit Advance hereunder is subject to the fulfillment of each of
the following conditions precedent to the satisfaction of the Lenders:
(a) Partnership Action. The Agent on behalf of the Lenders shall
have received certified copies of all partnership action taken by the
Partnership authorizing the execution, delivery and performance of this
Agreement (including, without limitation, a certificate of the Partnership
setting forth the special vote of the Management Committee of the Partnership
authorizing the transactions contemplated hereby).
(b) Incumbency. The Partnership shall have delivered to the Agent
on behalf of the Lenders a certificate in respect of the name and signature of
each of the Persons (i) who is authorized to sign and deliver this Agreement
and the other Loan Documents on behalf of the Partnership and (ii) who will,
until replaced by another Person or Persons duly authorized for that purpose,
act as its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and the
other Loan Documents. The Agent and each Lender may conclusively rely on such
certificates until the Agent receives notice in writing from the Partnership
to the contrary.
(c) Notes. The Agent on behalf of the Lenders shall have received a
Note for each Lender, duly completed and executed.
- 17 -
(d) Counterparts. The Agent shall have received duly executed
counterparts of this Agreement, executed by the Partnership, each of the
Lenders and the Agent.
(e) Agency Agreement. The Agent and the Lenders shall all have
executed and delivered the Agency Agreement.
3.2 Conditions Precedent to Credit Advances. The obligation of the
Lenders to make any Credit Advance (including the initial Credit Advance) is
subject to the conditions precedent that on the date of such Credit Advance
(and giving effect thereto):
(a) The representations and warranties made in this Agreement shall
continue to be correct in all material respects as of such date as if made on
and as of such date except (i) as otherwise permitted or contemplated in this
Agreement or (ii) as to which the Lenders have received written notice and as
to which the Lenders have given their written consent; and
(b) No Default shall have occurred and be continuing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to execute this Agreement and to agree to
make the Credit Advances, the Partnership hereby represents and warrants to the
Lenders as follows:
4.1 Corporate Existence. The Partnership and each of its partners:
- 18 -
(i) is duly organized, validly existing and in good standing under
the laws of the state of its organization and is duly qualified and in
good standing in each jurisdiction in which the failure to qualify would
have a materially adverse effect upon the financial condition, business or
properties of the Partnership; and
(ii) has all requisite power and authority to conduct its business
and to own its property, as now conducted or owned or as proposed to be
conducted or owned.
4.2 Performance of Loan Documents. The execution, delivery and
performance by the Partnership of this Agreement and the Notes are within its
powers, have been duly authorized by all necessary partnership and other action
and do not and will not:
(i) violate any provision of the Partnership Agreement, as amended
to date;
(ii) constitute or result in the Partnership, any of its partners or
any of their respective Affiliates being in breach of or default under or
conflict with any material statute or other law, or any material order,
regulation or ruling of any court or other tribunal or of any governmental
or administrative authority or agency of which the Partnership has
knowledge, or any material provision of any material indenture, agreement,
lease, instrument or other undertaking to which the Partnership or any of
its partners or any of their respective Affiliates is a party or by which
it or its property or assets may be bound or affected; or
- 19 -
(iii) result in the imposition of any Liens on any property or
assets of the Partnership.
4.3 Governmental Approval. (a) The Partnership and each of its
partners possesses all consents, licenses, franchises and permits of
governmental and administrative authorities and agencies as are necessary for
the conduct of their respective businesses and the ownership of their
respective properties and assets, as now conducted and owned or as proposed to
be conducted and owned, except where the absence of same will have no material
adverse effect on the ability of the Partnership to perform its obligations
under any Loan Document.
(B) No authorization, consent, exemption of or filing or
registration with any court or other tribunal or any governmental or
administrative authority or agency is or will be necessary to the valid
execution, delivery or performance, in any material way, by the Partnership of
any Loan Document.
4.4 Binding Obligations. This Agreement constitutes, and each Note,
when duly executed and delivered for value, will constitute legal, valid and
binding obligations of the Partnership, enforceable against the Partnership in
accordance with the respective terms thereof, subject to bankruptcy, insolvency
and similar laws of general application affecting the rights and remedies of
creditors and, with respect to the availability of the remedies of specific
enforcement, injunctive relief or other equitable remedies, to the discretion
of the court before which any proceeding therefor may be brought.
4.5 Subsidiaries. The Partnership does not have any Subsidiaries.
- 20 -
4.6 Financial Statements. (a) The audited consolidated balance
sheet of the Partnership as at the end of the Prior Fiscal Year, and the
related audited statements of consolidated income and retained earnings and
consolidated changes in cash flows, for the Prior Fiscal Year then ended,
reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP, independent accountants (correct and
complete copies of which have been furnished to the Lenders), fairly present
the consolidated financial condition of the Partnership and the results of
operations for the Prior Fiscal Year, all in accordance with GAAP.
(b) The unaudited consolidated balance sheets of the Partnership as
of August 3, 1996, and the related unaudited statements of consolidated income
and retained earnings and changes in cash flows, for the six month period then
ended (correct and complete copies which have been furnished to the Lenders),
fairly present the consolidated financial condition of the Partnership as at
such date and the results of consolidated operations for the six month period
ended on such date, all in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes.
(c) Except as described in Schedule 4.6(c), since August 3, 1996,
there has been:
(i) no change in the consolidated assets or liabilities of the
Partnership, other than changes in the ordinary course of business,
none of which has been, either singly or in the aggregate, materially
adverse;
(ii) no materially adverse depletion of cash (other than through
the payment of long-term debt of the Partnership prior to the date
hereof) or material decrease of working capital other than such as
- 21 -
result from seasonal variations or other changes in the ordinary
course of business;
(iii) no material damage, destruction or loss (whether or
not covered by insurance) adversely affecting a material portion of
its property, assets or business;
(iv) no material controversy with its employees or with any
labor organization; or
(v) no other occurrence or development whatsoever materially
affecting adversely its business, operations or condition, financial
or otherwise, or a material portion of its property or assets, other
than seasonal variations in the ordinary course of business.
4.7 Litigation. There are no actions, suits, investigations or
proceedings pending or, to the knowledge of the Partnership, threatened against
or affecting the Partnership or any of its property or assets, by or before any
court or other tribunal or any governmental or administrative authority or
agency, which, if determined adversely to the Partnership would, singly or in
the aggregate, have a material adverse effect on the financial condition,
business or properties, of the Partnership or which calls into question the
validity of any Loan Document.
4.8 Regulations U and X. The Partnership is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U or X of the Board of Governors of the Federal
- 22 -
Reserve System) and no part of the proceeds of any Credit Advance hereunder
will be used to purchase or carry any such margin stock.
4.9 Encumbrances. The Partnership has good and clear record and
marketable title to all of its property and assets, and there are no Liens on
any of such property or assets, except those permitted in Section 5.2(a).
4.10 Defaults. The Partnership is not in violation of or default
under any statute or other law or under any order, regulation or ruling of any
court or other tribunal or any governmental or administrative authority or
agency, or in any material respect under any indenture, agreement, lease,
instrument or other undertaking to which the Partnership is a party or by which
it or its property or assets may be bound or affected, which violation or
default would have a material adverse effect on the financial condition,
business or properties of the Partnership.
4.11 Taxes. The Partnership has filed all material tax returns and
reports (federal, state and local) required to be filed by it, and paid all
material taxes, assessments and other governmental charges imposed upon it and
its property and assets, other than (i) such as are presently payable without
interest or penalty or (ii) such as are being contested in good faith by
appropriate proceedings, and for which adequate reserves are being maintained
in accordance with GAAP.
4.12 Investment Company Act. Neither the Partnership nor either of
its partners is an "investment company" or a company "controlled" by an
investment company, within the meaning of the Investment Company Act of 1940,
as amended.
- 23 -
4.13 Information. The certificates, reports and other papers
furnished by or on behalf of the Partnership to each Lender in connection with
this Agreement, taken as a whole, do not contain any material misstatement of
fact or fail to state a material fact necessary to make the statements
contained therein not misleading.
ARTICLE 5
COVENANTS OF THE PARTNERSHIP
5.1 Affirmative Covenants. So long as any Credit Advance or any
other Obligation shall remain unpaid, or any Commitment is outstanding, the
Partnership will, unless the Lenders shall otherwise consent in writing:
(a) Taxes - Accrue all tax liabilities according to GAAP, and pay and
discharge all taxes, assessments and other governmental charges imposed upon
the Partnership and its property and assets, prior to the date on which
interest, penalties or liens accrue or attach in a material amount, and all
other known material liabilities and obligations, when due (including, without
limitation, all Obligations), provided that the Partnership shall not be
required to pay any such tax, assessment, governmental charge or other
liability (other than Obligations) which is being contested in good faith by
appropriate proceedings, so long as adequate reserves therefor are maintained,
and provided further that payments to trade creditors shall be deemed paid when
due if made within such period of time as payments are made to trade creditors
in the customary course of business of the Partnership unless the failure to
make such payments to trade creditors within such period of time would have a
material adverse effect on the financial condition, business or properties of
the Partnership.
- 24 -
(b) Insurance - Maintain insurance with responsible insurance companies,
in such amounts and against such risks and to such extent as is usually carried
by companies engaged in a similar business and owning similar property in the
same general areas in which the Partnership conducts its business or owns its
property and under similar circumstances; and furnish to the Lenders
appropriate evidence of the maintenance of such insurance at such times as the
Lenders may reasonably request.
(c) Existence - Maintain its good standing in the state of its formation
and qualify and remain qualified and in good standing in each other
jurisdiction where the failure to qualify in such other jurisdiction would have
a material adverse effect upon the financial condition, business or properties
of the Partnership; and maintain in good standing all material consents,
licenses, franchises and permits of public and private authorities as are
necessary for the conduct of its business and the ownership of its property
and assets.
(d) Compliance with Law - Comply with the requirements of all statutes
and other laws and all rules, regulations and orders of any court or other
tribunal or governmental or administrative authority or agency applicable to
the Partnership or its business, property or assets, the failure to comply with
which would have a material adverse effect on the Partnership's financial
condition, business or properties.
(e) Maintenance of Property - Maintain all property which is necessary in
the proper conduct of its business, in good working order and condition for
such use, and make all necessary repairs thereto and replacements thereof,
reasonable wear and tear excepted.
- 25 -
(f) Maintenance of Books and Records - Maintain proper and accurate
corporate, financial and other records and books of account.
(g) Inspection - Upon reasonable notice and at all reasonable times
during normal business hours, permit each of the Lenders and agents,
accountants, auditors, attorneys and other representatives of each of the
Lenders, to examine and make copies of and abstracts from its books of account,
correspondence (other than correspondence with its attorneys that is subject
to the attorney-client privilege or that is not permitted to be disclosed
pursuant to a confidentiality agreement between the Partnership, on the one
hand, and any other Person that is not an Affiliate of the Partnership, on the
other) and other records, to examine its property and to discuss its financial
and other affairs with any of its managers, and any accountants or auditors
hired by it, it being understood that the Lenders will not divulge information
obtained from such examination or received from the Partnership to other
Persons, except as permitted by Article 12 of the Participation Agreement, or
otherwise in connection with the proper administration of the Loan Documents,
or filings under the securities laws of any jurisdiction, or as may be required
to be disclosed by a Lender to any of its lending or financing sources.
(h) Clean-Up Period - Have no unpaid Credit Advance or part thereof
outstanding on the last day of any fiscal year of the Partnership and for at
least thirty (30) consecutive days immediately following the last day of each
fiscal year of the Partnership.
(i) Further Assurances - From time to time, execute and deliver all such
instruments and documents, and do or cause to be done all such acts and things,
as the Lenders may reasonably request, more completely to assure to the Lenders
their rights hereunder and to effectuate the intent of this Agreement.
- 26 -
5.2 Negative Covenants. So long as any Credit Advance or any other
Obligation remains unpaid, or any Commitment remains outstanding, the
Partnership will not unless the Lenders shall otherwise consent in writing:
(a) Liens - Create, incur, assume or suffer to exist, any Lien on
or with respect to any of its property or assets, whether now owned or
hereafter acquired, or income or profits therefrom, except the following:
(i) Liens for taxes, assessments or other governmental charges
which are being contested in good faith by appropriate proceedings, and
for which adequate reserves are being maintained;
(ii) Statutory Liens of carriers, warehousemen, mechanics,
materialmen, repairmen and others arising in the ordinary course of
business for sums not overdue, or which are being contested in good faith
by appropriate proceedings;
(iii) Liens incurred or deposits or pledges made in connection
with worker's compensation, health or unemployment insurance, social
security laws, or similar legislation or in connection with or to secure
the payment or performance of bids, tenders, sale agreements, leases,
trade agreements, statutory obligations or surety bonds, or other Liens
incidental to the ordinary conduct of its respective business or the
ownership of its respective property and assets, which are not incurred in
connection with the borrowings of money; or judgment liens in proceedings
which are being appealed and with respect to which there has been a stay
of execution; provided that all of the foregoing do not in the aggregate
- 27 -
materially adversely affect the value of its respective property or assets
or impair the use thereof in the operation of its respective business;
(iv) Landlord's Liens arising under real property leases, or Liens
on property hereafter acquired (either in connection with purchase money
mortgages, rental purchase agreements, including capital leases, or
conditional sale or other title retention agreements), which are
restricted to the property so acquired and do not secure Indebtedness
exceeding the fair value (at the time of acquisition) thereof;
(v) Liens described on Schedule 5.2(a);
(vi) 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 the Partnership; and
(vii) Liens created pursuant to Section 4.3 of the Partnership
Agreement.
(b) Indebtedness - Create, incur, assume or suffer to exist any
Indebtedness, except the following:
(i) Indebtedness to the Lenders hereunder;
(ii) Current liabilities and accrued expenses which are not
incurred through the borrowing of money or the obtaining of credit except
credit on an open account customarily extended and which are payable
without interest within 30 days;
- 28 -
(iii) Indebtedness described on Schedule 5.2(b), and extensions
or renewals thereof provided that there is no increase in the unpaid
principal amount thereof; and
(iv) Indebtedness secured by Liens as described in Section
5.2(a)(iv); and
(v) Indebtedness created pursuant to Section 4.3 of the
Partnership Agreement.
(c) Guarantees - Create or become or remain liable with respect to any
Guarantee; provided that the Partnership may guaranty the payment of amounts
due under corporate credit cards issued to the Partnership and any of its
employees, provided such cards are only intended for use in respect of expenses
incurred in the ordinary course of the Partnership's business.
(d) Consolidation, Mergers or Acquisition - Be a party to any merger,
consolidation or similar transaction or acquire the business of any Person
except so long as no Default shall have occurred or be continuing hereunder at
the time of such acquisition or after giving effect thereto, for Permitted
Acquisitions (as defined below).
For purposes of this Section 5.2(d), a "Permitted Acquisition" shall mean
an acquisition of assets ancillary, incidental or necessary to the retail sale
of apparel and related activities.
(e) Sales of Assets - Sell, assign, lease to another or otherwise
transfer, convey or dispose of any Relevant Assets (as hereinafter defined),
- 29 -
the book value of which, when added to the book value of all other Relevant
Assets sold, assigned, leased, transferred, conveyed or disposed of during any
fiscal year of the Partnership equals or exceeds $100,000 other than in a cash
distribution solely to the partners of the Partnership which is not a
Restricted Payment. The term "Relevant Asset" shall mean any asset of the
Partnership other than inventory, and obsolete or worn-out property and
equipment, disposed of in the ordinary course of business for fair value.
(f) Investments - Organize or acquire an interest in any corporation or
other entity, or make any loan or advance to any person, or purchase or
otherwise acquire, the capital stock or a substantial portion of the assets or
obligations of, or any interest in, any Person (an "Investment"), except for
the following:
(i) advances to employees or officers, with respect to
reimbursable expenses incurred in the ordinary course of business;
(ii) acquisition of property, subject to other limitations set
forth in this Agreement, to be used in the ordinary course of its
respective business;
(iii) Eligible Investments;
(iv) advances to vendors or suppliers, for the purpose of
obtaining services or supplies, in the ordinary course of business; or
(v) advances to contractors for the construction or renovation
of stores, buildings or improvements for use in the business of the
Partnership.
- 30 -
(g) Line of Business - Fail to continue to carry on substantially the
same business as carried on during the Prior Fiscal Year, and engage in no
business other than such business and activities that are ancillary, incidental
or necessary thereto; provided, however, that the foregoing shall not prohibit
the expansion of the Partnership's business so long as the Partnership is still
engaged solely in the retail sale of apparel and other activities, ancillary,
incidental or necessary thereto.
(h) Restricted Payments - Declare or make any Restricted Payment if at
the time of such declaration or payment, or after giving effect thereto, a
Default or Event of Default shall have occurred and be continuing.
(i) Administrative Services Agreement - Terminate or make a material
amendment to the Administrative Services Agreement or elect either to obtain
material services described therein from a Person other than Designs or to
perform any such material services with Partnership personnel.
5.3 Reporting Requirements. (a) In the event that Designs is not
providing all accounting services needed by the Partnership under the
Administrative Services Agreement, then so long as any Credit Advance or any
other Obligation shall remain unpaid or any Commitment remains outstanding,
the Partnership will, unless the Lenders shall otherwise consent in writing,
furnish to the Lenders the information described in Schedule 5.3.
(b) So long as any Credit Advance or any other Obligation shall
remain unpaid or any Commitment remains outstanding, the Partnership will,
unless the Lenders shall otherwise consent in writing, furnish to the Lenders:
- 31 -
(i) promptly after the General Manager of the Partnership has
knowledge of the occurrence of a Default which is then continuing, a
certificate of the General Manager of the Partnership setting forth
the details thereof and the action which the Partnership has taken or
proposes to take with respect thereto; and
(ii) with reasonable promptness, such other information
respecting the Partnership as the Lenders may from time to time
reasonably request, it being understood that neither Lender will
divulge any such information obtained from the Partnership except as
otherwise permitted by Article 12 of the Participation Agreement or
otherwise in connection with the proper administration and the
enforcement of the Loan Documents or filings under the securities
laws of any jurisdiction.
ARTICLE 6
DEFAULTS
6.1 Events of Default. The occurrence of any one of the following
events, where applicable, of, by or against the Partnership or any partner of
the Partnership, shall constitute an Event of Default under this Agreement:
(a) Failure to make any payment of principal of or interest on any Credit
Advance, or any other amount payable hereunder within five (5) Business Days
after the same is due (whether by demand, on the Termination Date or
otherwise).
(b) Any representation, warranty or statement made by the Partnership in
or in connection with this Agreement, any Credit Advance or any other
- 32 -
Obligation shall prove to have been incorrect or false in any material respect
when made or furnished.
(c) Failure to perform or observe any covenant contained in Section
5.1(h), Section 5.2 or Section 5.3 hereof.
(d) Failure to perform or observe any material covenant or condition
(other than as provided in paragraphs (a), (b) or (c) above) contained in any
of the Loan Documents, which failure shall continue for more than 30 days after
the Partnership knew or should have known of such default.
(e) Failure of the Partnership or any partner thereof to make any payment
in respect of Indebtedness (other than Credit Advances) in the aggregate
principal amount of more than $100,000 when due or within any applicable grace
period.
(f) Any event or condition occurs that results in the acceleration of the
maturity of any Indebtedness (other than Credit Advances) of the Partnership or
any partner thereof in the aggregate principal amount of more than $100,000 or
that enables (or, with the giving of notice or passage of time would enable) a
holder of such Indebtedness, or any Person acting on behalf of such holder, to
accelerate the maturity thereof.
(g) Termination of existence of the Partnership or any partner thereof;
suspension or discontinuance of their respective businesses; or insolvency of
the Partnership or any partner thereof or inability of the Partnership or any
partner thereof to pay their respective debts as they mature.
- 33 -
(h) Breach by any Person of any provision of Article 7 of the
Participation Agreement.
(i) Transfer of any part of a Partnership Interest in the Partnership or
any assets of the Partnership pursuant, in either case, to any of Articles 13
through 17 of the Partnership Agreement.
(j) Making of a general assignment for the benefit of creditors or of a
composition or similar arrangement with creditors; conveyance of all or a
substantial part of its property or assets to a trust mortgagee or liquidating
agent; or appointment, in a voluntary proceeding, of a receiver, trustee or
similar judicial officer or agent, to take charge of or liquidate all or a
substantial part of the respective property or assets of the Partnership or any
partner thereof.
(k) Appointment of such a receiver, trustee or similar judicial officer
or agent, in any involuntary proceeding, or action by any court to take
jurisdiction of all or a substantial part of the property of the Partnership
or any partner thereof.
(l) Commencement of any voluntary proceeding under any provision of Title
11 of the United States Code, as now or hereafter amended, or any other
proceeding, under any state or federal law, now or hereafter in force, relating
to bankruptcy, insolvency, reorganization, or otherwise to the relief of
debtors or the readjustment of indebtedness; or commencement of any such
proceeding against the Partnership or any partner thereof, unless the
Partnership or such partner is diligently contesting the same by appropriate
action, or if, despite such contest, such proceeding is not dismissed within a
period of 90 days.
- 34 -
(m) Attachment, levy or seizure of or on any material asset or assets of
the Partnership or any partner thereof, which is not released within 30 days.
(n) Entry of a final uninsured judgment which, singly or with any other
outstanding final uninsured judgments, against the Partnership or any partner
thereof, exceeds an aggregate amount of $100,000 if such judgment is not
discharged or execution thereof stayed pending appeal within 60 days, or if,
within 60 days after the expiration of any such stay, it is not discharged or
satisfied.
(o) Substantial loss, theft, damage or destruction to or of any
substantial portion of the Partnership's property (unless covered by
insurance); or occurrence of any change in the Partnership's, condition or
affairs, financial or otherwise, which would have a material adverse effect on
the ability of the Partnership to perform the requirements of this Agreement
or the Notes.
(p) The Partnership shall fail to pay aggregate monthly rent of at least
$35,000 when due, or within any applicable grace period, under leases for any
stores that the Partnership has not intentionally closed, or any other event or
condition occurs that permits (or, with the giving of notice or the passage of
time would permit) leases for stores that the Partnership has not intentionally
closed, with aggregate monthly rents of at least $35,000, to be terminated
prior to the stated termination date thereof.
6.2 Rights and Remedies on Default. Upon the occurrence of any
Event of Default, and at any time thereafter, unless the same is previously
cured, the Agent, acting with the consent of Designs, may:
- 35 -
(i) declare the unused portion of the Commitments terminated,
whereupon the same and the obligation of the Lenders to make Credit
Advances shall be thereupon terminated;
(ii) declare the entire unpaid principal amount of all Credit
Advances then outstanding, all interest accrued and unpaid thereon
and all other amounts payable under this Agreement, and all other
Obligations of the Partnership, to be forthwith due and payable,
whereupon the same shall become forthwith due and payable and the
Commitment shall be terminated, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived by
the Partnership; and
(iii) exercise all rights and remedies hereunder, under the Notes
and under any other Loan Documents and all other rights and remedies
which the Lenders may have under applicable law.
LOS may not invoke any of such remedies without the consent of Designs.
ARTICLE 7
MISCELLANEOUS
7.1 Waivers; Remedies. The Partnership waives notice of all action
by the Lenders in reliance hereon, but not any notice which is expressly
required by any provision of this Agreement to be given to the Partnership by
any Lender. No failure or delay by the Lenders in exercising any right or
remedy hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy hereunder or thereunder. No amendment, modification,
- 36 -
termination, consent or waiver of any provision of this Agreement or of any
other Loan Document shall in any event be effective unless the same shall be
set forth in a writing signed by the Lenders and the Partnership, and then only
to the extent specifically set forth therein. In the event the Partnership
requests that the Lenders give their consent, grant any waiver or enter into
any amendment to this Agreement in accordance with the terms of this Agreement,
and LOS fails to respond to such request within ten (10) Business Days after
receipt of a written request from the Partnership for such consent, waiver or
amendment, the Agent may (but shall be under no obligation) with the consent of
Designs, give such consent, grant such waiver or enter into such amendment
without the consent of LOS. The rights and remedies of the Lenders hereunder
and under the other Loan Documents are cumulative and not exclusive of any
other rights and remedies under other agreements of the Partnership with any
Lender or under applicable law, and all such rights and remedies may be
exercised singly or concurrently.
7.2 Action by Lenders. No notice to or demand upon the Partnership
in any instance, shall entitle the Partnership to any other or further notice
or demand under similar or other circumstances, unless expressly required by
this Agreement, any other Loan Document or applicable law. Each of the Lenders
shall be entitled to rely upon any instrument or communication in any form
believed by it to be genuine and to have been signed or sent by a proper
Person. No Lender shall be liable for any action taken or omitted to be taken
by it hereunder or under any other Loan Document, except for its own manifest
error, gross negligence or willful misconduct.
7.3 Notices. (a) All notices, demands and other communications
between any of parties hereunder to the other shall be deemed effective (except
for Credit Requests, which shall be effective when received by the Agent) when
- 37 -
delivered by hand or sent by first class mail or by facsimile transmission, and
addressed to the other party as set forth below:
If to the Partnership:
The Designs/OLS Partnership
c/o Designs, Inc.
▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Manager
or to such other address of which notice is given in the same manner.
- 38 -
If to the Lenders:
Designs, Inc.
▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Executive Vice President and General Counsel
Designs, Inc.
▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
Levi's Only Stores, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
- 39 -
with a copy to
▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇.
▇▇▇▇'▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel/LOS
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either Lender may designate by notice in writing to
the Partnership with a copy of such notice to the other Lender and the Agent;
provided, however, that the failure of the Partnership to deliver a copy of
any notice to ▇▇. ▇▇▇▇▇ or Levi ▇▇▇▇▇▇▇ & Co. shall not constitute a failure
to send notice to the Lenders.
(b) Credit Requests from the Partnership to the Agent shall be delivered
in accordance with Section 2.6 and notices to the Agent shall be addressed to
the Agent at:
Designs, Inc.
▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the Agent may designate in writing to the other
parties hereto.
(c) The proceeds of all Credit Advances made hereunder shall be delivered
to the following account of the Partnership with BayBank, N.A. (unless
otherwise agreed in writing by the parties hereto):
- 40 -
BayBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA #011 001742
For credit to Account No. 0038652079
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
7.4 Costs and Expenses. The Partnership shall pay to the Lenders,
on request by the Agent:
(i) all reasonable costs and expenses paid or incurred by the Lenders in
connection with the preparation of this Agreement and the other Loan Documents,
and any amendment thereof, including, without limitation, the reasonable fees
and disbursements of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, special counsel for Designs, with
respect thereto; and
(ii) the reasonable fees and disbursements of such counsel or other legal
counsel, independent public accountants and other experts retained by the
Lenders in connection with the collection or enforcement of any Loan
Documents and any collateral or security therefor, and the defense by the
Lenders of any claims asserted against any of them with respect thereto,
whether or not, in any instance, litigation is commenced.
7.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original and all of which taken together shall constitute but one and the
same Agreement.
- 41 -
7.6 Effective Date; Assignment. This Agreement shall become
effective when executed by the Partnership, the Lenders and the Agent and
thereafter shall be binding upon and inure to the benefit of the Partnership
and the Lenders and their respective successors and assigns, except that (a)
the Partnership may not assign its rights hereunder or any interest herein
without the prior written consent of each of the Lenders, and (b) neither
Lender may assign its rights hereunder or any interest herein without the prior
written consent of the Partnership and the other Lender (each of which
consents shall not be unreasonably withheld or delayed).
7.7 Survival of Covenants. All of the covenants, representations
and warranties made herein shall survive the execution and delivery of this
Agreement and the making and repayment of any and all Credit Advances. All
covenants, representations and warranties contained in any of the other Loan
Documents, and in any certificate, statement, report or other document
delivered by or on behalf of the Partnership as provided herein, or otherwise,
in connection with the transactions contemplated hereby, shall be deemed to
have been made in this Agreement as of the date of such certificate, statement,
report or other document.
7.8 Governing Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
7.9 Waiver of Jury Trial. EXCEPT TO THE EXTENT PROHIBITED BY LAW
WHICH CANNOT BE WAIVED, EACH OF THE LENDERS, THE AGENT AND THE PARTNERSHIP
HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR
- 42 -
PROCEEDING OF ANY NATURE WHATSOEVER ARISING UNDER, OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP BEING ESTABLISHED HEREBY,
WHETHER ARISING UNDER STATUTE (INCLUDING ANY FEDERAL OR STATE CONSTITUTION) OR
UNDER THE LAW OF CONTRACT, TORT OR OTHERWISE AND INCLUDING, WITHOUT LIMITATION,
ANY CHALLENGE TO THE LEGALITY, VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF
THIS SECTION OR THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
7.10 Attachments. All Exhibits and Schedules hereto are hereby
incorporated into and made a part of this Agreement.
7.11 Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid, such
invalidity shall not affect any other provision which can be given effect
without the invalid provision or application, and to this end the provisions
hereof shall be severable.
IN WITNESS WHEREOF, the Partnership, the Lenders and Designs, as Agent,
have caused this Credit Agreement to be executed and delivered as a sealed
instrument by their duly authorized representatives, all as of the date first
written above.
THE DESIGNS/OLS PARTNERSHIP
By: Designs JV Corp.,
a General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________
Its President
By: LDJV Inc., a General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
Its President
DESIGNS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________
Its President
LEVI'S ONLY STORES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
Its President
DESIGNS, INC., as Agent
for the Lenders
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________
Its President