1
Exhibit 10.3
BRIDGE LOAN AGREEMENT
dated as of
September 25, 1998
among
Venator Group, Inc.
The Banks Party Hereto
and
Morgan Guaranty Trust Company of New York,
as Administrative Agent
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TABLE OF CONTENTS
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ARTICLE 1
Definitions
Section 1.01. Definitions...............................................1
Section 1.02. Accounting Terms and Determinations......................13
Section 1.03. Types of Borrowings......................................13
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend......................................13
Section 2.02. Notice of Borrowing......................................14
Section 2.03. Notice to Banks; Funding of Loans........................14
Section 2.04. Notes....................................................15
Section 2.05. Maturity of Loans........................................15
Section 2.06. Interest Rates...........................................15
Section 2.07. Method of Electing Interest Rates........................17
Section 2.08. Commitment Fee...........................................18
Section 2.09. Optional Termination or Reduction of Commitments.........18
Section 2.10. Mandatory Termination or Reduction of Commitments........18
Section 2.11. Optional Prepayments.....................................19
Section 2.12. Mandatory Prepayments....................................19
Section 2.13. General Provisions as to Payments........................20
Section 2.14. Funding Losses...........................................21
Section 2.15. Computation of Interest and Fees.........................21
ARTICLE 3
Conditions
Section 3.01. Effectiveness of this Agreement; Closing.................21
Section 3.02. Extensions of Credit.....................................22
ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence and Power............................23
Section 4.02. Concentration and Governmental Authorization; No
Contravention..................................................23
Section 4.03. Binding Effect...........................................23
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Section 4.04. Financial Information....................................23
Section 4.05. Litigation...............................................24
Section 4.06. Compliance with Laws.....................................24
Section 4.07. Compliance with ERISA....................................24
Section 4.08. Environmental Matters....................................25
Section 4.09. Taxes....................................................25
Section 4.10. Subsidiaries.............................................25
Section 4.11. Not an Investment Company................................25
Section 4.12. Full Disclosure..........................................25
ARTICLE 5
Covenants
Section 5.01. Information..............................................26
Section 5.02. Maintenance of Property; Insurance.......................29
Section 5.03. Conduct of Business and Maintenance of Existence.........29
Section 5.04. Compliance with Laws.....................................29
Section 5.05. Inspection of Property, Books and Records................30
Section 5.06. Negative Pledge..........................................30
Section 5.07. Minimum Consolidated Tangible Net Worth..................31
Section 5.08. Leverage Ratio...........................................31
Section 5.09. Limitation on Debt of Subsidiaries.......................31
Section 5.10. Fixed Charge Coverage Ratio..............................31
Section 5.11. Consolidations, Mergers and Sales of Assets..............32
Section 5.12. Use of Proceeds..........................................32
Section 5.13. Restricted Payments......................................32
Section 5.14. German Purchase Agreement................................32
ARTICLE 6
Defaults
Section 6.01. Events of Default........................................32
Section 6.02. Notice of Default........................................35
ARTICLE 7
The Administrative Agent
Section 7.01. Appointment and Authorization............................35
Section 7.02. Administrative Agents and Affiliates.....................35
Section 7.03. Obligations of Administrative Agent......................35
Section 7.04. Consultation with Experts................................35
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Section 7.05. Liability of Agents......................................35
Section 7.06. Indemnification..........................................36
Section 7.07. Credit Decision..........................................36
Section 7.08. Successor Administrative Agent...........................36
Section 7.09. Administrative Agent's Fees..............................37
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.37
Section 8.02. Illegality...............................................38
Section 8.03. Increased Cost and Reduced Return........................38
Section 8.04. Taxes....................................................40
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans..........................................................42
Section 8.06. Substitution of Bank.....................................42
ARTICLE 9
Miscellaneous
Section 9.01. Notices..................................................43
Section 9.02. No Waivers...............................................44
Section 9.03. Expenses; Indemnification................................44
Section 9.04. Sharing of Set-offs......................................44
Section 9.05. Amendments and Waivers...................................45
Section 9.06. Successors and Assigns...................................45
Section 9.07. No-Reliance on Margin Stock..............................47
Section 9.08. Governing Law; Submission to Jurisdiction................47
Section 9.09. Counterparts.............................................47
Section 9.10. Waiver of Jury Trial.....................................48
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Commitment Schedule
Exhibit A - Form of Note
Exhibit B - Form of Opinion of Special Counsel for the Borrower
Exhibit C - Form of Opinion of General Counsel of the Borrower
Exhibit D - Form of Opinion of Special Counsel for the
Administrative Agent
Exhibit E - Form of Assignment and Assumption Agreement
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BRIDGE LOAN AGREEMENT
AGREEMENT dated as of September 25, 1998 among VENATOR GROUP, INC., the
BANKS party hereto and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.06(b).
"Administrative Agent" means Morgan Guaranty Trust Company of New York, in
its capacity as administrative agent for the Banks hereunder, and its successors
in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means, as to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Annual Rent Expense" means, for purposes of calculations pursuant to
Section 5.10 as of the end of each Fiscal Year (the "Relevant Fiscal Year") and
the end of each of the first three Fiscal Quarters of the next Fiscal Year, the
total rent expense (net of sublease income) of the Borrower and its Consolidated
Subsidiaries for the Relevant Fiscal Year, calculated in the same manner as the
$611,000,000 amount shown as total rent expense (net of sublease income) for
Fiscal Year 1997 in Note 14 ("Leases") to the audited financial statements of
the Borrower contained in the Borrower's 1997 Form 10-K.
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"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Asset Sale" means any sale, lease or other disposition (including any such
transaction effected by way of merger or consolidation) of any asset by the
Borrower or any of its Subsidiaries, including without limitation any
sale-leaseback transaction, whether or not involving a capital lease, and any
sale of real estate, but excluding (i) dispositions of inventory, cash, cash
equivalents and other cash management investments and obsolete, unused or
unnecessary equipment, in each case in the ordinary course of business, (ii)
dispositions in connection with the liquidation of the Kinney Shoes and
Footquarters divisions, (iii) dispositions of assets to the Borrower or a
Subsidiary and (iv) any transaction involving a disposition of one or more
assets for a consideration less than $250,000. Asset Sale shall include, in any
event, any sale, lease or other disposition of (i) the Borrower's headquarters
building at 233 Broadway, New York, New York (the "Headquarters Building") or
(ii) the "Woolworth Group" as defined in the German Purchase Agreement.
"Assignee" has the meaning set forth in Section 9.06(c).
"Available Net Cash Proceeds" means:
(i) with respect to any Asset Sale, an amount equal to the cash
proceeds received by the Borrower or any of its Subsidiaries from or in
respect of such Asset Sale (including any cash proceeds received as income
or other proceeds of any noncash proceeds of such Asset Sale), less (w) any
expenses reasonably incurred by such Person in respect of such Asset Sale,
(x) the amount of any Debt secured by a Lien on any asset disposed of in
such Asset Sale and discharged from the proceeds thereof, (y) any taxes
actually paid or to be payable by such Person (as estimated by a senior
financial or accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower and its Subsidiaries) in respect of
such Asset Sale and (z) up to $30,000,000 of proceeds from the sale of the
Headquarters Building that are transferred to a "qualified intermediary" as
defined in Treasury Reg. $1.1031(k) - 1(g)(4),
(ii) with respect to any Public Debt Issuance, an amount equal to the
cash proceeds received by the Borrower or any of its Subsidiaries in
respect thereof less any expenses reasonably incurred by them in respect
thereof, and
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(iii) with respect to any Equity Issuance, an amount equal to the cash
proceeds received by the Borrower or any of its Subsidiaries in respect
thereof less any expenses reasonably incurred by them in respect thereof.
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Bank Parties" means the Banks and the Administrative Agent.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Article VIII.
"Borrower" means Venator Group, Inc., a New York corporation, and its
successors.
"Borrower's 1997 Form 10-K" means the Borrower's annual report on Form 10-K
for 1997, as filed with the SEC pursuant to the Exchange Act.
"Borrower's Latest 10-Q" means the Borrower's quarterly report on Form 10-Q
for the quarter ended August 1, 1998, as filed with the SEC pursuant to the
Exchange Act.
"Borrowing" has the meaning set forth in Section 1.03.
"Change in Consolidated Net Working Investment" means, for any Fiscal
Quarter, the amount (which may be positive or negative) obtained by subtracting
Consolidated Net Working Investment at the beginning of such Fiscal Quarter from
Consolidated Net Working Investment at the end of such Fiscal Quarter. For
purposes of this definition, "Consolidated Net Working Investment" means, at any
time, the amount obtained by subtracting consolidated accounts payable of the
Borrower and its Consolidated Subsidiaries at such time from consolidated
merchandise inventories of the Borrower and its Consolidated Subsidiaries at
such time.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the Commitment Schedule (or, in the case of
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an Assignee, the portion of the transferor Bank's Commitment assigned to such
Assignee pursuant to Section 9.06(c)), in each case as such amount may be
reduced from time to time pursuant to Sections 2.09 and 2.10 or changed as a
result of an assignment pursuant to Section 8.06 or 9.06(c).
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Consolidated Capital Expenditures" means, for any period, the gross
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Consolidated Subsidiaries for such period.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date in accordance with generally accepted accounting principles.
"Consolidated Tangible Net Worth" means at any date the consolidated
shareholders' equity of the Borrower and its Consolidated Subsidiaries as of
such date less their consolidated goodwill as of such date.
"Continuing Director" means at any date a member of the Borrower's board of
directors who was either (i) a member of such board twelve months prior to such
date or (ii) nominated for election to such board by at least two-thirds of the
Continuing Directors then in office.
"Credit Exposure" means, as to any Bank at any time, the sum of (i) its
Commitment plus (ii) the aggregate outstanding principal amount of its Loans,
all determined at such time after giving effect to any prior assignments by or
to such Bank pursuant to Section 9.06(c).
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.06 and the definition of Material
Debt, all contingent obligations) of such Person to reimburse any bank or other
Person in
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respect of amounts paid under a letter of credit or similar instrument, (vi) all
Debt secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person, and (vii) all Guarantees by such Person
of Debt of another Person (each such Guarantee to constitute Debt in an amount
equal to the maximum amount of such other Person's Debt Guaranteed thereby);
provided that the term "Debt" shall not include amounts borrowed against the
cash value of life insurance policies.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent;
"EBIT" means, for any period, the sum of (i) the consolidated net income of
the Borrower and its Consolidated Subsidiaries for such period plus (ii) to the
extent deducted in determining such consolidated net income, the sum of (A)
Interest Expense, (B) income taxes, (C) the after-tax effect of any
extraordinary non-cash losses (or minus the after-tax effect of any
extraordinary non-cash gains), (D) the before-tax effect of any non-recurring
non-cash losses that are not classified as extraordinary losses (or minus the
before-tax effect of any non- recurring non-cash gains that are not classified
as extraordinary gains) and (E) any pre-tax loss (or minus any pre-tax gain) on
the sale of any ownership or leasehold interest in real property.
"Effective Date" means the date on which the Administrative Agent shall
have received the documents specified in or pursuant to Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, injunctions, permits, licenses and agreements relating to the protection
of the environment, to the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, hazardous or
toxic substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing,
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distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous or toxic substances or wastes or the
clean-up or other remediation thereof.
"Equity Issuance" means any issuance of equity securities, or any sale or
other transfer of treasury stock, by the Borrower or any of its Subsidiaries,
other than equity securities issued to, or treasury stock sold or transferred
to, the Borrower or any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and 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
Subsidiary, are treated as a single employer under subsection (b), (c), (m) or
(o) of Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"Euro-Dollar Loan" means a Loan which bears interest at a Euro-Dollar Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election.
"Euro-Dollar Margin" has the meaning set forth in Section 2.06(b).
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.06(b) on the basis of an Adjusted London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.06(b).
"Event of Default" has the meaning set forth in Section 6.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Extension of Credit" means the making of a Loan.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan on such day on such transactions
as determined by the Administrative Agent.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower. A Fiscal Year is
identified by the calendar year which includes approximately eleven months of
such Fiscal Year (e.g., Fiscal Year 1998 refers to the Fiscal Year that will end
on January 30, 1999).
"German Purchase Agreement" means the Purchase Agreement dated as of
September 20, 1998 between Retail Company of Germany, Inc., Venator Group, Inc.,
Dr. Peter Wessels Vermogensverwaltungs GmbH and Dr. Peter Wessels
Beteiligungsverwaltungs GmbH.
"Group of Loans" or "Group" means at any time a group of Loans consisting
of (i) all Loans which are Base Rate Loans at such time and (ii) all Euro-Dollar
Loans having the same Interest Period at such time; provided that if a Loan of
any particular Bank is converted to or made as a Base Rate Loan pursuant to
Section 8.02 or 8.05, such Loan shall be included in the same Group or Groups of
Loans from time to time as it would have been in if it had not been so converted
or made.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
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arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Immaterial Subsidiaries" means at any time one or more Subsidiaries that
in the aggregate did not account for (i) more than 5% of the consolidated
revenues or consolidated net income of the Borrower and its Consolidated
Subsidiaries for the then most recent Fiscal Year for which audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries have been
delivered to the Banks or (ii) more than 5% of the consolidated assets of the
Borrower and its Consolidated Subsidiaries at the end of such Fiscal Year.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Expense" means, for any period, the consolidated interest expense
(net of interest income) of the Borrower and its Consolidated Subsidiaries for
such period, calculated in the same manner as the amounts shown as "Interest
Expense" in the consolidated statements of operations of the Borrower contained
in the Borrower's 1997 Form 10-K.
"Interest Period" means, with respect to each Euro-Dollar Loan, a period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one week thereafter; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit or otherwise.
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'Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a loan made or to be made by a Bank pursuant to Section 2.01;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Loan" shall
refer to the combined principal amount resulting from such combination or to
each of the separate principal amounts resulting from such subdivision, as the
case may be.
"London Interbank Offered Rate" has the meaning set forth in Section
2.06(b).
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole or (ii) the ability of the Borrower to
perform, or of any Bank Party to enforce, any payment obligation of the Borrower
under this Agreement and the Notes.
"Material Assets" means at any time assets that accounted for more than 5%
of the aggregate book value of the consolidated assets of the Borrower and its
Consolidated Subsidiaries at the end of the then most recent Fiscal Year for
which audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries have been delivered to the Banks.
"Material Debt" means Debt (other than the Loans) of the Borrower and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $25,000,000.
"Material Plan" means at any time a Plan (or any two or more Plans, each of
which has Unfunded Liabilities) having aggregate Unfunded Liabilities in excess
of $25,000,000.
"Morgan" means Morgan Guaranty Trust Company of New York.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of
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the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
'Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.07.
"Parent" means, with respect to any Bank Party, any Person controlling such
Bank Party.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prime Rate" means a rate of interest per annum equal to the rate of
interest publicly announced from time to time in New York City by Morgan as its
Prime Rate.
"Public Debt Issuance" means the issuance of any Debt by the Borrower or
any of its Subsidiaries for cash in a transaction that is required to be
registered
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with the SEC (or would have been required to be registered with the SEC if such
transaction had occurred within the United States).
"Reduction Event" means the receipt by the Borrower or a Subsidiary of
Available Net Cash Proceeds in respect of any one or more Asset Sales, Public
Debt Issuances or Equity Issuances in an aggregate amount equal to or greater
than $10,000,000.
"Reference Bank" means the principal London office of Morgan.
'Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Requesting Banks" means at any time one or more Banks having at least 15%
of the aggregate amount of the Credit Exposures at such time.
"Required Banks" means at any time Banks having more than 50% of the
aggregate amount of the Credit Exposures at such time.
"Responsible Officer" means, with respect to the Borrower, its chief
operating officer, its chief financial officer, its general counsel, its
treasurer, any assistant treasurer or any other officer whose duties include the
administration of this Agreement.
"Restricted Payment" means (i) any dividend or other distribution on any
shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock of the same class) or (ii) any payment on account of
the purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other rights to acquire
shares of the Borrower's capital stock (but not including payments of principal,
premium (if any) or interest made pursuant to the terms of convertible debt
securities prior to conversion).
"SEC" means the Securities and Exchange Commission.
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Termination Date" means November 16, 1998, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day.
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"Total Borrowed Funds" means at any date the sum, without duplication, of
(i) Consolidated Debt at such date,
(ii) the present value of operating lease commitments of the Borrower
and its Consolidated Subsidiaries, and
(iii) the present value of third-party operating lease payments under
guarantees entered into after the date hereof by the Borrower and its
Consolidated Subsidiaries.
The present value referred to in clause (ii) of this definition shall be deemed
to be $1,952,000,000 (being the "present value of operating lease commitments"
of the Borrower and its Consolidated Subsidiaries at January 31, 1998) until the
first officer's certificate to be delivered pursuant to Section 5.01(e) is
delivered, and thereafter shall be deemed to be the amount set forth as the
present value of operating lease commitments at the end of the applicable Fiscal
Year in the officer's certificate delivered most recently pursuant to Section
5.01(e). The present value referred to in clause (iii) of this definition shall
be deemed to be zero until the first officer's certificate to be delivered
pursuant to Section 5.01(e) is delivered, and thereafter shall be deemed to be
the amount set forth as the present value of third-party operating lease
payments guaranteed by the Borrower and its Consolidated Subsidiaries at the end
of the applicable Fiscal Year in the officer's certificate delivered most
recently pursuant to Section 5.01(e).
"Total Capitalization" means at any date the sum of (i) Total Borrowed
Funds at such date and (ii) Consolidated Tangible Net Worth at such date.
"Unfunded Liabilities' means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the States
thereof and the District of Columbia, but excluding its territories and
possessions.
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Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any provision hereof to eliminate the effect
of any change in generally accepted accounting principles on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the
Required Banks wish to amend any provision hereof for such purpose), then such
provision shall be applied on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such provision is amended in a manner satisfactory to the Borrower
and the Required Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II on the same date, all of which Loans are of the same type (subject to
Article VIII) and, except in the case of Base Rate Loans, have the same initial
Interest Period. Borrowings are classified for purposes of this Agreement by
reference to the pricing of Loans comprising such Borrowing (i.e., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans and a Base
Rate Borrowing" is a Borrowing comprised of Base Rate Loans).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time on and after the Effective Date and
prior to the Termination Date; provided that the aggregate principal amount of
Loans made by such Bank on any date shall not exceed its Commitment at such
date. Each Borrowing under this Section shall be in an aggregate principal
amount of $10,000,000 or any larger multiple of $1,000,000; provided that any
such Borrowing may be in an aggregate amount equal to the then aggregate amount
of the Commitments. Each such Borrowing shall be made from the several Banks
ratably in proportion to their respective Commitments. The Commitments are not
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revolving in nature, and amounts prepaid or repaid may not be reborrowed
hereunder.
Section 2.02. Notice of Borrowing. The Borrower shall give the
Administrative Agent notice (a "Notice of Borrowing") not later than 11:00 A.M.
(New York City time) on (x) the date of each Base Rate Borrowing and (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in
the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing, and
(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate or a Euro-Dollar Rate.
Section 2.03. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share of such Borrowing and such Notice
of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank shall make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.01. Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied the Administrative Agent shall make the funds
so received from the Banks available to the Borrower not later than 2:00 P.M.
(New York City time) at the Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
(b) of this Section 2.03 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
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repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.06 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.
Section 2.04. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount of
such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date and amount of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding;
provided that neither the failure by any Bank to make any such recordation or
endorsement, nor any error therein, shall affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
Section 2.05. Maturity of Loans. Each Loan shall mature, and the principal
amount thereof shall be due and payable, together with accrued interest thereon,
on the Termination Date.
Section 2.06. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made (or is converted from a Euro-Dollar Loan to a Base Rate Loan) until
it becomes due or is converted, at a rate per annum equal to the Base Rate for
such day. Accrued interest shall be payable for each calendar month in arrears
on the last Domestic Business Day thereof and, with respect to the principal
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amount of any Base Rate Loan converted to a Euro-Dollar Loan, on the date such
principal amount is so converted. Any overdue principal of or interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus
the Adjusted London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof.
"Euro-Dollar Margin" means 1.00% per annum.
The "Adjusted London Interbank Offered Rate" applicable to (a) any Interest
Period (other than an Interest Period beginning on September 25, 1998 means a
rate per annum equal to the quotient obtained (rounded upward, if necessary, to
the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank
Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage and (b) the
Interest Period beginning on September 25, 1998 means the rate per annum
determined by the Administrative Agent in the manner agreed by the Borrower and
the Administrative Agent on September 24, 1998.
The "London Interbank Offered Rate" applicable to any Interest Period
(other than an Interest Period beginning on the September 25, 1998) means the
rate per annum at which deposits in dollars are offered to the Reference Bank in
the London interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-Dollar Loan of
the Reference Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
'Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
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(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the Base Rate for such day.
(d) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) The Reference Bank agrees to use its best efforts to furnish quotations
to the Administrative Agent as contemplated by this Section. If the Reference
Bank does not furnish a timely quotation, the provisions of Section 8.01 shall
apply.
Section 2.07. Method of Electing Interest Rates. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject in each case to the provisions of Article VIII), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day; or
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or elect to continue such Loans
as Euro-Dollar Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent at least three Euro-Dollar Business
Days before the conversion or continuation selected in such notice is to be
effective. A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such notice applies, and the remaining
portion to which it does not apply, are each $10,000,000 or any larger multiple
of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify: (NY)
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(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
type of Loans; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, such election.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Administrative Agent shall promptly notify
each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower. If the Borrower fails to deliver a timely Notice of
Interest Rate Election to the Administrative Agent for any Group of Euro-Dollar
Loans, such Loans shall be converted into Base Rate Loans on the last day of the
then current Interest Period applicable thereto.
Section 2.08. Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Bank a commitment fee at the rate of 0.10% per
annum on the daily average amount of such Bank's Commitment. Such commitment
fees shall accrue for each day from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety) and shall be payable in arrears on the
Termination Date (or earlier date of termination of the Commitments in their
entirety).
Section 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, without premium or penalty, upon at least three Domestic Business
Days' notice to the Administrative Agent, (i) terminate the Commitments at any
time or (ii) ratably reduce the Commitments from time to time, in each case by
an aggregate amount of at least $10,000,000. Upon any such termination or
reduction of the Commitments, the Administrative Agent shall promptly notify
each Bank of such termination or reduction.
Section 2.10. Mandatory Termination or Reduction of Commitments. (a) The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
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(b) On the date of each Borrowing, the Commitment of each Bank shall be
automatically reduced by the amount of its Loan included in such Borrowing.
(c) On the date upon which any Reduction Event occurs, the Commitments
shall be automatically and ratably reduced by an amount equal to the largest
multiple of $1,000,000 which does not exceed the excess, if any, of (i) the
aggregate Available Net Cash Proceeds in respect of such Reduction Event over
(ii) the portion of such Available Net Cash Proceeds to be applied to the
prepayment of Loans pursuant to Section 2.12.
Section 2.11. Optional Prepayments. (a) The Borrower may upon at least one
Domestic Business Day's notice to the Administrative Agent, prepay the Base Rate
Loans in whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Base Rate
Loans of the several Banks.
(b) Subject to Section 2.14, the Borrower may, upon at least three
Euro-Dollar Business Days' notice to the Administrative Agent, in the case of a
Group of Euro-Dollar Loans, prepay the Loans comprising such a Group, in whole
at any time, or from time to time in part in amounts aggregating $10,000,000 or
any larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group.
(c) In connection with any substitution of Banks pursuant to Section 8.06,
the Borrower may prepay the Loans of the Bank being replaced, as provided in
clause (ii) of Section 8.06.
(d) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
Section 2.12. Mandatory Prepayments. (a) Upon the occurrence of a Reduction
Event, the Borrower shall prepay a principal amount of the Loans equal to the
largest multiple of $1,000,000 which does not exceed the aggregate amount of
Available Net Cash Proceeds in respect of such Reduction Event. Such prepayment
shall be made not later than the second Euro-Dollar Business Day following the
date of such Reduction Event, and shall be applied ratably to the Loans of the
Banks included in such outstanding Group or Groups of Loans as the
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Borrower may designate in the notice required by subsection (b) or, failing such
designation by the Borrower, as the Administrative Agent may specify by notice
to the Borrower and the Banks.
(b) The Borrower shall notify the Administrative Agent of each Reduction
Event and the related Available Net Cash Proceeds not later than the date of
such Reduction Event. The Administrative Agent shall promptly notify each Bank
of the contents of each such notice received by it and of such Bank's ratable
share of any prepayment pursuant to this Section 2.12 or reduction of the
Commitments pursuant to Section 2.10(c) in respect of such Reduction Event.
Section 2.13. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Administrative Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans
or fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, any Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
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Section 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any such Loan is converted to
a Base Rate Loan (pursuant to Article 2, 6 or 8 or otherwise) on any day other
than the last day of an Interest Period applicable thereto, or the last day of
an applicable period fixed pursuant to Section 2.06(c), or if the Borrower fails
to borrow or prepay any Euro-Dollar Loans or fails to continue any Euro-Dollar
Loans for an additional Interest Period or fails to convert any outstanding
Loans to Euro-Dollar Loans, in each case after notice of such borrowing,
prepayment, continuation or conversion has been given to any Bank in accordance
with Section 2.03(a), 2.07(c), 2.11(d) or 2.12(b), the Borrower shall reimburse
each Bank within 15 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or conversion or failure to borrow, prepay,
continue or convert, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
Section 2.15. Computation of Interest and Fees. Interest based on the Prime
Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). All other interest and commitment fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
ARTICLE 3
Conditions
Section 3.01. Effectiveness of this Agreement; Closing. This Agreement
shall become effective, and the closing hereunder shall occur, when the
Administrative Agent shall have received the following:
(a) a counterpart hereof signed by each party listed on the signature pages
hereof or facsimile or other written confirmation satisfactory to the
Administrative Agent that each such party has signed a counterpart hereof;
(b) a duly executed Note for the account of each Bank complying with the
provisions of Section 2.04 dated the Effective Date;
(c) an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
for the Borrower, substantially in the form of Exhibit B hereto, dated the
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Effective Date and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(d) an opinion of Gary M. Bahler, General Counsel of the Borrower,
substantially in the form of Exhibit C hereto, dated the Effective Date and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(e) an opinion of Davis Polk & Wardwell, special counsel for the
Administrative Agent, substantially in the form of Exhibit D hereto, dated the
Effective Date and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request; and
(f) all documents that the Administrative Agent may reasonably request
relating to the existence of the Borrower, the corporate authority for and the
validity of this Agreement, the Notes and any other matters relevant hereto, all
in form and substance satisfactory to the Administrative Agent.
The Administrative Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.
Section 3.02. Extensions of Credit. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) the fact that the Effective Date shall have occurred on or prior to
September 25, 1998;
(b) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02;
(c) the fact that, immediately before and after such Extension of Credit,
no Default shall have occurred and be continuing; and
(d) the fact that each of the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the date of such
Extension of Credit.
Each Extension of Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Extension of Credit as to the facts
specified in clauses (c) and (d) of this Section.
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ARTICLE 4
Representations and Warranties
The Borrower represents and warrants that:
Section 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New York, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where failures to possess such licenses,
authorizations, consents and approvals could not, in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
Section 4.02. Concentration and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each of the Notes, when executed and
delivered in accordance with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms.
Section 4.04. Financial Information. (a) The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of January 31, 1998 and the
related consolidated statements of operations, cash flows and changes in
shareholders' equity for the Fiscal Year then ended, reported on by KPMG Peat
Marwick LLP and set forth in the Borrower's 1997 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of August 1, 1998 and the related unaudited
consolidated statements of operations, cash flows and changes in shareholders'
equity for the six months then ended, set forth in the Borrower's Latest Form
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10-Q, a copy of which has been delivered to each of the Banks, fairly present,
on a basis consistent with the financial statements referred to in subsection
(a) of this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such six-month period (subject to normal year-end
adjustments).
(c) Since August 1, 1998 there has been no material adverse change in the
business, financial position, results of operations or prospects of the Borrower
and its Consolidated Subsidiaries, considered as a whole.
Section 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to
result in a Material Adverse Effect.
Section 4.06. Compliance with Laws. The Borrower and its Subsidiaries are
in compliance in all material respects with all applicable laws, ordinances,
rules, regulations and binding requirements of governmental authorities, except
where (i) the necessity of compliance therewith is being contested in good faith
by appropriate proceedings or (ii) failure to comply therewith could not, in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 4.07. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or made any amendment
to any Plan, which has resulted or will result in the imposition of a Lien under
Section 412(n) of the Internal Revenue Code or in the incurrence of a
requirement under Section 401(a)(29) of the Internal Revenue Code to post a bond
or other security in order to retain the tax-qualified status of such Plan or
(iii)incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.
Section 4.08. Environmental Matters. To the knowledge of the Borrower, (i)
the Borrower and its Subsidiaries are in material compliance with all applicable
Environmental Laws, (ii) there are no claims, demands or investigations against
the Borrower or any of its Subsidiaries by any governmental authority or other
person or entity that may reasonably be expected to result in material liability
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for the clean up of materials that have been released into the environment and
(iii) there are no conditions that are reasonably likely to result in such
claims, demands or investigations against the Borrower or any of its
Subsidiaries, except for failures to comply and liabilities which, in the
aggregate, are unlikely to result in a Material Adverse Effect.
Section 4.09. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any material assessment received by the Borrower or
any Subsidiary, except taxes and assessments which are not yet delinquent or are
being contested in good faith by appropriate proceedings. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
Section 4.10. Subsidiaries. Each of the Borrower's corporate Subsidiaries
is a corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where failures to
possess such licenses, authorizations, consents and approvals could not, in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 4.11. Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 4.12. Full Disclosure. All information (taken as a whole)
heretofore furnished in writing by the Borrower to any Bank for purposes of or
in connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished in writing by the Borrower to any Bank
will be, true in all material respects on the date as of which such information
is stated or certified. Any projections and pro forma financial information
contained in any such writing will be based upon good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made, it being
recognized by the Banks that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results. The Borrower has
disclosed to the Banks in writing any and all facts which could reasonably be
expected to result in a Material Adverse Effect (to the extent the Borrower can
now reasonably foresee, utilizing reasonable assumptions and the information now
actually known to the Borrower's Responsible Officers).
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ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Credit Exposure
hereunder:
Section 5.01. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after the end of
each Fiscal Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, cash flows and changes in shareholders'
equity for such Fiscal Year, setting forth in each case in comparative form the
figures as of the end of and for the previous Fiscal Year, all reported on
(without any qualification that would not be acceptable to the SEC for purposes
of filings under the Exchange Act) by KPMG Peat Marwick LLP or other independent
public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, a consolidated
condensed balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such Fiscal Quarter, the related consolidated condensed statement of
operations for such Fiscal Quarter and the related consolidated condensed
statements of operations, cash flows and retained earnings for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in
comparative form (i) in the case of such statement of operations, the figures
for the corresponding Fiscal Quarter of the previous Fiscal Year and (ii) in the
case of such statements of operations, cash flows and retained earnings, the
figures for the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
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(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the Borrower's chief
financial officer or chief accounting officer (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.06 to 5.10, inclusive, on the
date of such financial statements and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default existed on the date of
such statements and (ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (c) above;
(e) as soon as practicable and in any event within 90 days after the end of
each Fiscal Year, a certificate of the Borrower's chief financial officer
setting forth:
(i) the total rent expense (net of sublease income) of the Borrower
and its Consolidated Subsidiaries for such Fiscal Year;
(ii) the present value, at the end of such Fiscal Year, of the
operating lease commitments of the Borrower and its Consolidated
Subsidiaries; and
(iii) the present value, at the end of such Fiscal Year, of any third-
party operating lease payments under guarantees entered into after the
date hereof by the Borrower and its Consolidated Subsidiaries;
and certifying that the amounts set forth have been calculated on the same basis
as the comparable amounts shown in Note 14 ("Leases") to the audited financial
statements of the Borrower contained in the Borrower's 1997 Form 10-K (treating
the guaranteed amounts set forth pursuant to clause (iii) as if they were direct
obligations of the Borrower and its Consolidated Subsidiaries);
(f) within five Domestic Business Days after any Responsible Officer
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the Borrower's chief financial officer or chief accounting
officer setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(g) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(h) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the SEC;
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(i) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" defined in PBGC Regulations
Sections 2615.11(a), .12(a), .14(a), .16(a), .17(a), .21(a), .22(a) or .23(a)
with respect to any Plan, or, with respect to any Plan, gives or is required to
give notice to the PBGC under Section 4043(b)(3) of ERISA or would be required
to give notice under such Section but for the provisions of Section 4043(b)(2)
of ERISA or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC, or that would
be required to be given but for the provisions of Section 4043(b)(2); (ii)
receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment
or contribution to any Plan or Multiemployer Plan or makes any amendment to any
Plan or which has resulted or will result in the imposition of a Lien under
Section 412(n) of the Internal Revenue Code or the incurrence of a requirement
under Section 401(a)(29) of the Internal Revenue Code to post a bond or other
security in order to retain the tax- qualified status of such Plan, a
certificate of the Borrower's chief financial officer or chief accounting
officer setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group has taken or proposes to
take; and
(j) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries (including, without
limitation, the status of the transactions contemplated by the German Purchase
Agreement) as the Administrative Agent, at the request of any Bank, may
reasonably request.
Section 5.02. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all material properties useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary's own name)
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with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; provided that such risks may be covered by self-insurance programs
consistent with past practice. The Borrower will furnish to the Banks, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
Section 5.03. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, except
where failures to possess such rights, privileges and franchises could not, in
the aggregate, reasonably be expected to result in a Material Adverse Effect;
provided that nothing in this Section shall prohibit (i) the merger of a
Subsidiary into the Borrower or the merger or consolidation of a Subsidiary with
or into another Person if the corporation surviving such consolidation or merger
is a Subsidiary and if, in each case, after giving effect thereto, no Default
shall have occurred and be continuing or (ii) the termination of the existence
of any Subsidiary if the Borrower in good faith determines that such termination
is in the best interest of the Borrower and is not materially disadvantageous to
the Banks.
Section 5.04. Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and binding requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where (i) the necessity of compliance
therewith is being contested in good faith by appropriate proceedings or (ii)
failures to comply therewith could not, in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
Section 5.05. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary (except for Subsidiaries that constitute
Immaterial Subsidiaries) to keep, proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and will cause each
Subsidiary (except for Subsidiaries that constitute Immaterial Subsidiaries) to
permit, representatives of any Bank at such Bank's expense, upon reasonable
prior notice, to visit and inspect any of their respective properties, to
examine and make
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abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
Section 5.06. Negative Pledge. Neither the Borrower nor any Subsidiary will
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except:
(a) Liens existing on April 4, 1997 securing Debt outstanding on April 4,
1997 in an aggregate principal or face amount not exceeding $100,000,000;
(b) any Lien on any asset (or improvement thereon) securing Debt incurred
or assumed solely for the purpose of financing all or any part of the cost of
acquiring such asset (or improvement thereon), provided that such Lien attaches
to such asset (or improvement thereon) concurrently with or within 90 days after
the acquisition thereof;
(c) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition (whether by
purchase, merger or otherwise) thereof by the Borrower or a Subsidiary and not
created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) Liens on life insurance policies securing amounts borrowed against the
cash value of such policies;
(h) Liens arising in the ordinary course of its business which (i) do not
secure Debt, (ii) do not secure any single obligation or series of related
obligations in an amount exceeding $100,000,000 and (iii) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business; and
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(i) Liens not otherwise permitted by the foregoing clauses of this Section
securing Debt in an aggregate principal or face amount at any date not to exceed
15% of Consolidated Tangible Net Worth.
Section 5.07. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth will at no time be less than the sum of (i) $800,000,000 plus
(ii) for each Fiscal Quarter ended at or prior to such time (but after January
25, 1997), 50% of the consolidated net income of the Borrower and its
Consolidated Subsidiaries for such Fiscal Quarter (if greater than zero).
Section 5.08. Leverage Ratio. Total Borrowed Funds will not (i) exceed 75%
of Total Capitalization at any time from the Effective Date through the end of
Fiscal Year 1998 or (ii) exceed 70% of Total Capitalization at any time
thereafter.
Section 5.09. Limitation on Debt of Subsidiaries. The total Debt of all
Consolidated Subsidiaries (excluding Debt owed to the Borrower or to another
Consolidated Subsidiary) will not at any time exceed $300,000,000.
Section 5.10. Fixed Charge Coverage Ratio. At the end of each Fiscal
Quarter listed below, the ratio of
(i) the sum of EBIT plus 1/3 of Annual Rent Expense, in each case for
the four consecutive Fiscal Quarters then ended, to
(ii) the sum of Interest Expense plus 1/3 of Annual Rent Expense, in
each case for the same four consecutive Fiscal Quarters,
will not be less than the ratio set forth below with respect to such Fiscal
Quarter:
Fiscal Quarter Ratio
----------------------------- ---------------------------
Each Fiscal Quarter of 1.75 to 1
Fiscal Year 1998
Each subsequent Fiscal Quarter 2.00 to 1
Section 5.11. Consolidations, Mergers and Sales of Assets. The Borrower
will not consolidate or merge with or into any other Person; provided that the
Borrower may merge with another Person if (A) the Borrower is the corporation
surviving such merger and (B) immediately after giving effect to such merger no
Default shall have occurred and be continuing. The Borrower and its Subsidiaries
will not sell, lease or otherwise transfer, directly or indirectly, all or
substantially all of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person; provided that the foregoing limitation shall not
apply
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to sales of inventory or sales and other dispositions of surplus assets, in each
case in the ordinary course of business.
Section 5.12. Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for its working capital needs.
Section 5.13. Restricted Payments. Neither the Borrower nor any Subsidiary
will declare or make any Restricted Payment.
Section 5.14. German Purchase Agreement. The Borrower shall not permit the
German Purchase Agreement to be amended, supplemented or otherwise modified if
the effect thereof would be to (i) materially reduce the purchase price (or the
portion thereof payable in cash), (ii) materially delay the consummation of the
transactions contemplated therein or (iii) impose any additional material
conditions to the consummation of the transactions contemplated therein.
ARTICLE 6
Defaults
Section 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail (i) to pay any principal of any Loan when due
or (ii) to pay any interest on any Loan, any fees or any other amount payable
hereunder within two Domestic Business Days after the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.06 to 5.14, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) or (b)
above) for 30 days after written notice thereof has been given to the Borrower
by the Administrative Agent at the request of any Requesting Banks;
(d) any representation, warranty, certification or statement made (or
deemed made) by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall prove to
have been incorrect in any material respect when made (or deemed made);
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(e) the Borrower and/or any of its Subsidiaries shall fail to pay, when due
or within any applicable grace period, an amount or amounts aggregating more
than $25,000,000 payable in respect of their Debt;
(f) any event or condition shall occur which results in the acceleration of
the maturity of any Material Debt or enables the holder of such Debt or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) any of the Borrower or one or more Subsidiaries (unless such
Subsidiaries are Immaterial Subsidiaries) shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any Material
Assets, or shall consent to any such relief or to the appointment of any such
official or to any such official taking possession of Material Assets, or shall
make a general assignment for the benefit of creditors, or shall state that it
is unable to pay its debts generally as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or one or more Subsidiaries (unless such Subsidiaries constitute
Immaterial Subsidiaries), in each case seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
Material Assets, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Borrower or any Subsidiary under the federal bankruptcy
laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $10,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
(except for any termination under Section 4041(b) of ERISA) shall be filed under
Title IV of ERISA by any member of the ERISA Group, any plan administrator or
any combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one
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or more members of the ERISA Group to incur a current payment obligation in
excess of $25,000,000;
(j) a judgment or order for the payment of money in excess of $10,000,000
shall be rendered against the Borrower or any Subsidiary and such judgment or
order shall continue unsatisfied and unstayed for a period of 10 days; or
(k) any person or group of persons (within the meaning of Section 13 or 14
of the Exchange Act) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) of 20% or more of
the outstanding shares of common stock of the Borrower; or Continuing Directors
shall cease to constitute a majority of the board of directors of the Borrower;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments and they shall thereupon terminate,
and (ii) if requested by Banks holding more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued interest
thereon) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that if any Event of Default specified
in clause (g) or (h) above occurs with respect to the Borrower, then without any
notice to the Borrower or any other act by the Administrative Agent or the
Banks, the Commitments shall thereupon terminate and the Loans (together with
accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
Section 6.02. Notice of Default. The Administrative Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Requesting Banks and shall thereupon notify all the Banks thereof.
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ARTICLE 7
The Administrative Agent
Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
Section 7.02. Administrative Agents and Affiliates. Morgan shall have the
same rights and powers under this Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Administrative
Agent. Morgan, and each of its affiliates, may accept deposits from, lend money
to, and generally engage in any kind of business with, the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent.
Section 7.03. Obligations of Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 7.05. Liability of Agents. None of the Administrative Agent, its
affiliates or their respective directors, officers, agents or employees shall be
liable for any action taken or not taken in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of its
own gross negligence or willful misconduct. None of the Administrative Agent,
its affiliates or their respective 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 this
Agreement or any Extension of Credit; (ii) the performance or observance of any
of the covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3 except, in the case of the Administrative
Agent, receipt of items required to be delivered to it; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The Administrative Agent
shall not incur any liability by acting in reliance upon any notice, consent,
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certificate, statement, or other writing (which may be a bank wire, telex,
facsimile transmission or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
Section 7.06. Indemnification. The Banks shall, ratably in accordance with
their respective Credit Exposures, indemnify the Administrative Agent and its
affiliates, directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any other Bank Party, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon any other Bank Party, 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 any
action under this Agreement.
Section 7.08. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Banks and the Borrower, such
resignation to be effective when a successor Administrative Agent is appointed
pursuant to this Section and accepts such appointment. Upon receiving any such
notice of resignation, the Required Banks shall have the right to appoint a
successor Administrative Agent, subject to the approval of the Borrower (unless
an Event of Default shall have occurred and be continuing at the time of such
appointment, in which case the Borrower's approval will not be required). If no
successor Administrative Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the other Banks, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder, the provisions of this Article
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shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent.
Section 7.09. Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its account, fees in the amounts and at the times
previously agreed upon between the Borrower and the Administrative Agent.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Bank that deposits
in dollars (in the applicable amounts) are not being offered to the Reference
Bank in the London interbank market for such Interest Period, or
(b) Banks having 50% or more of the aggregate principal amount of the
affected Loans advise the Administrative Agent that the Adjusted London
Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans, or to continue such Loans
for an additional Interest Period, or to convert outstanding Loans into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of any
affected Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
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(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, to continue Euro-Dollar Loans
for an additional Interest Period or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate Loan either (a) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may lawfully continue to maintain and fund such Loan to such
day or (b) immediately if such Bank shall determine that it may not lawfully
continue to maintain and fund such Loan to such day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office)
or shall impose on any Bank (or its Applicable Lending Office) or the London
interbank market any other condition affecting its Euro-Dollar Loans, its Note
or its obligation to make Euro-Dollar Loans and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after receiving
a request by such Bank for compensation under this subsection, accompanied by a
certificate complying with subsection (d) of this Section (with a copy to the
Administrative Agent), the Borrower shall, subject to subsection (e) of this
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Section, pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of its obligations hereunder to a
level below that which such Bank (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by it to be
material, then from time to time, within 15 days after receiving a request by
such Bank for compensation under this subsection, accompanied by a certificate
complying with subsection (d) of this Section (with a copy to the Administrative
Agent), the Borrower shall, subject to subsection (e) of this Section, pay to
such Bank such additional amount or amounts as will compensate it (or its
Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle it to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in its
judgment, be otherwise disadvantageous to it. If a Bank fails to notify the
Borrower of any such event within 180 days after such event occurs, it shall not
be entitled to compensation under this Section for any effect of such event
arising more than 180 days before it does notify the Borrower thereof
(d) Each request by a Bank for compensation under this Section shall be
accompanied by a certificate, signed by one of its authorized employees, setting
forth in reasonable detail (i) the basis for claiming such compensation, (ii)
the additional amount or amounts to be paid to it hereunder and (iii) the method
of calculating such amount or amounts, which certificate shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
(e) Notwithstanding any other provision of this Section, none of the Banks
shall be entitled to compensation under subsection (a) or (b) of this Section if
it is not then its general practice to demand compensation in similar
circumstances under comparable provisions of other credit agreements.
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Section 8.04. Taxes. (a) For purposes of this Section 8.04, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by the Borrower
pursuant to this Agreement or under any Note, and all liabilities with respect
thereto, excluding (i) in the case of each Bank Party, taxes imposed on or
measured by its income, and franchise or similar taxes imposed on it, by a
jurisdiction under the laws of which it is organized or qualified to do business
(but only if the taxes are imposed solely because such Bank Party is qualified
to do business in such jurisdiction without regard to any Loan) or in which its
principal executive office is located or in which its Applicable Lending Office
is located and (ii) in the case of each Bank, any United States withholding tax
imposed on such payments other than such withholding tax imposed as a result of
a change in treaty, law or regulation occurring after a Bank first becomes
subject to this Agreement.
"Other Taxes" means any present or future stamp, documentary or mortgage
recording taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement or under
any Note or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of any Bank
Party hereunder or under any Note shall be made without deduction for any Taxes
or Other Taxes; provided that, if the Borrower shall be required by law to
deduct any Taxes or Other Taxes from any such payments, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.04) such Bank Party receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank Party for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
8.04) paid by such Bank Party and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, provided that Borrower
shall not indemnify any Bank Party for any penalties or interest on any Taxes or
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Other Taxes accrued during the period between the 15th day after such Bank Party
has received a notice from the jurisdiction asserting such Taxes or Other Taxes
and such later day on which such Bank Party has informed the Borrower of the
receipt of such notice. This indemnification shall be paid within 15 days after
such Bank Party makes demand therefor.
(d) Each Bank Party organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank Party listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank Party in the case of each
other Bank Party, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Bank Party remains lawfully able to do
so), shall provide the Borrower with Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank Party is entitled to benefits under an income
tax treaty to which the United States is a party which exempts such Bank Party
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank Party or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank Party has failed to provide
the Borrower with the appropriate form as required by Section 8.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank Party shall not be entitled to indemnification under
Section 8.04(b) or (c) with respect to Taxes (including penalties, interest and
expenses) imposed by the United States; provided that if a Bank Party, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank Party shall reasonably request
to assist such Bank Party to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank Party pursuant to this Section 8.04, then such Bank Party
will change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank Party, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank Party.
(g) If a Bank Party receives a notice from a taxing authority asserting any
Taxes or Other Taxes for which the Borrower is required to indemnify such Bank
Party under Section 8.04(c), it shall furnish to the Borrower a copy of such
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notice no later than 90 days after the receipt thereof. If such Bank Party has
failed to furnish a copy of such notice to the Borrower within such 90-day
period as required by this Section 8.04(g), the Borrower shall not be required
to indemnify such Bank Party for any such Taxes or Other Taxes (including
penalties, interest and expenses thereon) arising between the 90th day after
such Bank Party has received such notice and the day on which such Bank Party
has furnished to the Borrower a copy of such notice.
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its Euro-Dollar Loans and the
Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such
Bank through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist, all Loans which would otherwise be made by such
Bank as (or continued as or converted into) Euro-Dollar Loans shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks). If
such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Banks.
Section 8.06. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank has demanded compensation under Section 8.03 or 8.04, the Borrower shall
have the right, with the assistance of the Administrative Agent, to seek a
mutually satisfactory substitute bank or banks (which may be one or more of the
Banks) to replace such Bank. Any substitution under this Section 8.06 may be
accomplished, at the Borrower's option, either (i) by the replaced Bank
assigning its rights and obligations hereunder to the replacement bank or banks
pursuant to Section 9.06(c) at a mutually agreeable price or (ii) by the
Borrower prepaying all outstanding Loans from the replaced Bank and terminating
its Commitment on a date specified in a notice delivered to the Administrative
Agent and the replaced Bank at least three Euro-Dollar Business Days before the
date so specified (and compensating such Bank for any resulting funding losses
as provided in Section 2.14) and concurrently the replacement bank or banks
assuming a Commitment in an amount equal to the Commitment being terminated and
making Loans in the same aggregate amount and having the same maturity date or
dates, respectively, as the Loans being prepaid, all pursuant to documents
reasonably satisfactory to the Administrative Agent (and in the case of any
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document to be signed by the replaced Bank, reasonably satisfactory to such
Bank). No such substitution shall relieve the Borrower of its obligation to
compensate and/or indemnify the replaced Bank as required by Sections 8.03 and
8.04 with respect to the period before it is replaced and to pay all accrued
interest, accrued fees and other amounts owing to the replaced Bank hereunder.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (y) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for such purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (iii) if given by mail, three Domestic
Business Days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iv) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Administrative Agent under Article 2 or Article 8 shall not be
effective until received.
Section 9.02. No Waivers. No failure or delay by any Bank Party in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Administrative Agent, including
reasonable fees and disbursements of special counsel for the Administrative
Agent, in connection with the negotiation and preparation of this Agreement,
(ii) all reasonable out-of-pocket expenses of the Administrative Agent and the
Administrative Agent, including reasonable fees and disbursements of special
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counsel for the Administrative Agent, in connection with the administration of
this Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (iii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Administrative Agent and each Bank
Party including (without duplication) the fees and disbursements of special
counsel and the allocated cost of internal counsel, in connection with any
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify each Bank Party, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or proposed use of proceeds of
Loans hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. (a) Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest that has
become due with respect to the Loans held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest that has become due with respect to the Loans held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans held by the Banks shall be
shared by the Banks pro rata.
(b) Nothing in this Section shall impair the right of any Bank to exercise
any right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of the Borrower other than its
indebtedness hereunder.
(c) The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Loan, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
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Section 9.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that no such amendment or waiver shall, unless
signed by all the Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder or for
the termination of any Commitment or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement.
Section 9.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of each Bank.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. If any Bank grants a participating interest to a
Participant, whether or not upon notice to the Borrower and the Administrative
Agent, such Bank shall remain responsible for the performance of its obligations
hereunder, such Bank shall remain the holder of its Loans, and the Borrower and
the Administrative Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii), (iii) or (iv) of Section 9.05 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits of
Article VIII with respect to its participating interest. An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
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(c) Any Bank 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
institutions (each an "Assignee") all, or a portion (not less than $10,000,000)
of its Commitment and/or its Loans, and of its rights and obligations under this
Agreement and the Notes with respect thereto, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit E hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consents of the Borrower
and the Administrative Agent (which consents shall not be unreasonably
withheld); provided that (i) such consents shall not be required if the Assignee
is an affiliate of such transferor Bank or was a Bank immediately prior to such
assignment; (ii) the minimum amount specified above for a partial assignment of
the transferor Bank's rights and obligations shall not apply if the Assignee was
a Bank immediately prior to such assignment; and (iii) no such consent of the
Borrower shall be required if at the time an Event of Default shall exist. Upon
execution and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder (and its Commitment shall
be reduced) to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note is
issued to the Assignee. In connection with any such assignment, the transferor
Bank shall pay to the Administrative Agent an administrative fee for processing
such assignment in the amount of $2,500; provided that the Borrower shall pay
such administrative fee if such assignment is required by the Borrower pursuant
to Section 8.06. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.04.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent
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or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under certain circumstances
or at a time when the circumstances giving rise to such greater payment did not
exist.
Section 9.07. No-Reliance on Margin Stock. Each of the Banks represents to
the Administrative Agent and each of the other Banks that it in good faith is
not relying upon any "margin stock" (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in this Agreement.
Section 9.08. Governing Law; Submission to Jurisdiction. (a) THIS AGREEMENT
AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
(b) The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the Notes or the
transactions contemplated hereby or thereby. The Borrower irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 9.09. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 9.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VENATOR GROUP, INC.
By /s/ John H. Cannon
---------------------------
Name: John H. Cannon
Title: Vice President and Treasurer
233 Broadway
New York, New York 10279-0003
Facsimile number: 212-553-2152
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Administrative Agent and a Bank
By /s/ Unn Boucher
---------------------------
Name: Unn Boucher
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Facsimile number:
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COMMITMENT SCHEDULE
Bank Commitment
Morgan Guaranty Trust Company
of New York $250,000,000
Total $250,000,000
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EXHIBIT A
NOTE
New York, New York
, 19
For value received, Venator Group, Inc., a New York corporation (the
"Borrower"), promises to pay to the order of _____________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid principal amount of each
Loan made by the Bank to the Borrower pursuant to the Bridge Loan Agreement
referred to below on the maturity date thereof provided for in the Bridge Loan
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of each such Loan on the dates and at the rate or rates provided for in the
Bridge Loan Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that neither the failure of the Bank to make any such recordation or
endorsement, nor any error therein, shall affect the obligations of the Borrower
hereunder or under the Bridge Loan Agreement.
This note is one of the Notes referred to in the Bridge Loan Agreement
dated as of September 25, 1998 among the Borrower, the Banks party thereto and
Morgan Guaranty Trust Company of New York, as Administrative Agent (as the same
may be amended from time to time, the "Bridge Loan Agreement"). Terms defined in
the Bridge Loan Agreement are used herein with the same meanings. Reference is
made to the Bridge Loan Agreement for provisions for the prepayment hereof and
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56
the acceleration of the maturity hereof. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
VENATOR GROUP, INC.
By________________________
Title:
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Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Amount of Notation
Date Loan Principal Repaid Made By
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EXHIBIT B
OPINION OF SPECIAL
COUNSEL FOR THE BORROWER
[Effective Date]
Morgan Guaranty Trust Company of New York,
as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
We have acted as special counsel to Venator Group, Inc., a New York
corporation (the "Borrower"), in connection with the preparation, execution and
delivery of, the Bridge Loan Agreement, dated as of September __, 1998 (the
"Bridge Loan Agreement") among the Borrower, the Banks, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. This opinion is being
delivered pursuant to Section 3.01(c) of the Bridge Loan Agreement. Capitalized
terms used and not otherwise defined herein shall have the meanings herein as
ascribed thereto in the Bridge Loan Agreement.
In our examination we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion which we did
not independently establish or verify, we have relied upon statements and
representations of the Borrower and its officers and other representatives and
of public officials, including the facts set forth in the Borrower's Certificate
described below.
In rendering the opinions set forth herein, we have examined and relied on
originals or copies of the following:
(a) the Bridge Loan Agreement;
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59
(b) the Notes delivered to you on the date hereof;
(c) the certificate of the Borrower executed by Andrew P. Hines dated
the date hereof, a copy of which is attached as Exhibit A hereto (the
"Borrower's Certificate");
(d) certified copies of the Certificate of Incorporation and By- laws
of the Borrower;
(e) a certified copy of certain resolutions of the Board of Directors
of the Borrower adopted on ____________, 1998; and
(f) such other documents as we have deemed necessary or appropriate as
a basis for the opinions set forth below.
The Bridge Loan Agreement and the Notes shall hereinafter be referred to
collectively as the "Transaction Documents."
Members of our firm are admitted to the bar of the State of New York. We
express no opinion as to the laws of any jurisdiction other than (i) the laws of
the State of New York, and (ii) the federal laws of the United States of America
to the extent specifically referred to herein.
Based on the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that
1. The Borrower has been duly incorporated and is validly existing and in
good standing under the laws of the State of New York.
2. The Borrower has the corporate power and authority to (i) carry on its
business as described in the Borrower's 1997 Form 10-K and (ii) execute, deliver
and perform all of its obligations under each of the Transaction Documents and
to borrow thereunder. The execution and delivery of each of the Transaction
Documents and the consummation by the Borrower of the transactions contemplated
thereby have been duly authorized by all requisite corporate action on the part
of the Borrower. Each of the Transaction Documents has been duly executed and
delivered by the Borrower.
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60
3. Each of the Transaction Documents constitutes a valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, subject to the following qualifications:
(a) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether enforcement is sought in equity or at law);
(b) we express no opinion as to the enforceability of any rights to
contribution or indemnification provided for in the Transaction
Documents which are violative of the public policy underlying any law,
rule or regulation (including any federal or state securities law,
rule or regulation); and
(c) we express no opinion as to Section 9.04 of the Bridge Loan
Agreement to the extent it authorizes or permits any party to any
Transaction Document or any purchaser of a participation interest for
any such party to set off or apply any deposit, property or
indebtedness with respect to any participation interest.
4. The execution and delivery by the Borrower of each of the Transaction
Documents and the performance by the Borrower of its obligations under each of
the Transaction Documents, each in accordance with its terms, do not conflict
with the Certificate of Incorporation or By-laws of the Borrower.
5. Neither the execution, delivery or performance by the Borrower of the
Transaction Documents nor the compliance by the Borrower with the terms and
provisions thereof will contravene any provision of any Applicable Law (as
hereinafter defined). "Applicable Laws" shall mean those laws, rules and
regulations of the State of New York and of the United States of America
(including, without limitation, Regulations U and X of the Federal Reserve
Board) which, in our experience, are normally applicable to transactions of the
type contemplated by the Transaction Documents.
6. No Governmental Approval (as hereinafter defined), which has not been
obtained or taken and is not in full force and effect, is required to authorize
or is required in connection with the execution, delivery or performance of any
of the Transaction Documents by the Borrower. "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing, recording
(NY) 27009/335/CA/ca.98
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61
or registration with, any Governmental Authority (as hereinafter defined)
pursuant to Applicable Laws. "Governmental Authority" means any New York or
federal legislative, judicial, administrative or regulatory body.
7. Neither the execution, delivery or performance by the Borrower of its
obligations under the Transaction Documents nor compliance by the Borrower with
the terms thereof will contravene any Applicable Order (as hereinafter defined)
against the Borrower. "Applicable Orders" means those orders, judgments or
decrees of Governmental Authorities identified in paragraph 2 of the Borrower's
Certificate.
8. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In rendering the foregoing opinions, we have assumed, with your consent,
that:
(a) the execution, delivery and performance of any of the
Borrower's obligations under the Transaction Documents does not and
will not conflict with, contravene, violate or constitute a default
under (i) to your knowledge, any lease, indenture, instrument or other
agreement to which the Borrower or its property is subject, (ii) any
rule, law or regulation to which the Borrower is subject (other than
Applicable Laws as to which we express our opinion in paragraph 5
herein) or (iii) any judicial or administrative order or decree of any
governmental authority (other than Applicable Orders as to which we
express our opinion in paragraph 7 herein); and
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62
(b) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body
(other than Governmental Approvals as to which we express our opinion
in paragraph 6 herein) is required to authorize or is required in
connection with the execution, delivery or performance by the Borrower
of the Transaction Documents or the transactions contemplated thereby.
We understand that you are separately receiving an opinion, dated as
of the date hereof, with respect to the foregoing from Gary M. Bahler (the
"General Counsel Opinion") and we are advised that such opinion contains
qualifications. Our opinions herein stated are based on the assumptions
specified above and we express no opinion as to the effect on the opinions
herein stated of the qualifications contained in the General Counsel
Opinion.
Our opinions are also subject to the following assumptions and
qualifications:
(a) we have assumed each of the Transaction Documents constitutes
the legal, valid and binding obligation of each party to such
Transaction Document (other than the Borrower) enforceable against
such party (other than the Borrower) in accordance with its terms; and
(b) we express no opinion as to the effect on the opinion
expressed herein of (i) the compliance or non-compliance of any party
(other than the Borrower) to the Transaction Documents with any state,
federal or other laws or regulations applicable to it or (ii) the
legal or regulatory status or the nature of the business of any party
(other than the Borrower) to the Transaction Documents.
In rendering the opinions herein stated, we have taken into account
the fact that you have asked the Borrower to make, and the Borrower has
made, the representation set forth in Section 4.02 of the Bridge Loan
Agreement.
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63
This opinion is being furnished only to you and is solely for your benefit
and is not to be relied upon by any other Person or for any other purpose
without our prior written consent, provided, however, that any Assignee that
becomes a Bank pursuant to Section 9.06(c) of the Bridge Loan Agreement may rely
on this opinion as if it were addressed to such Assignee and delivered on the
date hereof.
Very truly yours,
6
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64
Schedule I
to SASM&F Opinion
Lenders
Morgan Guaranty Trust Company of New York
(NY) 27009/335/CA/ca.98
65
Exhibit C
[Form of Opinion of Borrower's General Counsel]
[Venator letterhead]
September __, 1998
Morgan Guaranty Trust Company
of New York,
as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
I am General Counsel of Venator Group, Inc., a New York corporation (the
"Borrower"), and have acted as such in connection with the preparation,
execution and delivery of, the Bridge Loan Agreement, dated as of September __,
1998 (the "Bridge Loan Agreement'), among the Borrower, the Banks and Morgan
Guaranty Trust Company of New York, as Administrative Agent. This opinion is
being delivered pursuant to Section 3.01(d) of the Bridge Loan Agreement.
Capitalized terms used and not otherwise defined herein shall have the same
meanings herein as ascribed thereto in the Bridge Loan Agreement.
In my examination I have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion which I did
not independently establish or verify, I have relied upon statements and
representations of the Borrower and its officers and other representatives and
of public officials.
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66
In rendering the opinions set forth herein, I, or a lawyer acting under my
general supervision, have examined and relied on originals or copies of the
following:
(a) the Bridge Loan Agreement;
(b) the Notes delivered to you on the date hereof;
(c) certified copies of the Certificate of Incorporation and By-laws
of the Borrower;
(d) a copy of certain resolutions of the Board of Directors of the
Borrower adopted on __________, 1998; and
(e) such other documents as I have deemed necessary or appropriate as
a basis for the opinions set forth below.
The Bridge Loan Agreement and the Notes shall hereinafter be referred
to collectively as the "Transaction Documents."
I am a member of the bar of the State of New York and I do not express
any opinion herein concerning any law other than the laws of the State of
New York.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the
opinion that:
1. Each of the Transaction Documents has been duly executed and
delivered by the Borrower.
2. The execution and delivery by the Borrower of each of the
Transaction Documents and the performance by the Borrower of its
obligations under each of the Transaction Documents, each in accordance
with its terms, do not (i) constitute a violation of or a default under any
Applicable Contracts (as hereinafter defined) or (ii) cause the creation of
any security interest or lien upon any of the property of the Borrower
pursuant to any Applicable Contracts. I do not express any opinion,
however, as to whether the execution, delivery or performance by the
Borrower of the Transaction Documents will constitute a violation of or a
default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or
results of operations of the Borrower as set forth in the Transaction
Documents or otherwise. "Applicable Contracts" mean those agreements or
instruments which are material to the business or financial condition of
the Borrower.
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67
3. There is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which could reasonably be expected to result in a
Material Adverse Effect.
This opinion is being furnished only to you and is solely for your
benefit and is not to be relied upon by any other Person or for any other
purpose without my prior written consent, provided, however, that any
Assignee that becomes a Bank pursuant to Section 9.06(c) of the Bridge Loan
Agreement may rely on this opinion as if it were addressed to such Assignee
and delivered on the date hereof.
Very truly yours,
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68
Schedule I
to Venator Opinion
Lenders
Morgan Guaranty Trust Company of New York
(NY) 27009/335/CA/ca.98
69
EXHIBIT D
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
To the Banks and the
Administrative Agent Referred to Below
c/o Morgan Guaranty Trust Company
of New York,
as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have participated in the preparation of the Bridge Loan Agreement (the
"Bridge Loan Agreement") dated as of September __, 1998 among Venator Group,
Inc. a New York corporation (the "Borrower"), the Banks (the "Banks"), and
Morgan Guaranty Trust Company of New York, as Administrative Agent, and have
acted as special counsel for the Arranger and Syndication Agent for the purpose
of rendering this opinion pursuant to Section 3.01(e) of the Bridge Loan
Agreement. Terms defined in the Bridge Loan Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that:
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1. The execution, delivery and performance by the Borrower of the Bridge
Loan Agreement and the Notes are within the Borrower's corporate powers and have
been duly authorized by all necessary corporate action.
2. The Bridge Loan Agreement constitutes a valid and binding agreement of
the Borrower and each Note delivered to you today constitutes a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general principles of
equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by any other person without our prior written consent; provided that any
Assignee that becomes a Bank pursuant to Section 9.06(c) of the Bridge Loan
Agreement may rely on this opinion as if it were addressed to such Assignee and
delivered on the date hereof.
Very truly yours,
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