[EXECUTION COPY]
$200,000,000
CREDIT AGREEMENT
Dated as of December 22, 1993
Among
BROWN GROUP, INC.
as Borrower
and
THE LENDERS NAMED THEREIN
as Lenders
and
THE FIRST NATIONAL BANK OF CHICAGO
as Agent
and
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
and
CITIBANK, N.A.
as Co-Agents
CREDIT AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . 1
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . 14
2.1. The Facility . . . . . . . . . . . . . . . . . . . 14
2.1.1. Description of Facility. . . . . . . . . . . . 14
2.1.2. Availability of Facility; Required
Payments . . . . . . . . . . . . . . . . . . . . . 14
2.2. Committed Advances . . . . . . . . . . . . . . . . 14
2.2.1. Committed Advances . . . . . . . . . . . . . . 14
2.2.2. Types of Committed Advances. . . . . . . . . . 15
2.2.3. Method of Selecting Types and Interest
Periods for
New Committed Advances . . . . . . . . . . . . 15
2.2.4. Conversion and Continuation of
Outstanding
Committed Advances . . . . . . . . . . . . . . 15
2.2.5. Applicable Margins . . . . . . . . . . . . . . 16
2.3. Competitive Bid Advances . . . . . . . . . . . . . 17
2.3.1. Competitive Bid Option; Repayment of
Competitive Bid Advances . . . . . . . . . . . 17
2.3.2. Competitive Bid Quote Request. . . . . . . . . 17
2.3.3. Invitation for Competitive Bid
Quotes . . . . . . . . . . . . . . . . . . . . . . 18
2.3.4. Submission and Contents of Competitive
Bid Quotes . . . . . . . . . . . . . . . . . . . . 18
2.3.5. Notice to the Borrower . . . . . . . . . . . . 20
2.3.6. Acceptance and Notice by the Borrower. . . . . 20
2.3.7. Allocation by the Agent. . . . . . . . . . . . 21
2.4. Fees . . . . . . . . . . . . . . . . . . . . . . . 21
2.4.1. Agency and Administration Fees . . . . . . . . 21
2.4.2. Commitment Fees. . . . . . . . . . . . . . . . 21
2.4.3. Excess Usage Fees. . . . . . . . . . . . . . . 21
2.5. General Facility Terms . . . . . . . . . . . . . . 22
2.5.1. Method of Borrowing. . . . . . . . . . . . . . 22
2.5.2. Minimum Amount of Each Committed
Advance. . . . . . . . . . . . . . . . . . . . . . 22
2.5.3. Optional Principal Payments. . . . . . . . . . 22
2.5.4. Interest Periods . . . . . . . . . . . . . . . 23
2.5.5. Availability of Eurodollar Rates;
Rate after Maturity. . . . . . . . . . . . . . . . 23
2.5.6. Interest Payment Dates; Interest and
Fee Basis. . . . . . . . . . . . . . . . . . . . . 23
2.5.7. Method of Payment. . . . . . . . . . . . . . . 24
2.5.8. Notes; Telephonic Notices. . . . . . . . . . . 24
2.5.9. Notification of Advances, Interest
Rates and Prepayments. . . . . . . . . . . . . . . 24
2.5.10. Non-Receipt of Funds by the Agent. . . . . . . 25
2.5.11. Cancellation . . . . . . . . . . . . . . . . . 25
2.5.12. Lending Installations. . . . . . . . . . . . . 25
2.5.13. Taxes. . . . . . . . . . . . . . . . . . . . . 26
2.5.14. Withholding Tax Exemption . . . . . . . . . . 26
2.6. Commitment Extensions. . . . . . . . . . . . . . . 26
2.6.1. Extensions of the Commitments. . . . . . . . . 26
2.6.2. Termination of Lenders . . . . . . . . . . . . 27
2.6.3. Successor Lenders. . . . . . . . . . . . . . . 28
ARTICLE III CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . 28
3.1. Yield Protection . . . . . . . . . . . . . . . . . 28
3.2. Changes in Capital Adequacy Regulations. . . . . . 29
3.3. Availability of Types of Advances. . . . . . . . . 30
3.4. Funding Indemnification. . . . . . . . . . . . . . 30
3.5. Lender Statements; Survival of Indemnity . . . . . 30
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 31
4.1. Initial Advance. . . . . . . . . . . . . . . . . . 31
4.2. Each Advance . . . . . . . . . . . . . . . . . . . 32
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 32
5.1. Corporate Existence and Standing . . . . . . . . . 33
5.2. Authorization and Validity . . . . . . . . . . . . 33
5.3. No Conflict; Government Consent. . . . . . . . . . 33
5.4. Financial Statements . . . . . . . . . . . . . . . 33
5.5. Material Adverse Change. . . . . . . . . . . . . . 33
5.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . 34
5.7. Litigation and Contingent Obligations. . . . . . . 34
5.8. Subsidiaries . . . . . . . . . . . . . . . . . . . 34
5.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . 34
5.l0. Accuracy of Information. . . . . . . . . . . . . . . 34
5.11. Regulation U . . . . . . . . . . . . . . . . . . . . 35
5.12. Material Agreements. . . . . . . . . . . . . . . . . 35
5.13. Compliance With Laws . . . . . . . . . . . . . . . . 35
5.14. Ownership of Properties. . . . . . . . . . . . . . . 35
5.15. Investment Company Act . . . . . . . . . . . . . . . 35
5.16. Public Utility Holding Company Act . . . . . . . . . 35
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . 36
6.1. Financial Reporting. . . . . . . . . . . . . . . . 36
6.2. Use of Proceeds. . . . . . . . . . . . . . . . . . 38
6.3. Notice of Default. . . . . . . . . . . . . . . . . 38
6.4. Conduct of Business. . . . . . . . . . . . . . . . 38
6.5. Taxes. . . . . . . . . . . . . . . . . . . . . . . 38
6.6. Insurance. . . . . . . . . . . . . . . . . . . . . 38
6.7. Compliance with Laws . . . . . . . . . . . . . . . 38
6.8. Maintenance of Properties. . . . . . . . . . . . . 38
6.9. Inspection . . . . . . . . . . . . . . . . . . . . 39
6.10. Subsidiary Indebtedness . . . . . . . . . . . . . . 39
6.11. Merger . . . . . . . . . . . . . . . . . . . . . . . 39
6.12. Sale of Assets . . . . . . . . . . . . . . . . . . . 40
6.13. Sale of Accounts . . . . . . . . . . . . . . . . . . 40
6.14. Investments and Acquisitions . . . . . . . . . . . . 40
6.15. Contingent Obligations . . . . . . . . . . . . . . . 42
6.16. Liens. . . . . . . . . . . . . . . . . . . . . . . . 42
6.17. Letters of Credit. . . . . . . . . . . . . . . . . . 43
6.18. Affiliates . . . . . . . . . . . . . . . . . . . . . 43
6.19. Ratio of Long-Term Debt to Consolidated
Capitalization. . . . . . . . . . . . . . . . . . . . . 44
6.20. Working Capital. . . . . . . . . . . . . . . . . . . 44
6.21. Consolidated Tangible Net Worth. . . . . . . . . . . 44
6.22. Fixed Charge Coverage. . . . . . . . . . . . . . . . 44
ARTICLE VII DEFAULTS . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 47
8.1. Acceleration . . . . . . . . . . . . . . . . . . . 47
8.2. Amendments . . . . . . . . . . . . . . . . . . . . 47
8.3. Preservation of Rights . . . . . . . . . . . . . . 48
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . 48
9.1. Survival of Representations. . . . . . . . . . . . 48
9.2. Governmental Regulation. . . . . . . . . . . . . . 49
9.3. Taxes. . . . . . . . . . . . . . . . . . . . . . . 49
9.4. Headings . . . . . . . . . . . . . . . . . . . . . 49
9.5. Entire Agreement . . . . . . . . . . . . . . . . . 49
9.6. Several Obligations; Benefits of this
Agreement . . . . . . . . . . . . . . . . . . . . . . . 49
9.7. Expenses; Indemnification. . . . . . . . . . . . . 49
9.8. Numbers of Documents . . . . . . . . . . . . . . . 50
9.9. Accounting . . . . . . . . . . . . . . . . . . . . 50
9.10. Severability of Provisions. . . . . . . . . . . . . . 50
9.11. Nonliability of Lenders . . . . . . . . . . . . . . . 50
9.12. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . 50
9.13. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . 50
9.14. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . 51
9.15. Confidentiality . . . . . . . . . . . . . . . . . . . 51
ARTICLE X THE AGENT. . . . . . . . . . . . . . . . . . . . . 51
10.1. Appointment. . . . . . . . . . . . . . . . . . . . . 51
10.2. Powers . . . . . . . . . . . . . . . . . . . . . . . 51
10.3. General Immunity . . . . . . . . . . . . . . . . . . 51
10.4. No Responsibility for Loans, Recitals, etc.. . . . . 52
10.5. Action on Instructions of Lenders. . . . . . . . . . 52
10.6. Employment of Agents and Counsel . . . . . . . . . . 52
10.7. Reliance on Documents; Counsel . . . . . . . . . . . 52
10.8. Agent's Reimbursement and Indemnification. . . . . . 53
10.9. Rights as a Lender . . . . . . . . . . . . . . . . . 53
10.l0. Lender Credit Decision . . . . . . . . . . . . . . . 53
10.11. Successor Agent. . . . . . . . . . . . . . . . . . . 54
10.12. Co-Agents. . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XI SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . 54
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . . 55
11.2. Ratable Payments . . . . . . . . . . . . . . . . . . 55
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. 55
12.1. Successors and Assigns . . . . . . . . . . . . . . . 55
12.2. Participations . . . . . . . . . . . . . . . . . . . 56
12.2.1 Permitted Participants; Effect. . . . . . . . . 56
12.2.2. Voting Rights. . . . . . . . . . . . . . . . . 56
12.2.3. Benefit of Setoff. . . . . . . . . . . . . . . 56
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . 56
12.3.1. Permitted Assignments. . . . . . . . . . . . . 57
12.3.2. Effect; Effective Date . . . . . . . . . . . . 57
12.4. Dissemination of Information. . . . . . . . . . . . . 57
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . 58
ARTICLE XIII NOTICES. . . . . . . . . . . . . . . . . . . . 58
13.1. Giving Notice. . . . . . . . . . . . . . . . . . . . 58
13.2. Change of Address. . . . . . . . . . . . . . . . . . 58
ARTICLE XIV COUNTERPARTS . . . . . . . . . . . . . . . . . . . 58
EXHIBIT "A-1" COMMITTED NOTE . . . . . . . . . . . . . . . . 63
EXHIBIT "A-2" COMPETITIVE BID NOTE . . . . . . . . . . . . . 65
EXHIBIT "B" COMPLIANCE CERTIFICATE . . . . . . . . . . . . 67
EXHIBIT "C" COMPETITIVE BID QUOTE REQUEST. . . . . . . . . 71
EXHIBIT "D" INVITATION FOR COMPETITIVE BID QUOTES. . . . . 72
EXHIBIT "E" COMPETITIVE BID QUOTE. . . . . . . . . . . . . 73
EXHIBIT "F" ASSIGNMENT AGREEMENT . . . . . . . . . . . . . 75
EXHIBIT "I" NOTICE OF ASSIGNMENT . . . . . . . . . . . . . 79
EXHIBIT "II" CONSENT AND RELEASE. . . . . . . . . . . . 82
EXHIBIT "G" LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION 83
EXHIBIT "H" FORM OF OPINION. . . . . . . . . . . . . . . . 84
EXHIBIT "I" FORM OF CONFIDENTIALITY LETTER . . . . . . . . 86
This Agreement, dated as of December 22, 1993, is among Brown
Group, Inc., the Lenders, The First National Bank of Chicago, as
Agent, and The Boatmen's National Bank of St. Louis and Citibank,
N.A., as Co-Agents. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Absolute Rate" means, with respect to a Loan made by a given
Lender for the relevant Absolute Rate Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by
such Lender and accepted by the Borrower pursuant to Section
2.3.6(ii).
"Absolute Rate Advance" means a borrowing hereunder consisting
of the aggregate amount of the several Absolute Rate Loans made by
some or all of the Lenders to the Borrower at the same time and for
the same Absolute Rate Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive
Bid Quotes setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to an
Absolute Rate Advance or an Absolute Rate Loan, a period of not
more than 270 days commencing on a Business Day selected by the
Borrower pursuant to this Agreement. If such Absolute Rate
Interest Period would end on a day which is not a Business Day,
such Absolute Rate Interest Period shall end on the next succeeding
Business Day.
"Absolute Rate Loan" means a Loan which bears interest at an
Absolute Rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement,
by which the Borrower or any of its Subsidiaries (i) acquires any
going concern, business or all or substantially all of the assets
of any firm, corporation or division thereof, or limited liability
company, whether through purchase of assets, merger or otherwise
or (ii) directly or indirectly acquires (in one transaction or as
the most recent transaction in a series of transactions) at least
a majority (in number of votes) of the securities of a corporation
which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership.
"Advance" means a Committed Advance or a Competitive Bid
Advance, as applicable.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if
the controlling Person owns 10% or more of any class of voting
securities (or other ownership interests) of the controlled Person
or possesses, directly or indirectly, the power to direct or cause
the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or
otherwise.
"Agent" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to Article X, and not in
its individual capacity as a Lender, and any successor Agent
appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments
of all the Lenders hereunder, as reduced from time to time pursuant
to the terms hereof.
"Agreement" means this Credit Agreement, as it may be amended
or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a
manner consistent with that used in preparing the financial
statements referred to in Section 5.4.
"Alternate Base Rate" means, on any date and with respect to
all Floating Rate Advances, a fluctuating rate of interest per
annum equal to the higher of (i) the Federal Funds Effective Rate
most recently determined by the Agent plus 1/2% per annum and (ii)
the Corporate Base Rate. Changes in the rate of interest on each
Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. The Agent will give notice
promptly to the Borrower and the Lenders of changes in the
Alternate Base Rate, provided, however, that the Agent's failure to
give any such notice will not affect the Borrower's obligation to
pay interest to the Lenders on Floating Rate Advances at the then
effective Alternate Base Rate.
"Applicable Margin" means the respective margin percentages
for each Eurodollar Committed Advance and commitment fee
calculation determined in accordance with the terms of Section
2.2.5.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means each of the officers of the
Borrower set forth in the Certificate of Incumbency delivered
pursuant to Section 4.1(ii), acting singly.
"Borrower" means Brown Group, Inc., a New York corporation,
and its permitted successors and assigns.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Business Day" means (i) with respect to any borrowing,
payment or rate selection of Eurodollar Committed Advances or
Eurodollar Bid Rate Advances, a day other than Saturday or Sunday
on which banks are open for business in Chicago and New York City
and on which dealings in United States dollars are carried on in
the London interbank market and (ii) for all other purposes, a day
other than Saturday or Sunday on which banks are open for business
in Chicago and New York City.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Cash Flow" means, for any period of determination for the
Borrower and its Subsidiaries on a consolidated basis, (i) the sum
of (a) Pre-tax Income, minus extraordinary gains other than
Extraordinary Cash Gains of up to $8,000,000 in the aggregate for
any period of determination, plus (b) Extraordinary Non-Cash
Losses, plus (c) allowance for depreciation and amortization, plus
(d) Interest Expense, plus (e) Rentals, minus (ii) capital
expenditures.
"Change in Control" means, the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding shares of voting stock of the Borrower.
"Cloth World" means any one or more of the following: Cloth
World, Inc., any of its Subsidiaries, CW Wholesale One L.P., a
Texas Limited Partnership, and those assets of Brown Group Retail,
Inc. which are comprised of CLOTH WORLD retail fabric stores and
their operations, as reported for financial statement purposes.
"Code" means, the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of the
Lender to make Loans to the Borrower not exceeding the amount set
forth opposite its signature below or as set forth in an applicable
Assignment Agreement in the form of Exhibit "F" hereto received by
the Agent under the terms of Section 12.3, as such amount may be
modified from time to time pursuant to the terms of this Agreement.
"Committed Advance" means a borrowing hereunder consisting of
the aggregate amount of the several Committed Loans made by the
Lenders to the Borrower at the same time, of the same Type and, in
the case of Fixed Rate Advances, for the same Interest Period.
"Committed Borrowing Notice" is defined in Section 2.2.3.
"Committed Loan" means a Loan made by a Lender pursuant to
Section 2.2.
"Committed Note" means a promissory note in substantially the
form of Exhibit "A-1" hereto, with appropriate insertions, duly
executed and delivered to the Agent by the Borrower for the account
of a Lender and payable to the order of such Lender in the amount
of its Commitment, including any amendment, modification, renewal
or replacement of such promissory note.
"Competitive Bid Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Competitive Bid
Loans made by some or all of the Lenders to the Borrower at the
same time, at the same interest basis, and for the same Interest
Period.
"Competitive Bid Borrowing Notice" is defined in Section
2.3.6.
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an
Absolute Rate Loan, as the case may be.
"Competitive Bid Margin" means the margin above or below the
applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate
Loan, expressed as a percentage (rounded to the nearest 1/100 of
1%) to be added or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in
substantially the form of Exhibit "A-2" hereto, with appropriate
insertions, duly executed and delivered to the Agent by the
Borrower for the account of a Lender and payable to the order of
such Lender, including any amendment, modification, renewal or
replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote
substantially in the form of Exhibit "E" hereto completed and
delivered by a Lender to the Agent in accordance with Section
2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote
Request substantially in the form of Exhibit "C" hereto completed
and delivered by the Borrower to the Agent in accordance with
Section 2.3.2.
"Condemnation" is defined in Section 7.8.
"Consenting Lender" is defined in Section 2.6.1.
"Consolidated Capitalization" means, at any date of
determination, the sum of (i) Consolidated Tangible Net Worth plus
(ii) Long Term Debt.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its
Subsidiaries determined in accordance with Agreement Accounting
Principles, less their consolidated Intangible Assets, all
determined as of such date.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of, or otherwise becomes or is contingently
liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any
creditor of such other Person against loss, including, without
limitation, any operating agreement, take-or-pay contract or
application for a Letter of Credit provided, however, that
obligations in respect of accounts payable and other similar
obligations of the Borrower or any Subsidiary arising in the
ordinary course of business payable on terms customary in the trade
shall not be considered Contingent Obligations hereunder.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower or any of its Subsidiaries, are treated as a single
employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from
time to time, changing when and as said corporate base rate
changes.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of
l974, as amended from time to time and any rule or regulation
issued thereunder.
"Eurodollar Auction" means a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Margins pursuant to Section
2.3.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Committed Advance or Eurodollar Bid Rate Advance for the relevant
Eurodollar Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. dollars are offered by First
Chicago to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days prior to the
first day of such Eurodollar Interest Period, in the approximate
amount of First Chicago's relevant Eurodollar Loan, in the case of
a Eurodollar Committed Advance, or, if applicable, in the
approximate amount of the requested Eurodollar Bid Rate Advance,
and having a maturity approximately equal to such Eurodollar
Interest Period.
"Eurodollar Bid Rate" means, with respect to a Loan made by a
given Lender for the relevant Eurodollar Interest Period, the sum
of (i) the Eurodollar Base Rate and (ii) the Competitive Bid Margin
offered by such Lender and accepted by the Borrower pursuant to
Section 2.3.6(i).
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance
which bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Competitive Bid Loan which
bears interest at a Eurodollar Bid Rate.
"Eurodollar Committed Advance" means an Advance which bears
interest at a Eurodollar Rate requested by the Borrower pursuant to
Section 2.2.
"Eurodollar Committed Loan" means a Loan which bears interest
at a Eurodollar Rate requested by the Borrower pursuant to Section
2.2.
"Eurodollar Interest Period" means, with respect to a
Eurodollar Committed Advance, a Eurodollar Committed Loan, a
Eurodollar Bid Rate Advance or a Eurodollar Bid Rate Loan, a period
of one, two, three or six months, and if available from all of the
Lenders, nine or twelve months, in each case commencing on a
Business Day selected by the Borrower pursuant to this Agreement.
Such Eurodollar Interest Period shall end on (but exclude) the day
which corresponds numerically to such date of commencement one,
two, three, six, nine or twelve months thereafter, provided,
however, that if there is no such numerically corresponding day in
such next, second, third, sixth, ninth or twelfth succeeding month,
such Eurodollar Interest Period shall end on the last Business Day
of such next, second, third, sixth, ninth or twelfth succeeding
month. If a Eurodollar Interest Period would otherwise end on a
day which is not a Business Day, such Eurodollar Interest Period
shall end on the next succeeding Business Day, provided, however,
that if said next succeeding Business Day falls in a new month,
such Eurodollar Interest Period shall end on the immediately
preceding Business Day.
"Eurodollar Loan" means a Eurodollar Committed Loan or a
Eurodollar Bid Rate Loan, as applicable.
"Eurodollar Rate" means, with respect to a Eurodollar
Committed Advance or a Eurodollar Committed Loan for each day
during the relevant Eurodollar Interest Period, the sum of (i) the
quotient of (a) the Eurodollar Base Rate applicable to such
Eurodollar Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Eurodollar
Interest Period plus (ii) the Applicable Margin for such day. The
Eurodollar Rate shall be rounded, if necessary, to the next higher
1/16 of 1%.
"Extension Period" is defined in Section 2.6.1.
"Extraordinary Cash Gains" means the positive cash effect
included in Pre-Tax Income of non-recurring and/or non-operating
credits, including, without limitation, gains on sales of assets,
but excluding the effect of the elimination of any portion of a
Subsidiary's LIFO Reserve.
"Extraordinary Non-Cash Losses" means the negative effect
included in Pre-Tax Income of non-recurring and/or non-operating
charges that do not require the outlay of cash, including, without
limitation, the cumulative effect of accounting changes, fixed
asset write-offs and inventory mark-downs included as part of
restructuring charges.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during such
period to (i) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the preceding Business
Day) by the Federal Reserve Bank of New York; or (ii) if such rate
is not so published for any day which is a Business Day, the
average of the quotations at approximately 10 a.m. (Chicago time)
for such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by the Agent.
"First Chicago" means The First National Bank of Chicago in
its individual capacity, and its successors and assigns.
"Fixed Charges" means, for any period of determination, the
sum of (i) Interest Expense plus (ii) Rentals.
"Fixed Rate" means a Eurodollar Rate, a Eurodollar Bid Rate or
an Absolute Rate.
"Fixed Rate Advance" means an Advance which bears interest at
a Fixed Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed
Rate.
"Floating Rate" means, for any day, a rate per annum equal to
the Alternate Base Rate.
"Floating Rate Advance" means an Advance which bears interest
at the Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the
Floating Rate.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable
and other similar obligations arising in the ordinary course of
such Person's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by Liens or
payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, (iv) obligations which
are evidenced by notes, acceptances, or other instruments, (v)
Capitalized Lease Obligations, (vi) net liabilities in respect of
Rate Hedging Obligations, and (vii) Contingent Obligations.
"Intangible Assets" means the amount (to the extent reflected
in determining such consolidated stockholders' equity) of (i) all
write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business
made within twelve months after the acquisition of such business)
subsequent to October 30, 1993 in the book value of any asset owned
by the Borrower or a Subsidiary, (ii) investments in an aggregate
amount in excess of $30,000,000 in unconsolidated Subsidiaries and
equity investments in Persons which are not Subsidiaries (other
than Investments permitted by the terms of Section 6.14(viii))and
(iii) all unamortized debt discount and expense, unamortized
deferred charges (other than prepaid expenses and net pension
assets recognized on the Borrower's consolidated balance sheet),
goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental expenses and other items
treated as intangibles under Agreement Accounting Principles.
"Interest Expense" means, for any period of determination for
the Borrower and its Subsidiaries on a consolidated basis and
after eliminating all intercompany transactions in accordance with
Agreement Accounting Principles, all interest expense (including
amortization of debt discount and expense and imputed interest on
Capitalized Lease Obligations).
"Interest Period" means a Eurodollar Interest Period or an
Absolute Rate Interest Period.
"Investment" of a Person means any loan, advance(other than
commission, travel and similar advances to officers and employees
made in the ordinary course of business), extension of credit
(other than accounts receivable, notes receivable and prepaid
expenses arising in the ordinary course of business on terms
customary in the trade), deposit account or contribution of capital
by such Person to any other Person or any investment in, or
purchase or other acquisition of, the stock, partnership interests,
notes, debentures or other securities of any other Person made by
such Person.
"Invitation for Competitive Bid Quotes" means an Invitation
for Competitive Bid Quotes substantially in the form of Exhibit "D"
hereto, completed and delivered by the Agent to the Lenders in
accordance with Section 2.3.3.
"Lenders" means the financial institutions listed on the
signature pages of this Agreement and their respective successors
and assigns.
"Lender Termination Date" is defined in Section 2.6.2.
"Lending Installation" means any office, branch, subsidiary or
affiliate of any Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which
such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion,
if any, of any Advance.
"Loan Documents" means this Agreement and the Notes.
"Long-Term Debt" means, for the Borrower and its Subsidiaries
on a consolidated basis, the sum of (i) Capitalized Lease
Obligations plus (ii) all indebtedness for borrowed money with a
final maturity in excess of one year from the date of the creation
thereof (including current maturities thereof) plus (iii)
Contingent Obligations, minus (a) aggregate Contingent Obligations
in respect of Cloth World store leases permitted by the terms of
Section 6.15(iv), and (b) aggregate Contingent Obligations of up to
(but not in excess of) $32,000,000 in respect of store leases
permitted by the terms of Section 6.15(iii).
"Material Adverse Effect" means a material adverse effect on
(i) the business, Property, condition (financial or otherwise),
results of operations, or prospects of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to
perform its obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which
the Borrower or any member of the Controlled Group is a party to
which more than one employer is obligated to make contributions.
"Non-Consenting Lender" is defined in Section 2.6.1.
"Notice of Assignment" is defined in Section 12.3.2.
"Notes" means, collectively, the Competitive Bid Notes and the
Committed Notes; and "Note" means any one of the Notes.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all
other reimbursements, indemnities or other obligations of the
Borrower to the Lenders or to any Lender or the Agent arising under
the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the first day of each March, June,
September, and December.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other
entity or organization, or any government or political subdivision
or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code as to which the Borrower or any
member of the Controlled Group may have any liability.
"Pre-Tax Income" means pre-tax earnings or loss, including
without limitation, the pre-tax effect of extraordinary gains and
losses, the pre-tax effect of gains and losses related to
discontinued operations, and the pre-tax effect of the cumulative
effect of accounting changes, all as determined in accordance with
Agreement Accounting Principles.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or
other assets owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices
or arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap
or collar protection agreements, forward rate currency or interest
rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of
any of the foregoing.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System from time to time in effect and shall
include any successor or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
"Regulations U and X" means Regulations U and X of the Board
of Governors of the Federal Reserve System from time to time in
effect and shall include any successor or other regulations or
official interpretations of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Rentals" means for purposes of determining Cash Flow and
Fixed Charges for any fiscal quarter (i) ending on or prior to
January 28, 1995, minimum rents paid by the Borrower or any
Subsidiary on all non-cancelable leases of Property, and (ii)
ending on or after January 29, 1995, such minimum rents plus all
contingent lease payments paid by the Borrower or any Subsidiary
net of the estimated portions thereof applicable to utilities and
other services received from lessors under such leases, as
disclosed in the notes to the consolidated financial statements of
the Borrower.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events as
to which the PBGC by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event, provided, however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at
least 66-2/3% of the Aggregate Commitment or, if the Aggregate
Commitment has been terminated, Lenders in the aggregate holding at
least 66-2/3% of the aggregate unpaid principal amount of the
outstanding Advances.
"Reserve Requirement" means, with respect to a Eurodollar
Interest Period, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves)
which is imposed under Regulation D on Eurocurrency liabilities.
The Reserve Requirement shall be adjusted automatically on and as
of the effective date of any change in the applicable reserve
requirement.
"S&P" means Standard & Poors Corporation.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower
or any member of the Controlled Group for employees of the Borrower
or any member of the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any
partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled, or (iii) any other entity the accounts of which would
be consolidated with those of such Person in such Person's
consolidated financial statements. Unless otherwise expressly
provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of
the Borrower and its Subsidiaries, Property which (i) represents
more than (a) 20%, in the case of any disposition of assets made
prior to January 29, 1995, and (b) 10%, at all times thereafter, of
the consolidated assets of the Borrower and its Subsidiaries as
would be shown in the consolidated financial statements of the
Borrower and its Subsidiaries as at the beginning of the
twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than (a)(1)
20%, in the case of any disposition of assets made prior to January
28, 1995, and (2) 10%, at all times thereafter, of the consolidated
net sales or (b) 10% of the consolidated net income of the Borrower
and its Subsidiaries, in each case as reflected in the financial
statements referred to in clause (i) above.
"Successor Lender" is defined in Section 2.6.3.
"Termination Date" means, with respect to any Lender, the
earlier of (i) December 31, 1996 or such later date as shall have
been agreed to by such Lender pursuant to Section 2.6.1, and (ii)
the date on which the Commitments shall have been reduced to zero
or terminated in whole pursuant to Section 2.5.11 or 8.1.
"Terminated Lender" is defined in Section 2.6.2.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Loan or Advance, its nature
as a Floating Rate Advance or Loan, Eurodollar Committed Advance or
Loan, Eurodollar Bid Rate Advance or Loan or Absolute Rate Advance
or Loan.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested nonforfeitable benefits under all
Single Employer Plans exceeds the fair market value of all such
Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary
all of the outstanding voting securities of which shall at the time
be owned or controlled, directly or indirectly, by such Person or
one or more Wholly-Owned Subsidiaries of such Person, or by such
Person and one or more Wholly-Owned Subsidiaries of such Person, or
(ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms.
ARTICLE II
THE FACILITY
2.1. The Facility.
2.1.1. Description of Facility. The Lenders grant to the
Borrower a revolving credit facility pursuant to which, and
upon the terms and subject to the conditions herein set out:
(i) each Lender severally agrees to make Committed
Loans in U.S. Dollars to the Borrower in accordance
with Section 2.2;
(ii) each Lender may, in its sole discretion, make bids
to make Competitive Bid Loans in U.S. Dollars to
the Borrower in accordance with Section 2.3; and
(iii) in no event may the sum of the aggregate principal
amount of all outstanding Advances to the Borrower
(including both the Committed Advances and the
Competitive Bid Advances) exceed the Aggregate
Commitment.
2.1.2. Availability of Facility; Required Payments.
Subject to the terms and conditions set forth in this
Agreement, the facility is available from each Lender from the
date of this Agreement to such Lender's respective Termination
Date, and the Borrower may borrow, repay and reborrow from
each Lender at any time prior to such Lender's respective
Termination Date. The Commitment of each Lender to lend
hereunder shall expire on such Lender's Termination Date. All
outstanding Loans and all other unpaid Obligations owing to
each Lender shall be paid in full by the Borrower on such
Lender's Termination Date.
2.2. Committed Advances.
2.2.1. Committed Advances. Each Lender severally agrees,
from and including the date of this Agreement and prior to
such Lender's Termination Date, on the terms and conditions
set forth in this Agreement, to make Committed Loans to the
Borrower from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment. Each Committed Advance hereunder shall consist of
borrowings made from the several Lenders ratably in proportion
to the ratio that their respective Commitments bear to the
Aggregate Commitment. The Committed Advances shall be
evidenced by the Committed Notes and shall be repaid as
provided by the terms of Section 2.1.2.
2.2.2. Types of Committed Advances. The Committed Advances
may be Floating Rate Advances or Eurodollar Committed
Advances, or a combination thereof, selected by the Borrower
in accordance with Sections 2.2.3 and 2.2.4.
2.2.3. Method of Selecting Types and Interest Periods for
New Committed Advances. The Borrower shall select the Type of
Advance and, in the case of each Fixed Rate Advance, the
Interest Period applicable to each Committed Advance from time
to time. The Borrower shall give the Agent irrevocable notice
(a "Committed Borrowing Notice") not later than 10:00 a.m.
(Chicago time) on the Borrowing Date of each Floating Rate
Advance, and three Business Days before the Borrowing Date for
each Eurodollar Committed Advance. A Committed Borrowing
Notice shall specify:
(i) the Borrowing Date, which shall be a Business Day,
of such Committed Advance;
(ii) the aggregate amount of such Committed Advance;
(iii) the Type of Committed Advance selected; and
(iv) in the case of each Eurodollar Committed Advance,
the Interest Period applicable thereto (which
Interest Period shall not extend beyond the then
earliest applicable Termination Date of any
Lender).
2.2.4. Conversion and Continuation of Outstanding Committed
Advances. Floating Rate Advances shall continue as Floating
Rate Advances unless and until such Floating Rate Advances are
converted into Eurodollar Committed Advances. Each Fixed Rate
Advance of any Type shall continue as a Fixed Rate Advance of
such Type until the end of the then applicable Interest Period
therefor, at which time if such Fixed Rate Advance is a
Eurodollar Committed Advance such Eurodollar Committed Advance
shall be automatically converted into a Floating Rate Advance
unless the Borrower shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of
such Interest Period, such Eurodollar Committed Advance either
continue as a Eurodollar Committed Advance for the same or
another Interest Period or be converted into an Advance of
another Type. Subject to the terms of Section 2.5.2, the
Borrower may elect from time to time to convert all or any
part of a Committed Advance of any Type into any other Type or
Types of Committed Advances; provided that any conversion of
any Eurodollar Committed Advance shall be made on, and only
on, the last day of the Interest Period applicable thereto.
The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a
Committed Advance or continuation of a Eurodollar Committed
Advance not later than 10:00 a.m. (Chicago time) at least one
Business Day, in the case of a conversion into a Floating Rate
Advance, or three Business Days, in the case of a conversion
into or continuation of a Eurodollar Committed Advance, prior
to the date of the requested conversion or continuation,
specifying:
(i) the requested date which shall be a Business Day,
of such conversion or continuation;
(ii) the aggregate amount and Type of the Committed
Advance which is to be converted or continued; and
(iii) the amount and Type(s) of Committed Advance(s) into
which such Committed Advance is to be converted or
continued and, in the case of a conversion into or
continuation of a Eurodollar Committed Advance, the
duration of the Interest Period applicable thereto
(which Interest Period shall not extend beyond the
then earliest applicable Termination Date of any
Lender).
2.2.5. Applicable Margins. The Applicable Margin for each
Eurodollar Committed Advance and for commitment fees payable
pursuant to Section 2.4 shall be determined on the basis of
the publicly announced credit ratings by Moody's and S&P on
the Borrower's senior unsecured long-term debt rating, in
accordance with the Applicable Margin Table set forth below
and shall be subject to adjustment (upwards or downwards, as
appropriate) when and as such credit ratings change.
Applicable Margin Table
-----------------------
Applicable
Margin for Applicable
Eurodollar Margin for
Committed Commitment
Long-Term Debt Rating Advances Fees
--------------------- ----------- -----------
A3 (Moody's) and .40% 0%
A- (S&P) or better
Baa2 (Moody's) and .50% .05%
BBB (S&P) or better
Any other case .75% .15%
2.3. Competitive Bid Advances.
2.3.1. Competitive Bid Option; Repayment of Competitive Bid
Advances. In addition to Committed Advances pursuant to
Section 2.2, but subject to the terms and conditions set forth
in this Agreement (including, without limitation, the
limitation set forth in Section 2.1.1(iii) as to the maximum
aggregate principal amount of all outstanding Advances
hereunder), the Borrower may, as set forth in this Section
2.3, request the Lenders, prior to the Termination Date, to
make offers to make Competitive Bid Advances to the Borrower.
Each Lender may, but shall have no obligation to, make such
offers and the Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth in this Section
2.3. Competitive Bid Advances shall be evidenced by the
Competitive Bid Notes. Each Competitive Bid Advance shall be
repaid in full by the Borrower on the last day of the Interest
Period applicable thereto.
2.3.2. Competitive Bid Quote Request. When the Borrower
wishes to request offers to make Competitive Bid Loans under
Section 2.3, it shall transmit to the Agent by telex or
telecopy a Competitive Bid Quote Request so as to be received
no later than (i) 9:00 a.m. (Chicago time) at least four
Business Days prior to the Borrowing Date proposed therein, in
the case of a Eurodollar Auction or (ii) 9:00 a.m. (Chicago
time) at least one Business Day prior to the Borrowing Date
proposed therein, in the case of an Absolute Rate Auction
specifying:
(a) the proposed Borrowing Date, which shall be a
Business Day, for the proposed Competitive Bid
Advance;
(b) the aggregate principal amount of such Competitive
Bid Advance;
(c) whether the Competitive Bid Quotes requested are to
set forth a Competitive Bid Margin or an Absolute
Rate, or both; and
(d) the Interest Period applicable thereto (which may not
end after the then earliest applicable Termination
Date of any Lender).
The Borrower may request offers to make Competitive Bid Loans
for more than one Interest Period and for a Eurodollar Auction
and an Absolute Rate Auction in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given
within 3 Business Days (or upon reasonable prior notice to the
Lenders, such other number of days as the Borrower and the
Agent may agree) of any other Competitive Bid Quote Request.
Each Competitive Bid Quote Request shall be in a minimum
amount of $2,000,000 (and in integral multiples of $1,000,000
if in excess thereof). A Competitive Bid Quote Request that
does not conform substantially to the format of Exhibit "C"
hereto shall be rejected, and the Agent shall promptly notify
the Borrower of such rejection by telex or telecopy.
2.3.3. Invitation for Competitive Bid Quotes.
Promptly and in any event before 12:00 noon (Chicago time) on
the same Business Day of receipt of a Competitive Bid Quote
Request that is not rejected pursuant to Section 2.3.2, the
Agent shall send to each of the Lenders by telex or telecopy
an Invitation for Competitive Bid Quotes which shall
constitute an invitation by the Borrower to each Lender to
submit Competitive Bid Quotes offering to make the Competitive
Bid Loans to which such Competitive Bid Quote Request relates
in accordance with Section 2.3.
2.3.4. Submission and Contents of Competitive Bid Quotes.
(i) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers
to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. Each
Competitive Bid Quote must comply with the
requirements of this Section 2.3.4 and must be
submitted to the Agent by telex or telecopy at its
offices specified in or pursuant to Article XIII
not later than (a) (I) 12:45 p.m. (Chicago time) in
the case of First Chicago and (II) 1:00 p.m.
(Chicago time) in the case of each other Lender, at
least three Business Days prior to the proposed
Borrowing Date, in the case of a Eurodollar Auction
or (b) (I) 8:45 a.m. (Chicago time) in the case of
First Chicago and (II) 9:00 a.m. (Chicago time) in
the case of each other Lender on the proposed
Borrowing Date, in the case of an Absolute Rate
Auction (or, in either case upon reasonable prior
notice to the Lenders, such other time and date as
the Borrower and the Agent may agree, provided that
First Chicago shall always be required to submit
its Competitive Bid Quotes not less than fifteen
minutes prior to the other Lenders). Subject to
Articles IV and VIII, any Competitive Bid Quote so
made shall be irrevocable except with the written
consent of the Agent given on the instructions of
the Borrower.
(ii) Each Competitive Bid Quote shall in any case
specify:
(a) the proposed Borrowing Date, which shall be
the same as that set forth in the applicable
Invitation for Competitive Bid Quotes;
(b) the principal amount of the Competitive Bid
Loan for which each such offer is being made,
which principal amount (1) may be greater
than, less than or equal to the Commitment of
the quoting Lender, (2) must be at least
$2,000,000 and an integral multiple of
$1,000,000, and (3) may not exceed the
principal amount of Competitive Bid Loans for
which offers were requested;
(c) in the case of a Eurodollar Auction, the
Competitive Bid Margin offered for each such
Competitive Bid Loan;
(d) the minimum or maximum amount, if any, of the
Competitive Bid Loan which may be accepted by
the Borrower and/or the limit, if any, as to
the aggregate principal amount of the
Competitive Bid Loans from such Lender which
may be accepted by the Borrower;
(e) in the case of an Absolute Rate Auction, the
Absolute Rate offered for each such
Competitive Bid Loan;
(f) the applicable Interest Period; and
(g) the identity of the quoting Lender.
(iii) The Agent shall reject any Competitive Bid Quote
that:
(a) is not substantially in the form of Exhibit
"E" hereto or does not specify all of the
information required by Section 2.3.4(ii);
(b) contains qualifying, conditional or similar
language, other than any such language
contained in Exhibit "E" hereto;
(c) proposes terms other than or in addition to
those set forth in the applicable Invitation
for Competitive Bid Quotes; or
(d) arrives after the time set forth in Section
2.3.4(i).
If any Competitive Bid Quote shall be rejected pursuant to
this Section 2.3.4(iii), then the Agent shall notify the
relevant Lender of such rejection as soon as practical.
2.3.5. Notice to the Borrower. The Agent shall promptly
notify the Borrower of the terms (i) of any Competitive Bid
Quote submitted by a Lender that is in accordance with Section
2.3.4 and (ii) of any Competitive Bid Quote that is in
accordance with Section 2.3.4 and amends, modifies or is
otherwise inconsistent with a previous Competitive Bid Quote
submitted by such Lender with respect to the same Competitive
Bid Quote Request. Any such subsequent Competitive Bid Quote
shall be disregarded by the Agent unless such subsequent
Competitive Bid Quote specifically states that it is submitted
solely to correct a manifest error in such former Competitive
Bid Quote. The Agent's notice to the Borrower shall specify
the aggregate principal amount of Competitive Bid Loans for
which offers have been received for each Interest Period
specified in the related Competitive Bid Quote Request and the
respective principal amounts and Competitive Bid Margins or
Absolute Rates, as the case may be, so offered.
2.3.6. Acceptance and Notice by the Borrower. Subject to
the receipt of the notice from the Agent referred to in
Section 2.3.5, not later than (i) 2:00 p.m. (Chicago time) at
least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (ii) 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, in the case of
an Absolute Rate Auction, the Borrower shall notify the Agent
of its acceptance or rejection of the offers so notified to it
pursuant to Section 2.3.5; provided, however, that the failure
by the Borrower to give such notice to the Agent shall be
deemed to be a rejection of all such offers. In the case of
acceptance, such notice (a "Competitive Bid Borrowing Notice")
shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may
accept or reject any Competitive Bid Quote in whole or in part
(subject to the terms of Section 2.3.4(ii)(d)); provided that:
(a) the aggregate principal amount of each Competitive Bid
Advance may not exceed the applicable amount set forth in
the related Competitive Bid Quote Request;
(b) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Absolute Rates, as
the case may be; and
(c) the Borrower may not accept any offer of the type
described in Section 2.3.4(iii) or that otherwise fails
to comply with the requirements of this Agreement for the
purpose of obtaining a Competitive Bid Loan under this
Agreement.
2.3.7. Allocation by the Agent. If offers are made by two
or more Lenders with the same Competitive Bid Margins or
Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which offers
are permitted to be accepted for the related Interest Period,
the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Agent
among such Lenders as nearly as possible (in such multiples,
not greater than $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal amount
of such offers; provided, however, that no Lender shall be
allocated a portion of any Competitive Bid Advance which is
less than the minimum amount which such Lender has indicated
that it is willing to accept. Allocations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error. The Agent shall promptly, but in
any event on the same Business Day in the case of Eurodollar
Bid Rate Advances, and by 11:00 a.m. (Chicago time) in the
case of Absolute Rate Advances, notify each Lender of its
receipt of a Competitive Bid Borrowing Notice and the
aggregate principal amount of such Competitive Bid Advance
allocated to each participating Lender.
2.4. Fees.
2.4.1. Agency and Administration Fees. The Borrower hereby
agrees to pay to the Agent for its sole account (i)
administration fees for Competitive Bid Quote Requests in such
amounts as are from time to time agreed upon by the Borrower
and the Agent and (ii) such other agency fees as heretofore
agreed upon by the Borrower in writing.
2.4.2. Commitment Fees. The Borrower hereby agrees to pay
to the Agent for the account of each Lender, ratably in the
proportion that such Lender's Commitment bears to the
Aggregate Commitment, a per annum commitment fee equal to .20%
plus the Applicable Margin on the average daily unused amount
of the Aggregate Commitment, payable quarterly in arrears on
each Payment Date and on each applicable Termination Date.
For purposes of calculating commitment fees hereunder,
outstanding Competitive Bid Loans shall not be deemed usage of
the Commitments of any of the Lenders. All accrued commitment
fees hereunder shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans
hereunder.
2.4.3. Excess Usage Fees. In the event that during any
calendar quarter, the average daily principal amount of the
Committed Advances outstanding hereunder is equal to or
greater than an amount equal to (i) 33-1/3% of the Aggregate
Commitment, but less than 66-2/3% of the Aggregate Commitment,
the Borrower agrees to pay to the Agent for the ratable
account of each Lender an excess usage fee of .125% per annum
on the average daily principal amount of the Committed
Advances outstanding during such calendar quarter, or (ii)
66 2/3% of the Aggregate Commitment, the Borrower agrees to
pay to the Agent for the ratable account of each Lender an
excess usage fee of .25% per annum on the average daily
principal amount of the Committed Advances outstanding during
such calendar quarter, in each case payable quarterly in
arrears on each Payment Date and on each applicable
Termination Date.
2.5. General Facility Terms.
2.5.1. Method of Borrowing. Not later than 12:00 noon
(Chicago time) on each Borrowing Date, each Lender shall make
available its Loan or Loans, if any, in funds immediately
available in Chicago, to the Agent at its address specified
pursuant to Article XIII or at such other location as the
Agent shall direct. The Agent shall promptly deposit the
funds so received from the Lenders in the Borrower's account
at the Agent's main office in Chicago or as otherwise directed
by the Borrower. Notwithstanding the foregoing provisions of
this Section 2.5.1, to the extent that a Loan made by a Lender
matures on the Borrowing Date of a requested Loan, such Lender
shall apply the proceeds of the Loan it is then making to the
repayment of principal of the maturing Loan.
2.5.2. Minimum Amount of Each Committed Advance. Each
Committed Advance shall be in the minimum amount of $5,000,000
(and in integral multiples of $1,000,000 if in excess
thereof); provided, however, that any Floating Rate Advance
may be in the aggregate amount of the unused Aggregate
Commitment.
2.5.3. Optional Principal Payments. The Borrower may from
time to time pay all of its outstanding Committed Advances,
or, in a minimum aggregate amount of $5,000,000 (and in
integral multiples of $1,000,000 if in excess thereof), any
portion of the outstanding Committed Advances upon one
Business Day's prior notice to the Agent. All such payments
shall be made in immediately available funds to the Agent at
the Agent's address specified in Article XIII or at any other
Lending Installation of the Agent specified by the Agent in
accordance with Section 2.5.7 by noon (Chicago time) on the
date of payment. A Competitive Bid Loan may not be prepaid
prior to the last day of its applicable Interest Period
without the prior consent of the Lender which originally made
such Loan, which consent may be given or withheld at the
Lender's sole and absolute discretion, provided that no
Competitive Bid Loan may be prepaid if there exists a Default
or Unmatured Default. Any prepayment of a Fixed Rate Advance
prior to the end of its applicable Interest Period shall be
subject to the indemnity provisions of Section 3.4.
2.5.4. Interest Periods. Subject to the provisions of
Section 2.5.5, each Advance (other than a Floating Rate
Advance) shall bear interest from and including the first day
of the Interest Period applicable thereto to (but not
including) the earlier of (i) the last day of such Interest
Period or (ii) the date of any earlier prepayment as permitted
by Section 2.5.3, at the interest rate determined as
applicable from time to time to such Advance.
2.5.5. Availability of Eurodollar Rates; Rate after
Maturity. Nothwithstanding anything to the contrary contained
in Section 2.2.3 or 2.2.4, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their
option, by notice to the Borrower, declare that no Committed
Advance may be made as, converted into or continued as a
Eurodollar Committed Advance. Except as provided in the next
sentence, any Advance not paid at maturity, whether by
acceleration or otherwise, shall bear interest until paid in
full at a rate per annum equal to the Alternate Base Rate plus
2% per annum, payable upon demand. In the case of a Fixed
Rate Advance the maturity of which is accelerated, such Fixed
Rate Advance shall bear interest for the remainder of the
applicable Interest Period (or until paid if paid prior to the
end of such Interest Period), at the higher of the rate
otherwise applicable to such Fixed Rate Advance for such
Interest Period plus 2% per annum or the Alternate Base Rate
plus 2% per annum.
2.5.6. Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Fixed Rate Advance shall be payable
on the last day of its applicable Interest Period, on any date
on which such Fixed Rate Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued
on each Floating Rate Advance shall be payable on each Payment
Date, on any date on which such Floating Rate Advance is
prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Fixed Rate Advance having
an Interest Period longer than three months shall also be
payable on the last day of each 90 day interval (in the case
of Absolute Rate Advances) or three-month interval (in the
case of Eurodollar Committed Advances or Eurodollar Bid Rate
Advances) during such Interest Period. All Interest,
commitment fees and excess usage fees hereunder shall be
calculated for actual days elapsed on the basis of a 360-day
year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of
time shall be included in computing interest in connection
with such payment.
2.5.7. Method of Payment. Subject to the last sentence of
Section 2.5.1, all payments of principal, interest, and fees
hereunder shall be made by noon (local time) on the date when
due in immediately available funds to the Agent at the Agent's
address specified pursuant to Article XIII, or at any other
Lending Installation of the Agent specified in writing by the
Agent to the Borrower and shall be made ratably among all
Lenders in the case of fees and payments in respect of
Committed Advances and ratably among the applicable Lenders in
respect of Competitive Bid Advances. Each payment delivered
to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds
which the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Borrower
authorizes the Agent to charge its general operating account
from time to time for amounts of principal, interest and
commitment fees when and as the same become due hereunder.
2.5.8. Notes; Telephonic Notices. Each Lender is hereby
authorized to record on the schedule attached to each of its
Notes, or otherwise record in accordance with its usual
practice, the date and amount of each of its Loans of the Type
evidenced by such Note; provided, however, that any failure to
so record shall not affect the Borrower's obligations under
any Loan Document. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect
selections of Types of Advances, transfer funds and submit
Competitive Bid Quotes based on telephonic notices made by any
person or persons the Agent or any Lender in good faith
believes to be an Authorized Officer or an officer, employee
or agent of the Borrower designated by an Authorized Officer.
The Borrower agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice given by the Borrower,
signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the
Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error. Neither the Agent
nor any Lender shall incur any liability for the Borrower's
failure to send written confirmation of any telephone notice,
the failure of any such written confirmation to conform to the
telephone instructions that the Agent or such Lender received
or the failure of the Agent or such Lender to produce such
written confirmation at any subsequent time.
2.5.9. Notification of Advances, Interest Rates and
Prepayments. The Agent will notify each Lender of the
contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice and repayment
notice received by it hereunder promptly and in any event
before the close of business on the same Business Day of
receipt thereof (or, in the case of borrowing notices with
respect to Floating Rate Advances and Absolute Rate Advances,
within one hour of receipt thereof). The Agent will notify
each Lender of the interest rate applicable to each Fixed Rate
Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the
Alternate Base Rate and the Applicable Margin.
2.5.10. Non-Receipt of Funds by the Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Agent
prior to the date on which it is scheduled to make payment to
the Agent of (i) in the case of a Lender, the proceeds of a
Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of
the Lenders, that it does not intend to make such scheduled
payment, the Agent may assume that such scheduled payment has
been made. The Agent may, but shall not be obligated to, make
the amount of such scheduled payment available to the intended
recipient in reliance upon such assumption. If such Lender or
the Borrower, as the case may be, has not in fact made such
scheduled payment to the Agent, the recipient of such
scheduled payment shall, on demand by the Agent, repay to the
Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on
the date such amount was so made available by the Agent until
the date the Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day or (y) in the case of
payment by the Borrower, the interest rate applicable to the
relevant Loan.
2.5.11. Cancellation. The Borrower may at any time after
the date hereof cancel the Aggregate Commitment, in whole, or
in a minimum aggregate amount of $5,000,000 (and in integral
multiples of $5,000,000 if in excess thereof) ratably among
the Lenders upon at least three Business Days' prior written
notice to the Agent, which notice shall specify the amount of
such reduction; provided, however, no such notice of
cancellation shall be effective to the extent that it would
reduce the Aggregate Commitment to an amount which would be
less than the outstanding principal amount of Loans
outstanding at the time such cancellation is to take effect.
Any notice of cancellation given pursuant to this Section
2.5.11 shall be irrevocable and shall specify the date upon
which such cancellation is to take effect.
2.5.12. Lending Installations. Subject to Section 3.5, each
Lender may, by written, telex or telecopy notice to the Agent
and the Borrower, book its Loans at any Lending Installation
selected by such Lender and may from time to time, change its
Lending Installation and for whose account Loan payments are
to be made. Each Lender will notify the Agent and the
Borrower on or prior to the date of this Agreement of the
Lending Installation which it intends to utilize for each type
of Loan hereunder.
2.5.13. Taxes. Any and all payments by the Borrower
hereunder shall be made free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings.
2.5.14. Withholding Tax Exemption. At least five Business
Days prior to the first date on which interest or fees are
payable hereunder for the account of any Lender, each Lender
that is not incorporated under the laws of the United States
of America, or a state thereof, agrees that it will deliver to
the Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction
or withholding of any United States federal income taxes.
Each Lender which so delivers a Form 1001 or 4224 further
undertakes to deliver to the Borrower and the Agent two
additional copies of such form (or a successor form) on or
before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year
for Form 4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the
Borrower or the Agent, in each case certifying that such
Lender is entitled to receive payments under this Agreement
and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or
withholding of United States federal income tax.
2.6. Commitment Extensions.
2.6.1. Extensions of the Commitments. The Commitment of
each Lender, and this Agreement as between such Lender and the
Borrower, may be extended for two periods of one year each
upon mutual agreement of such Lender and the Borrower in the
manner provided in this Section 2.6, and may be successively
so extended on an annual basis for a period of one year on
each such extension, to the effect that the Termination Date
with respect to such Lender for all purposes under this
Agreement and the Notes shall be extended (and successively so
extended) by one year to the same date in the following year.
Each request for such an extension shall be made by the
Borrower in writing and delivered to the Agent at any time not
more than 90 days and not less than 60 days prior to an
anniversary date of the date of this Agreement (each an
"Extension Period"). The failure of the Borrower to request
such an extension during the Extension Period in any calendar
year shall not operate as a waiver of the Borrower's right to
request an extension of the Termination Date during any
subsequent Extension Period, provided that (i) no extension
granted under this Section 2.6 at any one time shall exceed a
period of one year and (ii) no more than two such extensions
shall be permitted. Promptly following the Agent's receipt of
any such request, the Agent shall notify each Lender thereof.
Each Lender may, in its sole discretion, agree to such
extension by giving written notice of such agreement to the
Agent and the Borrower within 30 days following the Borrower's
request for such extension (each Lender which so consents to
a requested extension is herein called a "Consenting Lender"
and each Lender which does not so consent is herein called a
"Non-consenting Lender"). If any Lender fails to respond to
any such request, such Lender shall be deemed to be a Non-
consenting Lender. If Consenting Lenders hold 66-2/3% or more
of the Aggregate Commitment, then the Termination Date of each
Consenting Lender shall be so extended and the Termination
Date of each Non-Consenting Lender, if any, shall remain
unchanged. Otherwise, the Termination Date shall not be
extended for any of the Lenders.
2.6.2. Termination of Lenders. If there are any Non-
Consenting Lenders pursuant to Section 2.6.1 and an extension
has occurred for Consenting Lenders, the Borrower may, at its
option, terminate the Commitment of a Non-Consenting Lender
and pay or prepay all outstanding Loans of such Non-Consenting
Lender (each a "Terminated Lender"). The Borrower shall, by
giving written notice thereof to the Terminated Lender and to
the Agent, specify the proposed effective date of termination
of the Terminated Lender's Commitment (the "Lender Termination
Date"), which date shall not in any event be less than five
nor more than sixty days following the date of such notice of
termination. The Borrower may not elect to terminate and
prepay any Lender under this Section 2.6.2 if a Default or
Unmatured Default exists. On the Lender Termination Date (i)
the Borrower shall pay or prepay all outstanding Loans of such
Terminated Lender, together with accrued interest thereon and
all fees due such Terminated Lender under Section 2.4, in each
case accrued through the Lender Termination Date, together
with all amounts, if any, payable under Section 3.4 in
connection with prepayment of such Loans, and any all other
amounts that may then be due and owing to such Terminated
Lender under the terms of the Loan Documents, and (ii) the
Terminated Lender shall have no further Commitment under this
Agreement and shall no longer be a "Lender" under this
Agreement for any purpose except insofar as it shall be
entitled to any payment or indemnification, or be obligated to
make any indemnification, on account of any event which shall
have occurred, or any right or liability which shall have
arisen, on or prior to the date of repayment in full of such
Advances. The termination of any Terminated Lender's
Commitment and the prepayment of a Terminated Lender's
Advances pursuant to this Section 2.6.2 shall not relieve or
satisfy the obligations of the Borrower to make any such
prepayments free and clear of all taxes, to reimburse such
Terminated Lender for all increased costs pursuant to Section
3.4, or to comply with all other terms and conditions of this
Agreement (including, without limitation, Section 9.7).
2.6.3. Successor Lenders. If, from time to time, any Non-
consenting Lender's Commitment is terminated pursuant to
Section 2.6.2, the Borrower may, at its option, specify one or
more commercial banks (including any Lender) (each a
"Successor Lender"), each such Successor Lender having a
combined capital, surplus (or its equivalent) and undivided
profits in an amount not less than U.S. $250,000,000 (or its
equivalent in another currency), which Successor Lender or
Successor Lenders shall have agreed, in the aggregate, to
succeed to the entire Commitment of such Terminated Lender on
the applicable Lender Termination Date. Effective as of such
Lender Termination Date, the Borrower, the Agent and such
Successor Lender shall enter into an appropriate Assignment
Agreement to so assign the entire Commitment of the applicable
Terminated Lender to the Successor Lender.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If, after the date of this Agreement,
the adoption of any law or the application of any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any change therein, or
any change in the interpretation or administration thereof, or the
compliance of any Lender therewith,
(i) with respect to Committed Loans bearing interest at
a Fixed Rate, subjects any Lender or any applicable
Lending Installation to any tax, duty, charge or
withholding on or from payments due from the
Borrower (excluding federal, state or local
taxation of the overall net income of any Lender or
applicable Lending Installation), or changes the
basis of taxation of payments to any Lender in
respect of its Committed Loans or other amounts due
it hereunder in respect of such Loans, or
(ii) with respect to Committed Loans bearing interest at
a Fixed Rate, imposes or increases or deems
applicable any reserve, assessment, insurance
charge, special deposit or similar requirement
against assets of, deposits with or for the account
of, or credit extended by, any Lender or any
applicable Lending Installation (other than
reserves and assessments taken into account in
determining the interest rate applicable to
Committed Advances bearing interest at a Fixed
Rate), or
(iii) with respect to Committed Loans bearing interest at
a Fixed Rate, imposes any other condition,
the result of which is to increase the cost to any Lender or
any applicable Lending Installation of making, funding or
maintaining such Loans or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection
with such Loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by
reference to the amount of such Loans held or interest
received by it, by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower
shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender
determines is attributable to making, funding and maintaining
its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a
Lender reasonably determines that the amount of capital required or
expected to be maintained by such Lender, any Lending Installation
of such Lender or any corporation controlling such Lender
attributable to this Agreement, the Loans or its obligation to make
Loans hereunder is increased as a result of a Change (as hereafter
defined), then, within 15 days of demand by such Lender, the
Borrower shall pay such Lender the amount which such Lender
determines is necessary to compensate it for any reduction in the
rate of return on capital to an amount below that which such Lender
could have achieved but for such Change and is attributable to this
Agreement, the Loans or its obligation to make Loans hereunder,
provided, however, that the effect of any Change shall be
determined based on the effect on such Lender that would be
applicable to such Lender if such Lender was maintaining the
highest credit quality as determined by the applicable regulatory
authorities at the time of such Change. "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the
force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling
any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the
date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules,
and any amendments to such regulations adopted prior to the date of
this Agreement.
3.3. Availability of Types of Advances. If the Required
Lenders determine that (i) deposits of a type and maturity
appropriate to match fund Committed Advances bearing interest at a
Fixed Rate are not available or (ii) the interest applicable to a
Type of Committed Advance does not accurately reflect the cost of
making or maintaining such Committed Advance, then the Agent shall
suspend the availability of the affected Type of Committed Advance.
If any Lender determines that maintenance of its Eurodollar Loans
would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, then such Lender may by
notice to the Borrower, through the Agent, require that any of its
Eurodollar Loans be promptly converted to an unaffected Type of
Loan.
3.4. Funding Indemnification. If any payment of a Fixed
Rate Loan occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Fixed Rate Advance is not made on the
date specified by the Borrower for any reason other than default by
the Lenders, the Borrower will indemnify each Lender for any loss
or cost incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Fixed Rate Advance.
3.5. Lender Statements; Survival of Indemnity. To the
extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Fixed Rate Loans
to reduce any liability of the Borrower to such Lender under
Section 3.1 or 3.2 or to avoid the unavailability of a Type of
Committed Advance under Section 3.3, so long as such designation is
not disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender as to the amount due, if any,
under Section 3.1, 3.2, 3.3 or 3.4. Such written statement shall
set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection
with a Fixed Rate Loan shall be calculated as though each Lender
funded its Fixed Rate Loan through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference
in determining the Fixed Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein,
the amount specified in the written statement shall be payable on
demand after receipt by the Borrower of the written statement. The
obligations of the Borrower under Sections 3.1, 3.2 and 3.4 shall
survive payment of any other of the Borrower's Obligations and the
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required
to make the initial Advance hereunder unless the Borrower has
furnished to the Agent with sufficient copies for the Lenders:
(i) Copies of the certified articles of incorporation of the
Borrower, together with all amendments thereto, and a
certificate of good standing, certified by the
appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of its by-laws and of its Board of
Directors' resolutions (and resolutions of other bodies,
if any are deemed necessary by counsel for any Lender)
authorizing the execution of the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify
by name and title and bear the signature of the
Authorized Officers authorized to sign the Loan Documents
and to make borrowings hereunder, upon which certificate
the Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of
the Borrower, stating that on the initial Borrowing Date
no Default or Unmatured Default has occurred and is
continuing.
(v) A written opinion of the Borrower's general counsel,
addressed to the Lenders in substantially the form of
Exhibit "H" hereto.
(vi) Notes payable to the order of each of the Lenders.
(vii) Written money transfer instructions, in substantially the
form of Exhibit "G" hereto, addressed to the Agent and
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Agent may
have reasonably requested.
(viii) A duly completed compliance certificate in substantially
the form of Exhibit "B" hereto, signed by the Borrower's
chief financial officer.
(ix) Copies of this Agreement duly executed by the Borrower.
(x) Such other documents as any Lender or its counsel may
have reasonably requested.
4.2. Each Advance. The Lenders shall not be required to make
any Advance (other than an Advance that, after giving effect
thereto and to the application of the proceeds thereof, does not
increase the aggregate amount of outstanding Advances), unless on
the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article
V are true and correct as of such Borrowing Date except
to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case
such representation or warranty shall be true and correct
on and as of such earlier date.
(iii) All legal matters incident to the making of such Advance
shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been
satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders as of the date
of this Agreement and as of each Borrowing Date pursuant to Section
4.2 (ii) that:
5.1. Corporate Existence and Standing. Each of the Borrower
and its Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower has the
corporate power and authority and legal right to execute and
deliver the Loan Documents and to perform its obligations
thereunder. The execution and delivery by the Borrower of the Loan
Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the
execution and delivery by the Borrower of the Loan Documents, nor
the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation or by-laws
or the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is
subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the Property of the Borrower
or a Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize,
or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
5.4. Financial Statements. The October 30, l993
consolidated financial statements of the Borrower and its
Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect
on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5. Material Adverse Change. Since October 30, 1993,
there has been no change in the business, Property, prospects,
condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries which has a substantial likelihood of
having a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed
all United States federal tax returns and all other tax returns
which are required to be filed and have paid all taxes due pursuant
to said returns or pursuant to any assessment received by the
Borrower or any of its Subsidiaries, except such taxes, if any, as
are being contested in good faith and as to which, in the
aggregate, adequate reserves have been provided. The United States
income tax returns of the Borrower and its Subsidiaries have been
audited by the Internal Revenue Service through the fiscal year
ended February 2, 1991. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges
are adequate.
5.7. Litigation and Contingent Obligations. There is no
litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its
Subsidiaries which has a substantial likelihood of having a
Material Adverse Effect. Other than any liability incident to such
litigation, arbitration or proceedings, the Borrower has no
material contingent obligations not provided for or disclosed in
the financial statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule "1" hereto contains an
accurate list of all of the presently existing Subsidiaries of the
Borrower, setting forth their respective jurisdictions of
incorporation and the percentage of their respective capital stock
owned by the Borrower or other Subsidiaries. All of the issued and
outstanding shares of capital stock of such Subsidiaries have been
duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. There are no Unfunded Liabilities. Neither
the Borrower nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal
liability to Multiemployer Plans in excess of $5,000,000 in the
aggregate. Each Plan complies in all material respects with all
applicable requirements of law and regulations and no Reportable
Event has occurred with respect to any Plan.
5.l0. Accuracy of Information. No information, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any
fact necessary to make the statements contained therein not
misleading.
5.11. Regulation U. Margin stock (as defined in
Regulation U) constitutes less than 25% of the value of those
assets of the Borrower and its Subsidiaries on a consolidated basis
which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to
any charter or other corporate restriction which has a substantial
likelihood of having a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party,
which default has a substantial likelihood of having a Material
Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness, which default has a substantial likelihood
of having a Material Adverse Effect.
5.13. Compliance With Laws. The Borrower and its
Subsidiaries have complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions of
any domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. Neither
the Borrower nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any
of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations or the
subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic
or hazardous waste or substance into the environment, which
non-compliance or remedial action has a substantial likelihood of
having a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on
Schedule "2" hereto, on the date of this Agreement, the Borrower
and its Subsidiaries will have good title, free of all Liens other
than those permitted by Section 6.16, to all of the Property and
assets reflected in the financial statements referred to in Section
5.4 as owned by it.
5.15. Investment Company Act. Neither the Borrower nor
any Subsidiary thereof is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.16. Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain,
for itself and each Subsidiary, a system of accounting established
and administered in accordance with generally accepted accounting
principles, and furnish to the Lenders:
(i) Within 95 days(or, in the case of the management
letter referred to in clause (a) below, 120 days)
after the close of each of its fiscal years, an
unqualified (except for qualifications relating to
changes in accounting principles or practices
reflecting changes in generally accepted principles
of accounting and required or approved by the
Borrower's independent certified public
accountants) audit report certified by independent
certified public accountants, acceptable to the
Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated basis for
itself and the Subsidiaries, including balance
sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements,
and a statement of cash flows, accompanied by (a)
any management letter prepared by said accountants,
and (b) a certificate of said accountants that, in
the course of their examination necessary for their
certification of the foregoing, they have obtained
no knowledge of any Default or Unmatured Default,
or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating
the nature and status thereof, provided, however,
that delivery pursuant to Section 6.1(vii) of
copies of the Annual Report on Form 10-K of the
Borrower for such fiscal year filed with the
Securities and Exchange Commission, together with
delivery of the items referred to in clauses (a)
and (b) of this Section 6.1(i), shall be deemed to
satisfy the requirements of this Section 6.1(i).
(ii) Within 50 days after the close of the first three
quarterly periods of each of its fiscal years, for
itself and the Subsidiaries, condensed consolidated
unaudited balance sheets as at the close of each
such period and condensed consolidated profit and
loss statement and a condensed consolidated
statement of cash flows for the period from the
beginning of such fiscal year to the end of such
quarter, all certified by its chief financial
officer provided, however, that delivery pursuant
to Section 6.1(vii) of copies of the Quarterly
Report on Form 10-Q of the Borrower for such
quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the
requirements of this Section 6.1(ii).
(iii) Together with the financial statements required
hereunder, a compliance certificate in
substantially the form of Exhibit "B" hereto signed
by its chief financial officer showing the
calculations necessary to determine compliance with
this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and
status thereof.
(iv) As soon as possible and in any event within l0 days
after the Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement,
signed by the Chief Financial Officer or Treasurer
of the Borrower, describing said Reportable Event
and the action which the Borrower proposes to take
with respect thereto.
(v) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (a) any
notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower,
any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any
violation of any federal, state or local
environmental, health or safety law or regulation
by the Borrower or any of its Subsidiaries which,
in the case of either clause (a) or (b) above, if
adversely determined, could result in liability to
the Borrower or any Subsidiary in excess of
$5,000,000.
(vi) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all
financial statements, reports and proxy statements
so furnished.
(vii) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly,
monthly or other regular reports which the Borrower
or any of its Subsidiaries files with the
Securities and Exchange Commission.
(viii) Such other information (including non-financial
information) as the Agent or any Lender may from
time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause
each Subsidiary to, use the proceeds of the Advances for general
corporate purposes. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances
to purchase or carry any "margin stock" (as defined in Regulation
U).
6.3. Notice of Default. The Borrower will, and will
cause each Subsidiary to, give prompt notice in writing to the
Lenders of the occurrence of any Default or Unmatured Default and
of any other development, financial or otherwise, which has a
substantial likelihood of having a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will
cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted (including the
establishment of any foreign Subsidiaries for the purpose of
providing financing to the Borrower and its Subsidiaries) and to do
all things necessary to remain duly incorporated, validly existing
and in good standing as a domestic corporation in its jurisdiction
of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is
conducted.
6.5. Taxes. The Borrower will, and will cause each
Subsidiary to, pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate
proceedings and with respect to which, in the aggregate, adequate
reserves have been set aside.
6.6. Insurance. The Borrower will, and will cause each
Subsidiary to, maintain with financially sound and reputable
insurance companies insurance on all their Property in such amounts
and covering such risks as is consistent with sound business
practice, and the Borrower will furnish to any Lender upon request
all information reasonably requested as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will
cause each Subsidiary to, comply in all material respects with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject.
6.8. Maintenance of Properties. The Borrower will, and
will cause each Subsidiary to, do all things reasonably necessary
to maintain, preserve, protect and keep in all material respects
its Property in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that
its business carried on in connection therewith may be properly
conducted at all times provided, however, that nothing in this
Section 6.8 shall prohibit the Borrower or any Subsidiary from
disposing of Properties which the Borrower reasonably determines is
no longer used or useful in the conduct of the business of the
Borrower and its Subsidiaries.
6.9. Inspection. The Borrower will, and will cause each
Subsidiary to, upon reasonable advance notice to the Borrower,
permit the Lenders, by their respective representatives and agents
and at their respective expense unless a Default has occurred and
is continuing, to inspect, in a commercially reasonable manner, any
of the Property, corporate books and financial records of the
Borrower and each Subsidiary, to examine the books of accounts and
other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each
Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and reasonable
intervals as the Lenders may designate.
6.10. Subsidiary Indebtedness. The Borrower will not
permit any Subsidiary to create, incur or suffer to exist any
Indebtedness, except:
(i) Indebtedness (exclusive of Indebtedness permitted under
clause (ii) of this Section 6.10) provided that the sum
of (a) such Indebtedness plus (b) all Indebtedness of the
Borrower secured by Liens permitted under Section
6.16(vi) shall not at any time exceed an amount equal to
10% of Consolidated Tangible Net Worth.
(ii) Reimbursement obligations pursuant to Letters of Credit
permitted under Section 6.17.
6.11. Merger. The Borrower will not, nor will it permit
any Subsidiary to, merge or consolidate with or into any other
Person, except:
(i) Any Subsidiary may merge or consolidate with, or dissolve
or liquidate into, the Borrower (provided that the
Borrower shall be the continuing or surviving
corporation) or may merge or consolidate with or dissolve
or liquidate into any one or more other Subsidiaries.
(ii) The Borrower may merge or consolidate with any other
corporation, provided that (A) the Borrower shall be the
continuing or surviving corporation and no Default or
Unmatured Default shall have occurred and be continuing
and (B) immediately after giving effect to such merger or
consolidation, no Default or Unmatured Default shall have
occurred and be continuing.
(iii) Cloth World may merge or consolidate with or into another
Person provided no Default or Unmatured Default exists or
would exist immediately after giving effect to such
merger or consolidation.
6.12. Sale of Assets. The Borrower will not, nor will it
permit any Subsidiary to, lease, sell or otherwise dispose of its
Property, to any other Person except:
(i) Sales of inventory in the ordinary course of business.
(ii) A sale or other disposition of all or substantially all
of the stock or assets of Cloth World.
(iii) Leases, sales or other dispositions of its Property
(other than sales of inventory in the ordinary course of
business or stock or assets of Cloth World) that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of as
permitted by this Section 6.12(iii) during the
twelve-month period ending with the month in which any
such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of the
Borrower and its Subsidiaries.
(iv) Sales permitted by the terms of Section 6.13.
6.13. Sale of Accounts. The Borrower will not, nor will
it permit any Subsidiary to, sell or otherwise dispose, with or
without recourse, notes receivable or accounts receivable having
an aggregate unpaid principal balance exceeding $20,000,000 at any
one time outstanding.
6.14. Investments and Acquisitions. The Borrower will
not, nor will it permit any Subsidiary to, make or suffer to exist
any Investments (including without limitation, loans and advances
to, and other Investments in, Subsidiaries), or commitments
therefor, or create any Subsidiary or become or remain a partner in
any partnership or joint venture, or make any Acquisition of any
Person, except:
(i) Short-term obligations of, or fully guaranteed by,
the United States of America.
(ii) Commercial paper rated A-l or better by Standard
and Poor's Corporation or P-l or better by Moody's
Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary
course of business.
(iv) Certificates of deposit issued by and time deposits
(a) with Shanghai Commercial Bank in an aggregate
amount not exceeding $10,000,000 and (b) with
commercial banks (whether domestic or foreign)
having capital and surplus in excess of
$100,000,000.
(v) Investments in Subsidiaries.
(vi) Investments in existence on the date hereof and
described in Schedule "1" hereto.
(vii) Acquisitions of entities engaged in, or supporting,
substantially the same lines of business as the
Borrower and its Subsidiaries provided (A) promptly
following such Acquisition, the entity so acquired
shall be merged with or into the Borrower or a
Subsidiary in compliance with the terms of Section
6.11 or shall become a Subsidiary, and (B) in the
case of any Acquisition of a corporation, the board
of directors of such corporation shall have
recommended and approved such Acquisition to its
respective shareholders.
(viii) If Cloth World ceases to be a Subsidiary, the
Borrower may own, purchase or acquire stock of (a)
Cloth World, (b) the surviving corporation of a
merger involving Cloth World or (c) any corporation
acquiring all or substantially all of the assets of
Cloth World.
(ix) Loans, advances or accounts receivable on non-
customary terms to independent retailers of the
products of the Borrower or any Subsidiary not in
excess of $15,000,000 in principal amount at any
one time outstanding with no more than an aggregate
amount of $5,000,000 in principal amount at any one
time outstanding with any one retailer.
(x) Investments in Persons which are not Subsidiaries
and which are not otherwise permitted by the terms
of this Section 6.14 provided (i) the aggregate
outstanding amount of all such Investments shall
not at any time exceed an amount equal to
$30,000,000 minus the aggregate amount of the then
outstanding Investments in unconsolidated
Subsidiaries, and (ii) the aggregate amount of all
such Investments which are in different lines of
business than those conducted by the Borrower and
its Subsidiaries on the date of this Agreement
shall not any time exceed $10,000,000.
6.15. Contingent Obligations. The Borrower will not, nor
will it permit any Subsidiary to, make or suffer to exist any
Contingent Obligation (including, without limitation, any
Contingent Obligation with respect to the obligations of a
Subsidiary), except:
(i) By endorsement of instruments for deposit or
collection in the ordinary course of business.
(ii) Contingent Obligations in respect of Letters of
Credit permitted under Section 6.17.
(iii) Contingent Obligations in respect of store leases
(other than with respect to store leases of Cloth
World in the event of any sale or other disposition
of Cloth World), as disclosed in the notes to the
consolidated financial statements of the Borrower.
(iv) Contingent Obligations in respect of store leases
of Cloth World retained pursuant to a sale or other
disposition of Cloth World in an aggregate amount
not exceeding, for any fiscal year of the Borrower,
the amount set forth below for such fiscal year:
Amount Fiscal Year Ending
------ ------------------
$19,500,000 January 29, 1994
$17,250,000 January 28, 1995
$15,250,000 February 3, 1996
$13,500,000 February 1, 1997
6.16. Liens. The Borrower will not, nor will it permit
any Subsidiary to, create, incur, or suffer to exist any Lien in,
of or on the Property of the Borrower or any of its Subsidiaries,
except:
(i) Liens for taxes, assessments or governmental
charges or levies on its Property if the same shall
not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in
good faith and by appropriate proceedings and for
which adequate reserves in accordance with
generally accepted principles of accounting shall
have been set aside on its books.
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other
similar liens arising in the ordinary course of
business which secure payment of obligations not
more than 60 days past due or which are being
contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set
aside on its books.
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance,
old age pensions, or other social security or
retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such
other encumbrances or charges against real property
as are of a nature generally existing with respect
to properties of a similar character and which do
not in any material way affect the marketability of
the same or interfere with the use thereof in the
business of the Borrower or the Subsidiaries.
(v) Liens granted in connection with sales, with
recourse or with limited recourse, of notes
receivable or accounts receivable permitted under
Section 6.13.
(vi) Other Liens securing Indebtedness of the Borrower
or any Subsidiary provided that the sum of (a) all
Indebtedness permitted under Section 6.10(i) plus
(b) all Indebtedness of the Borrower secured by
such Liens shall not at any time exceed an amount
equal to 10% of Consolidated Tangible Net Worth.
6.17. Letters of Credit. The Borrower will not, nor will
it permit any Subsidiary to, apply for or become liable upon any
Letter of Credit except:
(i) Commercial Letters of Credit supporting the
importation of goods in the ordinary course of
business.
(ii) Standby Letters of Credit supporting worker's
compensation, insurance obligations and other
obligations which may occur in the ordinary course
of business in a aggregate amount not exceeding
$25,000,000 at any one time outstanding.
6.18. Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or
service) with, or make any payment or transfer to, any Affiliate
except in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.
6.19. Ratio of Long-Term Debt to Consolidated
Capitalization. The Borrower will maintain at all times a ratio of
(i) Long-Term Debt to (ii) Consolidated Capitalization, of not more
than .50 to 1.0.
6.20. Working Capital. The Borrower will maintain at all
times an excess of the consolidated current assets of the Borrower
and its consolidated Subsidiaries over the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries, all
determined in accordance with Agreement Accounting Principles, of
not less than $150,000,000.
6.21. Consolidated Tangible Net Worth. The Borrower will
maintain at all times and on any date of determination a
Consolidated Tangible Net Worth of not less than the sum of (i)
$150,000,000 plus (ii) an amount equal to 50% of the consolidated
net income (if positive) of the Borrower and it Subsidiaries,
determined in accordance with Agreement Accounting Principles, for
each full fiscal quarter of the Borrower from and including the
fiscal quarter ended October 30, 1993 through and including the
Borrower's fiscal quarter then most recently ended on or prior to
such date of determination.
6.22. Fixed Charge Coverage. The Borrower will maintain
as at the end of each of its fiscal quarters, a ratio of (i) Cash
Flow to (ii) Fixed Charges, for the period of the four then most
recently ended fiscal quarters, of not less than (a) 1.20 to 1.0
for each such period ended on or prior to January 29, 1995, and (b)
1.25 to 1.0 for each such period ended thereafter.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events
shall constitute a Default:
7.1. Any representation or warranty made or deemed made
by or on behalf of the Borrower or any of its Subsidiaries to the
Lenders or the Agent under or in connection with this Agreement,
any Loan, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall be materially
false on the date as of which made.
7.2. Nonpayment of principal of any Note within one
Business Day after the same becomes due, or nonpayment of interest
upon any Note within five days after the same becomes due or
nonpayment of any commitment fee or other obligations under the
Loan Documents within two Business Days after demand therefor from
the Agent or any Lender.
7.3. The breach by the Borrower of any of the terms or
provisions of Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.16, 6.18, or
6.22.
7.4. The breach by the Borrower (other than a breach
which constitutes a Default under Section 7.1, 7.2 or 7.3) of any
of the terms or provisions of this Agreement which is not remedied
within thirty days after written notice from the Agent or any
Lender.
7.5. Failure of the Borrower or any of its Subsidiaries
to pay any Indebtedness in an aggregate amount of $10,000,000 or
more when due (taking into account any applicable grace periods or
notice provisions); or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition
contained in any agreement under which any such Indebtedness was
created or is governed, or any other event shall occur or condition
exist, the effect of which is to cause, or to permit the holder or
holders of such Indebtedness to cause, such Indebtedness to become
due prior to its stated maturity; or any such Indebtedness of the
Borrower or any of its Subsidiaries shall be declared to be due and
payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become
due.
7.6. The Borrower or any of its Subsidiaries shall (i)
have an order for relief entered with respect to it under the
Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it
or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy
laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to
authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment
or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the
Borrower or any of its Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower
or any of its Subsidiaries or any Substantial Portion of its
Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any of its Subsidiaries and such
appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control
of (each a "Condemnation"), all or any portion of the Property of
the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $5,000,000, which is
not stayed or otherwise being appropriately contested in good
faith.
7.10. Any Unfunded Liabilities in excess of $5,000,000 in
the aggregate shall exist or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all
other amounts required to be paid to Multiemployer Plans by the
Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds
$5,000,000.
7.12. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result
of such reorganization or termination the aggregate annual
contributions of the Borrower and the other members of the
Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or
will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding
$5,000,000.
7.13. The Borrower or any of its Subsidiaries shall be the
subject of any proceeding or investigation pertaining to the
release by the Borrower or any of its Subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which, in either
case, has a substantial likelihood of having a Material Adverse
Effect.
7.14. Any Change in Control shall occur.
7.15. Nonpayment by the Borrower of any Rate Hedging
Obligation or the breach by the Borrower of any term, provision or
condition contained in any agreement, device or arrangement giving
rise to any Rate Hedging Obligation (taking into account any
applicable grace periods and notice provisions).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section
7.6 or 7.7 occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder shall automatically terminate
and the Obligations shall immediately become due and payable
without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders may
terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any
kind, all of which the Borrower hereby expressly waives.
If, within ten days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to
make Loans hereunder as a result of any Default (other than any
Default as described in Section 7.6 or 7.7 with respect to the
Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent
shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this
Article VIII, the Required Lenders (or the Agent with the consent
in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Extend the maturity of any Loan or Note of any Lender
other than pursuant to the terms of Section 2.6 or
forgive all or any portion of the principal amount
thereof, or reduce the rate or extend the time of payment
of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Termination Date other than pursuant to the
terms of Section 2.6, reduce the amount or extend the
payment date for, the mandatory payments required under
Section 2.2, or increase the amount of the Commitment of
any Lender hereunder, or permit the Borrower to assign
its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the Agent.
The Agent may waive payment of the fee required under Section
12.3.2 without obtaining the consent of any other party to this
Agreement.
8.3. Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any
Default or an acquiescence therein, and the making of a Loan
notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions
of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then
only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall
be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations
and warranties of the Borrower contained in this Agreement shall
survive delivery of the Notes and the making of the Loans herein
contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on
the overall net income of any Lender) or other similar assessments
or charges made by any governmental or revenue authority in respect
of the Loan Documents shall be paid by the Borrower, together with
interest and penalties, if any.
9.4. Headings. Section headings in the Loan Documents
are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the
entire agreement and understanding among the Borrower, the Agent
and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Agent and the Lenders
relating to the subject matter thereof.
9.6. Several Obligations; Benefits of this Agreement.
The respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any other
(except to the extent to which the Agent is authorized to act as
such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and
assigns.
9.7. Expenses; Indemnification. The Borrower shall
reimburse the Agent for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and
time charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection
with the preparation, negotiation, execution, delivery, review,
amendment, modification, and administration of the Loan Documents.
The Borrower also agrees to reimburse the Agent and the Lenders for
any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the
Agent and the Lenders, which attorneys may be employees of the
Agent or the Lenders) paid or incurred by the Agent or any Lender
in connection with the collection and enforcement of the Loan
Documents. The Borrower further agrees to indemnify the Agent and
each Lender and their respective directors, officers and employees
(each an "Indemnified Person") against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable expenses of litigation or preparation
therefor whether or not the Agent or any Lender is a party thereto)
(collectively, "Losses") which any of them may pay or incur arising
out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan
hereunder, except, in respect of any Indemnified Person, for Losses
resulting from the gross negligence or willful misconduct of such
Indemnified Person. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices,
closing documents, and requests hereunder shall be furnished to the
Agent with sufficient counterparts so that the Agent may furnish
one to each of the Lenders.
9.9. Accounting. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted and
all accounting determinations hereunder shall be made in accordance
with Agreement Accounting Principles.
9.10. Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
9.11. Nonliability of Lenders. The relationship between
the Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower. Neither the Agent
nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY
LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
9.15. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure (i)
to other Lenders and their respective Affiliates, (ii) to legal
counsel, accountants, and other professional advisors to that
Lender or to a Transferee, (iii) to regulatory officials, (iv) to
any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with
any legal proceeding to which that Lender is a party, and (vi)
permitted by Section 12.4.
ARTICLE X
THE AGENT
10.1. Appointment. The First National Bank of Chicago is
hereby appointed Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent
to act as the agent of such Lender. The Agent agrees to act as
such upon the express conditions contained in this Article X. The
Agent shall not have a fiduciary relationship in respect of the
Borrower or any Lender by reason of this Agreement.
10.2. Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to
the Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to
take any action thereunder except any action specifically provided
by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the
Borrower, the Lenders or any Lender for any action taken or omitted
to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith except for its or
their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire
into, or verify (i) any statement, warranty or representation made
in connection with any Loan Document or any borrowing hereunder;
(ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any
condition specified in Article IV, except receipt of items required
to be delivered to the Agent and verification that such items
appear on their face to conform to the requirements of this
Agreement; or (iv) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in
connection therewith. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the
Borrower to the Agent at such time, but is voluntarily furnished by
the Borrower to the Agent (either in its capacity as Agent or in
its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall
in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance
with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all holders
of Notes. The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take
any such action.
10.6. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder
and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by
the proper person or persons, and, in respect to legal matters,
upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Agent ratably in
proportion to their respective Commitments (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for
any other expenses incurred by the Agent on behalf of the Lenders,
in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii) for
any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith
or the transactions contemplated thereby, or the enforcement of any
of the terms thereof or of any such other documents, provided that
no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the
Agent. The obligations of the Lenders under this Section 10.8
shall survive payment of the Obligations and termination of this
Agreement.
10.9. Rights as a Lender. In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Lender and may exercise
the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the
context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or
any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent,
in its individual capacity, is not obligated to remain a Lender.
10.l0. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or
any other Lender and based on the financial statements prepared by
the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and the other Loan Documents. Each
Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.11. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a
successor Agent or, if no successor Agent has been appointed,
forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or
without cause by written notice received by the Agent from the
Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent.
Provided that no Default then exists and is continuing, the
Borrower shall have the right to consent to such Successor Agent,
such consent not to be unreasonably withheld or delayed. If no
successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may
appoint, on behalf of the Borrower and the Lenders, a successor
Agent. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor
Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed
Agent. Upon the effectiveness of the resignation or removal of the
Agent, the resigning or removed Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents.
After the effectiveness of the resignation or removal of an Agent,
the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent hereunder and under
the other Loan Documents.
10.12. Co-Agents. None of the Lenders identified on the
cover page or signature pages of this Agreement as a "Co-Agent"
shall have any right, power, obligation, liability, responsibility
or duty under this Agreement other than those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding
to enter into this Agreement or in taking or refraining from taking
any action hereunder or pursuant hereto.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of,
any rights of the Lenders under applicable law, if the Borrower
becomes insolvent, however evidenced, or any Default occurs, any
and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and
any other Indebtedness at any time held or owing by any Lender to
or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be
due.
11.2. Ratable Payments. If any Lender, whether by setoff
or otherwise, has payment made to it upon its Committed Loans
(other than payments received pursuant to Sections 3.1, 3.2 or 3.4)
in a greater proportion than that received by any other Lender,
such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans. If any
Lender, whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject
to setoff, such Lender agrees, promptly upon demand, to take such
action necessary such that all Lenders share in the benefits of
such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lenders and their respective successors and
assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii)
any assignment by any Lender must be made in compliance with
Section 12.3. Notwithstanding clause (ii) of this Section, any
Lender may at any time, without the consent of the Borrower or the
Agent, assign all or any portion of its rights under this Agreement
and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment shall release the transferor Lender from its
obligations hereunder. The Agent may treat the payee of any Note
as the owner thereof for all purposes hereof unless and until such
payee complies with Section 12.3 in the case of an assignment
thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Agent. Any assignee or transferee
of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall
be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange
therefor.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan Documents,
all amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating
interests, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases any
substantial portion of collateral, if any, securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount
of its participating interest were owing directly to it as a Lender
under the Loan Documents, provided that each Lender shall retain
the right of setoff provided in Section 11.1 with respect to the
amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant,
by exercising the right of setoff provided in Section 11.1, agrees
to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under
the Loan Documents. Such assignment shall be substantially in the
form of Exhibit "F" hereto or in such other form as may be agreed
to by the parties thereto. The consent of the Borrower and the
Agent shall be required prior to an assignment becoming effective
with respect to a Purchaser which is not a Lender or an Affiliate
thereof; provided, however, that if a Default has occurred and is
continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld.
12.3.2. Effect; Effective Date. Upon (i) delivery to the
Agent of a notice of assignment, substantially in the form attached
as Exhibit "I" to Exhibit "F" hereto (a "Notice of Assignment"),
together with any consents required by Section 12.3.1, and (ii)
payment by the parties to such assignment of a $2,500 fee to the
Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Loans
under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment,
such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and
shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower, the
Lenders or the Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Commitment
and Loans assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to
such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Commitment, as adjusted pursuant
to such assignment.
12.4. Dissemination of Information. The Borrower
authorizes each Lender to disclose to any Participant or Purchaser
or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective
Transferee agrees in writing and in advance of receipt of any such
information to be bound by a confidentiality agreement in
substantially the form of Exhibit "I" hereto.
12.5. Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is organized under the laws
of any jurisdiction other than the United States or any State
thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.5.14.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by
Section 2.13 with respect to borrowing notices, all notices and
other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing or by
telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if
transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes).
13.2. Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it by
a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any
of the parties hereto may execute this Agreement by signing any
such counterpart. This Agreement shall be effective when it has
been executed by the Borrower, the Agent and the Lenders and each
party has notified the Agent by telex or telephone, that it has
taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders, the Agent, and
the Co-Agents have executed this Agreement as of the date first
above written.
BROWN GROUP, INC.
By: /s/ Andrew M. Rosen
Title: Vice President and Treasurer
8400 Maryland Avenue
P.O. Box 29
St. Louis, MO 63166
Attn: Mr. Andrew M. Rosen
Vice President and Treasurer
Telephone No.: (314) 854-4124
Telecopier No.: (314) 854-4098
Commitments
- ----------- THE FIRST NATIONAL BANK OF CHICAGO,
$ 30,000,000 individually and as Agent
By: /s/ The First National Bank of Chicago
Title:
One First National Plaza
Suite 0175
Chicago, IL 60607-0175
Attn: Ms. Lynn Dillon
Telephone No.: (312) 732-7703
Telecopier No.: (312) 732-1712
$ 40,000,000 THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
individually and as Co-Agent
By: /s/ the Boatmen's National Bank of St. Louis
Title:
One Boatmen's Plaza, LBP 3506
St. Louis, MO 63101
Attn: Ms. C. Susan Taylor
Telephone No.: (314) 466-7818
Telecopier No.: (314) 466-7783
$ 30,000,000 CITIBANK, N.A.,
individually and as Co-Agent
By: /s/ Citibank, N.A.
Title:
399 Park Avenue
New York, NY 10043
With a copy to:
Citibank North America, Inc.
200 South Wacker Drive
31st Floor
Chicago, IL 60606
Attn: Ms. Emily Rosenstock
Ms. Anne McAloon
Telephone No.: (312) 993-3233
Telecopier No.: (312) 993-6840
$ 20,000,000 MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By: /s/ Mercantile Bank of St. Louis
Title:
721 Locust Street
Tram 12-3
St. Louis, MO 63105
Attn: Ms. Sally H. Roth
Telephone No.: (314)425-2456
Telecopier No.: (314) 425-2162
$ 20,000,000 NBD BANK, N.A.
By: /s/ NBD Bank, N.A.
Title:
611 Woodward
Detroit, MI 48226
Attn: Mr. Curtis A. Price
Telephone No.: (313) 225-4387
Telecopier No.: (313) 225-2649
$ 20,000,000 ROYAL BANK OF CANADA
By: /s/ Royal Bank of Canada
Title:
New York Branch
Royal Bank of Canada
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West, 14th Floor
Brooklyn, NY 11201-2701
Attn: Ms. Elizabeth Gonzalez
Telephone No.: (212) 858-7168
Telefax No: (212) 522-6292/3
With a copy to:
Royal Bank of Canada
33 North Dearborn Street
Suite 2300
Chicago, IL 60602
Attn: Ms. Partricia A. Herbig
Telephone No.: (312) 372-4404
Telefax No.: (312) 782-3429
$ 15,000,000 SHANGHAI COMMERCIAL BANK LTD.
By: /s/ Shanghai Commercial Bank Ltd.
Title:
135 William Street
New York, NY 10038
Attn: Mr. Daniel Chan
Telephone No.: (212) 619-7070
Telecopier No.: (216) 619-7077
$ 15,000,000 TRUST COMPANY BANK
By: /s/ Trust Company Bank
Title:
By:
Title:
25 Park Place
24th Floor, Center 124
Atlanta, GA 30303
Attn: Mr. F. McClellan Deaver
Telephone No.: (404) 588-8719
Telecopier No.: (404) 827-6270
$ 10,000,000 J.P. MORGAN DELAWARE
By: /s/ J. P. Morgan Delaware
Title:
902 Market Street
Wilmington, DE 19801
Attn: Mr. David J. Morris
Telephone No.: (302) 651-3788
Telecopier No.:(302) 654-5336
____________
$200,000,000
============
EXHIBIT "A-1"
COMMITTED NOTE
$ _________, 1993
Brown Group, Inc., a New York corporation (the "Borrower"),
promises to pay to the order of ____________________________(the
"Lender") the lesser of the principal sum of ___________________
Dollars or the aggregate unpaid principal amount of all Committed
Loans made by the Lender to the Borrower pursuant to Section 2.2 of
the Agreement (as hereinafter defined), in lawful money of the
United States in immediately available funds at the main office of
The First National Bank of Chicago in Chicago, Illinois, as Agent
or as otherwise directed by the Agent pursuant to the terms of the
Agreement, together with interest, in like money and funds, on the
unpaid principal amount hereof at the rates and on the dates set
forth in the Agreement. The Borrower shall pay all Committed
Loans in full on the Termination Date applicable to such Lender.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with
its usual practice, the date and amount of each Committed Loan and
the date and amount of each principal payment hereunder provided,
however, that any failure to so record shall not affect the
Borrower's obligations under any Loan Document.
This Committed Note is one of the Notes issued pursuant to,
and is entitled to the benefits of, the Credit Agreement dated as
of December 22, 1993 (as the same may be amended or modified and in
effect from time to time, the "Agreement") among the Borrower, the
lenders named therein, including the Lender, The First National
Bank of Chicago, as Agent, and The Boatmen's National Bank of St.
Louis and Citibank, N.A., as Co-Agents, to which Agreement
reference is hereby made for a statement of the terms and
conditions under which this Committed Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to
them in the Agreement.
BROWN GROUP, INC.
By:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMMITTED NOTE OF BROWN GROUP, INC.
Dated as of _____________, 1993
Principal Maturity
Amount of Interest Principal Unpaid
Date of Loan Period Amount Paid Balance
- ---- --------- ----------- ------------ -------
EXHIBIT "A-2"
COMPETITIVE BID NOTE
_________, 1993
Brown Group, Inc., a New York corporation (the "Borrower"),
promises to pay, on or before the Termination Date, to the order
of ____________________________ (the "Lender") the aggregate unpaid
principal amount of all Competitive Bid Loans made by the Lender
to the Borrower pursuant to Section 2.3 of the Agreement (as
hereinafter defined), in lawful money of the United States in
immediately available funds at the main office of The First
National Bank of Chicago, as Agent, in Chicago, Illinois or as
otherwise directed by the Agent pursuant to the terms of the
Agreement, together with interest, in like money and funds, on
the unpaid principal amount hereof at the rates and on the dates
determined in accordance with the Agreement. The Borrower shall
pay each Competitive Bid Loan in full on the last day of such
Competitive Bid Loan's applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or otherwise record in accordance with
its usual practice, the date and amount of each Competitive Bid
Loan and the date and amount of each principal payment hereunder,
provided, however, that any failure to so record shall not affect
the Borrower's obligations under any Loan Document.
This Competitive Bid Note is one of the Notes issued
pursuant to, and is entitled to the benefits of, the Credit
Agreement dated as of December 22, 1993 (as the same may be
amended or modified and in effect from time to time, the
"Agreement") among the Borrower, the lenders named therein,
including the Lender, The First National Bank of Chicago, as
Agent, and The Boatmen's National Bank of St. Louis and Citibank,
N.A., as Co-Agents, to which Agreement reference is hereby made
for a statement of the terms and conditions under which this
Competitive Bid Note may be prepaid or its maturity date
accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in
the Agreement.
BROWN GROUP, INC.
By:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMPETITIVE BID NOTE OF
BROWN GROUP, INC.
DATED _________, 1993
Principal Maturity
Amount of Interest Principal Unpaid
Date of Loan Period Amount Paid Balance
- ---- ---------- ----------- ----------- -------
EXHIBIT "B"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that
certain Credit Agreement dated as of December 22, 1993 (as
amended, modified, renewed or extended and in effect from time to
time, the "Agreement") among Brown Group, Inc. (the "Borrower"),
the lenders party thereto, The First National Bank of Chicago, as
Agent for the Lenders, and The Boatmen's National Bank of St.
Louis and Citibank, N.A., as Co-Agents. Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________ of the
Borrower;
2. I have reviewed the terms of the Agreement and I have
made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of the Borrower and its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any
condition or event which constitutes a Default or Unmatured
Default during or at the end of the accounting period covered by
the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Agreement, all of which data and computations
are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which the
Borrower has taken, is taking, or proposes to take with respect
to each such condition or event:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements
delivered with this Certificate in support hereof, are made and
delivered this ___ day of ______________, 19___.
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ___________________, 19__ with
the provisions of Sections 6.19, 6.20, 6.21 and 6.22 of the
Agreement.
($000s) Quarter Ended
SECTION 6.19 - LONG-TERM DEBT TO
CONSOLIDATED CAPITALIZATION
Long-Term Debt +
Current Maturities +
Capitalized Leases +
Contingent Obligations +
Contingent Obligations Limit -
------------
LONG TERM DEBT $
============
Net Worth +
Intangibles -
------------
CONSOLIDATED TANGIBLE NET WORTH $
============
LONG TERM DEBT +
TANGIBLE NET WORTH +
------------
CONSOLIDATED CAPITALIZATION
------------
RATIO :1.0
------------
**MAXIMUM** .50:1.0
------------
SECTION 6.20 - WORKING CAPITAL
Current Assets +
Current Liabilities -
------------
ACTUAL $
============
**MINIMUM** $150,000,000
------------
SECTION 6.21 - CONSOLIDATED TANGIBLE NET
WORTH MAINTENANCE
Cumm'l 50% of Net Income +
Tangible Net Worth Floor +
------------
Min Consolidated Tangible Net Worth $
------------
CONSOLIDATED TANGIBLE NET WORTH $
============
SECTION 6.22 - FIXED CHARGE COVERAGE
Pre-tax income +
Extraordinary Gains -
Extraordinary Cash Gains
(Maximum of $8MM) +
Extraordinary Non-cash losses +
Depreciation and Amortization +
Interest Expense +
Minimum Rent Expense +
Contingent Rent +
Capital Expenditures -
------------
CASH FLOW $
------------
Interest Expense +
Minimum Rent Expense +
Contingent Rent +
------------
FIXED CHARGES $
------------
FIXED CHARGE COVERAGE RATIO :1.0
-------------
**MINIMUM ** :1.0
-------------
EXHIBIT "C"
COMPETITIVE BID QUOTE REQUEST
(Section 2.3.2)
_________, 19__
To: The First National Bank of Chicago,
as agent (the "Agent")
From: Brown Group, Inc. (the "Borrower")
Re: Credit Agreement dated as of December 22, 1993 (as
amended or modified and in effect from time to time, the
"Agreement") among the Borrower, the Lenders listed on the
signature pages thereof, The First National Bank of
Chicago, as Agent, and The Boatmen's National Bank of St.
Louis and Citibank, N.A., as Co-Agents.
We hereby give notice pursuant to Section 2.3.2 of the
Agreement that we request Competitive Bid Quotes for the
following proposed Competitive Bid Advance(s):
Borrowing Date: _____________, 19___
Principal Amount(1) Interest Period(2)
- ------------------- ------------------
$
Such Competitive Bid Quotes should offer [a Competitive
Bid Margin] [an Absolute Rate].
Upon acceptance by the undersigned of any or all of the
Competitive Bid Advances offered by Lenders in response to this
request, the undersigned shall be deemed to affirm as of the
Borrowing Date thereof the representations and warranties made in
the Agreement to the extent specified in Article IV thereof.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Agreement.
Brown Group, Inc.
By:____________________
Title:_________________
(1) Amount must be at least $5,000,000 and an integral
multiple of $1,000,000.
(2) One, two, three or six months (Eurodollar Auction) or up
to 270 days (Absolute Rate Auction), subject to the
provisions of the definitions of Eurodollar Interest
Period and Absolute Rate Interest Period.
EXHIBIT "D"
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.3.3)
__________, 19__
To: [Name of Lender]
Re: Invitation for Competitive Bid Quotes to
Brown Group, Inc. (the "Borrower")
Pursuant to Section 2.3.3 of the Credit Agreement dated as
of December 22, 1993 (as amended or modified and in effect from
time to time, the "Agreement") among the Borrower, the Lenders
parties thereto, The First National Bank of Chicago, as Agent,
and The Boatmen's National Bank of St. Louis and Citibank, N.A.,
as Co-Agents, we are pleased on behalf of the Borrower to invite
you to submit Competitive Bid Quotes to the Borrower for the
following proposed Competitive Bid Advance(s):
Borrowing Date: _____________, 19__
Principal Amount Interest Period
- ---------------- ---------------
$
Such Competitive Bid Quotes should offer [a Competitive
Bid Margin] [an Absolute Rate]. Your Competitive Bid Quote must
comply with Section 2.3.4 of the Agreement and the foregoing.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Agreement.
Please respond to this invitation by no later than [1:00
p.m.] [9:00 a.m.] Chicago time on ____________, 1__.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: _______________________________
Title:_____________________________
EXHIBIT "E"
COMPETITIVE BID QUOTE
(Section 2.3.4)
__________, 19__
To: The First National Bank of Chicago, as Agent
Attn:
Re: Competitive Bid Quote to Brown Group, Inc. (the Borrower")
In response to your invitation on behalf of the Borrower dated
_________, 199_, we hereby make the following Competitive Bid Quote
pursuant to Section 2.3.4 of the Credit Agreement hereinafter
referred to and on the following terms:
1. Quoting Lender:__________________________________________
2. Person to contact at Quoting Lender:______________________________
3. Borrowing Date: ____________, 19__(1)
4. We hereby offer to make Competitive Bid Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest [Competitive [Absolute Minimum
Amount(2) Period(3) Bid Margin(4)] Rate(5)] Amount(6)
- --------- --------- ------------- -------- ---------
$
- ------------------------------------
(1) As specified in the related Invitation For Competitive Bid
Quotes.
(2) Principal amount bid for each Interest Period may not exceed
the principal amount requested. Bids must be made for at
least $5,000,000 and an integral multiple of $1,000,000.
(3) One, two, three or six months or up to 270 days, as
specified in the related Invitation For Competitive Bid
Quotes.
(4) Competitive Bid Margin over or under the Eurodollar Base
Rate determined for the applicable Interest Period. Specify
percentage (rounded to the nearest 1/100 of 1%) and specify
whether "PLUS" or "MINUS".
(5) Specify rate of interest per annum (rounded to the nearest
1/100 of 1%).
(6) Specify minimum or maximum amount, if any, which the
Borrower may accept and/or the limit, if any, as to the
aggregate principal amount of the Competitive Bid Loans of
the quoting Lender which the Borrower may accept (see
Section 2.3.4(ii)(d)).
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable
conditions set forth in the Credit Agreement dated as of
December 22, 1993 (as amended or modified and in effect
from time to time, the "Credit Agreement") among the
Borrower, the Lenders listed on the signature pages
thereof, The First National Bank of Chicago, as Agent, and
The Boatmen's National Bank of St. Louis and Citibank,
N.A., as Co-Agents, irrevocably obligates us to make the
Competitive Bid Loan(s) for which any offer(s) are
accepted, in whole or in part. Capitalized terms used
herein and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_____________, 19__ By:__________________________
Authorized Officer
EXHIBIT "F"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement")
between ____________________ (the "Assignor") and _______________
(the "Assignee") is dated as of________________, 19__. The
parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a
Credit Agreement, dated as of December 22, 1993 (which, as it may
be amended, modified, renewed or extended from time to time, is
herein called the "Credit Agreement"), among Brown Group, Inc. (the
"Borrower"), certain lenders party thereto, and The First National
Bank of Chicago, as agent for such lenders, and The Boatmen's
National Bank of St. Louis and Citibank, N.A., as Co-Agents.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
The Assignor desires to assign to the Assignee, and the Assignee
desires to assume from the Assignor, an undivided interest (the
"Purchased Percentage") in the Commitment of the Assignor such that
after giving effect to the assignment and assumption hereinafter
provided, the Commitment of the Assignee shall equal $______________
and its percentage of the Aggregate Commitment shall equal
___%.
2. ASSIGNMENT. For and in consideration of the assumption
of obligations by the Assignee set forth in Section 3 hereof and
the other consideration set forth herein, and effective as of the
Effective Date (as hereinafter defined), the Assignor does hereby
sell, assign, transfer and convey to the Assignee all of its right,
title and interest in and to the Purchased Percentage of (i) the
Commitment of the Assignor (as in effect on the Effective Date),
(ii) each Committed Loan made by the Assignor outstanding on the
Effective Date and (iii) the Credit Agreement and the other Loan
Documents. Pursuant to Section 12.3.2 of the Credit Agreement, on
and after the Effective Date the Assignee shall have the same
rights, benefits and obligations as the Assignor had under the Loan
Documents with respect to the Purchased Percentage of the Loan
Documents, all determined as if the Assignee were a "Lender" under
the Credit Agreement with % of the Aggregate Commitment. The
Effective Date shall be the later of ___________ or two Business
Days (or such shorter period agreed to by the Agent) after a Notice
of Assignment substantially in the form of Exhibit "I" attached
hereto and any consents substantially in the form of Exhibit "II"
attached hereto required to be delivered to the Agent by Section
12.3 of the Credit Agreement have been delivered to the Agent. In
no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under
Sections 4 and 5 hereof are not made on the proposed Effective
Date. The Assignor will notify the Assignee of the proposed
Effective Date on the Business Day prior to the proposed Effective
Date.
3. ASSUMPTION. For and in consideration of the assignment
of rights by the Assignor set forth in Section 2 hereof and the
other consideration set forth herein, and effective as of the
Effective Date, the Assignee does hereby accept that assignment,
and assume and covenant and agree fully, completely and timely to
perform, comply with and discharge, each and all of the
obligations, duties and liabilities of the Assignor under the
Credit Agreement which are assigned to the Assignee hereunder,
which assumption includes, without limitation, the obligation to
fund the unfunded portion of the Aggregate Commitment in accordance
with the provisions set forth in the Credit Agreement as if the
Assignee were a "Lender" under the Credit Agreement with ____% of
the Aggregate Commitment. The Assignee agrees to be bound by all
provisions relating to "Lenders" under and as defined in the Credit
Agreement, including, without limitation, provisions relating to
the dissemination of information and the payment of
indemnification.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Agent all payments
of principal, interest and fees with respect to the Purchased
Percentage of the Assignor's Commitment and Loans. The Assignee
shall advance funds directly to the Agent with respect to each Loan
and reimbursement payments made on or after the Effective Date.
In consideration for the transfer of the assigned obligations
hereunder, with respect to each Loan made by the Assignor
outstanding on the Effective Date, the Assignee shall pay the
Assignor on the Effective Date (or, if Assignee so elects with
respect to each Loan bearing interest at a Fixed Rate, on the
Payment Date, as hereinafter defined) an amount equal to the
Purchased Percentage of any such Loan. If the Assignee elects to
make such payment on the Effective Date, with respect to any Loan
made by Assignor outstanding on the Effective Date which bears
interest at a fixed rate (each an "Outstanding Fixed Rate Loan"),
Assignee shall be entitled to receive interest at a rate agreed
upon by the Assignee and the Assignor (the "Outstanding Fixed Rate
Loan Interest Rate") for the remainder of the existing Interest
Period. When Assignee receives interest on the Purchased
Percentage of any Outstanding Fixed Rate Loan, Assignee shall remit
to Assignor the excess of (a) the interest received by Assignee on
the Outstanding Fixed Rate Loan over (b) the Outstanding Fixed Rate
Loan Interest Rate. In the event Assignee elects not to pay the
Assignor the Purchased Percentage of any such Outstanding Fixed
Rate Loan on the Effective Date, the Assignee shall pay the
Assignor an amount equal to the Purchased Percentage of such
Outstanding Fixed Rate Loan (a) on the last day of the Interest
Period therefor or (b) on such earlier date agreed to by the
Assignor and the Assignee or (c) on the date on which any such
Outstanding Fixed Rate Loan either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing
clauses (a), (b) or (c) being hereinafter referred to as the
"Payment Date"). In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid
by the Borrower with respect to any Outstanding Fixed Rate Loan
sold by the Assignor to the Assignee pursuant to the preceding
sentence, the Assignee shall pay to the Assignor interest for such
period on such Outstanding Fixed Rate Loan at the applicable rate
provided by the Credit Agreement. In the event of a prepayment of
any Outstanding Fixed Rate Loan, Assignee shall remit to Assignor
the excess of (a) the amount received by the Assignee as breakage
costs over (b) the amount which would have been received by the
Assignee as a prepayment penalty if the amount of prepayment
penalty was based on Outstanding Fixed Rate Loan Interest Rate.
On and after the Effective Date, the Assignee will also remit to
the Assignor any amounts of interest on Loans and fees received
from the Agent which relate to the Purchased Percentage of Loans
made by the Assignor accrued for periods prior to the Effective
Date or the Payment Date as applicable. In the event that either
party hereto receives any payment to which the other party hereto
is entitled under this Assignment Agreement, then the party
receiving such amount shall promptly remit it to the other party
hereto. ***[This Section subject to modification by the Assignor
and the Assignee]***
5. FEES PAYABLE BY ASSIGNEE. On each day on which the
Assignee receives a payment of interest or fees under the Credit
Agreement (other than a payment of interest or fees which the
Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof, which shall be excluded in determining fees
payable to the Assignor pursuant to this Section), the Assignee
shall pay to the Assignor a fee. The amount of such fee shall be
the difference between (i) the amount of such interest or fee, as
applicable, received by the Assignee and (ii) the amount of the
interest or fee, as applicable, which would have been received by
the Assignee if each interest rate was of 1% less than the
interest rate paid by the Borrower or if the facility fee was
of 1% less than the facility fee paid by the Borrower pursuant to
Section 2.4.2, as applicable. In addition, the Assignee agrees to
pay % of the fee required to be paid to the Agent pursuant to
Section 12.3.2 of the Credit Agreement. ***[This Section subject
to modification by the Assignor and the Assignee]***
6. CREDIT DETERMINATION; LIMITATIONS ON ASSIGNOR'S LIABILITY.
The Assignee represents and warrants to the Assignor that it is
capable of making and has made and shall continue to make its own
credit determinations and analysis based upon such information as
the Assignee deemed sufficient to enter into the transaction
contemplated hereby and not based on any statements or
representations by the Assignor, the Agent or any Lender. It is
understood and agreed that the assignment and assumption hereunder
are made without recourse to the Assignor and that the Assignor
makes no representation or warranty of any kind to the Assignee and
shall not be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or
collectability of the Credit Agreement or any other Loan Document,
including without limitation, documents granting the Assignor and
the other Lenders a security interest in assets of the Borrower or
any guarantor, (ii) any representation, warranty or statement made
in or in connection with any of the Loan Documents, (iii) the
financial condition or creditworthiness of the Borrower or any
guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting
any of the property, books or records of the Borrower or (vi) the
validity, enforceability, perfection, priority, condition, value
or sufficiency of any collateral securing or purporting to secure
the Loans. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be liable for any
mistake, error of judgment, or action taken or omitted to be taken
in connection with the Loans or the Loan Documents, except for its
or their own bad faith or willful misconduct.
7. INDEMNITY. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses
(including, without limitation, reasonable attorneys' fees, which
attorney's may be employees of the Assignee) and liabilities
incurred by the Assignor in connection with or arising in any
manner from the Assignee's performance or non-performance of
obligations assumed under this Assignment Agreement.
8. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the
Assignee shall have the right pursuant to Section 12.3 of the
Credit Agreement to assign the rights which are assigned to the
Assignee hereunder to any entity or person, provided that (i) any
such subsequent assignment does not violate any of the terms and
conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained,
(ii) the assignee under such assignment from the Assignee shall
agree to assume all of the Assignee's obligations hereunder in a
manner satisfactory to the Assignor and (iii) the Assignee is not
thereby released from any of its obligations to the Assignor
hereunder.
9. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in
the Aggregate Commitment occurs between the date of this Assignment
Agreement and the Effective Date, the percentage of the Aggregate
Commitment assigned to the Assignee shall remain the percentage
specified in Section 1 hereof and the dollar amount of the
Commitment of the Assignee shall be recalculated based on the
reduced Aggregate Commitment.
10. ENTIRE AGREEMENT. This Assignment Agreement ****[and the
attached consent]**** embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and
understandings between the parties hereto relating to the subject
matter hereof.
11. GOVERNING LAW. This Assignment Agreement shall be
governed by the internal law, and not the law of conflicts, of the
State of Illinois.
12. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the
purpose hereof, the addresses of the parties hereto (until notice
of a change is delivered) shall be the address set forth under each
party's name on the signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the
date first above written.
[NAME OF ASSIGNOR]
By:____________________
Title:_________________
[NAME OF ASSIGNEE]
By:____________________
Title:_________________
EXHIBIT "I"
NOTICE OF ASSIGNMENT
To: Brown Group, Inc.*
__________________________
__________________________
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
One First National Plaza
Chicago, IL 60670
From: [NAME OF ASSIGNOR]
[NAME OF ASSIGNEE]
____________, 19__
1. We refer to that Credit Agreement dated as of
December 22, 1993 (which, as it may be amended, modified, renewed
or extended and in effect from time to time, is herein called the
"Credit Agreement") among Brown Group, Inc. (the "Borrower"),
certain lenders party thereto (each a "Lender"), including
___________________ (the "Assignor"), The First National Bank of
Chicago, as agent for the Lenders (as such, the "Agent"), and The
Boatmen's National Bank of St. Louis and Citibank, N.A., as Co-Agents.
Capitalized terms used herein and in any consent delivered
in connection herewith and not otherwise defined herein or in such
consent shall have the meanings attributed to them in the Credit
Agreement.
2. This Notice of Assignment (this "Notice") is given
and delivered to ****[the Borrower and]**** the Agent pursuant to
Section 12.3.2 of the Credit Agreement.
3. The Assignor and ___________________ (the
"Assignee") have entered into an Assignment Agreement, dated as of
__________, 19__, pursuant to which, among other things, the
Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from
the Assignor, an undivided interest in and to all of the Assignor's
rights and obligations under the Credit Agreement such that
Assignee's percentage of the Aggregate Commitment shall equal
%, effective as of the "Effective Date" (as hereinafter defined).
The "Effective Date" shall be the later of ______ or two Business
___________________________
*To be included only if consent must be obtained from the Borrower
pursuant to Section 12.3.1 of the Credit Agreement.
Days (or such shorter period as agreed to by the Agent) after this
Notice of Assignment and any consents and fees required by Sections
12.3.1 and 12.3.2 of the Credit Agreement have been delivered to
the Agent, provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee has
not been satisfied.
4. As of this date, the percentage of the Assignor in
the Aggregate Commitment and Committed Advances is ____%. As of
the Effective Date, the percentage of the Assignor in the Aggregate
Commitment and Committed Advances will be ____% (as such percentage
may be reduced or increased by assignments which become effective
prior to the assignment to the Assignee becoming effective) and the
percentage of the Assignee in the Aggregate Commitment and
Committed Advances will be ____%.
5. The Assignor and the Assignee hereby give to the
****[Borrower and the]**** Agent notice of the assignment and
delegation referred to herein. The Assignor will confer with the
Agent before _______, 19__ to determine if the assignment to the
Assignee will become effective on such date pursuant to Section 3
hereof, and will confer with the Agent to determine the Effective
Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the assignment to the Assignee
does not become effective on any proposed Effective Date as a
result of the failure to satisfy the conditions precedent agreed
to by the Assignor and the Assignee. At the request of the Agent,
the Assignor will give the Agent written confirmation of the
occurrence of the Effective Date.
6. The Assignee hereby accepts and assumes the
assignment and delegation referred to herein and agrees as of the
Effective Date (i) to perform fully all of the obligations under
the Credit Agreement which it has hereby assumed and (ii) to be
bound by the terms and conditions of the Credit Agreement as if it
were a "Lender".
7. The Assignor and the Assignee request and agree that
any payments to be made by the Agent to the Assignor on and after
the Effective Date shall, to the extent of the assignment referred
to herein, be made entirely to the Assignee, it being understood
that the Assignor and the Assignee shall make between themselves
any desired allocations.
8. The Assignor or the Assignee shall pay to the Agent
on or before the Effective Date the processing fee of $2,500
required by Section 12.3.2 of the Credit Agreement.
9. The Assignor and the Assignee request and direct
that the Agent prepare and cause the Borrower to execute and
deliver [new Notes or, as appropriate,] replacement Notes, to the
Assignor and the Assignee in accordance with Section 12.3.2 of the
Credit Agreement. The Assignor [and the Assignee] agree[s] to
deliver to the Agent the original Notes received from it by the
Borrower upon its receipt of new Notes in the amounts set forth
above.
10. The Assignee advises the Agent that the address
listed below is its address for notices under the Credit Agreement:
____________________________
____________________________
____________________________
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:__________________________ By:_________________________
Title:_______________________ Title:______________________
EXHIBIT "II"
CONSENT AND RELEASE
TO: [NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
__________________ _________________
__________________ _________________
__________, 19__
1. We acknowledge receipt from ____________________ (the
"Assignor") and _______________________ (the "Assignee") of the
Notice of Assignment, dated as of ______________, 19__ (the
"Notice"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Notice.
****[2. In consideration of the assumption by the Assignee
of the obligations of the Assignor as referred to in the Notice,
the Borrower hereby (i) irrevocably consents, as required by
Section 12.3.1 of the Credit Agreement, to the assignment and
delegation referred to in the Notice and (ii) as of the Effective
Date, irrevocably reduces the percentage of the Assignor in the
Aggregate Commitment by the percentage of the Aggregate Commitment
assigned to the Assignee and releases the Assignor from all of its
obligations to the Borrower under the Loan Documents to the extent
that such obligations have been assumed by the Assignee.]****
3. The Agent is hereby requested to prepare for issuance
by the Borrower new Notes as requested by the Assignor and the
Assignee in the Notice.
****[4. In consideration of the assumption by the Assignee
of the obligations of the Assignor as referred to in the Notice,
the Agent hereby (i) irrevocably consents, as required by Section
12.3.1 of the Credit Agreement, to the assignment and delegation
referred to in the Notice, (ii) as of the Effective Date,
irrevocably releases the Assignor from its obligations to the Agent
under the Loan Documents to the extent that such obligations have
been assumed by the Assignee, and (iii) agrees that, as of the
Effective Date, the Agent shall consider the Assignee as a "Lender"
for all purposes under the Loan Documents to the extent of the
assignment and delegation referred to in the Notice.]****
THE BROWN GROUP, INC. THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:________________________ By:_______________________________
Title:_____________________ Title:____________________________
****Paragraphs 2 and 4 are to be included only if the consent of
the Borrower and/or the Agent is required pursuant to Section
12.3.1 of the Credit Agreement.
EXHIBIT "G"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement dated as of December 22, 1993 (as the same
may be amended or modified and in effect, the "Credit
Agreement") among Brown Group, Inc. (the "Borrower"), the
Lenders named therein, the Agent, and The Boatmen's National
Bank of St. Louis and Citibank, N.A., as Co-Agents.
Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon
the following standing money transfer instructions with respect to
the proceeds of Advances or other extensions of credit from time
to time until receipt by the Agent of a specific written revocation
of such instructions by the Borrower, provided, however, that the
Agent may otherwise transfer funds as hereafter directed in writing
by the Borrower in accordance with Section 13.1 of the Credit
Agreement or based on any telephonic notice made in accordance with
Section 2.5.8 of the Credit Agreement.
Facility Identification Number(s)_________________________
Customer/Account Name Brown Group, Inc.
------------------------------------
Transfer Funds To The Boatmen's National Bank of St. Louis
-----------------------------------------------
[Routing No. 0810-0003-2]
-----------------------------------------------
For Account No. 100101058829
----------------------------
Reference/Attention To Treasurer
-------------------------
Authorized Officer (Customer Representative) Date_________________
_______________________________ _____________________________
(Please Print) Signature
Bank Officer Name Date__________________
_______________________________ _____________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate
Processing)
EXHIBIT "H"
FORM OF OPINION
______________, 1993
To the Agent and the Lenders who are parties to the
Credit Agreement described below.
Gentlemen/Ladies:
I am general counsel for Brown Group, Inc., a New York
corporation (the "Borrower"), and have represented the Borrower
in connection with its execution and delivery of a Credit Agreement
dated as of December 22 , 1993 (the "Agreement") among the
Borrower, the Lenders named therein, The First National Bank of
Chicago, as Agent, and The Boatmen's National Bank of St. Louis and
Citibank, N.A., as Co-Agents, providing for Advances in an
aggregate principal amount not exceeding $200,000,000 at any one
time outstanding. All capitalized terms used in this opinion and
not otherwise defined shall have the meanings attributed to them
in the Agreement.
I have examined the Borrower's articles of incorporation,
by-laws, resolutions, the Loan Documents and such other matters of
fact and law which I deem necessary in order to render this
opinion. Based upon the foregoing, it is my opinion that:
l. The Borrower and each Subsidiary are corporations duly
incorporated, validly existing and in good standing under the laws
of their states of incorporation and have all requisite authority
to conduct their business in each jurisdiction in which their
business is conducted.
2. The execution and delivery of the Loan Documents by the
Borrower and the performance by the Borrower of the Obligations
have been duly authorized by all necessary corporate action and
proceedings on the part of the Borrower and will not:
(a) require any consent of the Borrower's shareholders;
(b) violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower
or any of its Subsidiaries or the Borrower's or any
Subsidiary's articles of incorporation or by-laws or any
indenture, instrument or agreement binding upon the Borrower or
any of its Subsidiaries; or
(c) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any indenture,
instrument or agreement binding upon the Borrower or any of its
Subsidiaries.
3. The Loan Documents have been duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations
of the Borrower enforceable in accordance with their terms except
to the extent the enforcement thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.
4. There is no litigation or proceeding against the Borrower
or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
5. No approval, authorization, consent, adjudication or order
of any governmental authority, which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by
the Borrower or any of its Subsidiaries in connection with the
execution and delivery of the Loan Documents, the borrowings under
the Agreement or in connection with the payment by the Borrower of
the Obligations.
This opinion may be relied upon by the Agent, the Lenders and
their participants, assignees and other transferees.
Very truly yours,
cc: Bryan Cave
One Metropolitan Square
211 N. Broadway
St. Louis, Missouri 63102-2705
EXHIBIT "I"
[FORM OF CONFIDENTIALITY LETTER]
______________, 19___
Re: Brown Group, Inc. (the "Borrower")
Dear _______________:
You have asked to receive from us certain information with
respect to the Borrower which is non-public, confidential or
proprietary in nature (collectively, the "Information") in order
to evaluate your possible participation in certain credit
facilities extended or to be extended to the Borrower ("the Credit
Facilities"). In consideration of our disclosure to you of the
Information, as you agree as follows:
1. Non-Disclosure. You will keep the information confidential
and, without our prior written consent, you will not disclose any
of the Information except:
(a) to your directors, employees, auditors or counsel
(collectively "representatives") to whom it is necessary to show
the Information, each of which shall be informed by your of the
confidential nature of the Information;
(b) in any statement or testimony pursuant to a subpoena or
order by any court, governmental body or other agency asserting
jurisdiction over you, or as may otherwise be required by law
(provided that you shall give us prior notice of the disclosure
permitted by this clause (b) unless such notice is prohibited by
the subpoena, order or law); and
(c) upon the request or demand of any regulatory agency or
authority having jurisdiction over you.
2. Use of Information. You will use the Information only for
the purposes of evaluating the proposed Credit Facilities and
making any necessary credit judgments with respect thereto. You
will not use the Information in a manner prohibited by any law,
including without limitation, the securities laws of the United
States.
3. Return of Documents. You will, upon demand, return to us
all documents or other written material received from us and all
copies thereof made by you which contain the Information which have
not been properly disposed of by you.
4. Public Information. The restrictions contained herein
shall not apply to Information which (a) is or becomes generally
available to the public other than as a result of a disclosure by
you or your representatives; (b) becomes available to you on a
non-confidential basis form a source other than us or one of our agents
or (c) was known to you on a non-confidential basis prior to its
disclosure to you by us or one of our agents.
5. Disclaimer. It is understood and agreed that we are under
no obligation to verify the accuracy of any of the Information and
make no representation or warranty of any kind, and shall have no
liability with respect to, the accuracy, completeness or
sufficiency of the Information.
6. General Provision. This agreement constitutes the entire
agreement of the parties hereto and supersedes all prior agreements
of all the parties relating to the subject matter hereof. Upon
your execution of definitive loan documents, some or all of your
confidentiality obligations with respect to the information may be
superseded by the confidentiality provisions of the loan documents.
This agreement shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
If you are in agreement with the foregoing, please acknowledge
your acceptance of the terms and conditions contained herein by
executing and returning a copy of this agreement as provided below
to the attention of the undersigned by FAX (___) _____-_____ with
the original to follow by mail.
Very truly yours,
__________________________
[Name of Prospective Seller
or Assignor]
By:
Its:
Accepted and agreed to:
- -----------------------------------
[Name of Prospective
Participant or Assignee]
By: ______________________
Its: ______________________
Date: ____________________