PHILLIPS-VAN HEUSEN CORPORATION
___________________________________
FIRST AMENDMENT AGREEMENT
DATED AS OF JUNE 24, 1996
to
NOTE AGREEMENTS
Dated as of October 1, 1992
Re: $55,000,000 7.85% Series A Senior Notes
Due November 1, 2002
and
$8,000,000 7.02% Series B Senior Notes
Due November 1, 1999
and
$6,000,000 7.75% Series C Senior Notes
Due November 1, 2002
PHILLIPS-VAN HEUSEN CORPORATION
1290 Avenue of the Americas-11th Floor
New York, New York 10104
FIRST AMENDMENT AGREEMENT
TO
NOTE AGREEMENTS
Dated as of October 1, 1992
Re: $55,000,000 7.85% Series A Senior Notes
Due November 1, 2002
and
$8,000,000 7.02% Series B Senior Notes
Due November 1, 1999
and
$6,000,000 7.75% Series C Senior Notes
Due November 1, 2002
Dated as of
June 24, 1996
To the holders as
defined hereinbelow
Ladies and Gentlemen:
Reference is made to the separate Note Agreements each
dated as of October 1, 1992 (The "Outstanding Note Agreements")
between PHILLIPS-VAN HEUSEN CORPORATION, a Delaware corporation
(the "Company"), and each of the Purchasers named on Schedule I
thereto (the "Purchasers"), pursuant to which the Company issued
and sold (i) $55,000,000 original aggregate principal amount of its
7.85% Series A Senior Notes due November 1, 2002 (the "Series A
Notes"), (ii) $8,000,000 original aggregate principal amount of its
7.02% Series B Senior Notes due November 1, 1999 (the "Series B
Notes") and (iii) $6,000,000 original aggregate principal amount of
its 7.75% Series C Senior Notes due November 1, 2002 (the "Series
C Notes"). The Purchasers or transferees of such Purchasers are
hereinafter collectively referred to as the "Holders." The
Series A Notes, Series B Notes and Series C Notes are hereinafter
collectively referred to as the "Outstanding Notes."
The Company and the Holders now desire to amend the
Outstanding Note Agreements in the respects, but only in the
respects, hereinafter set forth.
Now, therefore, the Company and the Holders, in
consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, do hereby agree as
follows:
Phillips-Van Heusen Corporation First Amendment to Note Agreements
SECTION 1. AMENDMENTS TO THE OUTSTANDING NOTE AGREEMENTS.
Section 1.1. There shall be added as new subparagraphs (d)
and (e) after subparagraph (c) in Section 1.1 of the Outstanding
Note Agreements the following:
(d) Notwithstanding any of the foregoing, from the
First Amendment Agreement Closing Date to, but not
including, the Adjustment Date, the Notes shall bear
interest at the Adjusted Coupon Rate payable semiannually on
the first day of each May and November in each year, and
shall bear interest on overdue principal (including any
overdue required or optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest at the rate per annum
equal to the Adjusted Coupon Rate, plus 2.00% per annum,
after the date due, whether by acceleration or otherwise,
until paid. Notwithstanding this subparagraph (d), any
computation of a Make-Whole Amount pursuant to this
Agreement shall be based upon the respective interest rates
of each series of Notes set forth in subparagraphs (a), (b)
and (c) above.
(e) At any time and at the sole option of any holder
of a Note, such holder may surrender such Note for a new
note or new notes of the same form as the Note so
surrendered but revised to reflect the appropriate interest
rate and this First Amendment Agreement (the "New Notes").
The Company shall deliver such New Notes not more than three
(3) Business Days after any request by the holder of a Note.
The Company agrees to pay all expenses incurred in
connection with any exchange of Notes.
Section 1.2. Section 5.6 of each of the Outstanding Note
Agreements shall be and is hereby amended to read in its entirety
as follows:
Section 5.6. Limitations on Debt; Interest
Charges Coverage Ratio. (a) The Company will not, and will
not permit any Restricted Subsidiary to, create, assume or
incur or in any manner be or become liable in respect of any
Current Debt or Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and its Restricted
Subsidiaries outstanding as of October 1, 1992 and reflected
on Annex B to Exhibit B hereto;
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
(3) additional Funded Debt of the Company and its
Restricted Subsidiaries incurred subsequent to the First
Amendment Agreement Closing Date;
(4) Current Debt of the Company or any Restricted
Subsidiary; provided, however, that during the twelve-month
period immediately preceding the date of any determination
hereunder, there shall have been a period of thirty
consecutive days during which the average daily amount of
Current Debt of the Company and all Restricted Subsidiaries
shall not exceed an amount equal to $25,000,000 plus the
amount of Funded Debt which could have been incurred (in
addition to any Funded Debt then outstanding) on each such
day by the Company and all Restricted Subsidiaries pursuant
to and in accordance with Sec. 5.6(a)(3) and Sec. 5.6(b)(3);
and
(5) Current Debt or Funded Debt of a Restricted
Subsidiary to the Company or to a Wholly-owned Restricted
Subsidiary.
(b) In addition to the restrictions contained in Sec.
5.6(a), the Company shall not:
(1) permit Basket Obligations to exceed 15% of
Consolidated Net Worth;
(2) create, assume or incur or in any manner become
liable in respect of any Debt secured by a Lien described in
Sec. 5.7(viii), if, after giving effect thereto, the sum of
(i) Basket obligations plus (ii) all Debt secured by Liens
incurred pursuant to Sec. 5.7(a)(vii), would exceed 15% of
Consolidated Net Worth; and
(3) permit the ratio of Funded Debt to Consolidated
Total Capitalization for the respective periods set forth
below to exceed the ratio set forth opposite such period:
PERIOD RATIO
From the date hereof through and .55 to 1
including the fiscal year ending
February 2, 1997:
For the entire fiscal year ending .50 to 1
February 1, 1998:
and at all times thereafter: .45 to 1
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
(c) Any corporation which becomes a Restricted Subsidiary
after the date hereof shall for all purposes of this Sec. 5.6 be
deemed to have created, assumed or incurred at the time it
becomes a Restricted Subsidiary all Debt of such corporation
existing immediately after it becomes a Restricted Subsidiary.
(d) The Company will not at any time permit the ratio of
Net Income Available for Interest Charges to Interest Charges for
the period of four consecutive fiscal quarters ending on or about
the end of each month specified below to be less than the ratio
set forth opposite such month:
PERIOD RATIO
April 1996 1.25x
July 1996 1.25x
October 1996 1.30x
January 1997 1.40x
April 1997 1.70x
July 1997 1.70x
October 1997 2.00x
January 1998 2.00x
April 1998 2.25x
July 1998 2.25x
October 1998 and each
April, July, October
and January thereafter 2.50x
Section 1.3. The following shall be added as new definitions
in the appropriate alphabetical locations in Section 8.1 of the
Outstanding Note Agreements:
"Adjusted Coupon Rate" shall mean 8.35% with respect to
the Series A Notes, 7.52% with respect to the Series B Notes
and 8.25% with respect to the Series C Notes.
"Adjustment Date" shall mean the first date, if any,
with respect to which the Company has certified (by written
certificate (in reasonable detail including, without
limitation, copies of the relevant ratings) of the chief
financial officer of the Company) to the holders of the
Notes that the Company's 7.75% Senior Debentures due 2023
(the "Senior Debentures"), or, in the event that such Senior
Debentures are no longer outstanding, other obligations
representing unsecured Funded Debt of the Company which have
an average life equal to or greater than the remaining
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
average life of the Notes, are accorded a rating of at least
Baa3 by Moody's Investors Service, Inc. and BBB- by Standard
& Poor's Corporation.
"First Amendment Agreement Closing Date" shall mean the
date on which the First Amendment Agreement to Note
Agreements dated as of June 24, 1996 shall have been duly
executed and delivered to the Holders referred to therein.
"Consolidated Total Capitalization" shall mean as of
the date of any determination thereof the sum of (a) Funded
Debt of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP
and (b) Consolidated Net Worth.
Section 1.4. Section 8.1 of the Outstanding Note Agreements
shall be and is hereby amended as follows:
(a) The definition of "Interest Charges" is hereby
amended to read in its entirety as follows:
"Interest Charges" for any period shall mean
all interest and all amortization of debt
discount and expense on any particular
Indebtedness for which such calculations are
being made, net of any interest income.
(b) The definition of "Net Income Available for
Interest Charges" is hereby amended to read in its entirety
as follows:
"Net Income Available for Interest Charges"
for any period shall mean the sum of (i)
Consolidated Net Income during such period
plus (to the extent deducted in determining
Consolidated Net Income), (ii) all provisions
for any Federal, state or other income taxes
made by the Company and its Restricted
Subsidiaries during such period, (iii) the
one-time restructuring reserve of $27,000,000
taken in the third and fourth quarters of the
fiscal year ended January 28, 1996 and (iv)
Interest Charges of the Company and its
Restricted Subsidiaries during such period.
(c) The definition of "Pro Forma Interest Charges" is
deleted in its entirety.
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Section 2.1. To induce the Holders to execute and deliver
this First Amendment Agreement (which representations shall
survive the execution and delivery of this First Amendment
Agreement), the Company represents and warrants to the Holders,
as true and correct as of the date of execution and delivery of
this First Amendment Agreement, that
(a) the Company and each Restricted Subsidiary is a
corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation;
(b) this First Amendment Agreement has been duly
authorized, executed and delivered by it and this First
Amendment Agreement constitutes the legal, valid and binding
obligation, contract and agreement of the Company
enforceable against it in accordance with its terms;
(c) each of the Outstanding Note Agreements and the
Outstanding Notes, as amended by this First Amendment
Agreement, constitute the legal, valid and binding
obligations, contracts and agreements of the Company
enforceable against it in accordance with their respective
terms;
(d) the execution, delivery and performance by the
Company of this First Amendment Agreement (i) has been duly
authorized by all requisite corporate action and, if
required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate or cause a default
under (1) any provision of law, statute, rule or regulation
or its certificate of incorporation or bylaws, (2) any order
of any court or any rule, regulation or order of any other
agency or government binding upon it, or (3) any provision
of any material indenture, agreement or other instrument to
which it is a party or by which its properties or assets are
or may be bound, or (B) result in a breach or constitute
(alone or with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument
referred to in clause (iii)(A)(3) of this Sec. 2.1(c);
(e) as of the date hereof after giving effect to this
First Amendment Agreement, no Default or Event of Default
has occurred which is continuing; and
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
(f) no consents or approvals are necessary from any
other holder of any Indebtedness of the Company to give
effect to this First Amendment Agreement.
SECTION 3. CONDITIONS PRECEDENT.
Section 3.1. This First Amendment Agreement shall not become
effective until, and shall become effective when, each and every
one of the following conditions shall have been satisfied:
(a) executed counterparts of this First Amendment
Agreement, duly executed by the Company and the holders of
at least 66-2/3% of the outstanding principal amount of the
Outstanding Notes, shall have been delivered to the Holders;
(b) the representations and warranties of the Company
set forth in Sec. 2 hereof are true and correct as of the
date of execution and delivery of this First Amendment
Agreement; and
(c) the Company shall have paid the reasonable fees
and expenses of Chapman and Cutler, counsel to the Holders,
in connection with the negotiation, preparation, approval,
execution and delivery of this First Amendment Agreement as
required by Sec. 9.4 of the Outstanding Note Agreements.
Upon receipt of all of the foregoing, this First Amendment
Agreement shall become effective.
SECTION 4. MISCELLANEOUS.
Section 4.1. This First Amendment Agreement shall be
construed in connection with and as part of each of the
Outstanding Note Agreements, and all terms, conditions and
covenants contained in each of the Outstanding Note Agreements
shall be and remain in full force and effect.
Section 4.2. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and
delivery of this First Amendment Agreement may refer to the
Outstanding Note Agreements without making specific reference to
this First Amendment Agreement but nevertheless all such
references shall include this First Amendment Agreement unless
the context otherwise requires.
Section 4.3. The descriptive headings of the various Sections
or parts of this First Amendment Agreement are for convenience
only and shall not affect the meaning or construction of any of
the provisions hereof.
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
Section 4.4. This First Amendment Agreement shall be governed
by and construed in accordance with New York law.
Section 4.5. This First Amendment Agreement shall be binding
upon the Company, the Holders and their respective successors and
assigns.
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and
this First Amendment Agreement to each of the Outstanding Note
Agreements may be executed in any number of counterparts, each
executed counterpart constituting an original, but all together
only one agreement.
PHILLIPS-VAN HEUSEN CORPORATION
By
Its
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
The execution by each of the following Holders shall
constitute its acceptance of the First Amendment Agreement and
its confirmation that it holds the Outstanding Notes set opposite
its name as of the date of its execution and delivery hereof.
Accepted as of June 24, 1996:
OUTSTANDING NOTES
THE EQUITABLE LIFE ASSURANCE SOCIETY $10,000,000 Series A Notes
OF THE UNITED STATES $8,000,000 Series B Notes
$6,000,000 Series C Notes
By________________________________
Its
EQUITABLE VARIABLE LIFE INSURANCE $8,000,000 Series A Notes
COMPANY
By________________________________
Its
UNUM LIFE INSURANCE COMPANY OF $20,000,000 Series A Notes
AMERICA
By________________________________
Its
NATIONWIDE LIFE INSURANCE $8,000,000 Series A Notes
COMPANY
By________________________________
Its
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Phillips-Van Heusen Corporation First Amendment to Note Agreements
EMPLOYERS LIFE INSURANCE COMPANY $2,000,000 Series A Notes
OF WAUSAU
By________________________________
Its
LUTHERAN BROTHERHOOD $7,000,000 Series A Notes
By________________________________
Its
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