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Exhibit 10.24
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CREDIT AGREEMENT
Dated as of June __, 1997
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Among
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION,
as Borrower
THE LENDERS AND OTHER FINANCIAL
INSTITUTIONS PARTIES HERETO
and
THE CHASE MANHATTAN BANK,
as Agent
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 21
SECTION 2. AMOUNT AND TERMS OF REVOLVING
CREDIT COMMITMENTS..................................... 22
2.1 Revolving Credit Commitments.................................... 22
2.2 Revolving Credit Notes.......................................... 22
2.3 Procedure for Revolving Credit Borrowing........................ 23
2.4 Use of Proceeds................................................. 23
SECTION 3. AMOUNT AND TERMS OF TERM LOANS................................. 23
3.1 Term Loan....................................................... 23
3.2 Term Notes...................................................... 24
SECTION 4. AMOUNT AND TERMS OF LETTERS OF CREDIT.......................... 24
4.1 Letters of Credit............................................... 24
4.2 Issuance of Commercial Letters of Credit........................ 25
4.3 Issuance of Standby Letters of Credit........................... 25
4.4 Participating Interests......................................... 26
4.5 Procedure for Opening Letters of Credit......................... 26
4.6 Payments........................................................ 26
4.7 Further Assurances.............................................. 28
4.8 Letter of Credit Applications................................... 28
4.9 Use of Letters of Credit........................................ 28
SECTION 5. ACCEPTANCES.................................................... 28
5.1 Acceptances..................................................... 28
5.2 Participating Interests......................................... 28
5.3 Payments........................................................ 29
5.4 Termination of Acceptance Commitments........................... 30
5.5 Mandatory Prepayment............................................ 30
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS......................... 31
6.1 Interest Rates and Payment Dates................................ 31
6.2 Commitment and Other Fees....................................... 31
6.3 Commercial Letter of Credit Fees................................ 31
6.4 Standby Letter of Credit Fees................................... 32
6.5 Acceptance Fees................................................. 32
6.6 Computation of Interest and Fees................................ 33
6.7 Optional Prepayments............................................ 33
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6.8 Termination or Reduction of Revolving Credit Commitments;
Extension of Revolving Credit Commitments................... 33
6.9 Pro Rata Treatment and Payments................................. 34
6.10 Conversion and Continuation Options............................ 34
6.11 Minimum Amounts and Maximum Number of Tranches................. 35
6.12 Inability to Determine Interest Rate........................... 35
6.13 Illegality..................................................... 36
6.14 Indemnity...................................................... 36
6.15 Change of Lending Office....................................... 36
6.16 Taxes.......................................................... 37
6.17 Requirements of Law............................................ 38
6.18 Obligations Absolute........................................... 40
6.19 Mandatory Prepayments and Commitment Reductions................ 41
6.20 Cash Collateralization of Letter of Credit Obligations and
Acceptance Obligations...................................... 42
SECTION 7. CONDITIONS PRECEDENT .......................................... 42
7.1 Conditions to Effectiveness..................................... 42
7.2 Conditions to All Extensions of Credit.......................... 44
SECTION 8. REPRESENTATIONS AND WARRANTIES................................. 45
8.1 Financial Condition............................................. 45
8.2 No Change....................................................... 46
8.3 Existence; Compliance with Law.................................. 46
8.4 Power; Authorization; Enforceable Obligations................... 46
8.5 No Legal Bar.................................................... 47
8.6 No Material Litigation.......................................... 47
8.7 No Default...................................................... 47
8.8 Ownership of Property; Liens.................................... 47
8.9 No Burdensome Restrictions...................................... 47
8.10 Taxes.......................................................... 48
8.11 Federal Regulations............................................ 48
8.12 ERISA.......................................................... 48
8.13 Investment Company Act; Other Regulations...................... 49
8.14 Subsidiaries................................................... 49
8.15 Chief Executive Office......................................... 49
8.16 General Partners' Existence; Compliance with Law............... 49
8.17 General Partners' Power; Authorization; Enforceable Obligations 49
8.18 Accuracy of Information........................................ 49
8.19 Environmental Matters.......................................... 50
8.20 Material Contracts............................................. 51
SECTION 9. AFFIRMATIVE COVENANTS.......................................... 51
9.1 Financial Statements and Information............................ 51
9.2 Corporate Existence; Nature of Business......................... 53
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9.3 Payment of Obligations.......................................... 54
9.4 Maintenance of Properties; Insurance............................ 54
9.5 Maintain Trademarks............................................. 54
9.6 Inspection; Books and Records................................... 54
9.7 Notices......................................................... 55
9.8 Maintenance of Liens of the Security Documents.................. 55
9.9 Guarantee and Collateral Agreement Supplement................... 56
9.10 Use of Proceeds................................................ 56
9.11 Observance of Agreements....................................... 56
SECTION 10. NEGATIVE COVENANTS............................................ 56
10.1 Consolidated Net Worth......................................... 56
10.2 Fixed Charge Coverage Ratio.................................... 56
10.3 Consolidated Indebtedness Ratio................................ 57
10.4 Limitation on Indebtedness..................................... 57
10.5 Limitation on Liens............................................ 58
10.6 Sale of Assets................................................. 60
10.7 Limitation on Fundamental Changes.............................. 60
10.8 Limitation on Loans, Advances and Other Investments............ 61
10.9 Compliance with ERISA.......................................... 62
10.10 Transactions with Affiliates.................................. 63
10.11 Additional Liens.............................................. 63
SECTION 11. EVENTS OF DEFAULT............................................. 63
SECTION 12. THE AGENT AND ISSUING LENDER.................................. 67
12.1 Appointment; Authorization..................................... 67
12.2 Delegation of Duties........................................... 67
12.3 Exculpatory Provisions......................................... 68
12.4 Reliance by Agent and Issuing Lender........................... 68
12.5 Notice of Default.............................................. 68
12.6 Non-Reliance on Agent, Issuing Lender or Other Lenders......... 69
12.7 Indemnification................................................ 69
12.8 Agent in Its Individual Capacity............................... 70
12.9 Successor Agent................................................ 70
SECTION 13. MISCELLANEOUS................................................. 70
13.1 Amendments and Waivers......................................... 70
13.2 Notices........................................................ 71
13.3 No Waiver; Cumulative Remedies................................. 72
13.4 Survival of Representations and Warranties..................... 72
13.5 Payment of Expenses and Taxes.................................. 72
13.6 Successors and Assigns; Participations......................... 73
13.7 Adjustments; Set-Off........................................... 76
13.8 Confidentiality................................................ 76
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13.9 Severability................................................... 77
13.10 Counterparts.................................................. 77
13.11 No Third Party Beneficiaries.................................. 77
13.12 SUBMISSION TO JURISDICTION; WAIVERS........................... 77
13.13 GOVERNING LAW................................................. 78
13.14 Integration................................................... 78
13.15 Acknowledgements.............................................. 79
13.16 Satisfaction in Dollars....................................... 79
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SCHEDULES:
Schedule 1.1 - Commitments
Schedule 7.1 - Filing Jurisdictions
Schedule 8.6 - Litigation
Schedule 8.8 - Ownership of Property
Schedule 8.12 - ERISA
Schedule 8.14 - Subsidiaries
Schedule 9.1 - Financial Information
Schedule 10.4 - Existing Indebtedness
Schedule 10.5 - Existing Liens
Schedule 10.8 - Existing Investments
Schedule 10.10 - Transactions with Affiliates
EXHIBITS:
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT B - Form of Guarantee and Collateral Agreement
EXHIBIT C - Form of Standby Letter of Credit Application
EXHIBIT D - Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
EXHIBIT E - Form of PRLE $24,000,000 Subordination Agreement
EXHIBIT F - Form of Company Officer's Certificate
EXHIBIT G - Form of Guarantor Officer's Certificate
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CREDIT AGREEMENT, dated as of June __, 1997, among ▇▇▇▇ ▇▇▇▇▇ LAUREN
CORPORATION, a Delaware corporation (the "Company"), the banks and other
financial institutions from time to time parties hereto (the "Lenders") and THE
CHASE MANHATTAN BANK ("Chase"), a New York banking corporation, as agent for the
Lenders hereunder.
W I T N E S S E T H :
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by Chase
as its prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by
Chase in connection with extensions of credit to debtors); "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms thereof, the ABR shall be
determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the ABR due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Acceptance": as defined in subsection 5.1.
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"Acceptance Commission": as defined in subsection 6.5(a).
"Acceptance Discount Rate": with respect to any Acceptance at any
particular time, the bid rate in effect at the principal office of the
Issuing Lender in New York City at such time for discount by the Issuing
Lender of commercial drafts or bills in the same face amount, with the
same maturity, and of the same type as such Acceptance.
"Acceptance Documents": the collective reference to the Drafts, the
Acceptances and any other documents arising out of or in connection with
the creation of Acceptances hereunder.
"Acceptance Obligations": at any particular time, all liabilities of
the Company on or with respect to Acceptances, whether for reimbursement
obligations due or to become due to the Issuing Lender or payments of
Acceptances and whether or not such liability is contingent or unmatured,
including the sum of (a) the then outstanding Acceptance Reimbursement
Loans plus (b) the aggregate face amount of all unmatured Acceptances then
outstanding.
"Acceptance Participating Interest": with respect to any Acceptance,
(a) in the case of the Issuing Lender, its undivided interest in such
Acceptance after giving effect to the granting of any participating
interests therein and (b) in the case of any Participating Lender, its
undivided participating interest in such Acceptance.
"Acceptance Reimbursement Loan": as defined in subsection 5.3(b).
"Acceptance Reimbursement Obligation": the obligation of the Company
to pay the Issuing Lender in accordance with subsection 5.3(a) in respect
of any Acceptances created by the Issuing Lender for the account of the
Company or any of its Subsidiaries.
"Accountants": as defined in subsection 9.1(a).
"Accounts": as to any Person, all rights to receive payment for
goods sold or leased by such Person or for services rendered in the
ordinary course of business of such Person to the extent not evidenced by
an instrument or chattel paper, together with all interest, finance
charges and other amounts payable by an account debtor in respect thereof.
"Adjustment Date": the fifth Business Day following receipt by the
Agent of both (i) the financial statements required to be delivered
pursuant to subsection 9.1(a) or 9.1(b), as the case may be, for the most
recently completed fiscal period and (ii) the certificate required to be
delivered pursuant to subsection 9.1(e) with respect to such fiscal
period.
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"Affiliate": with respect to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control"
(including, with correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of Voting Stock, by contract or otherwise), provided that, in
any event, any Person which owns directly or indirectly Voting Stock
having 10% or more of the ordinary voting power for the election of
directors or other governing body of a Person (other than as a limited
partner of such other Person) shall be deemed to control such other
Person. Notwithstanding the foregoing, no individual shall be deemed to be
an Affiliate of a Person solely by reason of his or her being an officer
or director of such Person.
"Agent": Chase, together with its affiliates, as the arranger of the
Term Loan Commitments and the Revolving Credit Commitments and as the
agent for the Lenders under this Agreement and the other Credit Documents.
"Aggregate Revolving Credit Extensions of Credit": on any date of
determination thereof, the sum of (a) the aggregate principal amount of
the Revolving Credit Loans outstanding on such date, (b) the aggregate
amount of the Letter of Credit Obligations on such date and (c) the
aggregate amount of the Acceptance Obligations on such date.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Annual Increase": for any Fiscal Year, an amount equal to 50% of
the Net Income of the Company and its Subsidiaries for such Fiscal Year
less the amount of any Restricted Payments during such Fiscal Year.
"Applicable Commitment Rate Percentage": shall mean .125% (or .175%
for the period commencing October 1, 1997 and ending on December 30, 1997
in the event that the Initial Public Offering is not consummated on or
before the thirtieth day following the Closing Date); provided that the
Applicable Commitment Rate Percentage will be adjusted, on December 31,
1997 and on each Adjustment Date to occur thereafter, to the Applicable
Commitment Rate Percentage set forth on Annex A opposite the column titled
"Margin Level Status of the Company" which is in effect on such Adjustment
Date (or, in the case of the adjustment to occur on December 31, 1997, in
effect on the last Adjustment Date to occur prior to December 31, 1997),
and provided, further, that in the event that the financial statements
required to be delivered pursuant to subsection 9.1(a) or 9.1(b), as
applicable, and the related certificate required to be delivered pursuant
to subsection 9.1(e), are not delivered when due, then during the period
commencing five Business Days after the date upon which such financial
statements were required to be
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delivered (or, if later, December 31, 1997) until five Business Days
following the date upon which they are actually delivered, the Applicable
Commitment Rate Percentage shall be .25%.
"Applicable Margin": shall mean .30% (or .40% for the period
commencing October 1, 1997 and ending on December 30, 1997 in the event
that the Initial Public Offering is not consummated on or before the
thirtieth day following the Closing Date); provided that the Applicable
Margin for Eurodollar Loans will be adjusted, on the first Adjustment Date
to occur after December 31, 1997 and on each Adjustment Date to occur
thereafter, to the Applicable Margin for Eurodollar Loans set forth on
Annex A opposite the column titled "Margin Level Status of the Company"
which is in effect on such Adjustment Date, and provided, further, that in
the event that the financial statements required to be delivered pursuant
to subsection 9.1(a) or 9.1(b), as applicable, and the related certificate
required to be delivered pursuant to subsection 9.1(e), are not delivered
when due, then during the period commencing five Business Days after the
date upon which such financial statements were required to be delivered
until five Business Days following the date upon which they are actually
delivered, the Applicable Margin shall be .75%.
"Applicable Sight Draft Fee Percentage": shall mean .0625%; provided
that the Applicable Sight Draft Fee Percentage shall be adjusted, on the
first Adjustment Date to occur after December 31, 1997 and on each
Adjustment Date to occur thereafter to the Applicable Sight Draft Fee
Percentage set forth on Annex A opposite the column titled "Margin Level
Status of the Company" which is in effect on such Adjustment Date, and
provided, further, that in the event that the financial statements
required to be delivered pursuant to subsection 9.1(a) or 9.1(b), as
applicable, and the related certificate required to be delivered pursuant
to subsection 9.1(e), are not delivered when due, then during the period
commencing five Business Days after the date upon which such financial
statements were required to be delivered until five Business Days
following the date upon which they are actually delivered, the Applicable
Sight Draft Fee Percentage shall be .125%.
"Approved Foreign Currency": as defined in subsection 4.2(b).
"Assignee": as defined in subsection 13.6(c).
"Available Revolving Credit Commitments": on any date of
determination thereof, the excess, if any, of the Revolving Credit
Commitments over the Aggregate Revolving Credit Extensions of Credit on
such date.
"Board": the Board of Governors of the Federal Reserve System or any
successor thereof.
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"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.3, 4.2 or 4.3 as a date on which the Company requests the
Lenders to make Loans or requests the Issuing Lender to issue Letters of
Credit hereunder.
"Business": as defined in subsection 8.20.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"Capital Expenditures": with respect to any Person for any period,
the sum of the aggregate of all expenditures (whether paid in cash or
accrued as a liability) by such Person and its Subsidiaries during that
period which, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in
the consolidated statement of cash flows of such Person. For purposes of
this definition, the purchase price of equipment which is purchased
simultaneously with the trade-in of existing equipment owned by the
Company or any Subsidiary or with insurance proceeds (as permitted
hereunder) shall be included in Capital Expenditures only to the extent of
the gross amount of such purchase price less any credit granted by the
seller of such equipment for the equipment being traded in at such time or
the amount of such proceeds, as the case may be.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Capitalized Lease": shall mean any lease which is required to be
capitalized on the balance sheet of the lessee pursuant to GAAP.
"Cash Equivalents": (a) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits and certificates of deposit of
any of the Lenders or any domestic commercial bank having capital and
surplus of at least $100,000,000, (c) commercial paper of any Person
organized under the laws of the United States or any State thereof that is
not a Subsidiary or an Affiliate of the Company rated at least A-2 by
Standard & Poor's Ratings Group or at least P-2 by ▇▇▇▇▇'▇ Investors
Service, Inc., (d) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States or by any political subdivision, taxing
authority or foreign government (as the case may be) that are rated at
least A by Standard & Poor's Rating Group or A by ▇▇▇▇▇'▇ Investors
Service, Inc., (e) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by
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any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition, (f) shares of money market mutual or similar funds
having assets in excess of $250,000,000 and which invest exclusively in
assets satisfying the requirements of clause (a) of this definition or (g)
shares of money market mutual or similar funds having assets in excess of
$500,000,000 and which invest exclusively in assets satisfying the
requirements of clauses (b) through (e) of this definition.
"CIT Agreements": means (i) that certain Financing Agreement, dated
as of October 17, 1995, by and between The ▇▇▇▇▇ ▇▇▇▇▇▇ Womenswear
Company, L.P. and The CIT Group/Commercial Services, Inc. and (ii) that
certain Financing Agreement, dated as of October 7, 1996, by and between
Polo Retail Corporation and The CIT Group/Commercial Services, Inc., each
as heretofore mended, supplemented or otherwise modified.
"CIT Indemnity": the obligations of the Agent to The CIT
Group/Commercial Services, Inc., in connection with the repayment and
termination of the CIT Agreements, to indemnify The CIT Group/Commercial
Services, Inc. for uncollected checks and other obligations arising under
lockbox arrangements related to the CIT Agreements.
"Closing Date": the date on which the conditions precedent set forth
in subsection 7.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": shall mean all assets of the Credit Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Combined Loan Percentage": as to any Lender at any time, the
percentage which (a) the sum of (i) such Lender's Revolving Credit
Commitment plus (ii) such Lender's Term Loans then outstanding, then
constitutes of (x) the sum of (1) the aggregate Revolving Credit
Commitments of all Lenders plus (2) the aggregate principal amount of Term
Loans of all the Lenders then outstanding.
"Commercial Letter of Credit": a commercial documentary letter of
credit issued by the Issuing Lender for the account of the Company or any
of its Subsidiaries for the purchase of goods in the ordinary course of
business.
"Commercial Letter of Credit Application": as defined in subsection
4.2(a).
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"Commitment Period": the period from and including the Closing Date
to but not including the Termination Date or such earlier date as the
Revolving Credit Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company or any Guarantor and which is treated as a single employer under
Section 414 of the Code.
"Consolidated Fixed Charges": with respect to the Company and its
Subsidiaries for any period, the sum of Fixed Charges for such period.
"Consolidated Fixed Charges Coverage Ratio": with respect to any
period, the ratio of (a) Income Available for Fixed Charges for such
period minus Capital Expenditures of the Company and its Subsidiaries
during such period to (b) Consolidated Fixed Charges for such period.
"Consolidated Indebtedness": as of the date of any determination
thereof, the aggregate of all Indebtedness of the Company and its
Subsidiaries, on a consolidated basis after eliminating all inter-company
items, in accordance with GAAP.
"Consolidated Indebtedness Ratio": for any period, the ratio of (a)
the average of Consolidated Indebtedness outstanding on the last day of
each Fiscal Quarter ending during such period to (b) Net Income of the
Company and its Subsidiaries for such period plus depreciation,
amortization, federal and state income taxes and Interest Expense deducted
in determining such Net Income.
"Consolidated Net Worth": as of any date of determination thereof,
the excess of (a) the aggregate consolidated net book value of the assets
of the Company and its Subsidiaries (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, permits,
goodwill and other similar intangible assets properly classified as such
in accordance with GAAP) after all appropriate adjustments in accordance
with GAAP (including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization and excluding the
amount of any write-up or revaluation of any asset) over (b) all of the
aggregate liabilities of the Company and its Subsidiaries, including all
items which, in accordance with GAAP, would be included on the liability
side of the balance sheet (other than Capital Stock, treasury stock,
capital surplus and retained earnings) in each case consolidated (after
eliminating all inter-company items) in accordance with GAAP.
"Consummation Date": the date on which the Company receives the net
cash proceeds from the Initial Public Offering.
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"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents": the collective reference to this Agreement, the
Notes, the Security Documents, the PRLE $24,000,000 Subordination
Agreement, the Letter of Credit Documents and the Acceptance Documents.
"Credit Parties": the collective reference to the Company and the
Guarantors.
"Default": any of the events specified in Section 11, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollar Equivalent": (a) with respect to any calculation involving
the face amount of any Letter of Credit issued in an Approved Foreign
Currency, the amount in Dollars into which the relevant amount in such
Approved Foreign Currency would be converted based upon the relevant
Exchange Rate in effect at 10:00 A.M., New York City time, on the date of
issuance of such Letter of Credit and (b) with respect to any calculation
involving the amount of any drawing under any Letter of Credit, the amount
in Dollars into which the relevant amount in such Approved Foreign
Currency would be converted based upon the relevant Exchange Rate in
effect at the time the Issuing Lender makes payment under such Letter of
Credit.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary of the Company organized under
the laws of any jurisdiction within the United States.
"Drafts": as defined in subsection 5.1.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or
the environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as
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a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the rate at which Chase is offered Dollar deposits at or about 10:00
A.M., New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank Eurodollar market where the Eurodollar
and foreign currency and exchange operations in respect of its Eurodollar
Loans are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding during
such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 11,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, event or act has been satisfied.
"Exchange Rate": with respect to any Approved Foreign Currency, the
arithmetic mean of the spot exchange rates for the purchase of such
Approved Foreign Currency with Dollars as listed on the WRLD screen of the
Reuters News Service, and if the Reuters spot exchange rates are
unavailable, the Telerate equivalent shall be used.
"Existing Credit Agreement": the Amended and Restated Credit
Agreement, dated as of October 31, 1994, among ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ L.P., the
several banks parties thereto and Chase, as agent for such banks, as
heretofore amended, supplemented or otherwise modified.
"Federal Funds Effective Rate": as defined in the definition of
"ABR" set forth above.
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"Fiscal Quarter": with respect to the Company and its Subsidiaries,
and with respect to any Fiscal Year, (a) each of the quarterly periods
ending 13 calendar weeks, 26 calendar weeks, 39 calendar weeks and 52 or
53 calendar weeks, as the case may be, after the end of the prior Fiscal
Year or (b) such other quarterly periods as the Company shall adopt after
giving prior written notice thereof to the Lenders.
"Fiscal Year": with respect to the Company and its Subsidiaries, (a)
the 52- or 53-week annual period, as the case may be, ending on the
Saturday nearest to March 31 of each calendar year or (b) such other
fiscal year as the Company shall adopt with the prior written consent of
the Required Lenders (which consent shall not be unreasonably withheld).
Any designation of a particular Fiscal Year by reference to a calendar
year shall mean the Fiscal Year ending during such calendar year.
"Fixed Charges": with respect to the Company and its Subsidiaries
for any period, the sum of (a) all fixed rent paid during the period by
the Company and its Subsidiaries under all leases of real and personal
property, (b) Interest Expense for such period and (c) aggregate payments,
other than Interest Payments, for such period in respect of Indebtedness
of the Company and its Subsidiaries, excluding, however, (i) any
prepayments of Indebtedness outstanding under the Existing Credit
Agreement or the CIT Agreements, (ii) any prepayments of the Indebtedness
of the Company under the Subordinated Note, dated as of October 31, 1994
in the original principal amount of $24,000,000 payable to Lauren, GS
Capital Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS
Capital Partners PRL ▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, L.P.,
Store Street Fund 1994, L.P. and Stone Street 1994 Subsidiary Corp., (iii)
any payments of Indebtedness outstanding under the Reorganization Notes
and (iv) any voluntary prepayments of the Revolving Credit Loans or the
Term Loans.
"Foreign Subsidiary": any Subsidiary of the Company organized under
the laws of any jurisdiction outside of the United States of America.
"Form S-1": the Registration Statement on Form S-1 (Registration No.
333-24733) filed by the Company with the SEC on April 8, 1997, as amended
on May 21, 1997, as the same may hereafter be amended, supplemented or
modified.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Company and each Domestic
Subsidiary of the Company listed on the signature pages thereto,
substantially in the form of Exhibit B, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assume or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (x) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (y) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
"Guarantor": each of Fashions Outlet of America, Inc., Polo Retail
Corporation, The Polo/Lauren Company, L.P., The ▇▇▇▇▇ ▇▇▇▇▇▇ Womenswear
Company, L.P., RL Fragrances LLC and each other Person which is or will
become a guarantor under the Guarantee and Collateral Agreement pursuant
to the terms of this Agreement.
"Income Available for Fixed Charges": with respect to the Company
and its Subsidiaries for any period, Net Income of the Company and its
Subsidiaries for such period plus (a) depreciation, amortization, federal
and
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state income taxes deducted in determining such Net Income and (b) the
amount of Fixed Charges for such period.
"Indebtedness": with respect to any Person, as of the date of any
determination thereof, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services (other
than current trade liabilities or employment or consulting compensation
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) all indebtedness for borrowed money secured by
any Lien on any property owned by such Person to the extent of such
Person's interest in such property, even though such Person has not
assumed or become liable for the payment thereof, (c) any other
indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, (d) all obligations of such Person as lessee under
Capitalized Leases, (e) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, and (f) all
Guarantee Obligations of such Person in respect of Indebtedness of any
other Person. For purposes of all calculations provided for in this
Agreement, there shall be disregarded any Guarantee Obligations of any
Person in respect of any Indebtedness of any other Person with which the
accounts of such first Person are then required to be consolidated in
accordance with GAAP.
"Initial Public Offering": the sale of the Company's Capital Stock
as described in the Form S-1.
"Insolvency": with respect to any Multiemployer Plan the condition
that such plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Expense": for any period, net interest expense in respect
of Indebtedness of the Company and its Subsidiaries (including, without
duplication, all interest capitalized or to be capitalized on the books of
the Company and its Subsidiaries properly charged or chargeable to income
for such period in accordance with GAAP) for such period.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest
Period.
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"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, or, if
available, four, five or nine months or one year thereafter, as
selected by the Company in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, or, if
available, four, five or nine months or one year thereafter, as
selected by the Company by irrevocable notice to the Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date or the final date
of maturity of the Term Loans, in the case of interest payable on
the Term Loans;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) the Company shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Investment": as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of Capital Stock or other
securities of, or any assets constituting a business unit of, any other
Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other
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Person. In computing the amount involved in any Investment at the time
outstanding, (a) undistributed earnings of, and unpaid interest accrued in
respect of Indebtedness owing by, such other Person shall not be included,
(b) there shall not be deducted from the amounts invested in such other
Person any amounts received as earnings (in the form of dividends,
interest or otherwise) on such Investment or as loans from such other
Person and (c) unrealized increases or decreases in value, or write-ups,
write-downs or write-offs, of Investments in such other Person shall be
disregarded.
"Issuing Lender": Chase, in its capacity as issuer of the Letters of
Credit and as creator of Acceptances.
"Lauren": ▇▇▇▇▇ ▇▇▇▇▇▇, an individual.
"Letter of Credit Applications": the collective reference to
Commercial Letter of Credit Applications and Standby Letter of Credit
Applications.
"Letter of Credit Documents": the collective reference to the Letter
of Credit Applications, and the Letters of Credit and any other documents
arising out of or in connection with the issuance of and participation in
Letters of Credit hereunder.
"Letter of Credit Obligations": at any particular time, all
liabilities of the Company with respect to Letters of Credit, whether or
not such liabilities are contingent or unmatured, including, without
limitation, the sum of (a) the then outstanding Letter of Credit
Reimbursement Loans plus (b) the then aggregate undrawn face amount of all
then outstanding Letters of Credit.
"Letter of Credit Participating Interest": with respect to any
Letter of Credit, (a) in the case of the Issuing Lender, its undivided
interest in such Letter of Credit, the related Letter of Credit
Application, after giving effect to the granting of any participating
interests therein and (b) in the case of any Participating Lender, its
undivided participating interest in such Letter of Credit and the related
Letter of Credit Application.
"Letter of Credit Reimbursement Loan": as defined in subsection
4.6(b).
"Letter of Credit Reimbursement Obligation": the obligation of the
Company to reimburse the Issuing Lender in accordance with subsection
4.6(a) for any payment made by the Issuing Lender under any Letter of
Credit issued for the account of the Company or any of its Subsidiaries.
"Letters of Credit": the collective reference to Commercial Letters
of Credit and Standby Letters of Credit.
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"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any Capitalized Lease having substantially the same economic
effect as any of the foregoing).
"Loans": the collective reference to the Revolving Credit Loans and
the Term Loans and any other loans and extensions of credit made by the
Lenders from time to time in accordance with the terms of this Agreement.
"Margin Level I Status": shall exist on an Adjustment Date if the
Consolidated Indebtedness Ratio as of the last day of the period covered
by the financial statements relating to such Adjustment Date is greater
than or equal to 2.0 to 1.
"Margin Level II Status": shall exist on an Adjustment Date if the
Consolidated Indebtedness Ratio as of the last day of the period covered
by the financial statements relating to such Adjustment Date is less than
2.0 to 1 but greater than or equal to 1.50 to 1.
"Margin Level III Status": shall exist on an Adjustment Date if the
Consolidated Indebtedness Ratio as of the last day of the period covered
by the financial statements relating to such Adjustment Date is less than
1.5 to 1 but greater than or equal to 1.25 to 1.
"Margin Level IV Status": shall exist on an Adjustment Date if the
Consolidated Indebtedness Ratio as of the last day of the period covered
by the financial statements relating to such Adjustment Date is less than
1.25 to 1 but greater than or equal to 1.0 to 1.
"Margin Level V Status": shall exist on an Adjustment Date if the
Consolidated Indebtedness Ratio as of the last day of the period covered
by the financial statements relating to such Adjustment Date is less than
1.0 to 1.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Credit Documents or
the rights or remedies of the Agent or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
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"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Income" ("Net Loss"): with respect to any Person or group of
Persons, as the case may be, for any fiscal period, the difference between
(a) gross revenues of such Person or group of Persons and (b) all costs,
expenses and other charges incurred in connection with the generation of
such revenue (including, without limitation, taxes on income), determined
on a consolidated or combined basis, as the case may be, and in accordance
with GAAP.
"Non-Consummation Date": the earlier of (a) the date that is 30 days
following the Closing Date if the Consummation Date has not occurred on or
before such date, and (b) the date on which a Responsible Officer of the
Company delivers a certificate to the Agent stating that the Initial
Public Offering will not be consummated within the period of 30 days
following the Closing Date.
"Non-Excluded Taxes": as defined in subsection 6.16(a).
"Notes": the collective reference to the Revolving Credit Notes and
the Term Notes; each, individually, a 'Note'.
"Participants": as defined in subsection 13.6(b).
"Participating Lender": any Lender (other than the Issuing Lender),
in its capacity as an acquiror of Letter of Credit Participating Interests
in Letters of Credit and as an acquiror of Acceptance Participating
Interests in Acceptances.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": any acquisition by the Company or any
Subsidiary, on or after the Closing Date, (whether effected through a
purchase of Capital Stock or assets or through a merger, consolidation or
amalgamation), of (i) another Person or (ii) the assets constituting an
entire business or operating business unit of another Person, provided
that:
(a) the assets so acquired or, as the case may be, the assets
of the Person so acquired shall be in a Related Line of
Business;
(b) no Default or Event of Default shall have occurred and be
continuing at the time thereof or would result therefrom;
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(c) the Company shall have delivered to the Agent, as soon as
available but in no event later than the date of disclosure by
the Company to the public, a copy of the executed purchase
agreement with respect thereto (without exhibits, except to
the extent available and requested by the Agent); and
(d) such acquisition shall be effected in such manner so that
the acquired Capital Stock or assets are owned either by the
Company or a Subsidiary and, if effected by merger,
consolidation or amalgamation, the Company or a Subsidiary
shall be the continuing, surviving or resulting entity.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at any particular time, any employee benefit plan other than
a Multiemployer Plan which is covered by ERISA and in respect of which the
Company or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" as defined in Section 3(5) of ERISA.
"Pre-Consummation Revolving Credit Commitment" as to any Lender, an
amount equal to such Lender's Revolving Credit Commitment at the opening
of business in New York City on the Consummation Date (without giving
effect to any rearrangement of the Revolving Credit Commitments
contemplated by subsection 6.19(b)).
"PRLE $24,000,000 Subordination Agreement": the Subordination
Agreement, dated as of June __, 1997, executed and delivered by Lauren, GS
Capital Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS
Capital Partners PRL ▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, L.P.,
Stone Street Fund 1994, L.P. and Stone Street 1994 Subsidiary Corp., and
the Company to the Agent, for the benefit of the Lenders, as amended by
the First Amendment thereto, dated as of the date hereof, substantially in
the form of Exhibit E hereto, and as may be further amended, supplemented
or otherwise modified from time to time in accordance with the terms
thereof.
"Properties": as defined in subsection 8.19(a).
"Register": as defined in subsection 13.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
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"Related Line of Business": (a) any line of business in which the
Company or any of its Subsidiaries is engaged as of, or immediately prior
to, the Closing Date, (b) any wholesale, retail or other distribution of
products or services under any Trademark or any derivative thereof or (c)
any similar business and any business which provides a service and/or
supplies products in connection with any business described in clause (a)
or (b) above.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reorganization Notes": means those certain promissory notes, dated
of even date herewith, in the aggregate initial principal amount of
$___________, issued in connection with the reorganization occurring on
the date hereof and described in the Form S-1.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Required Lenders": at a particular time, Lenders the Combined Loan
Percentages of which aggregate at least 51%.
"Requirement of Law": as to any Person, the Articles or Certificate
of Incorporation and By-Laws or Certificate of Partnership or partnership
agreement or other organizational or governing documents of such Person,
and any law, treaty, rule or regulation or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserve Determination": as defined in subsection 5.4.
"Responsible Officer": with respect to the Company, the chief
executive officer, the chief operating officer, the president or any vice
president of the Company, and with respect to financial matters, the chief
financial officer or the Vice President-Controller or the Vice
President-Treasurer of the Company.
"Restricted Payment": with respect to the Company and any of its
Subsidiaries, (a) any declaration or payment of any dividend on, or the
making of or provision for any distribution on account of, shares of any
class of Capital Stock of such Person (other than to the Company or
another Subsidiary of the Company), now or hereafter outstanding, whether
in cash or property or in obligations of the Company or any of its
Subsidiaries, (b) any purchase, redemption or other acquisition or
retirement for value of any shares of any class of Capital Stock of such
Person (other than from the Company or another
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Subsidiary of the Company), or any warrants, rights or options to acquire
any such shares, now or hereafter outstanding and (c) if the Consummation
Date shall not occur prior to the date which is 30 days following the
Closing Date, compensation paid to direct or indirect holders of Capital
Stock of the Company or any of its Subsidiaries for employment,
consulting, management fees or other similar personal services performed
for the Company or such Subsidiary to the extent that such compensation to
all such holders exceeds $10,000,000 in the aggregate in any Fiscal Year.
"Revolving Credit Commitment": at any time, with respect to each
Lender, the amount set forth opposite such Lender's name on Schedule 1.1
in the section entitled "Revolving Credit Commitments", as such amount may
be reduced from time to time in accordance with the provisions of this
Agreement or increased as contemplated by subsection 6.19(c).
"Revolving Credit Commitment Percentage": as to any Lender at any
particular time, the percentage of the aggregate Revolving Credit
Commitments then constituted by such Lender's Revolving Credit Commitment
(or, at any time after the Revolving Credit Commitments shall have expired
or terminated, the percentage which such Lender's portion of the Aggregate
Revolving Credit Extensions of Credit constitutes of the Aggregate
Revolving Credit Extensions of Credit).
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and all other security documents hereafter delivered
to the Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Company hereunder and under
any of the other Credit Documents or to secure any guarantee of any such
obligations and liabilities.
"SEC": the Securities and Exchange Commission.
"Sight Draft Letter of Credit": a Commercial Letter of Credit
providing for payment of sight drafts when presented for honor thereunder
in accordance with the terms thereof and when accompanied by documents
complying with the terms thereof.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Standby Letter of Credit": an irrevocable letter of credit pursuant
to which the Issuing Lender agrees to make payments in Dollars for the
account
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of the Company or any of its Subsidiaries in respect of obligations of the
Company or any of its Subsidiaries incurred pursuant to contracts made or
performances undertaken or to be undertaken or like matters relating to
contracts to which the Company or any of its Subsidiaries is or proposes
to become a party in the ordinary course of the Company's or any of its
Subsidiaries' business, including, without limiting the foregoing, for
insurance purposes and in connection with lease transactions.
"Standby Letter of Credit Application": as defined in subsection
4.3(a).
"Subordinated Indebtedness": (a) the Indebtedness of the Company in
the principal amount of $24,000,000, evidenced by the Subordinated Notes
dated October 31, 1994, payable to Lauren, GS Capital Partners, L.P., GS
Capital Partners PRL Holding I, L.P., GS Capital Partners PRL ▇▇▇▇▇▇▇ ▇▇,
▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, L.P., Stone Street Fund 1994, L.P., and
Stone Street 1994 Subsidiary Corp., and (b) any other Indebtedness of the
Company, provided that with respect to any such other Indebtedness (i) no
part of the principal of such Indebtedness is stated to be payable or is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption, mandatory prepayment or otherwise) prior to the Termination
Date and the payment of principal of which and (subject to clause (ii)
below) any other obligations of the Company in respect thereof are
subordinated to the prior payment in full of principal of and interest
(including post-petition interest) on the Notes, the Letter of Credit
Obligations, the Acceptance Obligations and all other obligations and
liabilities of the Company to the Agent and the Lenders hereunder on terms
and conditions first approved in writing by the Required Lenders, (ii) no
part of the interest accruing on such Indebtedness (other than interest
payable solely in kind which shall be similarly subordinated) is payable
after a Default or Event of Default has occurred and is continuing, and
(iii) such Indebtedness otherwise contains terms, covenants and conditions
in form and substance reasonably satisfactory to the Required Lenders, as
evidenced by their prior written approval thereof.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having voting
power (other than stock having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries (including a wholly owned
Subsidiary of such Person), or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company.
"Term Loan": as defined in subsection 3.1.
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"Term Loan Commitment": as to any Lender, the obligation of such
Lender to make a Term Loan in the amount provided for in subsection 3.1."
"Term Loan Percentage": as to any Lender at any time, the percentage
of the aggregate Term Loans then constituted by such Lender's Term Loan.
"Term Note": as defined in subsection 3.2.
"Termination Date": December 31, 2002.
"Time Draft Letter of Credit": a Commercial Letter of Credit
providing for acceptance by the Issuing Lender of time drafts when
presented for honor thereunder in accordance with the terms thereof,
provided that no such draft shall be payable more than 180 days after
sight or later than 90 days after the Termination Date, and provided,
further, that each such draft is accompanied by documents complying with
the terms of such Letter of Credit.
"Time Draft and Standby Fee Percentage:" at any time, a percentage
equal to the Applicable Margin then in effect.
"Trademarks": as defined in subsection 9.5.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Voting Stock": stock of any class or classes (however designated),
or other equity ownership interests, of any Person, the holders of which
are at the time entitled, as such holders, to vote for the election of the
directors or other governing body of the Person involved, whether or not
the right so to vote exists by reason of the happening of a contingency.
1.2 Other Definitional Provisions. (a) Unless otherwise defined
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes and the other Credit Documents or any certificate or
other document made or delivered pursuant hereto or in connection herewith.
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(b) As used herein and in the Notes, the other Credit Documents and
any certificate or other document made or delivered pursuant hereto or in
connection herewith, accounting terms relating to the Company and its
Subsidiaries not defined in subsection 1.1, and accounting terms partly defined
in subsection 1.1 to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING
CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Company from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Lender's Revolving Credit Commitment; provided,
that no Revolving Credit Loan shall be made if, after giving effect thereto, the
Available Revolving Credit Commitments would be less than zero. During the
Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans, or (iii) a combination thereof, as determined by the Company and notified
to the Agent in accordance with subsections 2.3 and 6.10, provided that no
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Termination Date.
2.2 Revolving Credit Notes. The Revolving Credit Loans made by each
Lender shall be evidenced by a promissory note of the Company, substantially in
the form of Exhibit A-1 hereto, with appropriate insertions as to payee, date
and principal amount (individually, a "Revolving Credit Note"; collectively, the
"Revolving Credit Notes"), payable to the order of such Lender and in a
principal amount equal to the lesser of (a) the amount set forth opposite each
Lender's name on Schedule 1.1 in the section entitled "Revolving Credit
Commitments" and (b) the aggregate unpaid principal amount of all Revolving
Credit Loans made by such Lender. Each Lender is hereby authorized to record the
date and amount of each such Revolving Credit Loan made by such Lender, each
continuation thereof and the date and amount of each payment or prepayment of
principal thereof, on the schedule annexed to and constituting a part of its
Revolving Credit Note, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded. Each Revolving Credit
Note shall (i) be dated the Closing Date, (ii) be stated to mature on the
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Termination Date, and (iii) provide for the payment of interest in accordance
with subsection 6.1.
2.3 Procedure for Revolving Credit Borrowing. The Company may borrow
under the Revolving Credit Commitments during the Commitment Period on any
Business Day, provided that the Company shall give the Agent irrevocable
telephonic notice (which notice must be received by the Agent prior to 11:00
A.M., New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans or (b) on the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be entirely or
partly of Eurodollar Loans, the amounts of such Type of Loan and the lengths of
the initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$500,000 or a whole multiple thereof (or, if the then Available Revolving Credit
Commitments are less than $500,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $5,000,000, or a whole multiple of $500,000 in excess thereof.
Upon receipt of any such notice from the Company, the Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Agent for the account of the Company at
the office of the Agent specified in subsection 13.2 prior to 1:00 P.M., New
York City time, on the Borrowing Date requested by the Company in funds
immediately available to the Agent. Such borrowing will then be made available
to the Company by the Agent crediting the account of the Company on the books of
such office with the aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
2.4 Use of Proceeds. The proceeds of the Revolving Credit Loans
shall be used by the Company for general corporate purposes, including to
finance the operations of the Company and its Subsidiaries in the ordinary
course of their businesses, to finance capital expenditures and to refinance
existing Indebtedness (including, without limitation, the Existing Credit
Agreement and the CIT Agreements).
SECTION 3. AMOUNT AND TERMS OF TERM LOANS
3.1 Term Loan. Subject to the terms and conditions hereof, each
Lender agrees to make a term loan (a "Term Loan") to the Company on the
Non-Consummation Date pursuant to a conversion of Revolving Credit Loans to Term
Loans in accordance with subsection 6.19(c) in an amount equal to such Lender's
Revolving Credit Commitment Percentage (after giving effect to the increase in
Chase's Revolving Credit Commitment as provided in clause (i) of subsection
6.19(c)) of the amount provided for in such relevant subsection to be so
converted. The Company shall give the Agent irrevocable notice (which notice
must be received by the Agent prior to 11:00 A.M., New York City time) three
Business Days prior to the date Revolving Credit Loans are converted to Term
Loans as provided above, specifying (i) whether such Term Loans are to be
initially Eurodollar Loans, ABR Loans, or a combination thereof, and (ii) if
such Term Loans are to be entirely or partly
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Eurodollar Loans, the respective lengths of the initial Interest Periods
therefor. If the Company fails to give such notice, the Term Loans shall be
initially ABR Loans.
3.2 Term Notes. The Term Loan made by each Lender shall be evidenced
by a promissory note of the Company, substantially in the form of Exhibit A-2
hereto, with appropriate insertions as to payee, date and principal amount
(individually, a "Term Note; collectively, the "Term Notes"), payable to the
order of each Lender and in a principal amount equal to the amount of the Term
Loan of such Lender. The Term Note of each Lender shall be dated the
Non-Consummation Date and shall be stated to mature in installments on the last
day of each of the Fiscal Quarters set forth in the relevant amortization
schedule below in the amounts equal to such Lender's Term Loan Percentage of the
amounts set forth opposite such Fiscal Quarter:
FISCAL QUARTER/FISCAL YEAR AMOUNT
-------------------------- ------
1st Quarter/1999 $10,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $10,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $15,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $15,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $20,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $20,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $20,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $20,000,000
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ $20,000,000
On the date that the last installment of principal on the Term Loans is due, the
principal amount of all Term Loans then outstanding shall be due and payable
together with all accrued but unpaid interest, fees and other amounts due and
payable hereunder. The Term Notes shall bear interest on the unpaid principal
amount thereof and on any overdue interest at the applicable interest rate per
annum specified in subsection 6.1. Interest on the Term Notes shall be payable
as specified in subsection 6.1.
SECTION 4. AMOUNT AND TERMS OF LETTERS OF CREDIT
4.1 Letters of Credit. Subject to the terms and conditions hereof,
the Issuing Lender and each Participating Lender agree to extend credit by the
Issuing Lender's issuing Letters of Credit in the form of Commercial Letters of
Credit or Standby Letters of Credit for the account of the Company and its
Subsidiaries, and by each Participating Lender's acquiring its Letter of Credit
Participating Interest in each such Letter of Credit issued by the Issuing
Lender, from time to time during the Commitment Period in an aggregate face
amount at any
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one time outstanding not to exceed in the case of Standby Letters of Credit,
$30,000,000, provided, that no Letter of Credit shall be issued hereunder if,
after giving effect thereto, the Available Revolving Credit Commitments would be
less than zero. During the Commitment Period, the Company may use the Revolving
Credit Commitments in this manner by having the Issuing Lender issue Letters of
Credit, having such Letters of Credit expire undrawn upon or, if drawn upon,
reimbursing the Issuing Lender for such drawing, and having the Issuing Lender
issue new Letters of Credit, all in accordance with the terms and conditions
hereof. From and after the Closing Date, all outstanding Letters of Credit
issued under, and as defined in, the Existing Credit Agreement shall be deemed
for all, if any, purposes hereunder to be Letters of Credit issued under this
Agreement on the Closing Date.
4.2 Issuance of Commercial Letters of Credit. (a) Subject to the
terms and conditions hereof (including, without limitation, subsection 4.1), the
Company may request the Issuing Lender to issue a Commercial Letter of Credit in
favor of sellers of goods to the Company and its Subsidiaries on any Business
Day during the Commitment Period by delivering to the Agent at its address
specified in subsection 13.2 (or such other lending office of the Agent as the
Agent shall request) a commercial letter of credit application (executed by the
Company and, in the case of any Letter of Credit to be issued for the account of
any Subsidiary of the Company, such Subsidiary) by a transmission in accordance
with past practice (a "Commercial Letter of Credit Application"), completed to
the satisfaction of the Issuing Lender, together with such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request. Subject to the provisions of the last sentence of subsection 4.8, the
Company hereby agrees to observe and perform its covenants, duties and
obligations under each Commercial Letter of Credit Application.
(b) Each Commercial Letter of Credit issued hereunder shall, among
other things, (i) be either a Sight Draft Letter of Credit or a Time Draft
Letter of Credit, (ii) have an expiry date occurring not later than one year
after the date of issuance of such Commercial Letter of Credit and in no event
later than 90 days after the Termination Date, and (iii) be denominated in
Dollars (except for Commercial Letters of Credit denominated in foreign
currencies acceptable to the Issuing Lender in its sole discretion (each an
"Approved Foreign Currency"; provided that the aggregate undrawn face amount of
all such Commercial Letters of Credit issued in an Approved Foreign Currency
shall not exceed the Dollar Equivalent of $10,000,000 at any time outstanding).
Each Commercial Letter of Credit Application and each Commercial Letter of
Credit shall be subject to the Uniform Customs and, to the extent not
inconsistent therewith, the laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Commercial Letter of Credit hereunder if such issuance would conflict with,
or cause the Issuing Lender or any Participating Lender to exceed any limits
imposed by, any applicable Requirements of Law.
4.3 Issuance of Standby Letters of Credit. (a) Subject to the terms
and conditions hereof (including, without limitation, subsection 4.1), the
Company may request the Issuing Lender to issue a Standby Letter of Credit for
the account of the Company or any of its Subsidiaries, on any Business Day
during the Commitment Period by delivering to the
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Agent at its address specified in subsection 13.2 (or such other lending office
of the Agent as the Agent shall request) a standby letter of credit application
(executed by the Company and, in the case of any Letter of Credit issued for the
account of any Subsidiary of the Company, such Subsidiary) substantially in the
form of Exhibit D hereto (a "Standby Letter of Credit Application"), completed
to the satisfaction of the Issuing Lender, together with such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request. Subject to the provisions of the last sentence of
subsection 4.8, the Company hereby agrees to observe and perform its covenants,
duties and obligations under each Standby Letter of Credit Application.
(b) Each Standby Letter of Credit issued hereunder shall, among
other things, (i) be in such form and for such purposes requested by the Company
as shall be acceptable to the Issuing Lender in its sole discretion, (ii) have
an expiry date occurring not later than one year after the date of issuance of
such Standby Letter of Credit and in no event occurring later than 90 days after
the Termination Date and (iii) be denominated in Dollars and have a minimum face
amount of $25,000. Each Standby Letter of Credit Application and each Standby
Letter of Credit shall be subject to the Uniform Customs and, to the extent not
inconsistent therewith, the laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Standby Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any Participating Lender to exceed any limits
imposed by, any applicable Requirements of Law.
4.4 Participating Interests. Effective in the case of each Letter of
Credit as of the date of the issuance thereof, the Issuing Lender agrees to
allot and does allot, to itself and each Participating Lender, and each
Participating Lender irrevocably agrees to take and does take, a Letter of
Credit Participating Interest in each Letter of Credit, the related Letter of
Credit Application and all obligations of the Company with respect thereto
(other than fees payable to the Issuing Lender pursuant to subsections 6.3(b)
and 6.4(b)) in a percentage equal to such Lender's Revolving Credit Commitment
Percentage. Each Participating Lender hereby agrees that its participation
obligations described in the immediately preceding sentence shall be irrevocable
and unconditional.
4.5 Procedure for Opening Letters of Credit. Upon receipt of any
Letter of Credit Application from the Company, the Issuing Lender will process
such Letter of Credit Application and the other certificates, documents and
other papers delivered to the Issuing Lender in connection therewith, in
accordance with its customary procedures and shall promptly open such Letter of
Credit by issuing the original of such Letter of Credit to the beneficiary
thereof and by furnishing a copy thereof to the Company. The Issuing Lender will
send monthly reports to each Participating Lender and the Company, on the third
Business Day of each calendar month, indicating the Letters of Credit opened
during the previous month.
4.6 Payments. (a) The Company agrees to reimburse the Issuing Lender
in Dollars and in immediately available funds, forthwith on the date the Issuing
Lender is
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presented with a draft under any Letter of Credit (whether issued for the
account of the Company or any Subsidiary of the Company) and otherwise in
accordance with the terms of the Letter of Credit Application relating thereto,
for any payment made by the Issuing Lender under any Sight Draft Letter of
Credit and any Standby Letter of Credit issued for its account. In the case of
any Letter of Credit issued in an Approved Foreign Currency, such reimbursement
obligation with respect to any payment thereunder made in an Approved Foreign
Currency shall be in an amount equal to the Dollar Equivalent of the amount of
such payment. The Issuing Lender is hereby authorized to charge the account(s)
maintained by the Company at Chase for all amounts payable pursuant to this
subsection 4.6(a).
(b) The failure by the Company on any day to have sufficient
aggregate Dollar funds on deposit in its account(s) maintained at Chase to pay
all Letter of Credit Reimbursement Obligations due on such day in accordance
with subsection 4.6(a) (such deficiency being hereinafter referred to as a
"Letter of Credit Reimbursement Deficiency") shall constitute the making by the
Issuing Lender of a loan to the Company (a "Letter of Credit Reimbursement
Loan") in a principal amount equal to the amount of the Letter of Credit
Reimbursement Deficiency as of such day. Each Letter of Credit Reimbursement
Loan shall (i) be payable on demand, (ii) be evidenced by a loan account
maintained on the books and records of the Issuing Lender (the "Letter of Credit
Reimbursement Loan Account") and (iii) bear interest from the date of the
creation of the applicable Letter of Credit Reimbursement Obligation until paid
in full at a rate per annum equal to (x) for the Business Day on which such
Letter of Credit Reimbursement Loan is created, the ABR and (y) thereafter, the
ABR plus 2%. Interest on each Letter of Credit Reimbursement Loan shall be
payable on demand. The entries in the Letter of Credit Reimbursement Loan
Account shall constitute prima facie evidence of the accuracy of the information
set forth therein.
(c) In the event that the Issuing Lender makes a Letter of Credit
Reimbursement Loan in accordance with subsection 4.6(b), the Issuing Lender will
promptly notify each Participating Lender. Forthwith upon its receipt of any
such notice, each Participating Lender will transfer to the Issuing Lender, in
Dollars and in immediately available funds, an amount equal to such
Participating Lender's Revolving Credit Commitment Percentage of such Letter of
Credit Reimbursement Loan plus interest thereon calculated from the date of such
notice at the Federal Funds Effective Rate.
(d) Whenever, at any time after the Issuing Lender has made payment
under any Sight Draft Letter of Credit or Standby Letter of Credit and has
received from each Participating Lender its Revolving Credit Commitment
Percentage of any Letter of Credit Reimbursement Loan in accordance with
subsection 4.6(c), the Issuing Lender receives any payments related to such
Letter of Credit Reimbursement Loan (whether received directly from the Company
or otherwise, including proceeds of collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to each Participating Lender its pro rata share thereof; provided,
however, that in the event that the receipt by the Issuing Lender of such
payments or such payment of interest (as the case may be) is required to be
returned, each Participating Lender will return to the Issuing Lender any
portion thereof previously distributed by the Issuing Lender to it.
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(e) Within fifteen days after the end of each calendar quarter, the
Issuing Lender will notify each Participating Lender (with copies to the
Company) of (i) each payment made by the Issuing Lender during such calendar
quarter under any Sight Draft Letter of Credit or Standby Letter of Credit and
(ii) each payment made by the Company during such calendar quarter to the
Issuing Lender in reimbursement of amounts paid by the Issuing Lender under any
such Letter of Credit.
4.7 Further Assurances. The Company hereby agrees to do and perform,
from time to time, any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of the Letters of Credit opened
hereunder for its account.
4.8 Letter of Credit Applications. The provisions of this Section 4
in respect of any Letters of Credit are supplemental to, and not in derogation
of, any rights and remedies of the Issuing Lender and the Lenders under the
Letter of Credit Applications related to such Letters of Credit and under the
Uniform Customs and other applicable laws. In the event of any conflict between
the terms of this Agreement and the terms of the Letter of Credit Applications,
the terms set forth in this Agreement shall control.
4.9 Use of Letters of Credit. The Commercial Letters of Credit
opened for the account of the Company and its Subsidiaries shall be used solely
to finance purchases of inventory by such Persons in the ordinary course of
their business, and the Standby Letters of Credit shall be used solely for the
purposes described in the definition of such term in subsection 1.1.
SECTION 5. ACCEPTANCES
5.1 Acceptances. The Issuing Lender and each Participating Lender
confirm that the Issuing Lender's issuance of Time Draft Letters of Credit and
each Participating Lender's acquisition of Letter of Credit Participating
Interests therein constitutes an agreement by the Issuing Lender and the
Participating Lenders to extend credit by the Issuing Lender's accepting drafts
("Drafts") for the account of the Company that are presented for honor under
Time Draft Letters of Credit in compliance with the terms thereof (each such
accepted Draft, an "Acceptance") and each Participating Lender's acquiring its
Acceptance Participating Interest in such Acceptance created by the Issuing
Lender, from time to time during the period from the Closing Date to and
including the Termination Date, provided, that each Draft shall be denominated
in Dollars and shall be stated to mature on a Business Day which is 30, 60, 90
or 180 days after the date thereof, at the option of the Company. From and after
the Closing Date, all then outstanding Acceptances, if any, created under, and
as defined in, the Existing Credit Agreement shall be deemed for all purposes
hereunder to be Acceptances created under this Agreement on the Closing Date.
5.2 Participating Interests. Effective in the case of each
Acceptance as of the date of the creation thereof, the Issuing Lender agrees to
allot and does allot, to itself and each Participating Lender, and each
Participating Lender irrevocably agrees to take and does
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take, an Acceptance Participating Interest in each Acceptance, the related Draft
and all obligations of the Company with respect thereto (other than fees payable
to the Issuing Lender pursuant to subsection 6.5(b)) in a percentage equal to
such Lender's Revolving Credit Commitment Percentage. Each Participating Lender
hereby agrees that its participation obligations described in the immediately
preceding sentence shall be irrevocable and unconditional.
5.3 Payments. (a) The Company shall be obligated, and hereby
unconditionally agrees, to pay to the Issuing Lender the face amount of each
Acceptance created by the Issuing Lender hereunder on the maturity thereof, or
such earlier date on which the obligations of the Company under this Agreement
become due and payable. The Issuing Lender is hereby authorized to charge the
account(s) maintained by the Company at Chase for all amounts payable pursuant
to this subsection 5.3(a).
(b) The failure by the Company on any day to have sufficient
aggregate Dollar funds on deposit in its account(s) maintained at Chase to pay
all Acceptance Reimbursement Obligations due on such day in accordance with
subsection 5.3(a) (such deficiency being hereinafter referred to as an
"Acceptance Reimbursement Deficiency") shall constitute the making by the
Issuing Lender of a loan to the Company (an "Acceptance Reimbursement Loan") in
a principal amount equal to the amount of the Acceptance Reimbursement
Deficiency as of such day. Each Acceptance Reimbursement Loan shall (i) be
payable on demand, (ii) be evidenced by a loan account maintained on the books
and records of the Issuing Lender (the "Acceptance Reimbursement Loan Account"),
and (iii) bear interest from the date of the creation of the applicable
Acceptance Reimbursement Obligation until paid in full at a rate per annum equal
to (x) for the Business Day on which such Acceptance Reimbursement Loan is
created, the ABR and (y) thereafter, the ABR plus 2%. Interest on each
Acceptance Reimbursement Loan shall be payable on demand. The entries in the
Acceptance Reimbursement Loan Account shall constitute prima facie evidence of
the accuracy of the information set forth therein.
(c) If the Issuing Lender makes an Acceptance Reimbursement Loan in
accordance with subsection 5.3(b), the Issuing Lender will promptly notify each
Participating Lender. Forthwith upon receipt of such notice, each Participating
Lender will transfer to the Issuing Lender, in Dollars and in immediately
available funds, an amount equal to such Participating Lender's Revolving Credit
Commitment Percentage of such Acceptance Reimbursement Loan plus interest
thereon calculated from the date of such notice at the Federal Funds Effective
Rate.
(d) Upon each Participating Lender's payment in full to the Issuing
Lender of its Revolving Credit Commitment Percentage of any Acceptance
Reimbursement Loan in accordance with subsection 5.3(b), such Participating
Lender shall acquire the Issuing Lender's claim against the Company in respect
of such Acceptance Reimbursement Loan to the extent of the amount paid by such
Participating Lender. Each Participating Lender agrees that the Issuing Lender
shall have full authority and responsibility for enforcing all claims against
the Company with respect to Acceptances and Acceptance Reimbursement Loans and
exercising all rights and remedies with respect thereto.
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(e) Whenever, at any time after the Issuing Lender has received from
each Participating Lender its pro rata share of any Acceptance Reimbursement
Loan in accordance with subsection 5.3(c), the Issuing Lender receives any
payments related to such Acceptance Reimbursement Loan (whether received
directly from the Company or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will distribute to each Participating Lender its pro rata
share thereof; provided, however, that in the event that the receipt by the
Issuing Lender of such payments or such payment of interest (as the case may be)
is required to be returned, each Participating Lender will return to the Issuing
Lender any portion thereof previously distributed by the Issuing Lender to it.
(f) Within fifteen days after the end of each calendar quarter, the
Issuing Lender will notify each Participating Lender and the Company of (i) each
creation of an Acceptance by the Issuing Lender during such calendar quarter and
(ii) each payment made by the Company to the Issuing Lender during such calendar
quarter on account of any Acceptance Reimbursement Obligation.
5.4 Termination of Acceptance Commitments. In the event that (a)
there is a determination made by any regulatory body or instrumentality thereof
(including, without limitation, any Federal Reserve Lender or any bank
examiner), or there is a change in, or change in interpretation of, any
applicable law, rule or regulation (such determination or such change, a
"Reserve Determination"), in either case to the effect that bankers' acceptances
created hereunder or in connection with a substantially similar facility
(whether or not the Company or any Lender is directly involved as parties) will
be ineligible for reserve-free treatment (or if already discounted, should have
been ineligible for reserve-free treatment) with Federal Reserve Banks, and as a
result any Lender is required to maintain, or determines as a matter of prudent
banking that it is appropriate for it to maintain, additional reserves, or (b)
any restriction is imposed on any Lender (including, without limitation, any
change in acceptance limits imposed on any Lender) which would prevent such
Lender from creating or purchasing participating interests in bankers'
acceptances, as the case may be, or otherwise performing its obligations in
respect of Acceptances, then, with the consent of the Participating Lenders, the
Issuing Lender may, or upon the direction of any Participating Lender, the
Issuing Lender shall, by notice to the Company in accordance with subsection
13.2 terminate the obligation of the Issuing Lender to issue Time Draft Letters
of Credit and to create Acceptances in whole, effective on the date on which the
Issuing Lender gives such notice, and the Issuing Lender shall have no further
obligation to issue Time Draft Letters of Credit.
5.5 Mandatory Prepayment. The Company shall, within one Business Day
of its receipt of a notice of termination from the Issuing Lender pursuant to
subsection 5.4, prepay the Acceptance Obligations with respect to each
Acceptance then outstanding by paying to the Issuing Lender the face amount of
each Acceptance less a prepayment discount calculated by the Issuing Lender
based upon the then prevailing rate for U.S. Treasury Bills maturing on or about
the maturity date of such Acceptance (and communicated to the Company in its
notice of termination pursuant to subsection 5.4); provided that in the event
the Company fails to make such prepayment as provided in this subsection 5.5,
each Lender's
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pro rata share of the Acceptance Obligation with respect to each Acceptance then
outstanding shall be deemed to be a Revolving Credit Loan made on the Business
Day on which such prepayment was due in a principal amount equal to such
Lender's pro rata share of the face amount of such Acceptance and subject to the
terms and conditions of Section 2 and Section 6 hereof.
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS
6.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR.
(c) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fee or
other amount, the rate described in paragraph (b) of this subsection plus 2%, in
each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
6.2 Commitment and Other Fees. (a) The Company agrees to pay to the
Agent, for the account of the Lenders, a commitment fee for the period from and
including the first day of the Commitment Period to the Termination Date,
computed at the rate per annum equal to the Applicable Commitment Rate
Percentage on the average daily amount of the Available Revolving Credit
Commitments during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The Company agrees to pay to the Agent, for the account of the
Agent, an agent's fee and the other fees described in the fee letter dated May
22, 1997 between the Company and the Agent.
6.3 Commercial Letter of Credit Fees. (a) The Company agrees that on
the date of each drawing under a Commercial Letter of Credit, it will pay to the
Agent, for the account of the Issuing Lender, a Commercial Letter of Credit fee.
In the case of a Sight Draft Letter of Credit, such fee shall be equal to the
higher of (i) $50 and (ii) the Applicable Sight Draft Fee Percentage then in
effect of the amount of such drawing (calculated on the
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basis of the Dollar Equivalent thereof in the case of any Letter of Credit
issued in an Approved Foreign Currency). In the case of a Time Draft Letter of
Credit, such fee shall equal the higher of (i) $120 and (ii) a percentage of the
amount of such drawing equal to the Applicable Margin then in effect (calculated
on the basis of the Dollar Equivalent thereof in the case of any Letter of
Credit issued in an Approved Foreign Currency). On the last day of each March,
June, September and December, the Issuing Lender will allocate and pay to each
Participating Lender a fee equal to such Participating Lender's pro rata share
of the amount of such fees received from the Company during the immediately
preceding three-month period calculated on the basis of the Applicable Sight
Draft Fee Percentage or the Applicable Margin.
(b) The Company agrees to pay to the Issuing Lender for its own
account the customary fees (including, without limitation, issuing fees,
amendment fees and processing fees) charged by the Issuing Lender in connection
with its issuance and administration of commercial letters of credit.
6.4 Standby Letter of Credit Fees. (a) The Company agrees to pay the
Agent, for the account of the Issuing Lender and the Participating Lenders, a
Standby Letter of Credit fee calculated at the rate per annum equal to the
Applicable Margin from time to time in effect of the amount available to be
drawn under each Standby Letter of Credit issued for its account (and in no
event less than $500 with respect to each such Standby Letter of Credit),
payable to the Issuing Lender semi-annually in advance on the date of issue of
any Standby Letter of Credit and, thereafter, on each six-month anniversary of
such date of issue. The Issuing Lender will promptly pay to the Participating
Lenders their pro rata shares of any amounts received from the Company in
respect of any such fees.
(b) The Company agrees to pay to the Issuing Lender for its own
account the customary fees (including, without limitation, issuing fees and
processing fees) charged by the Issuing Lender in connection with its issuance
and administration of standby letters of credit.
6.5 Acceptance Fees. (a) The Company agrees to pay the Issuing
Lender an acceptance commission (an "Acceptance Commission") on the face amount
of each Acceptance created by the Issuing Lender hereunder for the period from
the date of such Acceptance to the date of its maturity at a rate per annum
equal to the Acceptance Discount Rate in effect on the date of creation of such
Acceptance plus the Applicable Margin, payable in full on the date of creation
of such Acceptance; provided that such Acceptance Commission shall be an amount
equal to at least $120. On the last day of each March, June, September and
December, the Issuing Lender will allocate and pay to each Participating Lender
such Participating Lender's pro rata share of the Applicable Margin portion of
the Acceptance Commissions paid during the immediately preceding three-month
period.
(b) The Company agrees to pay to the Issuing Lender for its own
account the customary fees (including, without limitation, processing fees)
charged by the Issuing Lender in connection with its creation and administration
of bankers' acceptances.
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6.6 Computation of Interest and Fees. (a) Interest on ABR Loans,
Letter of Credit Reimbursement Loans, Acceptance Reimbursement Loans, Letter of
Credit Reimbursement Obligations and Acceptance Reimbursement Obligations, and
per annum fees shall be calculated on the basis of a 365- (or 366, as the case
may be) day year for the actual days elapsed; otherwise interest shall be
calculated on the basis of a 360-day year for the actual days elapsed. The Agent
shall as soon as practicable notify the Company and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
(or on any other obligation accruing interest under the terms hereof) resulting
from a change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Agent shall as soon as practicable notify the Company and the
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Company
and the Lenders in the absence of manifest error.
6.7 Optional Prepayments. The Company may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice to the Agent prior to 11:00 A.M. on such date of prepayment,
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice the Agent
shall promptly notify each Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to subsection 6.14 and, in
the case of prepayments of the Term Loans only, accrued interest to such date on
the amount prepaid. Partial prepayments of the Term Loans shall be applied to
the installments of principal thereof in the inverse order of their scheduled
maturities. Amounts prepaid on account of the Term Loans may not be reborrowed.
Partial prepayments shall be in an aggregate principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. In the event any prepayment
pursuant to this subsection 6.7 of Eurodollar Loans is not made on the last day
of an Interest Period, the Company shall be obligated to reimburse the Lenders
in respect thereof pursuant to subsection 6.14.
6.8 Termination or Reduction of Revolving Credit Commitments;
Extension of Revolving Credit Commitments. The Company shall have the right,
upon not less than five Business Days' notice to the Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments, provided that no such termination or reduction
shall be permitted (i) to the extent that, after giving effect thereto and to
any prepayments of the Loans made on the effective date thereof, the Aggregate
Revolving Credit Extensions of Credit then outstanding would exceed the
Revolving Credit Commitments then in effect or (ii) prior to the Consummation
Date. Any such reduction shall be in an amount equal to $1,000,000 or a whole
multiple of $100,000 in excess thereof and shall reduce permanently the
Revolving Credit Commitments then in effect.
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6.9 Pro Rata Treatment and Payments. (a) Each borrowing by the
Company from the Lenders under the Revolving Credit Commitments, each payment by
the Company on account of any commitment fee hereunder and any reduction of the
Revolving Credit Commitments of the Lenders shall be made pro rata according to
the respective Revolving Credit Commitment Percentages of the Lenders. Each
payment (including each prepayment) by the Company on account of principal of
and interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by the Company hereunder and under
the Notes, whether on account of principal, interest, fees or otherwise, shall
be made without set off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Agent at the Agent's office
specified in subsection 13.2, in Dollars and in immediately available funds. The
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment shall be due on the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
(b) Unless the Agent shall have been notified in writing by any
Lender prior to a Borrowing Date that such Lender will not make the amount that
would constitute its Revolving Credit Commitment Percentage of the borrowing on
such date available to the Agent, the Agent may assume that such Lender has made
such amount available to the Agent on such Borrowing Date, and the Agent may, in
reliance upon such assumption, make available to the Company a corresponding
amount. If such amount is made available to the Agent on a date after such
Borrowing Date, such Lender shall pay to the Agent on demand an amount equal to
the product of (i) the daily average Federal Funds Effective Rate during such
period as quoted by the Agent, times (ii) the amount of such Lender's Revolving
Credit Commitment Percentage of such borrowing, times (iii) a fraction the
numerator of which is the number of days that have elapsed from and including
such Borrowing Date to the date on which such Lender's Revolving Credit
Commitment Percentage of such borrowing shall have become immediately available
to the Agent and the denominator of which is 360. A certificate of the Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's Revolving
Credit Commitment Percentage of such borrowing is not in fact made available to
the Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall be entitled to recover (without duplication) such amount with
interest thereon at the rate per annum applicable to ABR Loans hereunder, on
demand, from the Company.
6.10 Conversion and Continuation Options. (a) The Company may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election, provided
that in the event any such conversion of Eurodollar Loans is not made on the
last day of an Interest Period, the Company shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 6.14. The Company may elect from
time to time to convert ABR Loans to Eurodollar Loans by giving the Agent at
least three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period or Interest Periods therefor. Upon receipt of any such notice
the Agent shall
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promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans may be converted as provided herein, provided that (i) no
Loan may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the Agent has or the Required Lenders have
determined that such a conversion is not appropriate and (ii) no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Termination Date or the date final payment is due on the Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving notice to the Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in subsection 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Termination Date and provided, further, that if the Company shall fail to
give such notice or if such continuation is not permitted such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
6.11 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $500,000 in excess thereof. In no event shall there be more
than 15 Eurodollar Tranches outstanding at any time.
6.12 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Company and
the Lenders as soon as practicable thereafter. Unless the Company shall have
notified the Agent promptly upon receipt of such notice that if it wishes to
rescind or modify its request (x) any Eurodollar Loans requested to be made on
the first day of such Interest Period shall be made as ABR Loans and (y) any
Loans that were to have been converted on the first day of such Interest Period
to Eurodollar Loans shall be converted to or continued as ABR Loans. In
addition, in the case any such notice is given, any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been
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withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Company have the right to convert Loans to Eurodollar
Loans.
6.13 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Company shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 6.14.
6.14 Indemnity. The Company agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Company in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Company has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Company in making any prepayment of Eurodollar
Loans after the Company has given notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate setting forth the calculations as to any additional
amounts payable pursuant to this subsection 6.14 shall be submitted by an
officer of a Lender, through the Agent, to the Company and shall be conclusive
in the absence of manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Loans, the Notes, the Acceptance
Obligations, the Letter of Credit Obligations and all other amounts payable
hereunder.
6.15 Change of Lending Office. Each Lender agrees that if it makes
any demand for payment under subsection 6.16 or 6.17, or if any adoption or
change of the type described in subsection 6.13 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need
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for the Company to make payments under subsection 6.16 or 6.17, or would
eliminate or reduce the effect of any adoption or change described in subsection
6.13.
6.16 Taxes. (a) All payments shall be made by the Company under this
Agreement and the Notes free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding, in the case of the Agent and each Lender, net income and
franchise taxes (imposed in lieu of net income taxes) imposed on the Agent or
such Lender, as the case may be, as a result of a present or former connection
between the Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax, or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the Agent
or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder or under the Notes, the amounts so
payable to the Agent or such Lender shall be increased to the extent necessary
to yield to the Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes, provided, however, that the
Company shall not be required to increase any such amounts payable to any Lender
that is not organized under the laws of the United States of America or a state
thereof (a "Non-U.S. Lender") with respect to any taxes that are attributable to
such Non-U.S. Lender's failure to comply with the requirements of paragraph (b)
of this subsection. Whenever any Non-Excluded Taxes specified in the preceding
sentence are payable by the Company, as promptly as possible thereafter the
Company shall send to the Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official receipt
received by the Company showing payment thereof. If the Company fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary evidence,
the Company shall indemnify the Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Agent or any Lender as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the outstanding Notes,
Acceptance Obligations, Letter of Credit Obligations and all other amounts
payable hereunder.
(b) Each Non-U.S. Lender agrees that prior to the first Interest
Payment Date it will deliver to the Company and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, and (ii) an Internal Revenue Service Form
W-8 or W-9 or successor applicable form. Each such Lender also agrees to deliver
to the Company and the Agent two new, duly completed copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Company, and
such extensions or renewals thereof as may reasonably be requested by the
Company or the Agent.
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Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under the Agreement without deduction or
withholding of any United States federal income taxes, unless in any such case
an event (including, without limitation, any change in treaty, law or
regulations) has occurred after the Closing Date and prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the Company
that it is not capable of so receiving payments without any deduction or
withholding, and (ii) in the case of a Form W-8 or W-9, that it is entitled to a
complete exemption from United States backup withholding tax. Each Person that
shall become a Lender or a Participant pursuant to subsection 13.6 shall, upon
the effectiveness of the related transfer, be required to provide all of the
forms and statements required pursuant to this subsection, provided that in the
case of a Participant, such Participant shall furnish all such required forms
and statements to the Lender from which the related participation shall have
been purchased.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change the office in which it is booking its Loans)
consistent with its internal policy and legal and regulatory restrictions and so
long as such efforts would not be disadvantageous to it, as determined in its
sole discretion, to avoid or minimize any amounts which might otherwise be
payable pursuant to this subsection 6.16.
(d) If the Agent or any Lender receives a refund which in the good
faith judgment of such Lender is allocable to Non-Excluded Taxes paid by the
Company, it shall promptly pay such refund, together with any other amounts paid
by the Company in connection with such refunded Non-Excluded Taxes, to the
Company, net of all out-of-pocket expenses of such Lender incurred in obtaining
such refund, provided, however, that the Company agrees to promptly return such
refund to the Agent or the applicable Lender, as the case may be, if it receives
notice from the Agent or applicable Lender that such Agent or Lender is required
to repay such refund.
6.17 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the dates hereof:
(i) does or shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Eurodollar Loan,
any Letter of Credit Document or any Acceptance Document, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by subsection 6.16 and changes in the rate
of tax on the overall net income of such Lender);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan, assessment or similar requirement
against Letters of Credit issued by the Issuing Lender or participated in
by the Participating Lender or against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
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other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining Eurodollar Loans, issuing,
maintaining or participating in any Letter of Credit or creating or
participating in any Acceptance, or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Company shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such additional increased cost or reduced amount receivable. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify the Company, through the Agent, of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this paragraph, submitted by such Lender,
through the Agent, to the Company shall be conclusive in the absence of manifest
error.
(b) In the event that any Acceptance created hereunder is not, for
any reason, a bankers' acceptance with respect to which no reserves are required
to be maintained by the Issuing Lender or any Participating Lender under
Regulation D of the Board in effect from time to time or under any other law or
regulation (an "Eligible Acceptance"), the Company shall, upon demand by the
Agent, pay to the Agent for the account of the Lenders, such additional amounts
as are sufficient to indemnify each Lender against any additional costs, as
determined by the Lenders and notified in writing to the Agent, incurred by the
Lenders (including, without limitation, costs resulting from any Reserve
Determination, or reserve requirements, or premium liability to the Federal
Deposit Insurance Corporation, or a higher discount rate) resulting from such
Acceptance not constituting an Eligible Acceptance hereunder.
(c) In the event that after the date hereof, any Lender shall
determine that the adoption of any Requirement of Law, rule, regulation or
guideline regarding capital adequacy or any change in any Requirement of Law,
rule, regulation or guideline regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority, including, without limitation, the
issuance of any final rule, regulation or guideline, does or shall have the
effect of reducing the rate of return on such Lender's capital as a consequence
of its obligations hereunder (including, without limitation, the issuance of any
Letters of Credit and the creation and discount of Acceptances) to a level below
that which such Lender could have achieved but for such Requirement of Law,
rule, regulation or guideline, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Company (with a copy to the Agent) of a written request therefor,
the Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
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(d) The agreements in this subsection 6.17 shall survive the
termination of this Agreement and payment of the outstanding Notes, Acceptance
Obligations, Letter of Credit Obligations and all other amounts payable
hereunder.
6.18 Obligations Absolute. (a) The Company's payment obligations
under this Agreement 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 existence of any claim, set-off, defense or
other right which the Company may have at any time against the Issuing Lender,
any Participating Lender, any Lender or the Agent, or against any beneficiary of
any Letter of Credit or any holder of any Acceptance, or any transferee from any
such beneficiary or holder (or any Person for whom any such beneficiary, holder
or transferee may be acting), or against any other Person, whether in connection
with this Agreement, the transactions contemplated hereby, or any unrelated
transaction; provided, however, that this provision shall be deemed a waiver by
the Company of the assertion of a compulsory counterclaim only to the extent
permitted by applicable law. The Company assumes all risks of the acts or
omissions of the users of the Letters of Credit and Acceptances and all risks of
the misuse of the Letters of Credit and Acceptances. Neither the Issuing Lender,
nor any of its correspondents, nor any Participating Lender, nor the Agent shall
be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document specified in any of the Letter of Credit
Documents, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any of the Letters of Credit or any of 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) for failure of any draft to bear
any reference or adequate reference to any of the Letters of Credit, or failure
of anyone to note the amount of any draft on the reverse of any of the Letters
of Credit or to surrender or to take up any of the Letters of Credit or to send
forward any such document apart from drafts as required by the terms of any of
the Letters of Credit, each of which provisions, if contained in a Letter of
Credit itself, it is agreed, may be waived by the Issuing Lender; (iv) for
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) for any error, neglect, default, suspension or insolvency of any
correspondents of the Issuing Lender; (vi) for errors in translation or for
errors in interpretation of technical terms; (vii) for any loss or delay, in the
transmission or otherwise, of any such document or draft or of proceeds thereof;
or (viii) for any other circumstances whatsoever in making or failing to make
payment under a Letter of Credit, except only that the Company shall have a
claim against the Issuing Lender, and the Issuing Lender shall be liable to the
Company, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by the Issuing Lender's willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit comply with the
terms of such Letter of Credit. None of the foregoing shall affect, impair or
prevent the vesting of any of the rights or powers of the Issuing Lender, the
Agent or any of the Participating Lenders. The Issuing Lender or the Agent shall
have the right to transmit the terms of the Letter of Credit involved without
translating them.
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(b) In furtherance and extension and not in limitation of the
specific provisions in subsection 6.18(a), (i) any action taken or omitted by
the Issuing Lender, the Agent or by any of their respective correspondents under
or in connection with any of the Letters of Credit, if taken or omitted in good
faith, shall be binding upon the Company and shall not put the Issuing Lender,
the Agent or their respective correspondents under any resulting liability to
the Company and (ii) the Issuing Lender may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary; provided that if the
Issuing Lender shall receive written notification from both the beneficiary of a
Letter of Credit and the Company that sufficiently identifies (in the opinion of
the Issuing Lender) documents to be presented to the Issuing Lender which are
not to be honored, the Issuing Lender agrees that it will not honor such
documents.
6.19 Mandatory Prepayments and Commitment Reductions. (a) If, at any
time during the Commitment Period, the Aggregate Revolving Credit Extensions of
Credit exceed the aggregate Revolving Credit Commitments then in effect, the
Company shall, without notice or demand, immediately prepay the Revolving Credit
Loans in an aggregate principal amount equal to such excess, together with
interest accrued to the date of such payment or prepayment and any amounts
payable under subsection 6.14. Prepayments shall be applied, first to ABR Loans
and second, to Eurodollar Loans. To the extent that after giving effect to any
prepayment of the Revolving Credit Loans required by the first sentence of this
paragraph (a), the Aggregate Revolving Credit Extensions of Credit exceed the
aggregate Revolving Credit Commitments then in effect, the Company shall,
without notice or demand, immediately deposit in a cash collateral account with
the Agent, having terms and conditions satisfactory to the Agent, as cash
collateral security for the liability of the Issuing Lender (whether direct or
contingent) under any Letters of Credit or Acceptances then outstanding, an
aggregate amount equal to the amount by which the Aggregate Revolving Credit
Extensions of Credit exceed the aggregate Revolving Credit Commitments then in
effect.
(b) On the Consummation Date, (i) the aggregate Revolving Credit
Commitments shall be automatically reduced to an amount equal to $225,000,000,
(ii) in connection with such reduction the amounts of the respective Revolving
Credit Commitments of each Lender shall be rearranged such that after giving
effect to clause (i) above each Lender's (other than Chase's) Revolving Credit
Commitment shall equal the lesser of (x) such Lender's Pre-Consummation
Revolving Credit Commitment and (y) the product of (1) $175,000,000 multiplied
by (2) a fraction the numerator of which is such Lender's Pre-Consummation
Revolving Credit Commitment and the denominator of which is the aggregate amount
of the Pre-Consummation Revolving Credit Commitments of all Lenders other than
Chase and Chase's Revolving Credit Commitment shall equal the greater of (x)
$50,000,000 and (y) the excess, if any, of $225,000,000 over the aggregate
amount of Pre-Consummation Revolving Credit Commitments of all Lenders other
than Chase and (iii) the Company shall prepay all then outstanding Revolving
Credit Loans and simultaneously reborrow from all Lenders, ratably according to
their respective Revolving Credit Commitments after giving effect to the
rearrangements thereof effected pursuant to clause (ii) above, an amount equal
to
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the lesser of (x) $225,000,000 and (y) the aggregate amount of the Revolving
Credit Loans so prepaid.
(c) On the Non-Consummation Date (i) Chase's Revolving Credit
Commitment shall automatically increase by $75,000,000, (ii) the Company shall
prepay all the outstanding Revolving Credit Loans and simultaneously reborrow
from all Lenders ratably according to their respective Revolving Credit
Commitments (after giving effect to Chase's increase pursuant to clause (i)
above) an amount equal to the lesser of (x) $225,000,000 and (y) the aggregate
amount of the Revolving Credit Loans so prepaid, and (iii) that portion of the
outstanding principal amount of the Revolving Credit Loans (after giving effect
to clause (ii) above) that does not exceed $150,000,000 shall be converted to
Term Loans in accordance with subsection 3.1.
6.20 Cash Collateralization of Letter of Credit Obligations and
Acceptance Obligations. With respect to all Letters of Credit and Acceptances
that shall not have matured or been paid or with respect to which presentment
for honor shall not have occurred on or prior to the Termination Date, the
Company shall, on the Termination Date, deposit in a cash collateral account
maintained by the Agent (and under the exclusive dominion and control of the
Agent) an amount equal to the aggregate amount of the Letter of Credit
Obligations plus the aggregate amount of Acceptance Obligations for application
to payments of drafts drawn under Letters of Credit and to payment of
Acceptances at maturity, and the unused portion thereof after such application,
if any, shall be applied to repay other obligations of the Company hereunder or
under the Notes or any of the other Credit Documents, and after all Letters of
Credit have expired, all drafts and Acceptances have matured and been repaid and
all other obligations of the Company hereunder or any of the other Credit
Documents are paid in full, the balance, if any, shall be returned to the
Company.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Effectiveness. The agreement of each Lender to
make the initial Loan requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan, on the
Closing Date of the following conditions precedent:
(a) Notes. The Agent shall have received a Revolving Credit Note for
each Lender, each conforming to the requirements hereof and executed by a
duly authorized officer of the Company.
(b) Legal Opinions. The Agent shall have received, with a
counterpart for each Lender, an opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Company and the Guarantors, substantially in the
form of Exhibit F, and covering such other matters incident to the
transactions contemplated by this Agreement, the Notes and the other
Credit Documents as the Agent or any Lender may reasonably request.
(c) Collateral Security, Guarantees and Subordination Agreements.
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(i) The Agent shall have received, with a counterpart for
each Lender, each of the following Credit Documents satisfactory to
the Agent, duly executed and delivered by the parties thereto and
each of which shall be in full force and effect:
(A) the Guarantee and Collateral Agreement; and
(B) the PRLE $24,000,000 Subordination Agreement.
(d) Closing Certificates. The Agent shall have received, with a
counterpart for each Lender, (i) a closing certificate of the Company,
dated the Closing Date, substantially in the form of Exhibit G, executed
by a duly authorized officer of the Company and (ii) a closing certificate
of each Guarantor, dated the Closing Date, substantially in the form of
Exhibit H, executed by a duly authorized officer of such Guarantor, in
each case with appropriate attachments thereto.
(e) Evidence of Insurance. The Agent shall have received evidence,
satisfactory to it, that the Company has obtained the policies of
insurance required pursuant to subsection 9.4 and by the Security
Documents.
(f) Recordings and Filings. Any documents (including, without
limitation, financing statements and termination statements) required to
be filed, registered or recorded under any of the Security Documents in
order to create, in favor of the Agent for the benefit of the Lenders, a
perfected first-priority security interest in the collateral thereunder
with respect to which a security interest may be perfected by a filing
under the Uniform Commercial Code or other applicable law shall be duly
executed and in form to be properly filed, registered or recorded in each
office in each jurisdiction (other than Puerto Rico) required in order to
create in favor of the Agent for the benefit of the Lenders, a perfected
Lien on the respective collateral described in any Security Document in
the jurisdictions listed on Schedule 7.1.
(g) Lien Searches. The Agent shall have received the results of a
recent search, by a Person satisfactory to the Agent, of the Uniform
Commercial Code filings which may have been filed with respect to personal
property of the Company and its Subsidiaries in the state and local filing
offices in each of the states indicated on Schedule 7.1.
(h) Other Documents. The Agent shall have received, with a copy for
each Lender, such other certificates, opinions, documents and instruments
relating to the transactions contemplated hereby as may have been
reasonably requested by any Lender.
(i) Corporate Proceedings of the Company. The Agent shall have
received a copy of the resolutions, in form and substance satisfactory to
the Agent, of the Board of Directors of the Company authorizing (i) the
execution, delivery and performance of the Credit Documents to which the
Company is a party and (ii) the granting by it of
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the Liens created pursuant to the Security Documents to which the Company
is a party, certified by the Secretary or an Assistant Secretary of the
Company as of the Closing Date, which certificate shall be in form and
substance satisfactory to the Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
(j) Corporate Documents. The Agent shall have received true and
complete copies of the certificate of incorporation and by-laws of the
Company, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the Company.
(k) Additional Matters. All corporate and other proceedings and all
other documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and legal matters in
connection with the transactions contemplated by this Agreement, the Notes
and the other Credit Documents shall be satisfactory in form and substance
to the Agent.
(l) Fees. The Agent shall have received the fees required to be paid
on the Closing Date pursuant to the fee letter referred to in subsection
6.2 hereof and the fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to the Agent.
(m) Consolidated Net Worth. The Agent shall have received a
certificate of a Responsible Officer of the Company (together with
supporting financial statements) certifying that the Consolidated Net
Worth of the Company as of the Closing Date is at least $150,000,000.
(n) Reorganization. The Agent shall have received evidence in form
and substance reasonably satisfactory to it that the reorganization
described in Form S-1 shall have occurred.
7.2 Conditions to All Extensions of Credit. The obligation of each
Lender to make any Loan and the obligation of the Issuing Lender to issue any
Letter of Credit or create any Acceptance (including the Revolving Credit Loan
made or initial Letter of Credit or Acceptance issued hereunder) is subject to
the satisfaction of the following conditions precedent on the date such Loan is
made or such Letter of Credit or Acceptance is issued or created:
(a) Payments. All applicable fees and commissions and any other
amounts payable pursuant to this Agreement shall have been paid in full.
(b) Representations and Warranties. The respective representations
and warranties made by each of the Company and the other Credit Parties in
the Credit Documents to which each is a party or which are contained in
any certificate, document or financial or other statement furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of such date as if made on and as of such date
(other than (i) such
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representations as are made as of a specific earlier date, in which case
such representations and warranties shall be true and correct in all
material respects as of such earlier date and (ii) as previously notified
to the Agent and waived by the Required Lenders).
(c) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Loans to be made, the Letters of Credit to be issued or the
Acceptances to be created and discounted, on such date.
(d) Delivery of Documents. All documents required or otherwise
requested in connection with the issuance of any Letters of Credit or the
creation of any Acceptances hereunder shall have been delivered to the
Issuing Lender, the Participating Lenders, the Lenders or the Agent, as
the case may be, completed in a manner in form and substance satisfactory
to the party to whom such documents are delivered.
Each borrowing by the Company hereunder and each issuance of a Letter of Credit
or creation of an Acceptance shall constitute a representation and warranty by
the Company as of the date of such borrowing or issuance that the conditions in
clauses (b) and (c) of this subsection 7.2 have been satisfied.
SECTION 8. REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Issuing Lender and the Lenders to enter
into this Agreement and to make the Loans, issue and participate in the Letters
of Credit and create and participate in the Acceptances as herein provided, the
Company hereby represents and warrants to the Agent, the Issuing Lender and to
each Lender that:
8.1 Financial Condition. (a) The combined balance sheets of ▇▇▇▇
▇▇▇▇▇ Lauren L.P. and its Subsidiaries, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Enterprises, L.P., The
▇▇▇▇▇ Lauren Womenswear Company, L.P. and its Subsidiary and Polo Retail
Corporation and its Subsidiaries (all of the foregoing, collectively, the "Polo
Company") as at March 29, 1997 and the related combined statements of income and
retained earnings and of changes in financial position for the fiscal year ended
on such date, reported on by Deloitte & Touche LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the financial condition of the Polo Company as at such date, and the
results of Polo Company's operations and changes in financial position for the
fiscal year then ended. All such financial statements, including the related
schedules and notes to all such financial statements, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as concurred in by such accountants or Responsible Officers, as the case
may be, and as disclosed therein). No Polo Company had, at the date of the most
recent balance sheet referred to above, any material Guarantee Obligation,
contingent liabilities or liability for taxes, long-term lease or unusual
forward or long-term commitment, which is not reflected in the foregoing
statements or in the notes thereto (and, in the case of such lease or
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commitment, which is required in accordance with GAAP to be reflected in such
statements or notes) or which has not otherwise been disclosed to the Lenders in
writing.
(b) The consolidated pro forma balance sheet of the Polo Company and
its Subsidiaries as at March 29, 1997, a copy of which is set forth in the Form
S-1, adjusted to give effect to the Initial Public Offering, is complete and
correct and presents fairly on a pro forma basis the financial condition of the
Company and its Subsidiaries as at such date.
8.2 No Change. Since March 29, 1997 (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (until the Closing Date) there has been no material
adverse change in the business, operations, property or financial or other
condition of the Polo Company, taken as a whole; and (b) prior to the Closing
Date, except as described in the Form S-1 no dividends or other distributions
have been declared, paid or made upon any shares of Capital Stock of the Company
or any of its Subsidiaries or any of the Polo Companies and neither the Company
nor any of its Subsidiaries nor any of the Polo Companies has redeemed, retired,
purchased or otherwise acquired for value any of its own Capital Stock.
8.3 Existence; Compliance with Law. Each Credit Party (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate or partnership, as the
case may be, power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and in which it proposes to be engaged
after the Closing Date, (c) is duly qualified as a foreign corporation or
partnership, as the case may be, and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to so
qualify could not have a Material Adverse Effect and (d) is in compliance with
all Requirements of Law, except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
8.4 Power; Authorization; Enforceable Obligations. (a) The Company
has the corporate power and authority and the legal right to execute, deliver
and perform the Credit Documents to which it is a party and to borrow hereunder
and has taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and to authorize the execution,
delivery and performance of the Credit Documents to which it is a party. Each
other Credit Party has the power and authority and the legal right to execute,
deliver and perform the Credit Documents to which it is a party and has taken
all necessary action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party.
(b) No consent or authorization of, filing with or other act by or
in respect of any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents, except for
those which have been duly obtained or made and are in full force and effect.
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(c) This Agreement has been and each other Credit Document has been
or will be (as the case may be) duly executed and delivered on behalf of each
Credit Party thereto, and each constitutes or will constitute (as the case may
be) a legal, valid and binding obligation of such Credit Party enforceable
against such Credit Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally.
8.5 No Legal Bar. The execution, delivery and performance of the
Credit Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any applicable usury laws or any other Requirement of Law
applicable to, or any Contractual Obligation of, any Credit Party, and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, other than the Liens created by the Security
Documents.
8.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Company, threatened by or against any Credit Party
or any of its Subsidiaries or against any of its or their respective properties
or revenues (i) with respect to any of the Credit Documents to which any of them
is a party or any of the transactions contemplated hereby or thereby, or (ii)
which could reasonably be expected to have a Material Adverse Effect. Schedule
8.6 lists all litigation pending on the date hereof against the Company or any
of its Subsidiaries in which the amount in controversy or potential liability of
the Company or any of its Subsidiaries exceeds $5,000,000 and is not covered by
insurance.
8.7 No Default. Neither the Company nor any other Credit Party is in
default under or with respect to any Contractual Obligation or any order, award
or decree of any Governmental Authority or arbitrator binding upon it or its
properties in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
8.8 Ownership of Property; Liens. Except as set forth in Schedule
8.8, each Credit Party has good record and marketable title in fee simple to or
valid leasehold interests in all its real property that is material to the
operation of its business, and good title to all its other property, and none of
such property is subject to any Lien, except as permitted by subsection 10.5.
8.9 No Burdensome Restrictions. No Contractual Obligation of the
Company or any other Credit Party and no Requirement of Law could reasonably be
expected to have a Material Adverse Effect.
8.10 Taxes. Each Credit Party has filed or caused to be filed all
material tax returns which to the knowledge the Company are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other material taxes,
fees or other charges imposed on it or any of its
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property by any Governmental Authority (other than those the amount or validity
of which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided on
the books of such Credit Party), and no material tax Liens have been filed and,
to the knowledge of the Company, no material claims are being asserted with
respect to any such taxes, fees or other charges.
8.11 Federal Regulations. No part of the proceeds of any Loans
hereunder will be used, directly or indirectly, for "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation G or Regulation U of the Board as now and from time to time
hereafter in effect or for any purpose which violates, or which would be
inconsistent with, the provisions of the Regulations of such Board. If requested
by the Agent or any Lender, the Company will furnish to the Agent and each
Lender a statement to the foregoing effect in conformity with the requirements
of FR Form G-1 or FR Form U-1 referred to in said Regulation G or Regulation U,
as the case may be.
8.12 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 or
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan,
and each Plan and, to the Company's knowledge, Multiemployer Plan, has complied,
and has been administered in compliance, in all material respects with the
applicable provisions of ERISA and the Code. No termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period. The present value of all accrued benefits under each
Single Employer Plan maintained by the Company or any Commonly Controlled Entity
(based on those assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto, exceed the value of the assets of such
Plan allocable to such accrued benefits. Except as disclosed on Schedule 8.12,
neither the Company nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, and the liability to which the
Company or any Commonly Controlled Entity would become subject under ERISA if
the Company or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made is not in excess of
$5,000,000. To the knowledge of the Company, no such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Company and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $5,000,000.
8.13 Investment Company Act; Other Regulations. No Credit Party is
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Company is not subject to regulation under any Federal or state statute or
regulation (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.
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8.14 Subsidiaries. Schedule 8.14 sets forth as of the date hereof
the name, and, where applicable, the jurisdiction of organization, number of
authorized and issued shares and ownership of each Subsidiary of the Company and
each general partner of each Credit Party which is a partnership.
8.15 Chief Executive Office. The Company's chief executive office on
the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
8.16 General Partners' Existence; Compliance with Law. The corporate
general partner of each Credit Party that is a partnership (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the power and authority and the legal
right to own and operate its property, to lease the property it operates and to
conduct the business in which it is currently engaged and in which it proposes
to be engaged after the Closing Date, (c) is duly qualified as a foreign
corporation or partnership, as the case may be, and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to so qualify could not have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.17 General Partners' Power; Authorization; Enforceable
Obligations. The general partner of any Credit Party that is a partnership has
the power and authority and the legal right to make, deliver and perform on
behalf of the Credit Party of which it is a general partner, and thereby legally
bind such Credit Party to perform, (a) in the case of the Company, this
Agreement, and has taken all necessary action to authorize the borrowings by the
Company on the terms and conditions of this Agreement and any Notes and (b) in
the case of each such Credit Party (including the Company), the Credit Documents
to which it is a party and has taken all necessary action to authorize the
execution and delivery on behalf of such Credit Party of, and thereby legally
bind such Credit Party to perform, this Agreement, the Notes and the other
Credit Documents to which such Credit Party is a party. This Agreement has been,
and each of the other Credit Documents has been or will be (as the case may be),
duly executed and delivered by each such general partner on behalf of each
Credit Party which is a party thereto.
8.18 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of any Credit Party or any of its
Affiliates to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of any Credit Party or any of
its Affiliates to the Agent or any Lender will be, true and accurate in all
material respects, taken as a whole, on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time.
8.19 Environmental Matters.
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(a) To the best knowledge of the Company, the facilities and
properties owned, leased or operated by the Company or any of its
Subsidiaries (the "Properties") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) could reasonably be expected to give rise to
liability to the Company or any of its Subsidiaries under, any
Environmental Law which would have a Material Adverse Effect.
(b) To the best knowledge of the Company, the Properties and all
operations at the Properties are in compliance, and have in the last five
years been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Company or any of its
Subsidiaries (the "Business") which could materially interfere with the
continued operation of the Properties.
(c) To the best knowledge of the Company, neither the Company nor
any of its Subsidiaries has received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
any of the Properties or the Business, nor does the Company have knowledge
or reason to believe that any such notice will be received or is being
threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could
reasonably be expected to have a Material Adverse Effect.
(d) To the best knowledge of the Company, Materials of Environmental
Concern have not been transported or disposed of from the Properties in
violation of, or in a manner or to a location which could reasonably be
expected to give rise to liability under, any Environmental Law, nor have
any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under,
any applicable Environmental Law except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, could
not reasonably be expected to have a Material Adverse Effect.
(e) To the best knowledge of the Company, no judicial proceeding or
governmental or administrative action is pending or, to the knowledge of
the Company, threatened, under any Environmental Law to which the Company
or any Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except
insofar as such proceeding, action, decree, order or other requirement, or
any aggregation thereof, could not reasonably be expected to have a
Material Adverse Effect.
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(f) To the best knowledge of the Company, there has been no release
or threat of release of Materials of Environmental Concern at or from the
Properties, or arising from or related to the operations of the Company or
any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner
that could reasonably give rise to liability under Environmental Laws
except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, could not reasonably be expected to
have a Material Adverse Effect.
8.20 Material Contracts. The Exhibit Index to the Form S-1 (as
amended through the date hereof) sets forth, as of the date hereof, all material
contracts of the Company and its Subsidiaries required to be filed pursuant to
item 601 of Regulation S-K.
SECTION 9. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Note, any Letter of Credit Obligation or any
Acceptance Obligation remains outstanding and unpaid or any other amount is
owing to any Lender or the Agent hereunder, the Company shall and shall cause
each of its Subsidiaries to:
9.1 Financial Statements and Information. Deliver to each Lender:
(a) as soon as available and, in any event, within 90 days following
the end of each Fiscal Year, (i) for any Fiscal Year ending prior to the
Consummation Date, consolidated and consolidating balance sheets of the
Company and its Subsidiaries, as of the end of such Fiscal Year, and the
related consolidated (and, as to statements of income, consolidating)
statements of income and retained earnings and statements of cash flows
for such Fiscal Year, in each case setting forth in comparative form the
figures for the previous comparable period, all in reasonable detail and
as reported to the holders of Capital Stock of the Company, and reported
upon by Deloitte & Touche LLP or other independent certified public
accountants of national standing approved by the Required Lenders (which
approval shall not be unreasonably withheld) (the "Accountants"), which
report shall state that such financial statements have been prepared in
accordance with GAAP applied consistently with prior periods; and (ii) for
any Fiscal Year ending after the Consummation Date, the Annual Report of
the Company on Form 10-K for such Fiscal Year signed by a Responsible
Officer of the Company;
(b) as soon as available and, in any event, within 75 days after the
end of each Fiscal Quarter of the Company, (i) for any Fiscal Quarter of
the Company ending prior to the Consummation Date, (x) consolidated and
consolidating balance sheets of the Company and its Subsidiaries as of the
end of such Fiscal Quarter and the related consolidated (and, as to
statements of income, consolidating) statements of income, retained
earnings and cash flows for the portion of the Company's Fiscal Year ended
at the end of such Fiscal Quarter, and (y) the information described in
Section II of Schedule 9.1, all in reasonable detail and certified by a
Responsible Officer of the
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Company as presenting fairly, in accordance with GAAP applied (except as
specifically set forth therein and approved by such Responsible Officer)
consistently with such prior periods, the information contained therein,
subject to changes resulting from normal year-end audit adjustments and
setting forth comparable figures for the same accounting period in the
preceding Fiscal Year; and (ii) for any Fiscal Quarter of the Company
ending after the Consummation Date, the Quarterly Report of the Company on
Form 10-Q for the relevant Fiscal Quarter signed by a Responsible Officer
of the Company;
(c) prior to the Consummation Date, promptly upon receipt thereof,
copies of all reports submitted to the Company, any Guarantor or any other
Credit Party by the Accountants in connection with each annual, interim or
special audit of the books of the Company, any Guarantor or any such
Credit Party made by the Accountants, including, without limitation, the
comment letter submitted by the Accountants to management in connection
with their annual audit;
(d) concurrently with the delivery of each set of the financial
statements referred to in paragraph (a) above, a certificate of the
Accountants certifying such financial statements, stating that in making
the examination necessary therefor no knowledge was obtained of any
Default or Event of Default (except as specified in such certificate);
(e) concurrently with the delivery of each set of the financial
statements referred to in paragraphs (a) and (b) above, a certificate of a
Responsible Officer of the Company (i) stating that such Officer has
obtained no knowledge of any Default or Event of Default (except as
specified in such certificate) and (ii) showing in reasonable detail the
calculations supporting such statement in respect of subsections 10.1,
10.2, 10.3, 10.4, 10.5, 10.8, 10.10 and 10.11 and (iii) for each fiscal
period ending prior to the Consummation Date, describing any litigation or
proceeding affecting the Company, the Guarantors or any other Credit Party
in which the amount involved is $2,000,000 or more and not covered by
insurance or in which injunctive or similar relief is sought involving
potential damages of $2,000,000 or more;
(f) forthwith upon the occurrence of any Default or Event of
Default, a certificate of a Responsible Officer of the Company setting
forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;
(g) immediately upon any authorized officer of the Company or any
Guarantor or of any Commonly Controlled Entity obtaining knowledge of the
occurrence of any (i) "reportable event", as such term is defined in
Section 4043 of ERISA, or (ii) "prohibited transaction", as such term is
defined in Section 4975 of the Code, in connection with any Plan or any
trust created thereunder, a written notice specifying the nature thereof,
what action the Company or such Guarantor has taken, is taking or proposes
to take with respect thereto, and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect
thereto, provided that, with respect to the occurrence of any "reportable
event" as to which the PBGC has waived
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the 30-day reporting requirement, such written notice need be given only
at the time notice is given to the PBGC;
(h) from time to time, such additional information regarding the
business, affairs or financial or other position of the Company, any
Guarantor and any other Credit Party as any Lender may reasonably request,
such information to be provided as soon as practicable after such request;
(i) for each Fiscal Year ending prior to the Consummation Date,
promptly upon completion but, in any event within 45 days after the end of
such Fiscal Year, a copy of the operating budget and projections by the
Company of cash flow of the Company and its Subsidiaries taken as a whole
and of the Company and each Subsidiary individually for the next
succeeding Fiscal Year of the Company, such operating budget and
projections of cash flow to be accompanied by a certificate of a
Responsible Officer to the effect that such operating budget and
projections of cash flow have been prepared on the basis of sound
financial planning practice and that such Responsible Officer has no
reason to believe they are incorrect or misleading in any material
respect;
(j) within five days after the same are sent, copies of all
financial statements and reports which the Company and/or its Subsidiaries
sends to its public holders of Capital Stock or debtholders, and within
five days after the same are filed, copies of all financial statements and
reports which the Company may make to, or file with, the SEC or any
successor or analogous Governmental Authority; and
(k) for any fiscal month of the Company ending prior to the
Consummation Date, as soon as available, but in any event within 30 days
following the end of such fiscal month of the Company, a certificate of a
Responsible Officer setting forth the information described in Section I
of Schedule 9.1 and certifying that such information is, to the best
knowledge of such Responsible Officer, true and correct in all respects.
9.2 Corporate Existence; Nature of Business. Except as otherwise
permitted under this Agreement, preserve and maintain its partnership or
corporate or other (as the case may be) existence and all of its material
rights, privileges and franchises; comply with all Requirements of Law, except
to the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; and pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its property prior to the date on which
penalties attach thereto, unless the failure to pay and discharge any such
taxes, assessments or governmental charges or levies could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect,
except for any such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained; not discontinue, and will actively
engage in and continue to pursue, the current business of the Company and its
Subsidiaries, taken as a whole, and no other business which is not a Related
Line of Business, provided that nothing in this subsection shall be deemed to
prevent the Company or any Subsidiary from making an Investment permitted by
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subsection 10.8(g) in the Capital Stock of, or any assets constituting a
business unit of, any other Person (including the Company or any of its
Subsidiaries) which is engaged in a business that is not a Related Line of
Business.
9.3 Payment of Obligations. Pay, discharge or otherwise satisfy when
the same shall become due, all its obligations of whatever nature, except when
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company or the appropriate Subsidiary, as the
case may be, in accordance with GAAP and, except to the extent that failure to
comply with this subsection 9.3 results from a good faith error (which shall be
corrected promptly following the Company becoming aware of such error) and such
failure could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.4 Maintenance of Properties; Insurance. Maintain or cause to be
maintained in good working order and condition, ordinary wear and tear excepted,
all material properties used in the businesses of the Company and its
Subsidiaries, provided that the Company and its Subsidiaries, may in accordance
with good business practices, make determinations with respect to the timeliness
of necessary repairs. The Company and its Subsidiaries will maintain or cause to
be maintained such insurance with respect to their respective properties and
businesses as a prudent Person engaged in the same or similar business of a
similar size and otherwise similarly situated would maintain.
9.5 Maintain Trademarks. Take all action reasonably necessary or
desirable in accordance with good business practices to (a) maintain in full
force and effect such domestic and foreign patents, trademarks, service marks,
trade names, copyrights and licenses and such material rights with respect to
the foregoing, in each case necessary for the conduct of its business as now
conducted (collectively, the "Trademarks") and (b) protect all domestic and
foreign Trademarks against infringement by third parties.
9.6 Inspection; Books and Records. Keep proper books of records and
accounts in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities. The Company and each other Credit Party will
permit on an annual basis at the request of the Agent (or at any time and from
time to time after the occurrence and during the continuance of a Default or
Event of Default) any authorized representatives designated by the Lenders to
visit and inspect any of the properties of the Company and such Credit Party,
all during reasonable business hours, including their respective books of
accounts, and to make copies and take extracts therefrom, and to analyze such
data of the Company and such Credit Party, and to discuss their respective
affairs, finances and accounts with their respective officers and the
Accountants (and by this provision the Company and each Credit Party authorize
the Accountants to discuss with such representatives the affairs, finances and
accounts of the Company and any such Credit Party, whether or not a
representative of the Company or such Credit Party is present). The Company
shall reimburse the Lenders for all reasonable costs and expenses incurred by
such Lenders in connection with the audit and verification activities
contemplated by the immediately preceding sentence. So long as no Default or
Event of Default shall have occurred and be continuing, the Agent shall, prior
to
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commencing any such verification activities, provide an estimate to the Company
of the costs thereof, but any failure to give such an estimate shall not impair
any of the rights of the Agent and the Lenders under this subsection.
9.7 Notices. Promptly give notice to the Agent and each Lender:
(a) of the occurrence of any Default or Event of Default (including,
without limitation, any event referred to in Section 11(j));
(b) of any (i) default or event of default under any Contractual
Obligation of the Company or any other Credit Party or (ii) litigation,
investigation (known to the Company) or proceeding which may exist at any
time between the Company or any other Credit Party and any Governmental
Authority or Person, which in either case, if not cured or if adversely
determined, as the case may be, would have a Material Adverse Effect;
(c) as soon as possible and in any event within five days after the
Company knows or has reason to know of the following events: (i) the
occurrence of any Reportable Event with respect to any Plan, or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by PBGC, the Company or any Commonly Controlled Entity,
or any Multiemployer Plan with respect to the withdrawal from,
Reorganization or Insolvency of, any Multiemployer Plan, or the
terminating of any Plan; and
(d) of a material adverse change in the business, operations,
property or financial or other condition of the Company and its
Subsidiaries taken as a whole.
Each notice pursuant to this subsection 9.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company proposes to take with respect
thereto.
9.8 Maintenance of Liens of the Security Documents. Promptly, upon
the reasonable request of any Lender, at the Company's expense, execute,
acknowledge and deliver, or cause the execution, acknowledgement and delivery
of, and thereafter register, file or record, or cause to be registered, filed or
recorded, in an appropriate governmental office, any document or instrument
supplemental to or confirmatory of the Security Documents or otherwise necessary
or desirable for the continued validity, perfection and priority of the Liens on
the collateral covered thereby.
9.9 Guarantee and Collateral Agreement Supplement. Each Domestic
Subsidiary that is or becomes a "significant subsidiary" (as that term is
defined in Regulation S-X (part 210 of the Code of Federal Regulations)) shall
promptly execute and deliver to the Agent (with a counterpart for each Lender) a
supplement to the Guarantee and Collateral Agreement pursuant to which such
Subsidiary shall become a party thereto as a Guarantor, together with such other
documents and opinions as the Lenders shall reasonably request.
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9.10 Use of Proceeds. The proceeds of the Loans shall be used by the
Company solely for the purposes set forth in subsection 2.4. No portion of the
proceeds of any Loan shall be used by the Company in any manner which might
cause the borrowing or the application of such proceeds to violate Regulation G,
T, U or X of the Board or any other regulation of such Board.
9.11 Observance of Agreements. Observe and perform all the terms and
conditions of all material agreements to which any of them or any other Credit
Party is party and shall diligently protect and enforce their respective rights
under all such agreements in a manner consistent with prudent business judgment.
SECTION 10. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Note, any Letter of Credit Obligation or any
Acceptance Obligation remains outstanding and unpaid or any other amount is
owing hereunder to any Lender or the Agent:
10.1 Consolidated Net Worth. (a) The Company will not permit
Consolidated Net Worth as at the end of any Fiscal Quarter ending after the
Closing Date and after the consummation of the Initial Public Offering to be
less than $300,000,000.
(b) Prior to the consummation of the Initial Public Offering or in
the event that the Initial Public Offering is not consummated on or before the
thirtieth day following the Closing Date, the Company will not (i) permit
Consolidated Net Worth as of the last day of the second Fiscal Quarter of Fiscal
Year 1998 to be less than $165,000,000, (ii) commencing with the last day of the
third Fiscal Quarter of Fiscal Year 1998, and any Fiscal Quarter thereafter,
permit Consolidated Net Worth to be less than the sum of (a) $165,000,000 and
(b) the aggregate of the Annual Increases for each Fiscal Year that shall have
ended during the period from the Closing Date through the date as at which
compliance with this covenant is being determined.
10.2 Fixed Charge Coverage Ratio. If the Initial Public Offering is
not consummated on or before the thirtieth day following the Closing Date, the
Company will not permit, for the period of three consecutive fiscal quarters
ending September 30, 1997 and for any period of four consecutive Fiscal Quarters
ending thereafter, the Consolidated Fixed Charges Coverage Ratio to be less than
1.25 : 1.00.
10.3 Consolidated Indebtedness Ratio. The Company will not permit
(a) for the period of three consecutive Fiscal Quarters ending September 30,
1997, the Consolidated Indebtedness Ratio to be greater than 2.75 : 1.00, and
(b) for any period of four consecutive Fiscal Quarters ending during any Test
Period set forth below after September 30, 1997, the Consolidated Indebtedness
Ratio to be greater than the ratio set forth opposite such Test Period:
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Test Period Ratio
----------- -----
October 1, 1997 through December 31, 1997 2.75 : 1
January 1, 1998 through March 30, 1999 2.50 : 1
March 31, 1999 to Termination Date 2.25 : 1
10.4 Limitation on Indebtedness. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness except:
(a) Indebtedness not secured by any Lien in an aggregate principal
amount not to exceed $200,000,000, provided that (i) no part of the
principal of such Indebtedness (except in the case of any such
Indebtedness in an aggregate principal amount, when added to the aggregate
principal amount of Indebtedness then outstanding as permitted by
subsection 10.4(g), not greater than $50,000,000) is stated to be payable
or is required to be paid (whether by way of mandatory sinking fund,
mandatory redemption, mandatory prepayment or otherwise) prior to the
Termination Date, (ii) the material terms, conditions and restrictive
covenants contained in the instrument governing such Indebtedness, taken
as a whole, are no less favorable to the Company or any of its
Subsidiaries, as the case may be, than the terms, conditions and
restrictive covenants contained in this Agreement and (iii) no Default or
Event of Default shall have occurred after giving effect to the incurrence
of such Indebtedness;
(b) Indebtedness secured by Liens permitted by subsection 10.5(g) in
an aggregate amount at any one time outstanding not in excess of the
amount set forth in said subsection;
(c) Indebtedness existing on the Closing Date, not otherwise
permitted under this Agreement, described in Schedule 10.4 hereto, and any
refinancings, refundings, renewals or extensions thereof on terms no less
favorable (taken as a whole) to the Company or such Subsidiary, as the
case may be, provided that the principal amount of such Indebtedness is
not increased;
(d) Subordinated Indebtedness;
(e) Indebtedness incurred under this Agreement;
(f) Indebtedness of the Company to its Subsidiaries or Indebtedness
of any Subsidiary of the Company to the Company or any of its
Subsidiaries; and
(g) Indebtedness of any Person which becomes a Subsidiary of the
Company after the date hereof (provided that (i) such Indebtedness was in
existence on the date such Person became a Subsidiary, (ii) such
Indebtedness was not created, incurred or assumed in anticipation thereof,
and (iii) the aggregate principal amount of such Indebtedness at any one
time outstanding, when added to the aggregate principal amount of
Indebtedness then outstanding as permitted by the parenthetical phrase
included in clause (i) of the proviso to subsection 10.4(a), shall not be
in excess of
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$50,000,000) and any Indebtedness resulting from the refinancing of any
such Indebtedness.
For purposes of this subsection 10.4, any Person becoming a
Subsidiary of the Company after the date of this Agreement shall be deemed to
have incurred all of its then outstanding Indebtedness at the time it becomes a
Subsidiary.
10.5 Limitation on Liens. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or acquire any property pursuant to any
conditional sale, lease purchase or other title retention agreement, except:
(a) Liens created pursuant to the Security Documents or securing the
Notes, the Letter of Credit Obligations, the Acceptance Obligations and
all amendments, extensions, renewals and substitutions thereof;
(b) Liens existing on the Closing Date, not otherwise permitted
under this Agreement, described in Schedule 10.5 hereto, securing the
Indebtedness described in such Schedule, and extensions, renewals and
substitutions thereof, provided that the principal amount so secured is
not increased and the Lien is not extended to any other property;
(c) Liens for taxes and duties, assessments, governmental charges or
levies not yet due or which are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
Company and its Subsidiaries in accordance with GAAP;
(d) Liens incurred in the ordinary course of and incidental to the
conduct of the business of the Company and its Subsidiaries or the
ownership of its property, including, without limitation, Liens incurred
in connection with the sale, lease, transfer or other disposition of any
credit card receivable of the Company or any of its Subsidiaries and Liens
for workmen's compensation, bids, tenders, lessors, vendors, bank
deposits, trade letters of credit and trust receipts, which were not
incurred in connection with the borrowing of money and which do not in the
aggregate materially detract from the value of the property of the Company
and its Subsidiaries, taken as a whole, or materially impair the use
thereof in the operation of the business of the Company and its
Subsidiaries;
(e) Liens imposed by law in favor of mechanics, repairmen, carriers
or warehousemen for sums not yet due or which are being contested in good
faith and by appropriate proceedings promptly initiated and diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the Company and its Subsidiaries in accordance with GAAP;
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(f) Liens existing on property or assets of a Person immediately
prior to its becoming a Subsidiary of the Company and which Lien was not
created, incurred or assumed in anticipation thereof, provided that such
Lien shall at all times be confined solely to the property subject thereto
at the time such Person becomes a Subsidiary of the Company;
(g) Liens securing Indebtedness of the Company and its Subsidiaries
(and any refinancings, refundings, renewals or extensions thereof on terms
no less favorable (taken as a whole) to the Company or such Subsidiary, as
the case may be, provided that the principal amount of such Indebtedness
is not increased) incurred after the Closing Date solely for the purpose
of financing the acquisition by the Company or any of its Subsidiaries of
real or personal property or solely for the purpose of financing the cost
of construction or improvements to or on real or personal property, or
Liens existing on such property so acquired at the time of acquisition
thereof, provided that:
(i) each such Lien shall at all times be confined solely to
the property so acquired;
(ii) the principal amount of Indebtedness secured by each such
Lien shall at no time exceed the lesser of (A) the cost to such
Person of the property subject thereto or (B) the fair value of such
property (as determined in good faith by the Board of Directors of
such Person) at the time of the acquisition thereof or completion of
construction thereon.
(h) Liens solely constituting the right of any other Person to a
share of any licensing royalties (pursuant to a licensing agreement or
other related agreement entered into by the Company or any of its
Subsidiaries with such Person in the ordinary course of the Company's or
such Subsidiary's business) otherwise payable to the Company or any of its
Subsidiaries, provided that such right shall have been conveyed to such
Person for consideration received by the Company or such Subsidiary on an
arm's-length basis; and
(i) in the case of real property owned by the Company or any of its
Subsidiaries, easements, rights of way, restrictive covenants,
encroachments and other non-monetary Liens which Liens would not have,
individually or in the aggregate, a Material Adverse Effect.
For purposes of this subsection 10.5, any Person becoming a Subsidiary of the
Company after the date hereof shall be deemed to have incurred all of its then
outstanding Liens at the time it becomes a Subsidiary of the Company, and any
Person extending, renewing or refunding any Indebtedness secured by any Lien
shall be deemed to have incurred such Lien at the time of such extension,
renewal or refunding.
10.6 Sale of Assets. Except in the ordinary course of business
(including the sale, lease, transfer or other disposition of any credit card
receivable of the Company or any
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of its Subsidiaries), the Company will not, nor will it permit any of its
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its assets
or sell, transfer or otherwise dispose of any of the Capital Stock of any of its
Subsidiaries, provided that, so long as no Default or Event of Default shall
have occurred and be continuing or would result therefrom, no such disposition
of assets or Capital Stock out of the ordinary course of business shall
constitute a violation of this subsection 10.6 so long as (i) the aggregate fair
market value of the assets or Capital Stock so disposed of during any Fiscal
Year of the Company shall not exceed 10% of Consolidated Net Worth as at the end
of the preceding Fiscal Year, or (ii) the net cash proceeds are used within 180
days after the receipt thereof to purchase assets to be utilized by the Company
in any Related Line of Business and if not so used within such time period, such
proceeds shall be applied to the prepayment of principal of any outstanding Term
Loans in inverse order of maturity and thereafter, 50% of such proceeds shall,
if Margin Level I Status then exists, be applied to the mandatory reduction of
the Revolving Credit Commitments. Notwithstanding anything contained in this
subsection 10.6 to the contrary, neither the Company nor any of its Subsidiaries
shall dispose of any of its right, title or interest in any Collateral or any
material Trademark, except for (i) licensing of Trademarks and sales of
inventory in the ordinary course of business and (ii) sales, leases, transfers
or other dispositions of Trademarks by the Company to any of its Subsidiaries
which is a Guarantor or by any Subsidiary to any other Subsidiary which is a
Guarantor or to the Company.
10.7 Limitation on Fundamental Changes. The Company will not, nor
will it permit any of its Subsidiaries to, enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any Subsidiary of the Company may be merged or consolidated with
or into the Company (provided that the Company shall be the continuing or
surviving entity) or with or into any one or more wholly owned
Subsidiaries of the Company (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving entity);
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation
or otherwise) to the Company or any other wholly owned Subsidiary of the
Company;
(c) the Company or any Subsidiary may effect any Investment
permitted by subsections 10.8(h), (i) or (j) by means of a merger of the
Person that is the subject of such acquisition with the Company or any of
its Subsidiaries (provided that, in the case of a merger with the Company,
the Company is the survivor); and
(d) the Company may, and may permit any of its Subsidiaries to,
enter into any transaction otherwise permitted pursuant to subsection
10.6.
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10.8 Limitation on Loans, Advances and Other Investments. The
Company will not, nor will it permit any of its Subsidiaries to, make any
Investment other than:
(a) advances or loans made in the ordinary course of business to
employees of the Company or any of its Subsidiaries;
(b) Investments in Cash Equivalents;
(c) Investments by the Company in and to its Domestic Subsidiaries
and any Foreign Subsidiary that becomes a party to the Guarantee and
Collateral Agreement as a Guarantor or of which 66% of such Foreign
Subsidiary's Capital Stock is pledged to the Lenders pursuant to a pledge
agreement in form and substance reasonably satisfactory to the Agent;
(d) Investments by any Subsidiaries of the Company in and to the
Company and any of its Domestic Subsidiaries that becomes a party to the
Guarantee and Collateral Agreement as a Guarantor;
(e) Investments in Foreign Subsidiaries in an aggregate amount not
in excess of $75,000,000;
(f) existing Investments not otherwise permitted under this
Agreement and described in Schedule 10.8 hereto;
(g) Investments received in connection with the bona fide settlement
of any defaulted Indebtedness or other liability owed to the Company or
any Subsidiary;
(h) Investments in Permitted Acquisitions provided that if, as a
result of Permitted Acquisition, a new Domestic Subsidiary shall be
created, such Domestic Subsidiary shall become a party to the Guarantee
and Collateral Agreement as a Guarantor;
(i) Investments in Permitted Acquisitions in Persons organized under
the laws of a jurisdiction outside of the United States in an aggregate
amount not in excess of the sum of (x) $200,000,000 plus (y) the Annual
Increase for each full Fiscal Year which shall have been completed and for
which financial statements and the related compliance certificate shall
have been delivered pursuant to subsections 9.1(a) and (e) hereof, during
the period from the Closing Date through the date at which compliance with
this paragraph is being determined (as reflected in such financial
statements and compliance certificate) less an amount equal to the
aggregate amount of Investments, if any, made pursuant to clause (j) of
this subsection 10.8 in excess of $100,000,000; and
(j) additional Investments in an amount not in excess of an amount
equal to the sum of (x) $100,000,000, and (y) the Annual Increase for each
full Fiscal Year which shall have been completed, and for which financial
statements and the related compliance certificate shall have been
delivered pursuant to subsections 9.1(a) and (e)
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hereof, during the period from the Closing Date through the date as at
which compliance with this paragraph is being determined (as reflected in
such financial statements and compliance certificate) less an amount equal
to the aggregate amount of Investments, if any, made pursuant to clause
(i) of this subsection 10.8 in excess of $200,000,000; provided that the
Investments under this subsection 10.8(j) shall in no event exceed
$175,000,000.
10.9 Compliance with ERISA. The Company and its Subsidiaries will
not:
(a) knowingly engage in any transaction in connection with which the
Company or any Subsidiary might reasonably be likely to be subject to
either a civil penalty assessed pursuant to Section 502(i) of ERISA or a
tax imposed by Section 4975 of the Code, terminate any Plan in a manner,
or take any other action with respect to any such Plan, which is likely to
result in any liability of the Company or any Subsidiary to the PBGC, fail
to make full payment when due of all amounts which, under the provisions
of any Plan, the Company or any Subsidiary is required to pay as
contributions thereto, or permit to exist any accumulated funding
deficiency, whether or not waived, with respect to any Plan (other than a
Multiemployer Plan), if, in any such case, such penalty or tax or such
liability, or the failure to make such payment, or the existence of such
deficiency, as the case may be, would have a Material Adverse Effect; or
(b) permit at any time the aggregate complete or partial withdrawal
liability of the Company and its Subsidiaries under Title IV of ERISA with
respect to Multiemployer Plans to exceed 5% of Consolidated Net Worth as
at the end of the then most recently ended Fiscal Quarter.
For purposes of subdivision (b) of this subsection 10.9, the amount of the
withdrawal liability of the Company or its Subsidiaries at any date shall be the
aggregate present value of the amount claimed to have been incurred less any
portion thereof as to which the Company or its Subsidiaries reasonably believes,
after appropriate consideration of possible adjustments arising under Sections
4219 and 4221 of ERISA, it and its Subsidiaries will have no liability, provided
that the Company and its Subsidiaries shall obtain prompt written advice from
independent actuarial consultants supporting such determination. The Company and
its Subsidiaries shall, promptly upon request by any Lender, transmit a copy of
any current statement of withdrawal liability from each Multiemployer Plan, if
and when available, after the Company or any Subsidiary receives the same. As
used in this subsection 10.9, the term "accumulated funding deficiency" has the
meaning specified in Section 301 of ERISA and Section 412 of the Code, and the
terms "accrued benefit" and "current value" have the meanings specified in
Section 3 of ERISA.
10.10 Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into any
transactions, including, without limitation, the purchase, sale or exchange of
property, the making of any Investment or the rendering of any service, with any
Affiliate of the Company or a spouse or any relative (by blood, adoption or
marriage) within the third degree of any such Affiliate or any other Person
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which is an Affiliate of any such spouse or relative, except (a) in the ordinary
course of business and pursuant to the reasonable requirements of the Company's
or such Subsidiary's business and upon reasonable terms no less favorable to the
Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person which is not an Affiliate of the Company, (b) any
transaction listed in Schedule 10.10 hereto and (c) any transaction between the
Company and any Subsidiary of the Company or between any Subsidiary and any
other Subsidiary.
10.11 Additional Liens. If at any time subsequent to the Closing
Date any Domestic Subsidiary shall distribute menswear products being
distributed by the Company on the date hereof under the Polo by ▇▇▇▇▇ ▇▇▇▇▇▇,
Polo Sport, ▇▇▇▇▇ Lauren/Purple Label Collection and Polo Golf brands, the
Company will cause such Subsidiary to become a party to the Guarantee and
Collateral Agreement as a Grantor of Liens on the Collateral described therein
and will deliver to the Lenders such legal opinions with respect thereto as the
Agent may reasonably request.
SECTION 11. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) (i) The Company shall fail to pay any principal of any Note, any
Letter of Credit Obligation or any Acceptance Obligation, in each case
within two days after such principal or Obligation becomes due or (ii) the
Company shall fail to pay any interest on any Note, any Letter of Credit
Obligation or any Acceptance Obligation, or any fee, commission or other
amount owing hereunder, in each case within five days after such interest,
fee or other amount is due; or
(b) Any representation or warranty made or deemed made by the
Company herein or by the Company or any other Credit Party in any other
Credit Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection
with this Agreement shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance of
any covenant or agreement contained in Section 10 or subsection 6.19; or
(d) The Company shall default in the observance or performance of
any covenant or agreement contained in this Agreement (other than in
Section 10 or subsection 6.19 hereof) or in any Security Document to which
it is a party; or any other Credit Party shall default in the observance
or performance of any covenant or agreement contained in any Credit
Document to which it is a party, and, in each case, such default is not
remediable or, if remediable, continues unremedied for a period of 30 days
after the earlier to occur of (i) the date on which such default is known
or reasonably should have become known to any officer of the Company or
such other Credit Party and (ii) the date on which the Agent or any Lender
shall have notified the Company or such other Credit Party of such
default; or
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(e) Any Security Document shall for any reason cease to be in full
force and effect; the Liens on the collateral described therein purported
to be created thereby shall cease to be or are not valid and perfected
first Liens to the extent contemplated thereby; any Guarantor shall assert
that it has no liability under the Guarantee to which it is a party; or
any Guarantee shall cease, for any reason, to be in full force and effect;
or
(f) The Company, any other Credit Party or any Foreign Subsidiary
shall (A) default in any payment of principal of or interest on any
Indebtedness (other than the Notes, the Acceptance Obligations or the
Letter of Credit Obligations) or in the payment of any Guarantee
Obligation in respect of Indebtedness (other than the Guarantee and
Collateral Agreement), the aggregate principal amount of which exceeds
$5,000,000 in the case of the Company or any Subsidiary, beyond the period
(without giving effect to any extensions, waivers, amendments or other
modifications of or to such period) of grace, if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (B) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice or the lapse of
time, or both, if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable; or
(g) (i) The Company, any other Credit Party or any Foreign
Subsidiary shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Company,
any other Credit Party or any Foreign Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company, any other Credit Party or any Foreign
Subsidiary any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 45 days; or (iii) there shall be
commenced against the Company, any other Credit Party or any Foreign
Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within 45 days from the entry thereof;
or (iv) the Company, any other Credit Party or any Foreign
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Subsidiary shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii) or (iii) above; or (v) the Company, any other Credit
Party or any Foreign Subsidiary shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they
become due; provided, however, that the occurrence of any of the events
specified in this paragraph (g) with respect to any Person other than the
Company shall not be deemed to be an Event of Default unless (x) the net
assets of such Person, determined in accordance with GAAP, shall have
exceeded $3,000,000 as of the date of the most recent audited financial
statements delivered to the Lenders pursuant to subsection 9.1 or on the
date of occurrence of any such event and/or (y) the aggregate net assets
of all Credit Parties and Foreign Subsidiaries in respect of which any of
the events specified in this paragraph (g) shall have occurred shall have
exceeded $5,000,000 as of the date of the most recent audited financial
statements delivered to the Lenders pursuant to subsection 9.1 or on the
date of occurrence of any such event; or
(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability (except as set forth in
Schedule 8.12) in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could subject the Company or any
other Credit Party to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken as
a whole; or
(i) One or more judgments or decrees shall be entered against the
Company, any other Credit Party or any Foreign Subsidiary involving in the
aggregate a liability (not paid or fully covered by insurance) of
$5,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
(j) Lauren, his estate or Persons related to him by blood, adoption
or marriage and/or trusts or other entities principally for the benefit of
any of the foregoing (the "Lauren Interests") shall cease to own in the
aggregate, directly or indirectly (i) at any time before the consummation
of the Initial Public Offering, Voting Stock of the
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Company having more than 50% of the voting power for the election of the
board of directors of the Company or (ii) at any time after the
consummation of the Initial Public Offering, either (x) Voting Stock of
the Company having the voting power to elect a majority of the Board of
Directors of the Company or (y) Voting Stock representing more than 25% of
the voting power of the Company's Capital Stock; or
(k) Prior to the consummation of the Initial Public Offering, Lauren
shall cease to be the principal manager of the Company by reason of death,
disability, retirement or otherwise, and the Company shall fail within 360
days after such event to (i) find a replacement chief executive officer
for Lauren acceptable to the Required Lenders and (ii) have presented a
business plan acceptable to the Required Lenders; or
(l) The PRLE $24,000,000 Subordination Agreement shall be amended
without the prior written consent of the Required Lenders;
then, and in any such event, (A) if such event is an Event of Default in respect
of the Company specified in clause (i) or (ii) of paragraph (g) above,
automatically the Revolving Credit Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of Letter of
Credit Obligations whether or not the beneficiaries thereof shall have presented
the documents required thereunder and all amounts of Acceptance Obligations
whether or not matured) and the Notes shall immediately become due and payable,
and (B) if such event is any other Event of Default, any or all of the following
actions may be taken: the Agent may, or upon the direction of the Required
Lenders, the Agent shall, (i) declare the Revolving Credit Commitments to be
terminated forthwith, whereupon the Revolving Credit Commitments shall
immediately terminate; (ii) declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (including, without
limitation, all amounts of Letter of Credit Obligations whether or not the
beneficiaries thereof shall have presented the documents required thereunder and
all amounts of Acceptance Obligations whether or not matured) and the Notes to
be due and payable forthwith, whereupon the same shall immediately become due
and payable; and (iii) exercise any and all remedies and other rights provided
pursuant to this Agreement and/or the other Credit Documents.
With respect to all Letters of Credit and Acceptances that shall not
have matured or been paid or with respect to which presentment for honor shall
not have occurred, upon the occurrence of an Event of Default, the Company shall
deposit in an interest bearing cash collateral account opened by the Agent (and
under the exclusive dominion and control of the Agent) an amount equal to the
aggregate amount of the Letter of Credit Obligations plus the aggregate
outstanding amount of Acceptance Obligations for application to payments of
drafts drawn under Letters of Credit and to payment of Acceptances at maturity,
and the unused portion thereof after such application, if any, shall be applied
to repay other obligations of the Company hereunder or under the Notes or any of
the other Credit Documents, and after all Letters of Credit have expired, all
drafts and Acceptances have matured and been repaid and all other obligations of
the Company hereunder or any of the other Credit Documents are paid in full, the
balance, if any, shall be returned to the Company.
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Except as expressly provided above in this Section 11, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 12. THE AGENT AND ISSUING LENDER
12.1 Appointment; Authorization. Each Lender hereby irrevocably
designates and appoints Chase as the Agent of such Lender under this Agreement
and each of the other Credit Documents, and each such Lender irrevocably
authorizes (a) Chase, as the Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and each of the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto
and (b) Chase, in its capacity as Issuing Lender, to issue the Letters of
Credit, subject to the terms and conditions hereof, to pay the amount of any
draft presented under any Letter of Credit upon presentation of documents which,
upon their face, conform to the terms of such Letter of Credit, to create
Acceptances, to receive from the Company reimbursement for the amount of each
draft paid under each Letter of Credit and each Acceptance and payment of all
commissions, charges and interest in respect of the Letters of Credit and the
Acceptances, and to take such action on behalf of such Lender under this
Agreement, the Letter of Credit Documents and the Acceptance Documents and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Issuing Lender by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Agent nor the Issuing Lender shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Credit Documents or otherwise exist against the Agent or
the Issuing Lender.
12.2 Delegation of Duties. Each of the Agent and the Issuing Lender
may execute any of its duties under this Agreement or the other Credit Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Neither the Agent nor
the Issuing Lender shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither the Agent nor the Issuing
Lender nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any Credit Document (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Company, any other Credit Party or any officer thereof contained in this
Agreement or any other Credit Document or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent or
the Issuing Lender under or in connection with,
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this Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
other Credit Document or the Notes or for any failure of the Company or any
other Credit Party to perform its or his obligations hereunder or thereunder.
Neither the Agent nor the Issuing Lender shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other
Credit Document, or to inspect the properties, books or records of the Company
or any other Credit Party.
12.4 Reliance by Agent and Issuing Lender. Each of the Agent and the
Issuing Lender shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company), independent accountants and other experts
selected by the Agent or the Issuing Lender, as the case may be. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. Each of the Agent and the Issuing Lender shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Each of the Agent and the Issuing Lender shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement, the Credit Documents and the Notes in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Notes.
12.5 Notice of Default. Neither the Agent nor the Issuing Lender
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received written notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give notice thereof
to the Lenders. The Agent shall take such action with respect to any Default or
Event of Default as shall be reasonably directed by the Required Lenders,
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
12.6 Non-Reliance on Agent, Issuing Lender or Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor the Issuing Lender nor
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent or the Issuing Lender hereinafter taken, including
any review of the affairs of the Company or any other Credit Party, shall be
deemed to constitute any representation or warranty by the Agent or the
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Issuing Lender to any Lender. Each Lender represents to the Agent and the
Issuing Lender that it has, independently and without reliance upon the Agent,
the Issuing Lender or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and the other Credit Parties and
made its own decision to make its Loans, to purchase Acceptance Participating
Interests, to purchase Letter of Credit Participating Interests and to enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent, the Issuing Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Company and the other
Credit Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent or the Issuing Lender
hereunder, neither the Agent nor the Issuing Lender shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company or any other Credit Party, which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
12.7 Indemnification. The Lenders agree to indemnify the Agent and
the Issuing Lender in their capacities as such (to the extent not reimbursed by
the Company and without limiting the obligation of the Company to do so),
ratably according to their respective Combined Loan Percentages in effect on the
date on which indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Combined Loan Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes and all other amounts payable
hereunder) be imposed on, incurred by or asserted against the Agent or the
Issuing Lender, as the case may be, in any way relating to or arising out of
this Agreement, the Notes, the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent or
the Issuing Lender, as the case may be, under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's or Issuing Lender's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Notes and all
other amounts payable hereunder.
12.8 Agent in Its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Company and the other Credit Parties as though the Agent were
not the Agent hereunder. With respect to Loans made or renewed by it,
Acceptances created by it, Letters of Credit issued by it, and any Note issued
to it, Chase shall have the same rights and powers under this Agreement as
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any Lender (as well as those of the Issuing Lender) and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" shall include
Chase in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Credit Documents, then the Required Lenders shall appoint a
successor agent for the Lenders (and if no successor agent shall have been so
appointed within 10 days of the retiring Agent's having given notice of its
resignation, then the retiring Agent shall, on behalf of the Lenders, appoint a
successor agent), which successor agent shall be approved by the Company (which
approval shall not be unreasonably withheld), whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 12 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement, any Note, any
other Credit Document nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection 13.1. Upon the written consent of the Required Lenders, the Agent
(or, in the case of the Letter of Credit Documents and the Acceptance Documents,
the Issuing Lender) and the Company may, from time to time, enter into written
amendments, supplements or modifications for the purpose of adding, deleting or
changing any provisions to this Agreement, the Notes or the other Credit
Documents or changing in any manner the rights of the Lenders or of the Company
hereunder or thereunder or waiving, on such terms and conditions as the Agent
(or the Issuing Lender, as the case may be) may specify in such instrument, any
of the requirements of this Agreement or the Notes or the other Credit Documents
or any Default or Event of Default and its consequences; provided, however, that
no such waiver and no such amendment, supplement or modification shall (a)
extend the Termination Date or the maturity of any Note or any installment
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any fee payable to the Lenders hereunder, or reduce the principal
amount of any Note, or change the amount of any Lender's Revolving Credit
Commitment, or amend, modify or waive any provision of this subsection 13.1, or
amend or modify the definition of Required Lenders, or consent to the release of
all or substantially all of the Collateral, or consent to the assignment or
transfer by the Company of any of its rights and obligations under this
Agreement, in each case without the written consent of all the Lenders, or (b)
amend, modify or waive any provision of Section 12 without the written consent
of the then Agent and Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply to each of the Lenders equally and shall
be binding upon the Company, the Lenders, the Issuing Lender, the Agent and all
future holders of the Notes. In the case of any waiver, the Company, the
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Lenders and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telegraph or facsimile), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or five days
after being deposited in the United States mail, postage prepaid and return
receipt requested, or, in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of facsimile, when sent, telephonic
confirmation received, addressed as follows, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Company: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Vice Chairman and C.O.O.
and ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.,
Senior Vice President,
General Counsel and Secretary
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephonic Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ Lauren Corporation
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Poli
Vice President-Chief Financial Officer
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephonic Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
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The Agent and
the Issuing
Lender: The Chase Manhattan Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephonic Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
The Lenders: To the addresses set forth on Schedule 1.1 hereto
provided that any notice, request or demand to or upon the Agent, the Issuing
Lender or the Lenders pursuant to subsections 2.3, 3.1, 4.2, 4.3, 6.7 and 6.8
shall not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Credit Documents, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided or provided in the
other Credit Documents are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes.
13.5 Payment of Expenses and Taxes. The Company agrees (a) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the negotiation, preparation and execution of, and any
amendment, supplement or modification to, this Agreement, the Notes, the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the disbursements and reasonable fees of
counsel to the Agent, (b) to pay or reimburse each Lender and the Agent for all
their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the other Credit
Documents and any such other documents, including, without limitation,
disbursements and reasonable fees of counsel to the Agent and to the several
Lenders, (c) to pay, indemnify, and hold each Lender and the Agent harmless
from, any and all recording and filing fees, and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment,
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supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes, the other Credit Documents and any such other
documents, (d) to pay or reimburse the Agent on demand for any amounts paid by
it under the CIT Indemnity and (e) to pay, indemnify, and hold each Lender and
the Agent harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Credit Documents and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"), provided that the
Company shall have no obligation hereunder to the Agent or any Lender with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Agent or any such Lender, or (ii) legal proceedings
commenced against the Agent or any such Lender by any other Lender or by any
Participant. The agreements in this subsection 13.5 shall survive repayment of
the Notes and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Company, the Lenders, the
Agent, all future holders of the Notes and their respective successors and
assigns, except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender. Assignments by any Lender of its rights and obligations hereunder may be
either in whole or in part.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, the Revolving Credit
Commitment of such Lender, any Acceptance Participating Interest, any Letter of
Credit Participating Interest or any other interest of such Lender hereunder. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Note for all purposes
under this Agreement, and the Company, the Agent and the Issuing Lender shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Each participation
agreement entered into between any Lender and any Participant shall provide that
such Lender shall not be required to seek the consent of such Participant before
agreeing to amend, waive or otherwise modify any Credit Document or taking any
other action with respect thereto, except that such participation agreement may
provide that the selling Lender thereunder must obtain the prior written consent
of the Participant thereunder to extend the Termination Date or the maturity of
any Note or any installment thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount of any Note. The
Company agrees that if amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement or any Note, provided that such right of setoff shall be subject
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to the obligation of such Participant to share with the Lenders, and the Lenders
agree to share with such Participant, as provided in subsection 13.7. The
Company also agrees that each Participant shall be entitled to the benefits of
subsections 6.14, 6.16 and 6.17 with respect to its participation in the
Commitments, the Acceptances, the Letters of Credit and the Loans outstanding
from time to time; provided that no Participant shall be entitled to receive any
greater amount pursuant to such subsections than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial lending
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Company and the Agent (which in each case shall not be unreasonably withheld),
to any additional bank, financial institution or other lending entity (each an
"Assignee"), all or any part of its rights and obligations under this Agreement
and the Notes pursuant to an Assignment and Acceptance Agreement, in form and
substance satisfactory to the Agent (each an "Assignment and Acceptance"),
executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the Agent and the
Company) and delivered to the Agent for its acceptance and recording in the
Register (as defined in paragraph (d) below); [provided that any such assignment
shall, in the case of Revolving Credit Commitments and Term Loans, be in an
amount at least equal to $________________ in the case of any such assignment by
Chase occurring within 90 days from the Closing Date (except in the case where
the original syndication hereof is oversubscribed), or $______________] [will be
set based on size of Syndication] in the case of any other assignment; and
provided, further, that any assignment by any Lender of all or any part of its
Revolving Credit Commitment and Term Loans must be made ratably in accordance
with the respective amounts of such Revolving Credit Commitment and Term Loans
then held by such Lender immediately prior to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Revolving Credit Commitment and Term Loans as set forth therein, and (y)
the assigning Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, 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
assigning Lender shall cease to be a party hereto).
(d) The Agent shall maintain at its address referred to in
subsection 13.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment and Term Loans of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the Company,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Agent and the Company) together
with payment to the Agent of a registration and processing fee of $4,000 (or
$1,500 in the case of an Assignment to a Lender or affiliate thereof), the Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Company. On or prior to such effective date, the Company, at
its own expense, shall execute and deliver to the Agent (in exchange for the
Notes of the assigning Lender) new Notes to the order of such Assignee in an
amount equal to the Revolving Credit Commitment and Term Loan assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Revolving Credit Commitment and a Term Loan hereunder, new Notes to
the order of the assigning Lender in an amount equal to the Revolving Credit
Commitment and Term Loan retained by it hereunder. Such new Notes shall be dated
the Closing Date and shall otherwise be in the form of the Notes replaced
thereby.
(f) The Company authorizes each Lender to disclose to any
Participant, Assignee and any prospective Participant or Assignee any and all
financial information in such Lender's possession concerning the Company and its
affiliates which has been delivered to such Lender by or on behalf of the
Company pursuant to this Agreement or which has been delivered to such Lender by
or on behalf of the Company in connection with such Lender's credit evaluation
of the Company and its affiliates prior to becoming a party to this Agreement;
provided that any prospective Participant or Assignee shall have acknowledged in
writing that it is receiving such information subject to the provisions of
subsection 13.8.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
13.7 Adjustments; Set-Off. (a) If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or any other amount payable to it hereunder, or receive any collateral
in respect thereof or any amount under any guarantee in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in paragraph (g) of Section 11, or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest thereon, or
any other amount payable to it hereunder, such Benefitted Lender shall purchase
for cash from the other Lender such portion of such other Lender's Loans, or
shall provide such other Lender with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but
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without interest. The Company agrees that each Lender so purchasing a portion of
another Lender's Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided
by law, upon the occurrence of an Event of Default and acceleration of the
obligations owing in connection with this Agreement, each Lender shall have the
right, without prior notice to the Company, any such notice being expressly
waived by the Company to the extent permitted by applicable law, to set-off and
apply against any indebtedness, whether matured or unmatured, of the Company to
such Lender, any amount owing from such Lender to the Company, at or at any time
after, the happening of any of the above-mentioned events, and the aforesaid
right of set-off may be exercised by such Lender against the Company or against
any trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or executor, judgment or attachment creditor of the Company,
or against anyone else claiming through or against the Company or such trustee
in bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or executor, judgment or attachment creditor, notwithstanding the fact
that such right of set-off shall not have been exercised by such Lender prior to
the making, filing or issuance, or service upon such Lender of, or of notice of,
any such petition, assignment for the benefit of creditors, appointment or
application for the appointment of a receiver, or issuance of execution,
subpoena, order or warrant. Each Lender agrees promptly to notify the Company
and the Agent after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
13.8 Confidentiality. Each Lender agrees that it will not disclose
Confidential Information (as hereinafter defined) to any Person other than (a)
as may be consented to by the Company, (b) as may be required by law or pursuant
to legal process and (c) to prospective Participants and Assignees and those of
such Lender's directors, officers, employees, examiners and professional
advisors who have a need to know the Confidential Information in accordance with
customary banking practices and who receive the Confidential Information having
been made aware of the restrictions of this subsection 13.8. As used herein, the
term "Confidential Information" means all information contained in materials
relating to the Company and its Subsidiaries provided to the Lenders by the
Company or its representatives or agents other than (i) information which is at
the time so provided or thereafter becomes generally available to the public
other than as a result of a disclosure by one or more Lenders, (ii) information
which was available to any Lender prior to its disclosure to the Lenders by the
Company, its representatives or agents and (iii) information which becomes
available to one or more Lenders from a source other than the Company, its
representatives or agents.
13.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
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13.10 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
13.11 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Agent, the Lenders (and Participants and Assignees to the extent
provided in subsection 13.6) and the Company, and nothing expressed in, or to be
implied from, this Agreement shall or shall be deemed to confer upon anyone
other than the Company, the Agent and the Lenders (and such Participants and
Assignees) any benefit, or legal or equitable right, remedy or claim under or by
virtue of this Agreement or any provision hereof, including, without limitation,
the right to insist upon or to enforce the performance or observance of any of
the obligations contained herein. All conditions to the obligations of the
Lenders to make the Loans, the Issuing Lender and the Participating Lenders to
issue and participate in the Letters of Credit and the Lenders to create and
participate in the Acceptances are imposed solely and exclusively for the
benefit of the Lenders, and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that the Lenders will not refuse to make such extensions of credit in the
absence of strict compliance with any or all thereof and no other Person shall
under any circumstances be deemed to be a beneficiary of such conditions, any or
all of which may be freely waived in whole or in part by the Lenders at any time
if, in their sole discretion, the Lenders deem it advisable or desirable to do
so.
13.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH OF THE COMPANY,
THE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY
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SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS
SET FORTH IN SUBSECTION 13.2 OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
(b) EACH OF THE COMPANY, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.
13.13 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT,
THE NOTES AND THE OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13.14 Integration. This Agreement and the other Credit Documents
represent the agreement of the Company, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to the subject
matter hereof not expressly set forth herein or in the other Credit Documents.
13.15 Acknowledgements. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Notes and the other Credit Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Company arising out of or in connection with this
Agreement or any of the other Credit Documents, and the relationship
between the Agent and the Lenders, on one hand, and the Company, on the
other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Company and the Lenders.
13.16 Satisfaction in Dollars. The obligation of the Company
hereunder, under the Notes and in respect of Letter of Credit Obligations and
Acceptance Obligations to make payments in Dollars shall not be discharged or
satisfied by any tender or recovery
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pursuant to any judgment expressed in or converted into any currency other than
Dollars or any other realization in such currency, whether as proceeds of
set-off, security, guarantee, distributions, or otherwise, except to the extent
to which such tender, recovery or realization shall result in the effective
receipt by the Agent and the Lenders of the full amount of Dollars expressed to
be payable hereunder, under the Notes and in respect of Letter of Credit
Obligations and Acceptance Obligations and the Company shall indemnify the Agent
and each Lender (as an alternative or additional cause of action) for the amount
(if any) by which such effective receipt shall fall short of the full amount of
Dollars expressed to be payable hereunder, under the Notes and in respect of
Letter of Credit Obligations and Acceptance Obligations and such obligation to
indemnify shall not be affected by judgment being obtained for any other sums
due under this Agreement, the Notes and in respect of Letter of Credit
Obligations and Acceptance Obligations.
▇▇▇▇ ▇▇▇▇▇ LAUREN CORPORATION
By: _____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent,
Issuing Lender and a Lender
By: _________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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ANNEX A
PRICING GRID
============================================================================================
STATUS APPLICABLE
MARGIN FOR APPLICABLE
EURODOLLAR COMMITMENT APPLICABLE SIGHT
LOANS RATE PERCENTAGE DRAFT FEE PERCENTAGE
============================================================================================
MARGIN LEVEL STATUS I 0.75% 0.2500% 0.1250%
============================================================================================
MARGIN LEVEL STATUS II 0.50% 0.1875% 0.1250%
============================================================================================
MARGIN LEVEL STATUS III 0.40% 0.1750% 0.0625%
============================================================================================
MARGIN LEVEL STATUS IV 0.35% 0.1500% 0.0625%
============================================================================================
MARGIN LEVEL STATUS V 0.30% 0.1250% 0.0625%
============================================================================================