EXECUTION COPY
Euro 350,000,000
180-DAY CREDIT AGREEMENT
dated as of
MAY 22, 2001
among
LIZ CLAIBORNE, INC.
The Lenders Party Hereto
and
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
and
THE CHASE MANHATTAN BANK
As Syndication Agent
-------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as Sole Lead Arranger and Book Runner
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
as
Co-Arranger
Table of Contents
Page
ARTICLE I.....................................................................1
SECTION 1.01. DEFINED TERMS...............................................1
SECTION 1.02. TERMS GENERALLY.............................................2
SECTION 1.03. ACCOUNTING TERMS; GAAP.....................................13
ARTICLE II...................................................................13
SECTION 2.01. COMMITMENTS................................................13
SECTION 2.02. LOANS AND BORROWINGS.......................................13
SECTION 2.03. REQUESTS FOR BORROWINGS....................................14
SECTION 2.04. FUNDING OF BORROWINGS......................................14
SECTION 2.05. INTEREST ELECTIONS.........................................15
SECTION 2.06. TERMINATION AND REDUCTION OF COMMITMENTS...................16
SECTION 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT.......................16
SECTION 2.08. PREPAYMENT OF LOANS........................................17
SECTION 2.09. FEES.......................................................18
SECTION 2.10. INTEREST...................................................18
SECTION 2.11. ALTERNATE RATE OF INTEREST.................................19
SECTION 2.12. INCREASED COSTS............................................19
SECTION 2.13. BREAK FUNDING PAYMENTS.....................................20
SECTION 2.14. TAXES......................................................20
SECTION 2.15. PAYMENTS GENERALLY; PRO RATA TREATMENT;
SHARING OF SET-OFFS .....................................21
SECTION 2.16. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.............22
SECTION 2.17. SOURCE OF FUNDS............................................23
ARTICLE III..................................................................23
SECTION 3.01. ORGANIZATION; POWERS.......................................23
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY..............................23
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS.......................24
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE............24
SECTION 3.05. PROPERTIES; LIENS..........................................24
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.......................25
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS........................25
SECTION 3.08. NO DEFAULT.................................................25
SECTION 3.09. INVESTMENT AND HOLDING COMPANY STATUS......................25
SECTION 3.10. NO BURDENSOME RESTRICTIONS.................................26
SECTION 3.11. TAXES......................................................26
SECTION 3.12. FEDERAL REGULATIONS........................................26
SECTION 3.13. SUBSIDIARIES...............................................26
SECTION 3.14. ERISA......................................................26
SECTION 3.15. DISCLOSURE.................................................26
ARTICLE IV...................................................................27
SECTION 4.01. EFFECTIVE DATE.............................................27
SECTION 4.02. ADDITIONAL BORROWERS.......................................28
SECTION 4.03. EACH CREDIT EVENT..........................................29
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ARTICLE V....................................................................29
SECTION 5.01. FINANCIAL STATEMENTS.......................................29
SECTION 5.02. CERTIFICATES; OTHER INFORMATION............................30
SECTION 5.03. NOTICES OF MATERIAL EVENTS.................................30
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS.............................31
SECTION 5.05. PAYMENT OF OBLIGATIONS.....................................31
SECTION 5.06. MAINTENANCE OF PROPERTIES AND TRADEMARKS; INSURANCE........31
SECTION 5.07. BOOKS AND RECORDS; INSPECTION RIGHTS.......................31
SECTION 5.08. ENVIRONMENTAL LAWS.........................................31
SECTION 5.09. COMPLIANCE.................................................32
SECTION 5.10. ADDITIONAL SUBSIDIARIES....................................32
SECTION 5.11. USE OF PROCEEDS............................................32
ARTICLE VI...................................................................32
SECTION 6.01. FINANCIAL COVENANTS........................................32
SECTION 6.02. INDEBTEDNESS...............................................32
SECTION 6.03. LIENS......................................................34
SECTION 6.04. FUNDAMENTAL CHANGES........................................35
SECTION 6.05. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; HEDGING AGREEMENTS.........................35
SECTION 6.06. LIMITATION ON SALE OF ASSETS...............................36
SECTION 6.07. RESTRICTED PAYMENTS........................................36
SECTION 6.08. TRANSACTIONS WITH AFFILIATES...............................37
SECTION 6.09. CHANGES IN FISCAL PERIODS..................................37
SECTION 6.10. LINES OF BUSINESS..........................................37
ARTICLE VII..................................................................37
ARTICLE VIII.................................................................39
SECTION 8.01. DEFINED TERMS..............................................39
SECTION 8.02. GUARANTEE..................................................39
SECTION 8.03. NO SUBROGATION.............................................40
SECTION 8.04. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS;
WAIVER OF RIGHTS.........................................40
SECTION 8.05. GUARANTEE ABSOLUTE AND UNCONDITIONAL.......................41
SECTION 8.06. REINSTATEMENT..............................................42
SECTION 8.07. PAYMENTS...................................................42
SECTION 8.08. AUTHORITY OF ADMINISTRATIVE AGENT..........................42
SECTION 8.09. SEVERABILITY...............................................42
ARTICLE IX...................................................................42
ARTICLE X....................................................................44
SECTION 10.01. NOTICES...................................................44
SECTION 10.02. WAIVERS; AMENDMENTS.......................................44
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER........................45
SECTION 10.04. SUCCESSORS AND ASSIGNS....................................46
SECTION 10.05. SURVIVAL..................................................48
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS..................48
SECTION 10.07. SEVERABILITY..............................................49
SECTION 10.08. RIGHT OF SETOFF...........................................49
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS......................................49
SECTION 10.10. HEADINGS..................................................50
SECTION 10.11. CONFIDENTIALITY...........................................50
ii
SECTION 10.12. JUDGMENT..................................................50
SECTION 10.13. DESIGNATED SUBSIDIARIES...................................51
SECTION 10.14. WAIVER OF JURY TRIAL......................................52
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Designation Letter
Exhibit C - Form of Subsidiary Guarantee
Exhibit D-1 - Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇
Exhibit D-2 - Form of Opinion of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Schedule 2.01 - Commitments
Schedule 3.06 - Disclosed Matters
Schedule 3.13 - Subsidiaries
Schedule 6.02 - Existing Indebtedness
Schedule 6.03 - Existing Liens
Schedule 6.05(i) - Existing Investments
Schedule 6.05(ii) - Company's Investment Policy
iii
180-DAY CREDIT AGREEMENT dated as of May 22, 2001, among LIZ CLAIBORNE,
INC., the LENDERS party hereto, THE CHASE MANHATTAN BANK, as syndication agent,
and CITICORP NORTH AMERICA, INC., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ADMINISTRATIVE AGENT" means Citicorp North America, Inc., in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGREEMENT" means this 180-Day Credit Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
Euro Reference Rate in effect on such day plus 3%. Any change in the Alternate
Base Rate due to a change in the Euro Reference Rate shall be effective from and
including the effective date of such change in the Euro Reference Rate.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"APPLICABLE RATE" means, for any day, with respect to any Eurocurrency
Revolving Loan, 0.725% per annum, with respect to any ABR Revolving Loan, 0.00%
per annum, or with respect to the facility fees payable hereunder, 0.15% per
annum.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"AVAILABILITY PERIOD" means the period from and including the Effective
Date to but
excluding the earlier of the Maturity Date and the date of termination of the
Commitments.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWERS" means, collectively, the Company and each Designated
Subsidiary that shall become a party to this Agreement pursuant to Section
10.13.
"BORROWING" means Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect.
"BORROWING REQUEST" means a request by the applicable Borrower for a
Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurocurrency
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in Euro deposits in the London interbank market" or on which
the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System is not open.
"CAPITAL LEASE OBLIGATIONS" means the obligations of the Company and
its Subsidiaries to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a consolidated balance sheet of the Company
under GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) of shares representing more than 33 1/3% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Company; or (b) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Company by Persons who were neither (i)
nominated by the board of directors of the Company nor (ii) appointed by
directors so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced
2
from time to time pursuant to Section 2.06 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04. The initial amount of each Lender's Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Commitment, as applicable.
"COMPANY" means Liz Claiborne, Inc., a Delaware corporation.
"CONDUIT LENDER" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans hereunder otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Company (which, in each case, shall
not be unreasonably withheld or delayed); PROVIDED, that the designation by any
Lender of a Conduit Lender shall not relieve the designating Lender of any of
its obligations to fund a Loan under this Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Lender (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender; and PROVIDED FURTHER, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 2.12, 2.13, 2.14 or
10.03 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Commitment hereunder.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (a) income or franchise tax expense, (b) interest expense, both expensed and
capitalized, amortization or writeoff of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business), and (f)
any other non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest income,
(b) any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other non-cash income, all as
determined on a consolidated basis.
"CONSOLIDATED EBITDAR" means, with respect to any period, Consolidated
EBITDA for such period plus the Consolidated Rental Expense of the Company for
such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, (a) the total
amount of interest expense, both expensed and capitalized, of the Company and
its Subsidiaries determined on a consolidated basis, without duplication, in
accordance with GAAP for such period minus (b) the amount of interest income of
the Company and its Subsidiaries determined on a consolidated basis in
accordance with GAAP for such period
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Company or is merged into or consolidated with the
Company or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a
3
Subsidiary of the Company) in which the Company or any of its Subsidiaries has
an ownership interest, except to the extent that any such income is actually
received by the Company or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Company to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under the Agreement) or Requirement of
Law applicable to such Subsidiary.
"CONSOLIDATED RENTAL EXPENSE" means, for any period, the aggregate
amount of fixed and contingent rentals payable by the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP with respect to leases of real property minus the aggregate amount of
rental income (including licensee related income from licensees operating on the
store premises of the Company and its Subsidiaries) payable to the Company and
its Subsidiaries for such period in accordance with GAAP with respect to leases
of real and personal property.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate principal
amount of the Indebtedness of the Company and its Subsidiaries at such date set
forth on the Company's consolidated balance sheet opposite the captions "Current
Portion of Long Term Borrowings," "Long Term Borrowings" and "Short Term
Borrowings," determined on a consolidated basis in accordance with GAAP.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DESIGNATED SUBSIDIARY" means any wholly owned Subsidiary designated
after the date of this Agreement for borrowing privileges hereunder pursuant to
Section 10.13.
"DESIGNATION LETTER" means a letter entered into by a Designated
Subsidiary, the Company and the Administrative Agent, in substantially the form
of Exhibit B hereto, pursuant to which such Designated Subsidiary shall become a
Borrower hereunder in accordance with Section 10.13.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"DOLLARS" or "$" refers to lawful money of the United States of America
unless otherwise specified.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
4
"ENVIRONMENTAL LAWS" means all applicable laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
which relate in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any
Hazardous Material or to human health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary, directly or
indirectly, resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract or agreement pursuant to which liability is
incurred by the Company or any Subsidiary with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURIBO RATE" means, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate appearing on Page 248 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in Euro by reference to the Banking
Federation of the European Union Settlement Rates for deposits in Euro) at
approximately 10:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for deposits in Euro with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "EURIBO Rate" with respect to
such Eurocurrency Borrowing for such Interest Period shall be the rate at which
deposits in Euro of Euro 5,000,000 and for a maturity
5
comparable to such Interest Period are offered to the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 10:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"EURO" or "Euro" means the lawful currency of the European Union as
constituted by the treaty establishing the European Community being the Treaty
of Rome, as amended from time to time and as referred to in the EMU legislation.
"EURO REFERENCE RATE" means, for any day, the rate per annum which is
the average of the rates quoted at approximately 10:00 A.M. (London time) by
Citicorp North America, Inc. and The Chase Manhattan Bank (or their respective
affiliates) for the offering of overnight deposits in Euro.
"EUROCURRENCY", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the EURIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
VII.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Company under
Section 2.16(b)), any United States withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or at the time such Lender changes its applicable lending
office or is attributable to such Foreign Lender's failure or inability to
comply with Section 2.14(e), except to the extent that such Foreign Lender's
assignor (if any) or such Foreign Lender, in the case of a Lender that changes
its applicable lending office, was entitled, at the time of assignment or at the
time of the change in applicable lending office, to receive additional amounts
from the Borrowers with respect to such withholding tax pursuant to Section
2.14(a).
"FINANCIAL OFFICER" means the Senior Vice President - Finance and
Administration, chief financial officer, principal accounting officer, treasurer
or controller of the Company.
"FIXED CHARGE COVERAGE RATIO" means, as at the last day of any period,
Consolidated EBITDAR divided by the sum of Consolidated Interest Expense plus
Consolidated Rental Expense.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which the applicable Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
6
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum, asbestos or asbestos containing materials, polychlorinated biphenyls,
radon gas, and all other substances or wastes regulated under any Environmental
Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include, without duplication, the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTEREST ELECTION REQUEST" means a request by the applicable Borrower
to convert or
7
continue a Borrowing in accordance with Section 2.05.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December, and (b) with respect to
any Eurocurrency Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurocurrency
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"INTEREST PERIOD" means with respect to any Eurocurrency Loan, the
period commencing on the date of such Loan and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the applicable Borrower may elect; PROVIDED, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurocurrency Loan that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made or if initially an ABR Loan, on the date initially
converted and, in the case of a Eurocurrency Loan, thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"LENDER AFFILIATE" means, (a) with respect to any Lender (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LEVERAGE RATIO" means, as at the last day of any period, the ratio of
(a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Subsidiary Guarantee and any
Notes.
"LOAN PARTIES" means each Borrower and each Subsidiary that is a party
to a Loan Document.
8
"LOANS" means the loans made by the Lenders to the Borrowers pursuant
to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole, (b) the ability of any Borrower
to perform any of its obligations under this Agreement or (c) the rights of or
benefits available to the Lenders under this Agreement and the Subsidiary
Guarantee.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Company and its Subsidiaries in an aggregate principal amount exceeding Euro
25,000,000 (or the equivalent thereof in one or more other currencies). For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"MATURITY DATE" means the earlier of (a) November 15, 2001 and (b) the
date that is 180 days after the Effective Date.
"MEXX" means Mexx Group B.V., a private company with limited liability
incorporated under the laws of the Netherlands.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NOTE" means a promissory note of a Borrower payable to the order of
any Lender, evidencing the aggregate indebtedness of such Borrower to such
Lender resulting from the Loans made by such Lender.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERMITTED ACQUISITION" means any acquisition by the Company or any
Subsidiary of any of the assets of, or capital stock in, a Person or of a
division or line of business of a Person if, immediately after giving effect
thereto, (a) no Default has occurred and is continuing or would result
therefrom, (b) the principal business of any such acquired Person, division or
line of business shall be a Permitted Line of Business, (c) all actions required
to be taken under Section 5.10 with respect to any Subsidiary acquired or newly
formed in connection with such acquisition have been taken, (d) the Company and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Section 6.01 recomputed as at
the last day of the most recently ended fiscal quarter of the Company for which
financial statements are available, as if such acquisition had occurred on the
first day of each relevant period for testing such compliance and (e) the
Company has delivered to the Administrative Agent an officers' certificate to
the effect set forth in clauses (a), (b), (c) and (d) above, together
9
with all relevant financial information for the Person or assets to be acquired
and reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in clause (d) above.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) Liens granted and deposits made to secure the performance of
bids, trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any Subsidiary; PROVIDED that the term
"Permitted Encumbrances" shall not include any Lien securing Indebtedness.
"PERMITTED LINES OF BUSINESS" means (a) the business of the Company as
conducted on the Effective Date, (b) any wholesale, retail or other distribution
of products (including catalogue and internet) or services under any Trademark
or any derivative thereof, (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 or (d) any reasonable modification or
extension thereof.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"REGISTER" has the meaning set forth in Section 10.04(c).
"REGULATION U" means Regulation U of the Board as in effect from time
to time.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit
10
Exposures and unused Commitments at such time, PROVIDED, that each of Citicorp
North America, Inc. and The Chase Manhattan Bank shall be included in the
"Required Lenders" so long as it has Revolving Credit Exposure and unused
Commitment representing not less than 25% of the sum of the total Revolving
Credit Exposures and unused Commitments at such time.
"REQUIREMENT OF LAW" means, as to any Person, the Certificate of
Incorporation and By-Laws 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.
"RESPONSIBLE OFFICER" means the chief executive officer, president, any
vice president or Financial Officer of the Company, but in any event, with
respect to financial matters, a Financial Officer of the Company.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Company or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Company
or any option, warrant or other right to acquire any such shares of capital
stock of the Company.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans at such time.
"REVOLVING LOAN" means a Loan made pursuant to Section 2.03.
"SHARE PURCHASE AGREEMENT" means the Share Purchase Agreement, dated
May 15, 2001, among the Company, Liz Claiborne Acquisition B.V., a private
company with limited liability incorporated under the laws of the Netherlands
and wholly owned Subsidiary of the Company, LCI Acquisition, Inc., a Delaware
corporation and wholly owned Subsidiary of the Company, Amex Holding B.V.,
Movement Trading B.V., Houseview Limited, Citicorp Capital Investors Europe
Ltd., Capital Investors Nominees Ltd., Messrs. ▇▇▇▇▇▇, Sen Sharma, Advenye,
Arora, Ho, Mehta and Ouwendijk, Stichting Administratiekantoor Mexx and Mexx.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, with
respect to the EURIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Borrowers,
PROVIDED that with respect to any such 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 Maturity Date and the payment of principal of which and
(subject to clause (ii) below) any other obligations of the Borrowers in respect
thereof are subordinated to the prior payment in full of principal of and
interest (including post-petition interest) on the Loans and all other
obligations and liabilities of the Borrowers to the Administrative Agent and the
Lenders hereunder on terms and conditions first approved in
11
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, without the prior written consent of the
Required Lenders, 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" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any wholly-owned subsidiary of the Company and any
other subsidiary of the Company that the Company and the Administrative Agent
agree in writing to designate as a "Subsidiary", it being understood that the
Company and the Administrative Agent have agreed to designate each of the
entities set forth on Schedule 3.13 as a Subsidiary.
"SUBSIDIARY GUARANTEE" means the Subsidiary Guarantee, substantially in
the form of Exhibit C, among the Subsidiary Guarantors signatories thereto and
the Administrative Agent, for the benefit of the Lenders.
"SUBSIDIARY GUARANTOR" means each Subsidiary indicated on Schedule 3.13
as being a "Subsidiary Guarantor", together with each other Subsidiary that
becomes a party to the Subsidiary Guarantee in compliance with Section 5.10.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TRADEMARKS" has the meaning set forth in Section 5.06.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrowers of this Agreement and by the Subsidiary Guarantors of the Subsidiary
Guarantee, the borrowing of Loans, the use of the proceeds thereof and the share
purchase contemplated by the Share Purchase Agreement.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the EURIBO Rate or the Alternate Base
Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any
12
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The word "will" shall be construed to have
the same meaning and effect as the word "shall." Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein," "hereof" and "hereunder," and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.03. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans in Euros to the
Borrowers from time to time during the Availability Period in an aggregate
principal amount that will not result in (a) such Lender's Revolving Credit
Exposure exceeding such Lender's Commitment or (b) the sum of the total
Revolving Credit Exposures exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; PROVIDED that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.11, each Borrowing shall be comprised
entirely of Eurocurrency Loans as the applicable Borrower may request in
accordance herewith. Each Lender at its option may make any Eurocurrency Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; PROVIDED that any exercise of such option shall not
13
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
Euro 1,000,000 and not less than Euro 3,000,000; provided, that a Borrowing may
be in an aggregate amount that is equal to the entire unused balance of the
total Commitments. Borrowings of more than one Type may be outstanding at the
same time; PROVIDED that there shall not at any time be more than a total of 15
Eurocurrency Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
applicable Borrower shall notify the Administrative Agent of such request by
telephone not later than 11:00 a.m., New York City time, three Business Days
before the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the applicable Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) the initial Interest Period to be applicable
to the requested Borrowing, which shall be a period
contemplated by the definition of the term "Interest Period";
and
(iv) the location and number of such Borrower's
account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.04.
If no Interest Period is specified with respect to any requested Eurocurrency
Borrowing, then the applicable Borrower shall be deemed to have selected an
Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the applicable Borrower by promptly crediting the amounts so received, in
like funds, to an account of such Borrower maintained with the Administrative
Agent in New York City and designated by such Borrower in the applicable
Borrowing Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the
14
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
such Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to such Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the Euro Reference Rate or (ii) in the case of a Borrower, the
interest rate otherwise applicable to such Borrowing. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.05. INTEREST ELECTIONS. (a) Each Borrowing initially shall be
a Eurocurrency Borrowing, and shall have an initial Interest Period as specified
in the applicable Borrowing Request. Thereafter, the applicable Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The applicable Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Borrowing to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by such Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest
Election Request applies and, if different options are being
elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made
pursuant to such Interest Election Request, which shall be a
Business Day;
(iii) whether the resulting Borrowing is to be an
ABR Borrowing or a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency
Borrowing, the interest Period to be applicable thereto after
giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an
15
Interest Period, then the applicable Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If a Borrower fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Company, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid,
each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
SECTION 2.06. TERMINATION AND REDUCTION OF COMMITMENTS. Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(a) The Company may at any time terminate, or from time to time
reduce, the Commitments without penalty; PROVIDED that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of Euro 1,000,000
and not less than Euro 3,000,000 and (ii) the Company shall not terminate or
reduce the Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.08, the sum of the Revolving Credit
Exposures would exceed the total Commitments.
(b) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (a) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; PROVIDED that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
(c) On each date on which the Borrowers are required to prepay
Loans pursuant to Section 2.08(b), the Commitments of the Lenders shall be
ratably and permanently reduced by the amount of such prepayment.
SECTION 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) Each Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
made to it on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such
16
Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.
SECTION 2.08. PREPAYMENT OF LOANS. (a) OPTIONAL. (i) The Borrowers
shall have the right at any time and from time to time to prepay any Borrowing
in whole or in part without penalty, except as provided in Section 2.13, subject
to prior notice in accordance with paragraph (ii) of this Section.
(ii) The applicable Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurocurrency
Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; PROVIDED
that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by
Section 2.06, then such notice of prepayment may be revoked if such
notice of termination is revoked in accordance with Section 2.06.
Promptly following receipt of any such notice relating to a Borrowing,
the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing, and the remainder of
such Borrowing after giving effect to such prepayment, shall be in an
amount that would be permitted in the case of an advance of a Borrowing
as provided in Section 2.02. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.10.
(b) MANDATORY. The Borrowers shall, on the date of receipt of the
net cash proceeds by the Company or any of its Subsidiaries from the incurrance
or issuance by the Company or any of its Subsidiaries of any debt security in
the capital markets with a maturity in excess of one year and an amount of
$100,000,000 (or the equivalent thereof in one or more other currencies) or
more, prepay an aggregate amount of the Loans comprising part of the same
Borrowings in an amount equal to the amount of such net cash proceeds.
SECTION 2.09. FEES. (a) The Company agrees to pay to the Administrative
Agent for the account of each Lender a facility fee, which shall accrue at the
Applicable Rate on the daily amount of the Commitment of such Lender (whether
used or unused) during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates; PROVIDED that, if such
Lender continues to have any Revolving Credit Exposure after its Commitment
terminates, then such facility fee shall continue to accrue on the daily amount
of such Lender's Revolving Credit Exposure from and including the date on which
its Commitment
17
terminates to but excluding the date on which such Lender ceases to have any
Revolving Credit Exposure. Accrued facility fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Commitments terminate, commencing on the first such date to occur
after the date hereof; PROVIDED that any facility fees accruing after the date
on which the Commitments terminate shall be payable on demand. All facility fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and utilization fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.
SECTION 2.10. INTEREST. (a) The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear
interest at a rate per annum equal to the EURIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by any Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided above.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; PROVIDED that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, (iii) in the event of any conversion of any
Eurocurrency Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion and (iv) all accrued interest shall be payable upon
termination of the Commitments.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate or EURIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.11. ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which
determination shall be
18
conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the EURIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the EURIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurocurrency Borrowing, such
Borrowing shall be made as an ABR Borrowing; PROVIDED that if the circumstances
giving rise to such notice affect only one Type of Borrowing, then the other
Type of Borrowing shall be permitted.
SECTION 2.12. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (including the
type referred to in clause (b) of the definition of "Statutory Reserve
Rate" in Section 1.01); or
(ii) impose on any Lender or the London interbank market
any other condition affecting this Agreement or Eurocurrency Loans made
by such Lender therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrowers will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to
19
this Section shall not constitute a waiver of such Lender's right to demand such
compensation; PROVIDED that the Borrowers shall not be required to compensate a
Lender pursuant to this Section for any increased costs or reductions incurred
more than three months prior to the date that such Lender notifies the Company
of the Change in Law giving rise to such increased costs or reductions and of
such Lender's intention to claim compensation therefor; PROVIDED FURTHER that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the three-month period referred to above shall be extended to
include the period of retroactive effect thereof. . SECTION 2.13. BREAK FUNDING
PAYMENTS. Each Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense that such Lender may sustain or incur as a
consequence of (a) default by such Borrower in making a borrowing of, conversion
into or continuation of Eurocurrency Loans after such Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(b) default by such Borrower in making any prepayment of or conversion from
Eurocurrency Loans after such Borrower has given a notice thereof in accordance
with the provisions of this Agreement, (c) the making of a prepayment of
Eurocurrency Loans on a day that is not the last day of an Interest Period with
respect thereto, (d) the assignment of any Eurocurrency Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
such Borrower pursuant to Section 2.16. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued or assigned for the period from the date of such prepayment or of such
failure to borrow, convert or continue or assign to the last day of such
Interest Period (or, in the case of a failure to borrow, convert or continue, or
assign 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 Rate included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
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 Eurocurrency
market. A certificate as to any amounts payable pursuant to this Section
submitted to the applicable Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
SECTION 2.14. TAXES. (a) Any and all payments by or an account of any
obligation of each Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent and
each Lender within 30 days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case
20
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by a Lender or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by such Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
SECTION 2.15. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or under Section 2.12, 2.13
or 2.14, or otherwise) prior to 3:00 p.m. New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, except that payments pursuant to Sections 2.12,
2.13, 2.14 and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Euros.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first, to
pay interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, to pay principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans; PROVIDED that (i)
21
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by any Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Company or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the applicable Borrower prior to the date on which any payment is due to
the Administrative Agent for the account of the Lenders hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if such Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Euro Reference
Rate.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to 2.04(b) or 2.15(d), then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.16. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under Section 2.12, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.12, or if
any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) if such assignee
is not a Lender, the Company shall have received the prior
22
written consent of the Administrative Agent which consent shall not be
unreasonably withheld or delayed, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.12 or payments required to be made pursuant to Section 2.14, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
SECTION 2.17. SOURCE OF FUNDS. None of the funds to be lent pursuant to
this Agreement are assets of an employee benefit plan or constitute "plan
assets" within the meaning of Department of Labor Regulation Section 2510.3-101.
ARTICLE III
Representations and Warranties
The Company represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the Company's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Company or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Company or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Company or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect, and (d) will not
result in the creation or imposition of any material Lien on any asset of the
Company or any of its Subsidiaries.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The
Company
23
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended December 30, 2000, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended March 31, 2001, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Company and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year -end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above. The
Company and its Subsidiaries do not have any material Guarantees, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the financial statements referred to in
this paragraph or in the notes thereto (and, in the case of such lease or
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) Since December 30, 2000, there has been no development, event
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.
(c) Since December 30, 2000, there has been no development, event
or circumstance that has had or could reasonably be expected to have a material
adverse effect on the business, assets, operation or condition, financial or
otherwise, of the Company and its Subsidiaries on a pro forma basis giving
effect to the transaction contemplated by the Share Purchase Agreement, taken as
a whole.
SECTION 3.05. PROPERTIES; LIENS. (a) Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes,
and none of such property is subject to any Lien, except as permitted by Section
6.03.
(b) Each of the Company and its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters), (ii) that involve this Agreement, any other Loan Document or the
Transactions or (iii) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected individually or in the aggregate, to result in a material adverse
effect on the business, assets, operation or condition, financial or otherwise,
of the Company and its Subsidiaries on a pro forma basis giving effect to the
transaction contemplated by the Share Purchase Agreement taken as a whole.
(b) Except for the Disclosed Matters and except with respect to
any other matters
24
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law, (ii) is
subject to any Environmental Liability, (iii) has received any written notice of
any claim with respect to any Environmental Liability or (iv) has knowledge of
any reason to reasonably conclude that Environmental Liability will be incurred.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Company
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.08. NO DEFAULT. Neither the Company nor any of its
Subsidiaries 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.
SECTION 3.09. INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.10. NO BURDENSOME RESTRICTIONS. Neither the Company nor any
Subsidiary is a party to any indenture, agreement, lease or other instrument
which is so unusual or burdensome such that it could be reasonably expected to
have a Material Adverse Effect.
SECTION 3.11. TAXES. Each of the Company and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and have paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.12. FEDERAL REGULATIONS. No part of the proceeds of any Loans
hereunder will be used, directly or indirectly, for "buying" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
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, each Borrower will furnish to the Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 referred
to in said Regulation U.
SECTION 3.13. SUBSIDIARIES. Schedule 3.13 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.
25
SECTION 3.14. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, except to the extent any such excess
(individually or in the aggregate) could not reasonably be expected to have a
Material Adverse Effect, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans except to the extent
any such excess (individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.15. DISCLOSURE. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Company to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contain any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED that,
with respect to projected financial information, the Company represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
ARTICLE IV
Conditions
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have received
(i) either (A) a counterpart of this Agreement and each Note, executed and
delivered by a duly authorized officer of the Company or (B) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement and the Notes) that
such party has signed a counterpart of this Agreement and the Notes and (ii) a
counterpart of the Subsidiary Guarantee, executed and delivered by a duly
authorized officer of each Subsidiary Guarantor.
(b) The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of (i) ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company, substantially in the form of Exhibit D-1, and (ii) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Deputy General Counsel of the Company, substantially in the form of Exhibit D-2,
and each opinion covering such other matters relating to the Company, this
Agreement or the Transactions as the Required Lenders shall reasonably request.
The Company hereby requests such counsel to deliver such opinion.
(c) The Administrative Agent shall have received all government
approvals necessary or, in the discretion of the Administrative Agent, advisable
in connection with the Transaction and the continuing operations of the Company
and its Subsidiaries shall have been
26
obtained and be in full force and effect.
(d) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the Company
and its Subsidiaries, the authorization of the Transactions and any other legal
matters relating to the Borrowers, this Agreement or the Transactions, all in
form and substance reasonably satisfactory to the Administrative Agent and its
counsel.
(e) The Administrative Agent shall have received (i) audited
consolidated financial statements of the Company for the two most recent fiscal
years ended prior to the Effective Date as to which such financial statements
are available and (ii) unaudited interim consolidated financial statements of
the Company for each quarterly period ended subsequent to the date of the latest
financial statements delivered pursuant to clause (i) of this paragraph as to
which such financial statements are available.
(f) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the president, a vice president or a
Financial Officer of the Company, confirming compliance with the conditions set
forth in paragraphs (a) and (b) of Section 4.03 (with such paragraph (a) being
deemed for this purpose not to include the parenthetical clause included
therein).
(g) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder. The Administrative
Agent shall notify the Company and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lenders to make Loans hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 10.02) at or prior to 3:00 p.m., New York City time, on May 25, 2001
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
(h) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the president, a vice president or a
Financial Officer of the Company, confirming the satisfaction of all of the
conditions precedent to the Share Purchase Agreement (or as amended in a manner
satisfactory to the Lenders) shall have been satisfied, and the share purchase
contemplated thereby shall have been effected.
SECTION 4.02. ADDITIONAL BORROWERS. The obligations of the Lenders to
make Loans hereunder to each Designated Subsidiary shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have received
(i) either (A) a counterpart of the Designation Letter of such Designated
Subsidiary, executed and delivered by a duly authorized officer of such
Designated Subsidiary or (B) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of the
Designation Letter of such Designated Subsidiary) that such party has signed a
counterpart of the Designation Letter of such Designated Subsidiary and (ii) a
consent to the addition of such Designated Subsidiary as a Borrower, executed
and delivered by a duly authorized officer of each Subsidiary Guarantor.
27
(b) The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated the
date of the applicable Designation Letter) of counsel to the applicable
Designated Subsidiary, covering such matters relating to such Designated
Subsidiary, the applicable Designation Letter, this Agreement or the
Transactions as the Administrative Agent or the Required Lenders shall
reasonably request. The applicable Designated Subsidiary hereby requests such
counsel to deliver such opinion.
(c) The Administrative Agent shall have received evidence that all
government approvals necessary or, in the discretion of the Administrative
Agent, advisable in connection with the financing contemplated hereby to such
Designated Subsidiary and the continuing operations of the Company and such
Designated Subsidiary shall have been obtained and be in full force and effect.
(d) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of such
Designated Subsidiary, the authorization of the Transactions and any other legal
matters relating to such Designated Subsidiary, the applicable Designation
Letter, this Agreement or the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.
SECTION 4.03. EACH CREDIT EVENT. The obligation of each Lender to make
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Company set forth in
this Agreement (except the representations set forth in Section 3.04(b),
3.04(c), Section 3.06 and the first sentence of Section 3.08) and, if such
Borrowing shall have been requested by a Designated Subsidiary, the
representations and warranties in its Designation Letter, shall be true and
correct in all material respects on and as of the date of such Borrowing, except
for representations and warranties which are made as of a specific date which
shall be true and correct as of such date.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing. Each Borrowing
shall be deemed to constitute a representation and warranty by the applicable
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS. The Company will furnish to the
Administrative Agent and each Lender:
(a) as soon as available, but in any event within 2 Business Days
after the end of 90 days following the end of each fiscal year of the Company, a
copy of the audited consolidated balance sheet of the Company and its
consolidated subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting forth
in each case in comparative form the figures for the previous year, reported on
without a "going
28
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event within 2 Business Days
after the end of 45 days following the end of each of the first three quarterly
periods of each fiscal year of the Company, the unaudited consolidated balance
sheet of the Company and its consolidated subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures for the
previous year, signed by a Responsible Officer (subject to normal year -end
audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
SECTION 5.02. CERTIFICATES; OTHER INFORMATION. The Company will furnish
to the Administrative Agent and each Lender (or, in the case of clause (d), to
the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 5.01(a), a certificate of the independent certified
public accountants reporting on 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;
(b) concurrently with the delivery of any financial statements
pursuant to Section 5.01, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it, that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (ii) in
the case of quarterly or annual financial statements, a Certificate containing
all information and calculations necessary for determining compliance by the
Company and its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of the Company,
as the case may be;
(c) within five days after the same are sent, copies of all
financial statements and reports that the Company sends to the holders of any
class of its debt securities or public equity securities and, within five days
after the same are filed, copies of all financial statements and reports that
the Company may make to, or file with, the Securities and Exchange Commission,
or any Governmental Authority; and
(d) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
SECTION 5.03. NOTICES OF MATERIAL EVENTS. The Company will promptly
(and in any event within five days after the Company knows of the following
events) furnish to the Administrative Agent and each Lender written notice of
the following:
(a) the occurrence of any Default;
29
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting the
Company or any Affiliate thereof as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to have
a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. The Company will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of Permitted Lines of Business; PROVIDED that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.04.
SECTION 5.05. PAYMENT OF OBLIGATIONS. The Company will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.06. MAINTENANCE OF PROPERTIES AND TRADEMARKS; INSURANCE. The
Company will, and will cause each of its Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, PROVIDED that the Company shall, in
good faith, determine when to repair any property, (b) take all action
reasonably necessary or desirable in accordance with good business practices to
(i) 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, now or hereafter acquired, in
each case necessary for the conduct of its business (collectively, the
"TRADEMARKS") and (ii) protect all domestic and foreign Trademarks against
infringement by third parties and (c) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as a prudent Person engaged in the same or similar business of a similar size
and otherwise similarly situated would maintain.
SECTION 5.07. BOOKS AND RECORDS; INSPECTION RIGHTS. The Company will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP are made
of all dealings and transactions in relation to its business and activities. The
Company will, and will cause each of its Subsidiaries to, permit on an annual
basis (or at any time and from time to time after the occurrence and during the
continuance of a Default or Event of Default) any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs,
30
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
SECTION 5.08. ENVIRONMENTAL LAWS. The Company will, and will use
reasonable best efforts to cause each of its Subsidiaries to:
(a) Comply in all material respects with, and use reasonable best
efforts to ensure compliance in all material respects by their tenants and
subtenants, if any, with, all applicable Environmental Laws, except for such
matters of noncompliance which could not reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect.
(b) Except to the extent being contested in good faith, conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws or by
Governmental Authorities.
SECTION 5.09. COMPLIANCE. The Company will, and will cause each of its
Subsidiaries to, comply with all Contractual Obligations and 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.
SECTION 5.10. ADDITIONAL SUBSIDIARIES. The Company will, with respect
to any Person that, subsequent to the Effective Date, becomes a Subsidiary
organized in a jurisdiction within the United States, promptly cause such new
Subsidiary to become a party to the Subsidiary Guarantee pursuant to
documentation which is in form and substance satisfactory to the Administrative
Agent; PROVIDED that the Administrative Agent and the Company may agree in
writing that any non-material or less than wholly-owned Subsidiary need not
become a Subsidiary Guarantor.
SECTION 5.11. USE OF PROCEEDS. The proceeds of the Loans will be used
only (i) to pay consideration under the Share Purchase Agreement, (ii) to pay
fees and expenses associated with the Transactions, (iii) to repay Indebtedness
of Mexx and its subsidiaries and (iv) for other general corporate purposes of
the Company and the Subsidiaries. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Company covenants and agrees with the Lenders that:
SECTION 6.01. FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Company will not permit the Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Company to exceed 2.50 to 1.00.
(b) FIXED CHARGE COVERAGE RATIO. The Company will not permit the
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Company to be less than 2.25 to 1.00.
31
SECTION 6.02. INDEBTEDNESS. The Company will not, and will not permit
any Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.02;
(c) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary;
(d) Guarantees by the Company of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Company or any other Subsidiary;
(e) Indebtedness of the Company or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, PROVIDED that (i) such
Indebtedness is incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement and (ii) the aggregate
principal amount of Indebtedness permitted by this clause (e) shall not exceed
$150,000,000 (or the equivalent thereof in one or more other currencies) at any
time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; PROVIDED that (i) such Indebtedness exists or is committed at the
time such Person becomes a Subsidiary and is not created in contemplation of or
in connection with such Person becoming a Subsidiary and (ii) the Company and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Section 6.01 recomputed as at
the last day of the most recently ended fiscal quarter of the Company for which
financial statements are available, as if such acquisition had occurred on the
first day of each relevant period for testing such compliance;
(g) Indebtedness of the Company or any Subsidiary incurred (a) as
an account party in respect of trade letters of credit issued in the ordinary
course of business and (b) in connection with standby letters of credit in an
aggregate principal amount not exceeding $25,000,000 (or the equivalent thereof
in one or more other currencies) at any time outstanding;
(h) Indebtedness of the Company or any Subsidiary in respect of
commercial paper;
(i) Subordinated Indebtedness;
(j) any refinancings, refundings, renewals or extensions of
Indebtedness permitted hereunder that do not increase the outstanding principal
amount of such Indebtedness;
(k) additional Indebtedness not otherwise permitted hereunder
secured by Liens and not exceeding $100,000,000 (or the equivalent thereof in
one or more other currencies) in aggregate principal amount at any time
outstanding; and
(l) Indebtedness not otherwise permitted hereunder, not secured by
any Lien and incurred after the date hereof; PROVIDED that the Company and its
Subsidiaries are in compliance, on a pro forma basis after giving effect to such
Indebtedness, with the covenants contained in
32
Section 6.01 recomputed as at the last day of the most recently ended fiscal
quarter of the Company for which financial statements are available, as if such
Indebtedness had been incurred on the first day of each relevant period for
testing such compliance.
SECTION 6.03. LIENS. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6.03; PROVIDED
that (i) such Lien shall not apply to any other property or asset of the Company
or any Subsidiary and (ii) such Lien shall secure only those obligations which
it secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(c) Liens arising by the terms of letters of credit entered into
in the ordinary course of business to secure reimbursement obligations and other
obligations in connection therewith;
(d) 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;
(e) Liens arising by reason of any judgment, decree or order of
any court or other Governmental Authority for the payment of money in aggregate
amount not to exceed $25,000,000 (or the equivalent thereof in one or more other
currencies) at any time outstanding;
(f) Liens arising in connection with factoring accounts receivable
related to any acquired Subsidiary; PROVIDED that such factoring shall not
continue for a period longer than one year from the date such Subsidiary is
acquired;
(g) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof prior to
the time such Person becomes a Subsidiary; PROVIDED that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the Company or any Subsidiary and (iii) such
Lien shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(h) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; PROVIDED that (i) such security
interests secure Indebtedness permitted by clause (e) of Section 6.02, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security
33
interests shall not apply to any other property or assets of the Company or any
Subsidiary; and
(i) Liens securing Indebtedness permitted under Sections 6.02(j)
and 6.02(k); PROVIDED that with respect to Indebtedness incurred pursuant to
Section 6.02(j) no such Lien is spread to cover additional property.
SECTION 6.04. FUNDAMENTAL CHANGES. Except in connection with
transactions otherwise permitted pursuant to Section 6.05 or 6.06, the Company
will not, and will not permit any Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto, no Default shall
have occurred and be continuing (i) any Person may merge into the Company in a
transaction in which the Company is the surviving corporation, (ii) any Person
may merge into any Subsidiary in a transaction in which the surviving entity is
a Subsidiary and, if required to be so under Section 5.10, a Subsidiary
Guarantor, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose
of its assets to the Company or to another Subsidiary which is a Subsidiary
Guarantor and (iv) any Subsidiary may liquidate or dissolve if the Company
determines in good faith that such liquidation or dissolution is in the best
interests of the Company and is not materially disadvantageous to the Lenders;
PROVIDED that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.05.
SECTION 6.05. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; HEDGING AGREEMENTS. (a) The Company will not, and will not permit
any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(i) existing investments not otherwise permitted under
this Agreement and described in Schedule 6.05(i) hereto;
(ii) investments made in accordance with the investment
policy of the Company as set forth on Schedule 6.05(ii) hereto;
PROVIDED that any material amendment or other material modification to
such policy is subject to the approval of the Administrative Agent in
its reasonable discretion;
(iii) investments by the Company in the capital stock of
its Subsidiaries;
(iv) Permitted Acquisitions;
(v) investments received in connection with the bona fide
settlement of any defaulted Indebtedness or other liability owed to the
Company or any Subsidiary;
(vi) advances or loans made in the ordinary course of
business to employees of the Company or any of its Subsidiaries in an
aggregate amount not to exceed
34
$10,000,000 (or the equivalent thereof in one or more other currencies)
at any time outstanding;
(vii) loans or advances to third party contractors,
suppliers or customers in the ordinary course of business and
consistent with past practice;
(viii) loans or advances made by the Company to any
Subsidiary and made by any Subsidiary to the Company or any other
Subsidiary;
(ix) guarantees by the Company or any Subsidiary of
obligations of the Company or any other Subsidiary which do not
constitute Indebtedness;
(x) Guarantees constituting Indebtedness permitted by
Section 6.02; and
(xi) any other investments in, advances or loans to or
Guarantees of, any Person in an aggregate amount not to exceed
$200,000,000 (or the equivalent thereof in one or more other
currencies) at any time outstanding.
(b) The Company will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements
entered into in the ordinary course of business (including, without limitation,
Hedging Agreements in connection with the Company's stock repurchase program) to
hedge or mitigate risks to which the Company or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.
SECTION 6.06. LIMITATION ON SALE OF ASSETS. Except in the ordinary
course of business, the Company will not, and will not permit any of its
Subsidiaries to, sell, convey, lease, transfer or otherwise dispose of (other
than as otherwise permitted by Section 6.04 or 6.05) all or any substantial part
of its assets; PROVIDED that the foregoing shall not prohibit any such sale,
conveyance, lease, transfer or disposition (i) which (x) is for a price not
materially less than the fair market value of such assets of the Company or such
Subsidiary, (y) would not materially impair the ability of the Company to
perform its obligations under this Agreement and (z) together with all other
such sales, conveyances, leases, transfers and dispositions, would have no
Material Adverse Effect, (ii) of assets that individually or in the aggregate
constitute less than 15% of the total assets of the Company and its Subsidiaries
taken as a whole or (iii) of assets in connection with factoring arrangements
with respect to any acquired Subsidiary, PROVIDED that such factoring
arrangements do not continue longer than a year after such Subsidiary is
acquired by the Company.
SECTION 6.07. RESTRICTED PAYMENTS. The Company will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) the Company may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (b) so long as no Default or Event of
Default has occurred and is continuing, the Company may declare and pay
dividends with respect to its capital stock, (c) any Subsidiary may declare and
pay dividends to the Company or, in the case of any Subsidiary that is wholly
owned by another Subsidiary, to such other Subsidiary, (d) the Company may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Company and its
Subsidiaries, (e) so long as no Default or Event of Default has occurred and is
continuing, the Company may repurchase its capital stock pursuant to its stock
repurchase program and (f) so long as no Default or Event of Default has
occurred and is continuing, the Company may make Restricted Payments in
connection with the repurchase of the Capital Stock of Lucky Brands, Inc. and
Segrets, Inc.
35
SECTION 6.08. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Company and its Subsidiaries not involving any
other Affiliate and (c) any Restricted Payment permitted by Section 6.07.
SECTION 6.09. CHANGES IN FISCAL PERIODS. The Company will not, and will
not permit any of its Subsidiaries to, permit the fiscal year of the Company to
end on a day other than the last Saturday closest to December 31 or change the
Company's method of determining fiscal quarters.
SECTION 6.10. LINES OF BUSINESS. The Company will not, and will not
permit any of its Subsidiaries to, enter into any business, either directly or
through any Subsidiary, except for Permitted Lines of Business.
ARTICLE VII
Events of Default
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of any Borrower or any Subsidiary in or in connection with this Agreement
or any amendment or modification hereof, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any amendment or modification hereof, shall prove to have
been materially incorrect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.04 (with respect to the Company's
existence) or 5.11 or in Article VI;
(e) the Company shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent (given at the request of any Lender) to the Company;
(f) the Company or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and
36
as the same shall become due and payable (after giving effect to any applicable
period of grace);
(g) any default or any event of default with respect to any
Material Indebtedness which results in such Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Company or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Company or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Company or any Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of Euro 25,000,000 (or the equivalent thereof in one or more
other currencies) shall be rendered against the Company, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Company or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent with the consent
of the Required Lenders may, and at the request of the Required Lenders shall,
by notice to the Company, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may
37
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrowers;
and in case of any event with respect to any Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Borrower.
ARTICLE VIII
Guaranty
SECTION 8.01. DEFINED TERMS. As used in this Article VIII,
"OBLIGATIONS" means the collective reference to the unpaid principal of and
interest on the Notes and all other obligations and liabilities of each Borrower
that is a Designated Subsidiary to the Administrative Agent or the Lenders
(including, without limitation, interest accruing at the then applicable rate
provided in this Agreement after the maturity of the Loans and interest accruing
at the then applicable rate provided in this Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to such Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, the Notes, the other Loan Documents or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are required to be
paid by such Borrower or the Company pursuant to the terms of this Agreement or
any other Loan Document).
SECTION 8.02. GUARANTEE. (a) The Company unconditionally and
irrevocably guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by each Designated Subsidiary
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) The Company further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of counsel in respect of, any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, the Company under this Article
VIII. The Guarantee under this Article VIII shall remain in full force and
effect until the Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto the applicable
Borrower may be free from any Obligations.
(c) No payment or payments made by any other Borrower, any of the
Subsidiary Guarantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Lender from any other Borrower, any
of the Subsidiary Guarantors, any other guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application at
any time or from time to time in reduction of or in payment of the
38
Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of the Company hereunder and the Company shall, notwithstanding any
such payment or payments (other than payments made by the Company in respect of
the Obligations or payments received or collected from the Company in respect of
the Obligations), remain liable for the Obligations up to the maximum liability
of the Company hereunder until the Obligations are paid in full and the
Commitments are terminated.
(d) The Company agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.
SECTION 8.03. NO SUBROGATION. Notwithstanding any payment or payments
made by any of the Company hereunder or any set-off or application of funds of
the Company by any Lender, the Company shall not be entitled to be subrogated to
any of the rights of the Administrative Agent or any Lender against any other
Borrower or any Subsidiary Guarantor or any collateral security or guarantee or
right of offset held by any Lender for the payment of the Obligations, nor shall
the Company seek or be entitled to seek any contribution or reimbursement from
any other Borrower or any Subsidiary Guarantor in respect of payments made by
the Company hereunder, until the Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to the Company on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by the Company in trust
for the Administrative Agent and the Lenders, segregated from other funds of the
Company, and shall, forthwith upon receipt by the Company, be turned over to the
Administrative Agent in the exact form received by the Company (duly indorsed by
the Company to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Administrative
Agent and the Lenders may determine.
SECTION 8.04. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER
OF RIGHTS. The Company shall remain obligated under this Article VIII
notwithstanding that, without any reservation of rights against the Company and
without notice to or further assent by the Company, any demand for payment of
any of the Obligations made by the Administrative Agent or any Lender may be
rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and this Agreement, the Notes and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against the Company, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the applicable Borrower or any Subsidiary Guarantor or
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from such Borrower or any such Subsidiary
Guarantor or guarantor or any release of such Borrower or such Subsidiary
Guarantor or guarantor shall not relieve the Company in respect of which a
demand or collection is not made,
39
and shall not impair or affect the rights and remedies, express or implied, or
as a matter of law, of the Administrative Agent or any Lender against the
Company. For the purposes hereof, "demand" shall include the commencement and
continuance of any legal proceedings.
SECTION 8.05. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between any other Borrower and the Company, on the
one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. The Company waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon any
Borrower or the Company with respect to the Obligations. The Company understands
and agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of this Agreement, any Note or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Borrower against the Administrative
Agent or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of any Borrower or the Company) which constitutes, or
might be construed to constitute, an equitable or legal discharge of such
Borrower for the Obligations, or of the Company under this Guarantee, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against the Company, the Administrative Agent and any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may have
against the applicable Borrower or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to pursue
such other rights or remedies or to collect any payments from such Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of such
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Company of any liability under this
Article VIII, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
and the Lenders against the Company. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
the Company and the successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations of the Company under this Guarantee shall have been satisfied by
payment in full and the Commitments shall be terminated, notwithstanding that
from time to time during the term of this Agreement any Borrower may be free
from any Obligations.
SECTION 8.06. REINSTATEMENT. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or the Company, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, such
Borrower or the Company or any substantial part of its property, or otherwise,
all as though such payments had not been made.
40
SECTION 8.07. PAYMENTS. The Company hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in the appropriate currency at the office of the Administrative
Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 8.08. AUTHORITY OF ADMINISTRATIVE AGENT. The Company
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guarantee with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the Administrative
Agent and the Lenders, be governed by this Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Company, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Company shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8.09. SEVERABILITY. Any provision of this Article VIII 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 provision in any other jurisdiction.
ARTICLE IX
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Company or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Company or a Lender, and the
41
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facility provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it
42
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:
(a) if to the Company, to it at Liz Claiborne, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇ (Facsimile No.
201-295-7825);
(b) if to the Administrative Agent, to Citicorp North America,
Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇
▇▇▇▇▇▇▇ (Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any other Lender, to it at its address (or number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or by the Borrowers and
the Administrative Agent with the consent of the Required Lenders; PROVIDED that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or any interest
thereon, or any fees payable hereunder, or reduce
43
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.15(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) except in connection with transactions otherwise
permitted pursuant to Section 6.04, 6.05 or 6.06, release all or substantially
all of the Subsidiary Guarantors from their obligations under the Subsidiary
Guarantee, without the written consent of each Lender, or (vi) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; PROVIDED
FURTHER that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Company
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent, in connection with the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by
any Administrative Agent or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made hereunder, including in connection with any workout,
restructuring or negotiations in respect thereof.
(b) The Company shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "INDEMNITEE") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; PROVIDED that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such.
44
(d) To the extent permitted by applicable law, no Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions or any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
no later than seven (7) days after written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by any Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or a Lender Affiliate other
than a Conduit Lender, each of the Company and the Administrative Agent must
give its prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
a Lender Affiliate or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than Euro 10,000,000 unless each of the
Company and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
Euro 3,000, and (v) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire; PROVIDED FURTHER that
any consent of the Company otherwise required under this paragraph shall not be
required if an Event of Default under clause (a), (b), (h) or (i) of Article VII
has occurred and is continuing. Upon acceptance and recording pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled, (with
respect to the period prior to such assignment ) to the benefits of Sections
2.12, 2.13, 2.14 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section. Notwithstanding the foregoing, any Conduit Lender may assign at
any time to its designating Lender hereunder with the consent of the
45
Company, any or all Loans it may have funded hereunder and pursuant to its
designation agreement.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and/or obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); PROVIDED that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (iv) all Participants shall represent, for
the benefit of Borrowers, that none of the participation interests are being
acquired with assets of an employee benefit plan or with assets that constitute
"plan assets" under Department of Labor Regulation Section 2510.3-101. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; PROVIDED that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
10.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Sections 2.12, 2.13 or 2.14 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.14
unless the Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.14(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any
46
such pledge or assignment to a Federal Reserve Bank, and this Section shall not
apply to any such pledge or assignment of a security interest; PROVIDED that no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such assignee for such Lender as
a party hereto.
(h) Each of the Borrowers, the Subsidiary Guarantors and each
Lender hereby confirms that it will not institute against a Conduit Lender or
join any other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Lender;
PROVIDED, HOWEVER, that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.
SECTION 10.05. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14 and 10.03 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be
47
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower against any of and all the obligations of
any Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured PROVIDED that such
Lender shall promptly notify the applicable Borrower of such setoff. The rights
of each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Borrower or its properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.11. CONFIDENTIALITY. Each of the Administrative Agent and
the Lenders expressly agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent required by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with
48
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than the Company. For the purposes of this Section,
"INFORMATION" means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company; PROVIDED that, in the case of information received
from the Company after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information, PROVIDED, HOWEVER, in
no event less than reasonable care.
SECTION 10.12. JUDGMENT. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder in Dollars into
Euros, the parties hereto agree, to the fullest extent that they may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase Dollars with
Euros at Citibank, N.A.'s principal office in London at 11:00 A.M. (London time)
on the Business Day preceding that on which final judgment is given.
(b) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Euros into Dollars, the parties
agree to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase Euros with Dollars at
Citibank, N.A.'s principal office in London at 11:00 A.M. (London time) on the
Business Day preceding that on which final judgment is given.
(c) The obligation of the Loan Parties in respect of any sum due
from it in any currency (the "PRIMARY CURRENCY") to any Lender or the
Administrative Agent hereunder shall, notwithstanding any judgment in any other
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or the Administrative Agent (as the case may be), of any
sum adjudged to be so due in such other currency, such Lender or the
Administrative Agent (as the case may be) may in accordance with normal banking
procedures purchase the applicable Primary Currency with such other currency; if
the amount of the applicable Primary Currency so purchased is less than such sum
due to such Lender or the Administrative Agent (as the case may be) in the
applicable Primary Currency, each Loan Party agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such Lender or the
Administrative Agent (as the case may be) against such loss, and if the amount
of the applicable Primary Currency so purchased exceeds such sum due to any
Lender or the Administrative Agent (as the case may be) in the applicable
Primary Currency, such Lender or the Administrative Agent (as the case may be)
agrees to remit to such Loan Party such excess.
SECTION 10.13. DESIGNATED SUBSIDIARIES. (a) DESIGNATION. The Company
may at any time and from time to time by delivery to the Agent of a Designation
Letter, duly executed by the Company and a wholly-owned Subsidiary and in
substantially the form of Exhibit B hereto, designate such Subsidiary as a
"DESIGNATED SUBSIDIARY" for all purposes of this Agreement, and,
49
upon fulfillment of the applicable conditions set forth in Article IV and after
such Designation Letter is accepted by the Administrative Agent, such Subsidiary
shall thereupon become a Designated Subsidiary for all purposes of this
Agreement and, as such, shall have all of the rights and obligations of a
Borrower hereunder. The Administrative Agent shall promptly notify each Lender
of each such designation by the Company and the identity of each such Designated
Subsidiary.
(b) TERMINATION. Upon the payment and performance in full of all
of the indebtedness, liabilities and obligations of any Designated Subsidiary
under this Agreement and the Notes issued by it, then, so long as at such time
such Designated Subsidiary has not submitted a Borrowing Request, such
Designated Subsidiary's status as a Borrower and as a Designated Subsidiary
shall terminate upon notice to such effect from the Administrative Agent to the
Lenders (which notice the Administrative Agent shall promptly deliver to the
Lenders following its receipt of such a request from the Company). Thereafter,
the Lenders shall be under no further obligation to make any Revolving Loans to
such Designated Subsidiary.
50
SECTION 10.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LIZ CLAIBORNE, INC.
By /s/ ▇▇▇▇▇▇ ▇. Vill
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. Vill
Title: VP - Treasury, Investor Relations
and Treasurer
CITICORP NORTH AMERICA, INC.,
individually and as Administrative
Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
51