U.S. $560,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 2, 1996
NINE WEST GROUP INC.,
as Borrower,
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CITICORP SECURITIES, INC.,
as Arranger
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CITIBANK, N.A.,
as Administrative Agent, and
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THE LENDERS PARTY HERETO
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS................... 1
1.1. Defined Terms.................................................... 1
1.2. Computation of Time Periods...................................... 32
1.3. Accounting Terms................................................. 32
1.4. Certain Terms.................................................... 32
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS..................... 33
2.1. The Revolving Credit Loans....................................... 33
2.2. The Term Loans................................................... 33
2.3. The Letters of Credit............................................ 34
2.4. Making the Loans................................................. 34
2.5. Fees............................................................. 37
2.6. Amendment, Reduction and Termination of the Commitments.......... 37
2.7. Repayment........................................................ 38
2.8. Prepayments...................................................... 39
2.9. Conversion/Continuation Option................................... 41
2.10. Interest......................................................... 42
2.11. Interest Rate Determination and Protection....................... 43
2.12. Increased Costs.................................................. 44
2.13. Illegality....................................................... 44
2.14. Capital Adequacy................................................. 45
2.15. Payments and Computations........................................ 45
2.16. Taxes............................................................ 46
2.17. Sharing of Payments, Etc......................................... 49
2.18. Letter of Credit Facility........................................ 49
2.19. Substitution of Lenders.......................................... 56
2.20. The Swing Loans.................................................. 57
2.21. The Competitive Loans............................................ 59
ARTICLE III
CONDITIONS......................................... 62
3.1. Conditions Precedent to Effectiveness............................ 62
3.2. Additional Conditions Precedent to Effectiveness................. 65
3.3. Conditions Precedent to Each Loan and Letter of Credit........... 66
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..................... 66
4.1. Corporate Existence; Compliance with Law......................... 67
4.2. Corporate Power; Authorization; Enforceable Obligations.......... 67
4.3. Taxes............................................................ 68
4.4. Full Disclosure.................................................. 69
4.5. Financial Matters................................................ 70
4.6. Litigation....................................................... 70
4.7. Margin Regulations............................................... 70
4.8. Subsidiaries..................................................... 71
4.9. ERISA............................................................ 71
4.10. Liens............................................................ 72
4.11. No Burdensome Restrictions; No Defaults.......................... 72
4.12. No Other Ventures................................................ 74
4.13. Investment Company Act; Public Utility Holding Company Act....... 74
4.14. Insurance........................................................ 74
4.15. Labor Matters.................................................... 74
4.16. Force Majeure.................................................... 75
4.17. Use of Proceeds.................................................. 75
4.18. Environmental Protection......................................... 75
4.19. Intellectual Property............................................ 76
4.20. Title............................................................ 77
4.21. Certain Indebtedness............................................. 77
4.22. Restricted Payments.............................................. 78
ARTICLE V
FINANCIAL COVENANTS................................ 78
5.1. Maximum Leverage Ratio........................................... 78
5.2. Fixed Charge Coverage Ratio...................................... 79
5.3. Maintenance of Net Worth......................................... 80
ARTICLE VI
AFFIRMATIVE COVENANTS.............................. 80
6.1. Compliance with Laws, Etc........................................ 80
6.2. Payment of Taxes, Etc............................................ 80
6.3. Maintenance of Insurance......................................... 81
6.4. Preservation of Corporate Existence, Etc......................... 81
6.5. Access .......................................................... 81
6.6. Keeping of Books................................................. 82
6.7. Maintenance of Properties, Etc................................... 82
6.8. Performance and Compliance with Other Covenants.................. 82
6.9. Application of Proceeds.......................................... 82
6.10. Financial Statements............................................. 82
6.11. Reporting Requirements........................................... 84
6.12. Employee Plans................................................... 88
6.13. Interest Rate Contracts.......................................... 88
6.14. Fiscal Year...................................................... 88
6.15. Environmental.................................................... 88
6.16. Cash Management System........................................... 88
ARTICLE VII
NEGATIVE COVENANTS................................. 89
7.1. Liens, Etc....................................................... 89
7.2. Indebtedness..................................................... 92
7.3. Sale/Leasebacks.................................................. 93
7.4. Restricted Payments.............................................. 93
7.5. Mergers, Borrower Stock Issuances, Sale of Assets, Etc........... 94
7.6. Investments in Other Persons..................................... 96
7.7. Maintenance of Ownership of Subsidiaries......................... 97
7.8. Change in Nature of Business..................................... 98
7.9. Modification of Material Agreements.............................. 98
7.10. Accounting Changes.............................................. 98
7.11. Contingent Obligations.......................................... 98
7.12. Transactions with Affiliates.................................... 99
7.13. No New Subsidiaries............................................. 99
7.14. Terms of Guarantors' Stock...................................... 100
7.15. No Speculative Transactions..................................... 100
ARTICLE VIII
EVENTS OF DEFAULT.................................. 100
8.1. Events of Default................................................ 100
8.2. Remedies......................................................... 103
8.3. Actions in Respect of Letters of Credit
and Other Obligations........................................ 104
ARTICLE IX
THE ADMINISTRATIVE AGENT........................... 106
9.1. Authorization and Action......................................... 106
9.2. Administrative Agent's Reliance, Etc............................. 106
9.3. Citibank and Affiliates.......................................... 107
9.4. Lender Credit Decision........................................... 107
9.5. Indemnification.................................................. 108
9.6. Successor Administrative Agent................................... 108
ARTICLE X
MISCELLANEOUS...................................... 109
10.1. Amendments, Etc................................................. 109
10.2. Notices, Etc.................................................... 109
10.3. No Waiver; Remedies............................................. 110
10.4. Costs; Expenses; Indemnities.................................... 110
10.5. Right of Set-off................................................ 113
10.6. Binding Effect.................................................. 114
10.7. Assignments and Participations.................................. 114
10.8. Governing Law................................................... 118
10.9. Submission to Jurisdiction; Service of Process.................. 118
10.10. Section Titles.................................................. 119
10.11. Execution in Counterparts....................................... 119
10.12. Entire Agreement................................................ 119
10.13. Confidentiality................................................. 119
10.14. Waiver of Jury Trial............................................ 120
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 2, 1996,
among Nine West Group Inc., a Delaware corporation (the "Borrower"), the
financial institutions listed on the signature pages hereof as lenders (each
individually a "Lender" and collectively the "Lenders"), Citibank, N.A., a
national banking association ("Citibank") and any other Lender which issues
letters of credit hereunder (each an "Issuer" and together the "Issuers") and
Citibank, as administrative agent for the Lenders and the Issuers (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, the Lenders, Citibank as an issuer of letters
of credit, the Administrative Agent and Merrill Lynch Capital Corporation as
Agent are party to a Credit Agreement, dated as of May 23, 1995, as amended by
Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated as of May 29, 1996 (the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested and the Lenders have agreed to
amend and restate the Existing Credit Agreement upon the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Accepted Competitive Bid" shall mean the competitive Bid or Bids that
are accepted by the Borrower.
"Accounts" has the meaning specified in the Borrower Security
Agreement and the Subsidiary Security Agreement.
"Acquisition" means the acquisition by the Borrower and certain of the
Guarantors of certain assets of USSC as contemplated by the Asset Purchase
Agreement.
"Administrative Agency Fee Letter" has the meaning specified in
Subsection 2.5(b).
"Administrative Agent" has the meaning specified in the first
paragraph of this Agreement.
"Affiliate" means, as to any Person, any Subsidiary of such Person and
any other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person and includes each officer or director or
general partner of such Person, and each Person (other than a Passive
Institutional Investor) who is the beneficial owner of 10% or more of any class
of voting Stock of such Person. For the purposes of this definition, "control"
means the possession of the power to direct or cause the direction of management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means this Amended and Restated Credit Agreement, together
with all Schedules and Exhibits, as the same may be amended, supplemented or
otherwise modified from time to time.
"Applicable Base Rate Margin" has the meaning set forth on
Schedule III.
"Applicable Eurodollar Rate Margin" has the meaning set forth on
Schedule III.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Asset Purchase Agreement" means the Asset Purchase Agreement, dated
as of March 15, 1995, among the Borrower, Footwear Acquisition Corp., a Delaware
corporation, and USSC, as amended by the Amendment to Asset Purchase Agreement,
dated as of May 23, 1995 and by the Amendment to Asset Purchase Agreement and
Settlement Agreement dated as of May 29, 1996 and as such agreement may be
further amended, supplemented or otherwise modified from time to time prior to
the date hereof.
"Asset Sale" means any sale or other disposition, or series of sales
or other dispositions (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise), made on or after
the Effective Date by the Borrower and/or any of the Guarantors to any Person of
any asset or assets which individually yields or in the aggregate for a series
of related transactions yield proceeds or have a Fair Market Value in excess of
$2,000,000; provided, however, that any sale or other disposition permitted
pursuant to clause (i) of Subsection 7.5(a) or clauses (i)(A), (ii) (other than
with respect to sale/leaseback transactions), (iii), (iv), (v) and (vi) of
Subsection 7.5(c) shall not constitute an Asset Sale for purposes of this
Agreement.
"Asset Sale Proceeds" means cash payments received by the Borrower or
any Guarantor (including, without limitation, any cash payments received by way
of deferred payment of principal (but not interest) pursuant to a note or
receivable or otherwise and any cash realized from any disposition of non-cash
proceeds received by the seller, but only as and when received, and any amount
eliminated from any reserve referred to in clause (e) below, but only as and
when eliminated without any corresponding payment having been made) from any
Asset Sale (after repayment of any Indebtedness other than the Loans due by
reason of such Asset Sale), in each case net of the amount of (a) brokers' and
advisors' fees and commissions payable in connection with such Asset Sale, (b)
all foreign, federal, state and local taxes estimated in good faith by the
Borrower to be payable as a direct consequence of such Asset Sale, including,
without limitation, in connection with the payment of a dividend or the making
of a distribution by a Guarantor of such payments to the Borrower or any other
Guarantor (including, without limitation, taxes withheld in connection with the
repatriation of such proceeds), net of any tax benefits derived in respect of
such dividend or distribution, (c) the fees and expenses attributable to such
Asset Sale, to the extent not included in clause (a) above, (d) any amount
required to be paid to any Person (other than the Borrower or any Guarantor)
owning a beneficial interest in the property or assets subject to such Asset
Sale, (e) deduction for the amount of any reserve established in its financial
statements in accordance with GAAP by the Borrower or any Guarantor in respect
of liabilities retained or representations or warranties made by the Borrower or
any Guarantor in connection with such Asset Sale, including, without limitation,
any indemnification associated with such Asset Sale, and (f) any proceeds
received from any sale or other disposition of Operating Assets which proceeds
are used to purchase, construct or otherwise acquire an interest in other
Operating Assets (to the extent such proceeds do not exceed the amount paid to
purchase, construct or otherwise acquire an interest in such other Operating
Assets) provided that such other Operating Assets are constructed or an interest
therein is otherwise acquired within 180 days before or after such receipt or a
binding agreement to construct or otherwise acquire an interest in such other
Operating Assets is entered into within 180 days before or after such receipt
and an interest in such other Operating Assets is constructed or acquired within
one year of such receipt. For the purposes of this definition, (i) an Asset
Sale shall be deemed to include, without limitation, any award of compensation
for any asset or property or group thereof taken by condemnation or eminent
domain and insurance proceeds for the loss of or damage to any asset or property
if such award or proceeds equals or exceeds $2,000,000 (per occurrence), and
(ii) in the case of insurance proceeds for damage to any Operating Asset, the
Borrower or any Guarantor shall be deemed to have acquired other Operating
Assets if such Operating Assets are repaired within 180 days of the receipt of
such proceeds or a binding agreement to repair the same is entered into within
such 180-day period and such repairs are completed within one year of the date
of the receipt of such proceeds.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, in substantially the form of
Exhibit J, and accepted by the Administrative Agent.
"Available Credit" means, at any time, an amount equal to (a) the then
effective Revolving Credit Commitments of the Lenders minus (b) the sum of (i)
the outstanding principal amount of the Revolving Credit Loans at such time,
(ii) the Letter of Credit Undrawn Amounts at such time, (iii) the outstanding
principal amount of the Competitive Loans at such time, (iv) the outstanding
principal amount of the Swing Loans at such time and (v) the Reimbursement
Obligations at such time; provided, however, that for the purposes of Section
2.1, Available Credit shall mean the lesser of the foregoing amount and, during
each Clean-Up Period after the Effective Date, an amount equal to (i)
$75,000,000 minus (ii) the aggregate of the outstanding principal amount of the
Revolving Credit Loans, Competitive Loans and Swing Loans at such time. For the
purpose of determining whether any new Loan to be made hereunder exceeds the
amount of the Available Credit, the amount of the Available Credit shall be
determined before such new Loan is deemed outstanding but after giving effect to
the concurrent repayment of any outstanding Loan or Loans from the proceeds of
such new Loan.
"Base Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time, which rate per annum shall be equal at any time to the
then highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of (i)
1/2 of one percent per annum, plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a Business Day, on
the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a percentage equal
to 100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or including
(among other liabilities) three-month U.S. dollar nonpersonal time deposits in
the United States, plus (iii) the average during such three-week period of the
maximum annual assessment rates payable to the Federal Deposit Insurance
Corporation (or any successor) by banks which are members of the Bank Insurance
Fund for insuring U.S. dollar deposits in the United States; and
(c) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of (i)
1/2 of one percent per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the Loans
of any Lender that bears interest with reference to the Base Rate.
"Borrower Pledge Agreement" means the pledge agreement dated as of May
23, 1995, in the form of Exhibit F, executed by the Borrower, as amended by
Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated the date hereof, and as such agreement may be further amended,
supplemented or otherwise modified from time to time.
"Borrower Security Agreement" means the security agreement dated as of
May 23, 1995, in the form of Exhibit G-1, executed by the Borrower, as amended
by Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated the date hereof, and as such agreement may be further amended,
supplemented or otherwise modified from time to time.
"Borrowing" means a borrowing consisting of Loans under the same
Facility made on the same day by the Lenders ratably according to their
respective Commitments.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to a Eurodollar Rate Loan, a day on which dealings are also carried on
in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate of (a) all cash expenditures made by such Person and its Subsidiaries,
except interest capitalized during construction, during such period for
property, plant or equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs, that would be reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person and its Subsidiaries prepared in conformity with GAAP and (b)
without duplication, the principal amount of all Indebtedness incurred or
assumed to finance any such additions to property, plant and equipment;
provided, however, that Capital Expenditures shall not include any expenditures
made to replace any Operating Assets sold, taken or otherwise disposed of or
subject to a loss with other Operating Assets, or to repair any damage to
Operating Assets, to the extent such expenditures do not exceed the aggregate
amount of proceeds payable to such Person and its Subsidiaries in connection
with such sale, taking, other disposition, loss or damage and are made within
180 days before or after such receipt or a binding agreement to construct or
otherwise acquire an interest in other Operating Assets or repair such damage is
entered into within 180 days before or after such receipt and such acquisition,
construction or repair is completed within one year of such receipt.
"Capitalized Lease" means, as to any Person, any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Cash Equivalents" means (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States government or any agency thereof, (b) overnight bank deposits made
with any Lender, (c) certificates of deposit, time deposits of any nature and
bankers' acceptances of any Lender, or any commercial bank organized under the
laws of the United States of America or any state thereof that has a combined
capital and surplus of at least $300,000,000, having maturities of one year or
less from the date of acquisition, (d) commercial paper of an issuer rated at
least "A-1" by Standard & Poor's Rating Group or "P-1" by Moody's Investors
Service, Inc., or carrying an equivalent rating by a nationally recognized
rating agency if both of the two named rating agencies cease publishing ratings
of investments, and (e) repurchase obligations for underlying securities of the
type described in clause (a) above, provided that (i) such repurchase
obligations do not have a term of longer than seven days from the date of
acquisition thereof and (ii) such repurchase obligations are with a counterparty
that is a financial institution organized or licensed under the laws of the
United States of America or any state thereof that has a combined capital and
surplus of at least $300,000,000.
"Cash Interest Expense" means, for any Person for any period, the Net
Interest Expense of such Person for such period, plus (a) interest expense
capitalized during construction for such period to the extent deducted in the
determination of such Net Interest Expense, less (b) Non-Cash Interest Expense
of such Person for such period.
"Change of Control" means the occurrence of any Person or group (other
than a Permitted Investor), determined in accordance with Section 13(d) of the
Exchange Act together with any Affiliates thereof, which, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases
or otherwise, having become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, of Stock of the Borrower
representing at least 25% of the voting Stock of the Borrower.
"Clean-Up Period" means any 30 consecutive calendar days during the
three-month period commencing November 1 of each calendar year, as chosen by the
Borrower in a written notice to the Administrative Agent received by the
Administrative Agent no later than November 30 of such calendar year; provided,
however, that if the Borrower shall not have so notified the Administrative
Agent for any calendar year, "Clean-Up Period" means, for such calendar year,
the 30-day period commencing December 1 of such calendar year.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party (other than Accounts
sold by the Borrower in connection with the Receivables Securitization) in or
upon which a Lien is purported to be granted in favor of the Secured Parties
under any of the Collateral Documents, except to the extent such property or
interests have been released from such Lien in accordance with the terms of the
applicable Collateral Document.
"Collateral Documents" means the Borrower Security Agreement, the
Subsidiary Security Agreements, the Borrower Pledge Agreement, the Mortgages,
the Intercreditor Agreements and any other document executed and delivered by a
Loan Party granting a Lien in favor of the Secured Parties on any of its
property to secure payment of the Obligations.
"Commitment" means, as to any Lender, such Lender's Revolving Credit
Commitment, and "Commitments" means the aggregate Revolving Credit Commitments
of all Lenders.
"Competitive Bid" means an offer to make a Competitive Loan pursuant
to Section 2.21.
"Competitive Bid Accept/Reject Letter" means a notification made by
the Borrower pursuant to Section 2.21(e) in substantially the form of Exhibit N.
"Competitive Bid Rate" means, as to any Competitive Bid made pursuant
to Section 2.21(c), (i) in the case of a Eurodollar Competitive Loan, the
Eurodollar Competitive Borrowing Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" means a request made pursuant to Section
2.21 in substantially the form of Exhibit K.
"Competitive Borrowing" means a borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bid or Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.21.
"Competitive Loan" means a Loan from a Lender to the Borrower pursuant
to the bidding procedure described in Section 2.21.
"Competitive Loan Obligation" has the meaning specified in Section
2.4(j).
"Competitive Note" means a promissory note of the Borrower in
substantially the form of Exhibit A-3, payable to the Lender whose Competitive
Bid was accepted, executed and delivered as provided in Section 2.4.
"Contaminant" means any substance regulated or forming the basis of
liability under any Environmental Law, including, without limitation, any waste,
pollutant, hazardous substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, and any constituent of any
such substance or waste.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness or Contractual Obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or Contractual Obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or Contractual Obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations of a Person include,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an obligation
of another Person, and (b) any liability of such Person for an obligation of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such obligation or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner invest
in such other Person (including, without limitation, to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of this sentence the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the outstanding amount of the obligation so guaranteed or
otherwise supported.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding, in each of the foregoing cases, a
Loan Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its properties is subject.
"Corporate Rating" means a Long-Term Issuer Credit Rating assigned by
the Corporate Credit Rating Service of S&P.
"Current Assets" means, with respect to any Person at any date, the
total consolidated current assets of such Person and its Subsidiaries at such
date, determined in conformity with GAAP.
"Current Liabilities" means, with respect to any Person at any date,
the total consolidated current liabilities of such Person and its Subsidiaries
at such date, determined in conformity with GAAP, less the current portion of
any Indebtedness for Borrowed Money of such Person and its Subsidiaries at such
date determined on a consolidated basis in conformity with GAAP.
"Debt Issuance Proceeds" means in respect of the issuance of any debt
securities or other incurrence of Indebtedness by the Borrower or any Guarantor
(other than Indebtedness permitted by clauses (a) through (g), (i), (j), (k) and
(l) of Section 7.2), the gross cash proceeds received from such issuance or
incurrence, minus all taxes, discounts, commissions and other fees and expenses
incurred in connection therewith, including, without limitation, the reasonable
fees and disbursements of counsel.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Documentary Letter of Credit" means a Letter of Credit in support of
trade obligations of the Borrower or any of its Subsidiaries incurred in the
ordinary course of business.
"DOL" means the United States Department of Labor, or any successor
thereto.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means each Subsidiary of the Borrower
incorporated under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, for any Person for any period, the Net Income (Loss)
of such Person for such period taken as a single accounting period, plus (a) the
sum of the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) interest expense, (iv) income tax
expense, (v) extraordinary losses (and other losses on Asset Sales not otherwise
included in extraordinary losses determined on a consolidated basis in
conformity with GAAP), and (vi) non-cash charges (including the cumulative
effect of accounting changes), less (b) the sum of the following amounts of such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP to the extent included in the determination of such Net Income (Loss):
(i) extraordinary gains (and other gains on Asset Sales not otherwise included
in extraordinary gains determined on a consolidated basis in conformity with
GAAP), (ii) the Net Income (Loss) of any other Person that is accounted for by
the equity method of accounting except to the extent of the amount of dividends
or distributions paid to such Person, (iii) the Net Income (Loss) of any other
Person acquired by such Person or a Subsidiary of such Person in a transaction
accounted for as a pooling of interests for any period prior to the date of such
acquisition, and (iv) non-cash credits (including the cumulative effect of
accounting changes).
"Effective Date" means the date on which this Amended and Restated
Credit Agreement becomes effective in accordance with Section 3.1.
"Eligible Assignee" means (a) a commercial bank organized or licensed
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000, (b) a savings and loan association
or savings bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $500,000,000, (c)
a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having a combined
capital and surplus of at least $500,000,000, as long as that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD or the Cayman
Islands, (d) the central bank of any country which is a member of the OECD, (e)
a finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$500,000,000, (f) any Lender, and (g) any Affiliate of any Lender.
"Environmental Laws" means all federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and any binding judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment relating to the
regulation and protection of human health, safety, the environment or natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, but are not limited to,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. section 9601 et seq.) ("CERCLA"); the Hazardous
Material Transportation Act, as amended (49 U.S.C. section 1801 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C.
section 136 et seq.); the Resource Conservation and Recovery Act, as amended (42
U.S.C. section 6901 et seq.) ("RCRA"); the Toxic Substances Control Act, as
amended (15 U.S.C. section 2601 et seq.); the Clean Air Act, as amended (42
U.S.C. section 7401 et seq.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. section 1251 et seq.); the Occupational Safety and Health
Act, as amended (29 U.S.C. section 651 et seq.); and the Safe Drinking Water
Act, as amended (42 U.S.C. section 300f et seq.), and their state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statute, including, without limitation, the New Jersey Industrial
Site Recovery Act (N.J. Stat. Ann. section 13:1K-6 et seq.) ("ISRA").
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any other Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including, without
limitation, any thereof arising under any Environmental Law, Permit, order or
agreement with any Governmental Authority or other Person, and which relate to
any environmental, health or safety condition, or a Release or threatened
Release, and result from the past, present or future operations of, or ownership
of property by, such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Environmental Reports" means the environmental reports prepared as a
condition precedent to the Existing Credit Agreement and delivered to the
Administrative Agent.
"Equity Issuance Proceeds" means the gross proceeds from the issuance
for cash of any equity securities of the Borrower or any Guarantor (other than
pursuant to any director and/or employee compensation or savings plan) minus all
discounts, commissions and other fees and expenses incurred in connection
therewith, including, without limitation, the reasonable fees and disbursements
of counsel.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower or any of its Subsidiaries
within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Title IV
Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any of its
Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from any Multiemployer
Plan, (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA, (e)
the institution by the PBGC of proceedings to terminate a Title IV Plan or
Multiemployer Plan, (f) the failure to make any contribution required by
applicable law to a Qualified Plan, (g) the insolvency or notice of
reorganization of a Multiemployer Plan, or (h) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Competitive Borrowing Margin" means, as to any Eurodollar
Competitive Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the Eurodollar Rate in order to determine the interest rate
applicable to such Loan, as specified in the Competitive Bid relating to such
Loan.
"Eurodollar Competitive Loan" means any Competitive Loan bearing
interest at a rate determined by reference to the Eurodollar Rate in accordance
with the provisions of Article II.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate of interest
determined by the Administrative Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are offered by
the principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the Eurodollar
Rate Loan of Citibank during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
which includes deposits by reference to which the Eurodollar Rate is determined)
having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" has the meaning given to that term in the
Recitals to this Agreement.
"Facility" means the Lenders' Commitments to make the Term Loans and
the Lenders' Commitments to make Revolving Credit Loans.
"Facility Fee" has the meaning specified in Subsection 2.5(a).
"Factoring Program" means the sale by the Borrower and the Guarantors
of Accounts of non-United States account debtors.
"Fair Market Value" means (a) with respect to any asset (other than a
marketable security) at any date, the value of the consideration obtainable in a
sale of such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset, as reasonably determined by the seller, or, if such asset shall have
been the subject of a relatively contemporaneous appraisal by an independent
third party appraiser, the basic assumptions underlying which have not
materially changed since its date, as set forth in such appraisal, and (b) with
respect to any marketable security at any date, the closing sale price of such
security on the business day (on which any national securities exchange is open
for the normal transaction of business) next preceding such date, as appearing
in any published list of any national securities exchange or in the National
Market List of the National Association of Securities Dealers, Inc. or, if there
is no such closing sale price of such security, the final price for the purchase
of such security quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of the Borrower and its
consolidated Subsidiaries for financial accounting purposes.
"Fiscal Year" means the period of 52 or 53 weeks, as the case may be,
ending on the Saturday nearest to January 31 of each year, with such Fiscal Year
ending in January or February, as the case may be, being referred to for
purposes of identification by the year of the immediately preceding calendar
year.
"Fixed Charges" means, for any Person for any period, the sum, without
duplication, of (a) the Cash Interest Expense of such Person for such period,
(b) all rentals under leases of real, personal or mixed property in respect of
such period payable in cash during such period by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, (c) the
principal amount of Indebtedness for Borrowed Money of such Person and each of
its Subsidiaries determined on a consolidated basis in conformity with GAAP
having a scheduled due date during such period, (d) all amounts having a
scheduled due date during such period payable by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, on
Capitalized Lease Obligations, (e) all dividends payable in cash during such
period by such Person and its Subsidiaries on preferred stock in respect of such
period other than to the Borrower and its Subsidiaries, (f) the total estimated
federal income tax liability payable by such Person in respect of such period,
and (g) Capital Expenditures of such Person made during such period net of the
aggregate principal amount of Indebtedness constituting a Capital Expenditure
incurred or assumed by such Person during such period but not payable during
such period.
"Fixed Rate Borrowing" means a Borrowing comprised of one or more
Fixed Rate Loans.
"Fixed Rate Loan" means any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"Footwear Business" has the meaning specified in the Asset Purchase
Agreement.
"Foreign Venture" means any Subsidiary of the Borrower other than a
Guarantor or a North American Venture.
"Funding" means Nine West Funding Corporation, a Delaware corporation.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Article V, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements referred to in
Section 4.5.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" means each Domestic Subsidiary that is a Wholly-Owned
Subsidiary, other than Pappagallo and Funding.
"Guaranty" means a guaranty, in substantially the form of Exhibit H,
executed by each Guarantor, as such guaranty may be amended, supplemented or
otherwise modified from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money (including, without limitation,
reimbursement and all similar obligations with respect to surety bonds, letters
of credit and bankers' acceptances, whether or not matured) or for the deferred
purchase price of property or services, (b) all indebtedness of such Person
evidenced by notes, bonds, debentures or similar instruments, (c) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (d) all Capitalized Lease Obligations of such Person, (e) all
Contingent Obligations of such Person, (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value (other than
with Stock or Stock Equivalents of such Person in respect of which such Person
has no purchase, redemption, retirement, defeasance or other acquisition
obligation) any Stock or Stock Equivalents of such Person, (g) all obligations
of such Person under Interest Rate Contracts, (h) all Indebtedness referred to
in clause (a), (b), (c), (d), (e), (f) or (g) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including, without limitation,
Accounts and general intangibles) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, and (i)
in the case of the Borrower, all monetary obligations constituting Obligations.
"Indebtedness for Borrowed Money" means, for any Person, all
indebtedness for borrowed money or evidenced by notes, bonds, debentures or
similar evidences of indebtedness of such Person and its Subsidiaries on a
consolidated basis in conformity with GAAP, all obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP for the
deferred purchase price of any property service or business (other than trade
accounts payable incurred in the ordinary course of business constituting
Current Liabilities), and all Capitalized Lease Obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP. For purposes
of this definition, "indebtedness for borrowed money" shall not include the
unmatured portion of any reimbursement or similar obligations with respect to
surety bonds, letters of credit and bankers' acceptances.
"Indemnitees" has the meaning specified in Section 10.4.
"Initial Lender" means each financial institution whose name is set
forth on the signature pages of this Agreement.
"Intercreditor Agreement" means each agreement, in the form to be
agreed between the Borrower, the Administrative Agent and the Majority Lenders,
executed by any new lender pursuant to Section 7.1(o), as such agreement may be
amended, supplemented or otherwise modified from time to time.
"Interest Period" means, (1) in the case of any Fixed Rate Loan, the
period commencing on the date of the related Competitive Borrowing and ending on
the date specified in the Competitive Bid in which the offer to make such Fixed
Rate Loans was extended, which period shall not be earlier than seven days or
later than 180 days after the date of such Competitive Borrowing, and (2) in the
case of any Eurodollar Rate Loan, (a) initially, the period commencing on the
date such Eurodollar Rate Loan is made or on the date of conversion of a Base
Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its Notice of Borrowing, Notice of
Conversion or Continuation or Competitive Bid Request given to the
Administrative Agent pursuant to Section 2.4, 2.9 or 2.21, respectively, and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to Section 2.9, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.9;
provided, however, that all of the foregoing provisions in clause (2) relating
to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to extend
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period in respect
of Term Loans which ends after the date of a scheduled principal payment on the
Term Loans as set forth in Article II unless, after giving effect to such
selection, the aggregate unpaid principal amount of the Term Loans for which
Interest Periods end after such scheduled principal payment shall be equal to or
less than the principal amount to which the Term Loans are required to be
reduced after such scheduled principal payment is made;
(iv) the Borrower may not select any Interest Period in respect
of Loans having an aggregate principal amount of less than $1,000,000; and
(v) there shall be outstanding at any one time no more than 12
Interest Periods in the aggregate.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"Investments" has the meaning specified in Section 7.6.
"Inventory" has the meaning specified in the Borrower Security
Agreement and the Subsidiary Security Agreement.
"Investment Grade" means, with respect to the Borrower's long-term
senior unsecured indebtedness, (i) a rating of "Baa3" or higher by Moody's, or
(ii) a rating of "BBB-" or higher by S&P, or (iii) a Corporate Credit Rating of
investment grade assigned by S&P, as determined by the Administrative Agent in
its sole discretion, and, in each case, such rating or Corporate Credit Rating
is maintained for a period of three consecutive months; provided, however, that
the Borrower's long-term senior unsecured indebtedness shall not be regarded as
Investment Grade for the purposes of this Agreement if one Rating Agency assigns
a rating which is more than one level below investment grade (being Ba1 or lower
in the case of Moody's and BB+ or lower in the case of S&P).
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuer" means (a) Citibank, in its capacity as initial issuer of
Letters of Credit, and (b) any other Lender requested by the Borrower which has
agreed to issue Letters of Credit.
"L/C Cash Collateral Account" has the meaning specified in Subsection
8.3(a).
"Letter of Credit" means any letter of credit issued for the account
of the Borrower or any of its Subsidiaries by any Issuer pursuant to Section
2.18.
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of the Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Subsection 2.18(c).
"Letter of Credit Request" has the meaning specified in Subsection
2.18(d).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever in respect of property
intended to assure payment of any Indebtedness or other obligation, including,
without limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a Capitalized Lease Obligation, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing, under the Uniform Commercial Code or comparable law of any jurisdiction,
of any financing statement naming the owner of the asset to which such Lien
relates as debtor.
"Loan" means a Revolving Credit Loan, a Term Loan, a Swing Loan or a
Competitive Loan.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Guaranty, each Letter of Credit Reimbursement Agreement, the Collateral
Documents, the Administrative Agency Fee Letter, and each agreement, contract or
facility evidencing, creating or otherwise giving rise to one or more Other
Obligations.
"Loan Party" means each of the Borrower and each Guarantor.
"Majority Lenders" means, at any time, Lenders holding at least 51% of
the sum of (a) the then aggregate unpaid principal amount of the Term Loans and
(b) the Revolving Credit Commitments or, if no Loans are then outstanding,
Lenders having at least 51% of the Commitments; provided, however, that if the
Commitments have been terminated, it means Lenders holding at least 51% of the
outstanding Loans.
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrower and its Subsidiaries taken as one
enterprise, (b) the ability of the Borrower to repay the Obligations or of any
Loan Party to perform its obligations under any Loan Document, or (c) the rights
and remedies of the Lenders, the Issuers or the Administrative Agent under the
Loan Documents, taken as a whole.
"Material Adverse Effect" means an effect that results in or causes,
or has a reasonable likelihood of resulting in or causing, a Material Adverse
Change.
"Minority Interest Venture" means any corporation, partnership or
other business entity (a) of which less than 50% (but more than 0%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by the Borrower and/or one or more
Subsidiaries of the Borrower (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency) and (b) which conducts a business
similar to that conducted by the Borrower or any Guarantor.
"Moody's" means Moody's Investor Services, Inc.
"Mortgages" means the mortgages or deeds of trust made or required
herein to be made by the Borrower or any of the Guarantors in form and substance
satisfactory to the Administrative Agent, in its reasonable judgment, as such
Mortgages may be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, and to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make in the six years preceding the date of termination, contributions on behalf
of participants who are or were employed by any of them.
"Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP.
"Net Interest Expense" means, for any Person for any period, gross
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP, less (a) the following for such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP: the sum of (i) interest capitalized during construction for such
period, (ii) interest income for such period, and (iii) gains for such period on
Interest Rate Contracts (to the extent not included in interest income above and
to the extent not deducted in the calculation of such gross interest expense),
plus (b) the following for such Person and its Subsidiaries determined on a
consolidated basis in conformity with GAAP: the sum of (i) losses for such
period on Interest Rate Contracts (to the extent not included in such gross
interest expense), and (ii) the amortization of up-front costs or fees for such
period associated with Interest Rate Contracts (to the extent not included in
gross interest expense).
"Net Worth" of any Person means, at any date, the excess of the Total
Assets of such Person at such date over the Total Liabilities of such Person at
such date.
"Non-Cash Interest Expense" means, for any Person for any period, the
sum of the following amounts to the extent included in Net Interest Expense of
such Person for such period: (a) the amount of amortized debt discount and debt
issuance costs, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Indebtedness, and (c) interest payable in evidences
of Indebtedness or otherwise not payable in cash during such period.
"North American Venture" means any Domestic Subsidiary (other than a
Guarantor, Funding and Pappagallo) and any Subsidiary of the Borrower
incorporated, organized or formed under the laws of Canada or any province of
Canada.
"Notes" means, collectively, the Revolving Credit Notes, the Term Loan
Notes and the Competitive Notes.
"Notice of Borrowing" has the meaning specified in Subsection 2.4(a).
"Notice of Competitive Bid Request" means a notice provided pursuant
to Section 2.21 in substantially the form of Exhibit L.
"Notice of Continuation or Conversion" has the meaning specified in
Subsection 2.9.
"Obligations" means the Loans, the Letter of Credit Obligations, the
Other Obligations, and all other advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Administrative Agent, any
Lender, any Issuer, any Affiliate of any of them or any Indemnitee, of every
type and description, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement or under any other
Loan Document, whether or not for the payment of money, whether arising by
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, any
Interest Rate Contract entered into pursuant to Section 6.13 or in any other
manner, whether direct or indirect (including, without limitation, those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired under this Agreement or any
other Loan Document. The term "Obligations" includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and disbursements and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document and all obligations of the Borrower to cash collateralize Letter of
Credit Obligations or Other Obligations.
"Open Year" has the meaning specified in Subsection 4.3(c).
"Operating Assets" means assets employed by any Loan Party in the
operation of its business (including, without limitation, assets constituting
property, plant or equipment but excluding assets held for investment).
"Other Obligations" means the total exposure of the Borrower to a
Lender or any of its Affiliates, as determined by such Lender or such Affiliate
in accordance with its customary criteria, arising from any and all Interest
Rate Contracts entered into by the Borrower pursuant to Section 6.13 with such
Lender or any of its Affiliates.
"Other Taxes" has the meaning specified in Subsection 2.16(b).
"Pappagallo" means The Shops for Pappagallo, Inc., an Ohio
corporation.
"Passive Institutional Investor" means any broker, dealer, bank,
insurance company, investment company, investment adviser, employee benefit
plan, pension fund or other institutional investor directly or indirectly owning
Stock of the Borrower to the extent such Person acquires such ownership in the
ordinary course of its business and acquires and continues to hold such
ownership not with the purpose nor the effect of changing or directing the
control, management or policies of such Person.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, and which the
Borrower, any of its Subsidiaries or, if a Title IV Plan, any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Investor" means (a) a Passive Institutional Investor, (b)
any group, as determined in accordance with Section 13(d) of the Exchange Act,
consisting solely of Passive Institutional Investors, (c) Jerome Fisher, his
Affiliates, immediate family members and lineal descendants, and (d) Vincent
Camuto, his Affiliates, immediate family members and lineal descendants.
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
"Qualified Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which the Borrower, any of its Subsidiaries or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them, other than a
Multiemployer Plan or plan subject to Section 4063 of ERISA.
"Ratable Portion" or "ratably" means, with respect to any Lender and
any Facility, the quotient obtained by dividing the Commitment in respect of
such Facility of such Lender by the Commitments in respect of such Facility of
all Lenders.
"Rating Agency" means each of Moody's and S&P.
"Receivables Purchase Agreement" means (i) the Receivables Purchase
Agreement dated as of December 28, 1995, between the Borrower and Funding, and
(ii) the Receivables Purchase Agreement dated as of December 28, 1995, between
the Borrower and Nine West Footwear Corporation, as each may be amended,
supplemented or otherwise modified from time to time.
"Receivables Securitization" means the transactions described and
contemplated in the Receivables Purchase Agreement.
"Register" has the meaning specified in Subsection 10.7(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to each Issuer for payment by such Issuer
of any draft drawn under Letters of Credit pursuant to Letter of Credit
Reimbursement Agreements.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration, in
each case of any Hazardous Material, into the indoor or outdoor environment or
into or out of any property owned or operated by such Person, including, without
limitation, the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(c) perform pre-remedial studies and investigations and post-remedial monitoring
and care.
"Reportable Event" means any of the events described in Sections
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state, local and foreign laws, rules and regulations,
and all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, any of the
executive officers of such Person including, without limitation, any Senior Vice
President of such Person.
"Revolving Credit Borrowing" means a Borrowing consisting of Revolving
Credit Loans made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments.
"Revolving Credit Commitment" means, as to each Lender, the commitment
of such Lender to make Revolving Credit Loans to the Borrower pursuant to
Section 2.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on Part I of Schedule I under the
caption "Revolving Credit Commitment," as such amount may be reduced or modified
pursuant to this Agreement, and, in the case of each Swing Bank, "Revolving
Credit Commitment" includes the Swing Commitment of such Swing Bank.
"Revolving Credit Loan" means a Loan made by a Lender to the Borrower
pursuant to Section 2.1.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Revolving Credit Commitment as in effect on the Effective Date, in
substantially the form of Exhibit A-1, evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from the Revolving Credit Loans made by
such Lender.
"S&P" means Standard & Poors Ratings Group.
"Secured Parties" means the Lenders, the Issuers and the
Administrative Agent.
"Securitization Documents" means each agreement, document and
instrument entered into by the Borrower, a Guarantor or Funding in connection
with the Receivables Securitization, including without limitation, the
Receivables Purchase Agreement, the promissory note(s) of Funding in favor of
the Borrower made in connection therewith and the promissory note(s) of the
Borrower in favor of Funding made in connection therewith.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including, without limitation, contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities of any Person at any time, such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means a Letter of Credit other than a
Documentary Letter of Credit.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of 50% or more of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency); provided, however, that this
definition does not include the receivables master trust established by Funding
in connection with the Receivables Securitization.
"Subsidiary Security Agreement" means an agreement, in substantially
the form of Exhibit G-2, executed by each of the Guarantors, as such agreement
may be amended, supplemented or otherwise modified from time to time.
"Swing Bank" means each Lender whose name is set forth on Part II of
Schedule I or such other Lender which agrees to act as a Swing Bank hereunder.
"Swing Commitment" means, as to each Swing Bank, the commitment of
such Swing Bank to make Swing Loans to the Borrower pursuant to Section 2.20 in
the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Swing Bank's name on Part II of Schedule I under the caption
"Swing Commitment," as such amount may be reduced or modified pursuant to this
Agreement.
"Swing Loan" means a Loan made by the Swing Bank to the Borrower
pursuant to Section 2.20.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Tax Affiliate" means, as to any Person, (a) any Subsidiary of such
Person, and (b) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.
"Tax Returns" has the meaning specified in Section 4.3.
"Taxes" has the meaning specified in Subsection 2.16(a).
"Term Loan" means a Loan made to the Borrower referred to in Section
2.2.
"Term Loan Note" means a promissory note of the Borrower payable to
the order of any Lender in a principal amount equal to the amount of such
Lender's Term Loan as in effect on the Effective Date, in substantially the form
of Exhibit A-2, evidencing the Indebtedness of the Borrower to such Lender
resulting from the Term Loan made by such Lender.
"Termination Date" means the earliest of (a) November 1, 2001 and (b)
the date of termination in whole of the Commitments pursuant to Section 2.6 or
8.2.
"Texas Boot" means Nine West Boot Corporation.
"Title IV Plan" means a Pension Plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP.
"Total Liabilities" of any Person means, at any date, all obligations
which in conformity with GAAP would be included in determining total liabilities
as shown on the liabilities side of a consolidated balance sheet of such Person
and its Subsidiaries at such date, and in any event includes, without
limitation, all Indebtedness of such Person or any of its Subsidiaries at such
date whether or not the same would be so shown.
"Unfunded Pension Liability" means, as to the Borrower at any time,
the aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan of the Borrower, any of
its Subsidiaries or any ERISA Affiliate exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (b) for a period of five years following a transaction reasonably
likely to be covered by Section 4069 of ERISA, the liabilities (whether or not
accrued) that could be avoided by the Borrower, any of its Subsidiaries or any
ERISA Affiliate as a result of such transaction.
"USSC" means The United States Shoe Corporation, an Ohio corporation.
"USSC Warrants" means the warrants to purchase the Borrower's Stock
issued by the Borrower to USSC pursuant to the Asset Purchase Agreement.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person of which 100% (other than director's qualifying
shares) of the outstanding Stock having ordinary voting power to elect all of
the directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, as to the Borrower at any time, the
aggregate amount of the liabilities of the Borrower, any of its Subsidiaries or
any ERISA Affiliate pursuant to Section 4201 of ERISA, and any increase in
contributions required to be made pursuant to Section 4243 of ERISA, with
respect to all Multiemployer Plans.
"Working Capital" means, for any Person at any date, the amount by
which the Current Assets of such Person at such date exceeds the Current
Liabilities of such Person at such date.
1.2 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."
1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4 Certain Terms. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole, and not to any
particular Article, Section, Subsection or clause in this Agreement. References
herein to an Exhibit, Schedule, Article, Section, Subsection or clause refer to
the appropriate Exhibit or Schedule to, or Article, Section, Subsection or
clause in this Agreement.
(b) The terms "Lender," "Issuer," and "Administrative Agent"
include their respective successors and the terms "Lender" and "Issuer" include
each assignee of such Lender or Issuer who becomes a party hereto pursuant to
Section 10.7.
(c) Upon the appointment of any successor Administrative Agent
pursuant to Section 9.6, references to Citibank in Section 9.3 and in the
definitions of Eurodollar Rate shall be deemed to refer to the successor then
acting as the Administrative Agent.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1 The Revolving Credit Loans. (a) On the terms and subject to the
conditions contained in this Agreement, on the Effective Date each Lender
severally agrees to make a loan (each a "Revolving Credit Loan") to the Borrower
in an aggregate amount sufficient to repay the principal amount of all Revolving
Credit Loans outstanding on the Effective Date less $50,000,000; provided,
however, to the extent that any Lender has Revolving Credit Loans outstanding
under the Existing Credit Agreement ("Existing Revolving Credit Loans") and is
making a Revolving Credit Loan on the Effective Date, such Existing Revolving
Credit Loans shall be deemed a Revolving Credit Loan made on the Effective Date.
(b) On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make from and after the Effective
Date Revolving Credit Loans to the Borrower from time to time on any Business
Day during the period from the date hereof until the Business Day preceding the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Revolving Credit Commitment; provided, however, that at no time
shall any Lender be obligated to make a Revolving Credit Loan in excess of such
Lender's Ratable Portion of the Available Credit. In no event shall any Swing
Bank be obligated to make any Revolving Credit Loan or Swing Loan if the sum of
outstanding Revolving Credit Loans and Swing Loans made or to be made by such
Swing Bank would exceed its Revolving Credit Commitment.
(c) Within the limits of each Lender's Revolving Credit Commitment,
amounts prepaid pursuant to Section 2.8 (other than pursuant to Section 2.8(d))
may be reborrowed under this Section 2.1. The Revolving Credit Loans of each
Lender shall be evidenced by the Revolving Credit Note to the order of such
Lender.
2.2 The Term Loans. On the terms and subject to the conditions
contained in this Agreement, on the Effective Date, each Lender severally agrees
to make a Loan (each a "Term Loan") to the Borrower in an aggregate amount
sufficient to repay the principal amount of all Term Loans plus $50,000,000 of
Revolving Credit Loans outstanding on the Effective Date; provided, however, to
the extent that any Lender which has a Term Loan outstanding under the Existing
Credit Agreement (an "Existing Term Loan"), such Existing Term Loan shall be
deemed a Term Loan made under this Agreement. Amounts of the Term Loans prepaid
pursuant to Section 2.8 may not be reborrowed. The Term Loan of each Lender
shall be evidenced by the Term Note to the order of such Lender.
2.3 The Letters of Credit. All Letter of Credit Undrawn Amounts
outstanding on the Effective Date with respect to Letters of Credit issued by an
Issuer shall become on the Effective Date Letter of Credit Undrawn Amounts
outstanding hereunder owed to such Issuer.
2.4 Making the Loans. Each Revolving Credit Borrowing shall be made
on notice, given by the Borrower to the Administrative Agent not later than
12:00 P.M. (New York City time) on the Business Day of the proposed Revolving
Credit Borrowing, in the case of Revolving Credit Loans that are to be made as
Base Rate Loans, and on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing, in the case of Revolving Credit Loans that are to be
made as Eurodollar Rate Loans. Each such notice (a "Notice of Borrowing") shall
be in substantially the form of Exhibit B, specifying therein (i) the date of
such proposed Revolving Credit Borrowing, (ii) the aggregate amount of such
proposed Revolving Credit Borrowing, (iii) the amount thereof, if any, requested
to be Eurodollar Rate Loans, and (iv) the initial Interest Period or Periods for
any such Eurodollar Rate Loans. The Revolving Credit Loans shall be made as
Base Rate Loans unless (subject to Section 2.13) the Notice of Borrowing
specifies that all or a pro rata portion thereof shall be Eurodollar Rate Loans;
provided, however, that the aggregate of the Eurodollar Rate Loans for each
Interest Period must be in an amount of not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate under Subsection 2.10(b). Each Lender shall, before
12:00 Noon (New York City time) on the date of the proposed Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 10.2, in immediately available
funds, such Lender's Ratable Portion of such proposed Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(c) Each Revolving Credit Borrowing shall be in an aggregate
amount of not less than $1,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(d) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower. In the case of any proposed Borrowing which the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such proposed Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any Eurodollar Rate Loan to be made by such Lender as part
of such proposed Borrowing when such Eurodollar Rate Loan, as a result of such
failure, is not made on such date, assuming for such purpose that such Lender
will fund such Eurodollar Rate Loan in the London interbank eurodollar market
with a loan of the same amount and Interest Period as such Eurodollar Rate Loan.
(e) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any proposed Borrowing that such Lender will
not make available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing, the Administrative Agent may assume that such Lender has made
such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.4 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 Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender 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 repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have to the Borrower hereunder.
(f) The failure of any Lender to make the Loan to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(g) Each Swing Loan Borrowing shall be made upon such notice as
the Swing Bank and the Borrower shall agree and shall bear interest at a rate to
be agreed between the Swing Bank and the Borrower.
(h) Each Competitive Borrowing shall be made, in the case of a
Eurodollar Competitive Borrowing, three Business Days following the
Administrative Agent's receipt of the Borrower's decision to accept a
Competitive Bid and, in the case of a Fixed Rate Borrowing, the same Business
Day as the Administrative Agent's receipt of the Borrower's decision to accept a
Competitive Bid, all in accordance with the provisions of Section 2.21(d).
(i) In connection with the Competitive Loans, the Administrative
Agent shall give prompt notice to the Lender or Lenders whose Competitive Bid
was accepted of such acceptance. Each Lender whose Competitive Bid was accepted
shall, before 12:00 P.M. (New York City time) on the date of the proposed
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at its address referred to in Section 10.2, in
immediately available funds, the amount committed by such Lender in its
Competitive Bid(s) (a Lender's "Competitive Loan Obligation"). After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(j) Each Notice of Borrowing or Accepted Competitive Bid shall
be irrevocable and binding on the Borrower. In the case of any proposed
Borrowing which the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Loans and in the case of the Competitive Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing or Accepted Competitive Bid for such proposed Borrowing
or Loan the applicable conditions set forth in Article III, including, without
limitation, any loss (including, without limitation, loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Loan to be made
by such Lender as part of such proposed Borrowing when such Loan, as a result of
such failure, is not made on such date.
2.5 Fees. (a) The Borrower agrees to pay to each Lender a facility
fee (the "Facility Fee") on the sum of such Lender's Commitment and the Term
Loan made by such Lender from the date hereof until the Termination Date at the
rates, and payable at the times, specified on Schedule III.
(b) The Borrower has agreed to pay to the Administrative Agent an
administrative agency fee, the amount and dates of payment of which are embodied
in a separate agreement, dated March 15, 1995, between the Borrower and Citibank
(the "Administrative Agency Fee Letter").
(c) The Borrower has agreed to pay to the Administrative Agent for
the account of each Lender for whom the sum of such Lender's Revolving Credit
Commitment and Term Loan committed by such Lender (its "New Commitment") exceeds
the sum of such Lender's Commitment and the Term Loan made by such Lender under
the Existing Credit Agreement immediately prior to the Effective Date (its
"Existing Commitment"), an up-front fee calculated at the following rates:
(a) For each Lender whose New Commitment is $25,000,000 to
$39,999,999: 0.05% on the amount by which the sum of Commitment allocated to
such Lender and the Term Loan made by such Lender on the Effective Date exceeds
its Existing Commitment.
(b) For each Lender whose New Commitment is $40,000,000 or more:
0.10% on the amount by which the sum of Commitment allocated to such Lender and
the Term Loan made by such Lender on the Effective Date exceeds its Existing
Commitment.
Up-front Fees are payable on or before the Effective Date.
2.6 Amendment, Reduction and Termination of the Commitments. (a) On
the Effective Date, the "Revolving Credit Commitments" outstanding under the
Existing Credit Agreement shall be amended as set forth under the heading
"Revolving Credit Commitments" in Part I of Schedule I.
(b) The Borrower may, upon at least three Business Days' prior notice
to the Administrative Agent, terminate in whole or reduce ratably in part the
unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in the aggregate amount
of not less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof. The then current Revolving Credit Commitments shall be reduced on each
date on which a prepayment of Revolving Credit Loans is made pursuant to Section
2.8(d) in the amount of such prepayment and the Revolving Credit Commitment of
each Lender shall be reduced by its Ratable Portion of such amount.
2.7 Repayment. (a) The Borrower shall repay the entire unpaid
principal amount of the Revolving Credit Loans on the Termination Date.
(b) The Borrower shall repay the Term Loans at the dates and in the
amounts set forth below:
On the First Business Day
to Occur On or After: Amount
--------------------- ------
October 1, 1996 $11,000,000
January 1, 1997 $ 2,000,000
April 1, 1997 $ 5,000,000
July 1, 1997 $ 5,000,000
October 1, 1997 $18,000,000
January 1, 1998 $ 5,000,000
April 1, 1998 $10,000,000
July 1, 1998 $ 5,000,000
October 1, 1998 $30,000,000
January 1, 1999 $10,000,000
April 1, 1999 $20,000,000
July 1, 1999 $10,000,000
October 1, 1999 $35,000,000
January 1, 2000 $10,000,000
April 1, 2000 $20,000,000
July 1, 2000 $10,000,000
October 1, 2000 $35,000,000
January 1, 2001 $10,000,000
April 1, 2001 $30,000,000
July 1, 2001 $10,000,000
October 1, 2001 $44,000,000
provided, however, that the Borrower shall repay the entire unpaid principal
amount of the Term Loans on the Termination Date.
(c) The Borrower shall repay the entire unpaid principal amount
of each Competitive Loan on the last day of the Interest Period applicable to
such Loan and on the Termination Date.
(d) The Borrower shall repay the entire unpaid principal amount
of the Swing Loans on the Termination Date to the extent not theretofore repaid
pursuant to Section 2.20.
2.8 Prepayments. (a) The Borrower shall have no right to prepay the
principal amount of any Loan other than as provided in this Section 2.8.
(b) The Borrower may (i) upon at least three Business Days'
prior notice to the Administrative Agent, in the case of Eurodollar Rate Loans
and (ii) on or after the date of written notice to the Administrative Agent, in
the case of Base Rate Loans, stating in such notice the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Swing Loans or Revolving Credit Loans, as the case may be, in
whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that each partial
prepayment of Revolving Credit Loans shall be in an aggregate principal amount
not less than $1,000,000 or integral multiples of $1,000,000 in excess thereof.
Upon the giving of such notice of prepayment, the principal amount of the Swing
Loans or Revolving Credit Loans, as the case may be, specified to be prepaid
shall become due and payable on the date specified for such prepayment.
(c) The Borrower may (i) upon at least three Business Days'
prior notice to the Administrative Agent, in the case of Eurodollar Rate Loans
and (ii) on or after the date of written notice to the Administrative Agent, in
the case of Base Rate Loans, stating in such notice the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Term Loans, in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (i) each partial prepayment shall be in an aggregate
amount not less than $1,000,000 or integral multiples of $1,000,000 in excess
thereof and (ii) any such partial prepayment shall be applied to the remaining
installments of such outstanding principal amount of the Term Loans in the
direct order of their maturities. Upon the giving of such notice of prepayment,
the principal amount of the Term Loans specified to be prepaid shall become due
and payable on the date specified for such prepayment.
(d) The Borrower shall prepay the Term Loans and, if there are
no Term Loans outstanding, the Revolving Credit Loans, within three Business
Days after the receipt by the Borrower or any Guarantor of any Asset Sale
Proceeds, Equity Issuance Proceeds or Debt Issuance Proceeds in the following
amounts: (i) in the case of Asset Sale Proceeds, an amount equal to such Asset
Sale Proceeds, provided, however, that no prepayment by reason of the Borrower's
or any Guarantor's receipt of Asset Sale Proceeds shall be required unless and
until the aggregate amount of all such Asset Sale Proceeds received by the
Borrower and the Guarantors since the Effective Date or, if thereafter, the last
date of a prepayment pursuant to this Subsection 2.8(d) by reason of the
Borrower's or any Guarantor's receipt of Asset Sale Proceeds, equals or exceeds
$20,000,000; (ii) in the case of Equity Issuance Proceeds, an amount equal to
50% of such Equity Issuance Proceeds, provided, however, that no prepayment by
reason of the Borrower's or any Guarantor's receipt of Equity Issuance Proceeds
shall be required if, upon receipt of such proceeds, the Borrower's long-term
senior unsecured indebtedness is rated Investment Grade or the Borrower's
Maximum Leverage Ratio is less than 1.75:1.00; and (iii) in the case of Debt
Issuance Proceeds, an amount equal to such Debt Issuance Proceeds. All
prepayments shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid. Any partial prepayment of the Term
Loans shall be applied to the remaining installments of the outstanding
principal amount of the Term Loans as follows: (i) Asset Sale Proceeds arising
from the sale of certain properties in Cincinnati owned by Community Urban
Redevelopment of Duck Creek, Inc. and the sale by the Borrower of Texas Boot,
shall be applied in direct order of the maturities of such installments; and
(ii) all other Asset Sale Proceeds, Equity Issuance Proceeds and Debt Issuance
Proceeds shall be applied 50% in the direct order and 50% in the inverse order
of the maturities of such installments.
(e) The Borrower shall, within three Business Days after its
receipt of any reversion from a Pension Plan, prepay the Term Loans in an amount
equal to the amount of such reversion so received, together with accrued
interest to the date of such prepayment on the amount prepaid. Any partial
prepayment of the Term Loans shall be applied to the remaining installments of
the outstanding principal amount of the Term Loans in the inverse order of their
maturities. For purposes of this subsection (g), reversion is defined as the
amount of surplus assets which, upon the termination of any Pension Plan, revert
to the Borrower or any of its Subsidiaries (net of (i) any taxes, after taking
into account any available tax credits or deductions, and excise taxes or
penalties thereon, and (ii) any amount thereof that, substantially
contemporaneously with such termination, are contributed by the Borrower to
another Pension Plan).
(f) If at any time the sum of (i) aggregate principal amount of
Swing Loans, Competitive Loans and Revolving Credit Loans outstanding at such
time plus, in the case of clause (A) hereof only, (ii) the sum of (x) the Letter
of Credit Undrawn Amounts at such time plus (y) the Reimbursement Obligations at
such time, exceeds (A) the Revolving Credit Commitments at any such time other
than during a Clean-Up Period or (B) $75,000,000 at any time during any Clean-Up
Period, the Borrower shall prepay within one Business Day thereof the Swing
Loans then outstanding in an amount equal to such excess, together with accrued
interest and, if there are no Swing Loans outstanding or if such prepayment of
the Swing Loans does not eliminate such excess, the Revolving Credit Loans
and/or the Reimbursement Obligations then outstanding in an amount equal to the
uneliminated portion of such excess, together with accrued interest on the
principal prepaid. If there are no Swing Loans, Revolving Credit Loans or
Reimbursement Obligations then outstanding or if such prepayment of Revolving
Credit Loans or Reimbursement Obligations does not eliminate such excess, the
Borrower shall fund the L/C Cash Collateral Account to cash collateralize
outstanding Letter of Credit Undrawn Amounts in an amount equal to the
uneliminated portion of such excess.
2.9 Conversion/Continuation Option. The Borrower may elect (a) at
any time to convert Base Rate Loans or any portion thereof to Eurodollar Rate
Loans, or (b) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to continue
such Eurodollar Rate Loans or any portion thereof for an additional Interest
Period; provided, however, that the aggregate of the Eurodollar Loans for each
Interest Period must be in the amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof. Each conversion or continuation shall be
allocated among the Lenders in accordance with their respective Ratable
Portions. Each such election shall be in substantially the form of Exhibit C
hereto (a "Notice of Conversion or Continuation") and shall be made by giving
the Administrative Agent at least (x) three Business Days' prior written notice
thereof, in the case of the conversion of Base Rate Loans into Eurodollar Rate
Loans or the continuation of Eurodollar Rate Loans, and (y) one Business Day's
prior written notice thereof, in the case of the conversion of Eurodollar Rate
Loans into Base Rate Loans, in each case specifying (i) the amount and type of
Loan being converted or continued, (ii) in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the Interest Period therefor, and (iii)
in the case of a conversion, the date of conversion (which date shall be a
Business Day and, if a conversion from Eurodollar Rate Loans, shall also be the
last day of the Interest Period therefor). The Administrative Agent shall
promptly notify each Lender of its receipt of a Notice of Conversion or
Continuation and of the contents thereof. Notwithstanding the foregoing, (x) no
conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and
no continuation in whole or in part of Eurodollar Rate Loans upon the expiration
of any Interest Period therefor, shall be permitted at any time at which an
Event of Default shall have occurred and be continuing, and (y) any such
conversion during the continuance of a Default shall not be permitted in respect
of Eurodollar Rate Loans having an Interest Period longer than one month. If,
within the time period required under the terms of this Section 2.9, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period, then, upon the expiration of the
Interest Period therefor, such Loans will be automatically converted to Base
Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable. No
conversion of any Swing Loan to a Eurodollar Rate Loan may be made.
2.10 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(a) For Base Rate Loans, at a rate per annum equal at all times
to the Base Rate in effect from time to time plus the Applicable Base Rate
Margin, payable in arrears quarterly on the first day of each January, April,
July and October, on the Termination Date and on the date any Base Rate Loan is
converted or paid in full (but only on the Base Rate Loan so converted or paid
in full); provided, however, that during the continuance of an Event of Default,
all Base Rate Loans shall bear interest, payable on demand, at a rate per annum
equal at all times to 2.00% per annum above the Base Rate in effect from time to
time plus the Applicable Base Rate Margin.
(b) For Eurodollar Rate Loans other than Competitive Loans, at a
rate per annum equal at all times during the applicable Interest Period for each
such Eurodollar Rate Loan to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Eurodollar Rate Margin in effect on the first day of
such Interest Period, payable in arrears on the last day of such Interest
Period, on the Termination Date and, if such Interest Period has a duration of
more than three months, on each day during such Interest Period which occurs
every three months from the first day of such Interest Period; provided,
however, that during the continuance of an Event of Default, all Eurodollar Rate
Loans shall bear interest, payable on demand, at a rate per annum equal at all
times to 2.00% above the Eurodollar Rate in effect from time to time plus the
Applicable Eurodollar Rate Margin.
(c)(i) For Eurodollar Rate Loans that are Competitive Loans, at
a rate per annum equal at all times during the applicable Interest Period for
each such Eurodollar Rate Loan to the sum of the Eurodollar Rate for such
Interest Period plus or minus the Eurodollar Competitive Borrowing Margin for
such Competitive Loan and (ii) for Fixed Rate Loans, at a rate per annum
(computed based on a year of 365 or 366 days, as the case may be) equal at all
times to the fixed rate of interest offered by the Lender making such Loan and
accepted by the Borrower pursuant to Section 2.21; provided, however that
interest on each Competitive Loan shall be payable on the last day of the
applicable Interest Period, on the Termination Date and if such Interest Period
has a duration of more than three months, on each day during such Interest
Period which occurs every three months from the first day of such Interest
Period.
2.11 Interest Rate Determination and Protection.
(a) The Eurodollar Rate for each Interest Period for Eurodollar
Rate Loans shall be determined by the Administrative Agent two Business Days
before the first day of such Interest Period.
(b) If, with respect to Eurodollar Rate Loans, the Majority
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period therefor will not adequately reflect the cost to such Majority
Lenders of making such Loans or funding or maintaining their respective
Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon:
(i) each Eurodollar Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Loan; and
(ii) the obligations of the Lenders to make Eurodollar Rate
Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Administrative Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no longer
exist.
2.12 Increased Costs. If, due to either (a) the introduction of or
any change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (b) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error. If the Borrower so notifies the Administrative
Agent within five Business Days after any Lender notifies the Borrower of any
increased cost pursuant to the foregoing provisions of this Section 2.12, the
Borrower may, at its election, either (A) prepay in full all Eurodollar Rate
Loans of such Lender then outstanding in accordance with Subsection 2.8(b) and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.12 or (B) convert all Eurodollar Rate Loans of all Lenders then
outstanding into Base Rate Loans in accordance with Section 2.9 and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.12.
2.13 Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Administrative Agent, (a) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (b) the
Borrower shall, at its election, either prepay in full all Eurodollar Rate Loans
of such Lender then outstanding, together with interest accrued thereon or
convert such Eurodollar Rate Loans to Base Rate Loans; provided, however, that
if the Borrower does not make such election within five Business Days of such
notice, all such Eurodollar Rate Loans shall automatically convert into Base
Rate Loans as of such fifth Business Day unless an earlier date for such
conversion is required by law.
2.14 Capital Adequacy. If (a) the introduction of or any change in
or in the interpretation of any law or regulation, (b) compliance with any law
or regulation, or (c) compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any corporation controlling any Lender and such
Lender reasonably determines that such amount is based upon the existence of
such Lender's Commitments and Loans and its other commitments and loans of this
type, then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
Commitments and Loans. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
2.15 Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due, in Dollars, to the Administrative Agent at its
address referred to in Section 10.2 in immediately available funds without set-
off or counterclaim. The Administrative Agent will promptly thereafter cause to
be distributed immediately available funds relating to the payment of principal
or interest or fees in respect of a Facility to the Lenders, in accordance with
their respective Ratable Portions, for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement; provided, however, that following the Termination Date all such
amounts shall be applied to the Obligations pro rata in accordance with the
amounts owed to the Lenders and the Administrative Agent and that amounts
payable pursuant to Sections 2.12, 2.14 and 2.16 shall be paid only to the
affected Lender or Lenders. Payment received by the Administrative Agent after
11:00 A.M. (New York City time) shall be deemed to be received on the next
Business Day.
(b) All computations of interest in connection with Fixed Rate
Borrowings shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Base Rate, the Eurodollar Rate and the Federal Funds Rate and of fees
hereunder shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest and
fees are payable. Each determination by the Administrative Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fee, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due hereunder to the
Lenders 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 Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal Funds
Rate.
(e) With respect to the Competitive Loans, each payment of
principal of any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Competitive Borrowing in accordance with the
respective principal amounts of their outstanding Loans comprising such
Competitive Borrowing. Each payment of interest on any Competitive Borrowing
shall be allocated pro rata among the Lenders participating in such Competitive
Borrowing in accordance with the respective amounts of accrued and unpaid
interest on their outstanding Competitive Loans comprising such Competitive
Borrowing.
2.16 Taxes. (a) Any and all payments by the Borrower under each
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in the
case of each Lender, each Issuer and the Administrative Agent, taxes measured by
its net income, and franchise taxes imposed on it, by any jurisdiction (or any
political subdivision thereof) under the laws of which such Person is organized
or qualified to do business, (ii) in the case of any Lender, taxes measured by
its net income, and franchise taxes imposed on it, by the jurisdiction (or any
political subdivision thereof) in which is located such Lender's Applicable
Lending Office, (iii) in the case of each Lender, each Issuer and the
Administrative Agent either organized under the laws of a jurisdiction in the
United States or engaged in a trade or business within the United States or, if
a tax treaty is applicable to such Person on the Effective Date (or the date of
an Assignment and Acceptance), engaged in a trade or business within the United
States through a permanent establishment, United States federal income taxes on
its net income, and (iv) in the case of each Lender organized under the laws of
a jurisdiction outside the United States, United States federal withholding tax
payable with respect to payments by the Borrower which would not have been
imposed had such Lender, to the extent required under Section 2.16(f), delivered
to the Borrower and the Administrative Agent the forms prescribed thereunder
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Administrative Agent (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including, without limitation, deductions applicable to additional
sums payable under this Section 2.16) such Lender or the Administrative Agent
(as the case may be) 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 taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxing or other authority.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document (collectively, "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.16) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including, without
limitation, for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 10.2, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.16 shall survive the payment in full of the Obligations.
(f) Prior to the Effective Date in the case of each initial
Lender, and prior to the date of the Assignment and Acceptance pursuant to which
it becomes a Lender in the case of each other Lender, and from time to time
thereafter if either required by law or reasonably requested by the Borrower or
the Administrative Agent (unless such Lender is unable to do so by reason of a
change in law (including, without limitation, any statute, treaty, ruling,
determination or regulation) occurring subsequent to the Effective Date or date
of Assignment and Acceptance, as the case may be), each Lender organized under
the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with two valid, accurate and complete
original signed copies of IRS Form 4224 or Form 1001 or other applicable form,
certificate or document prescribed by the IRS certifying as to such Lender's
entitlement to full exemption from United States withholding tax with respect to
all payments to be made to such Lender under this Agreement. Unless the
Borrower and the Administrative Agent have received forms or other documents
indicating that payments hereunder or under any Note are not subject to United
States withholding tax, the Borrower or the Administrative Agent shall, in the
case of payments to or for any Lender organized under the laws of a jurisdiction
outside the United States, withhold taxes from such payments at the applicable
statutory rate, or at a rate reduced by an applicable tax treaty (provided that
the Borrower or the Administrative Agent, as the case may be, has received forms
or other documents indicating that such reduced rate applies).
2.17 Sharing of Payments, Etc. (a) If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise but other than pursuant to Section 2.12, 2.14 or 2.16) on
account of Loans made by it and there is any Reimbursement Obligation
outstanding in respect of which the relevant Issuer has not received payment in
full from the Lenders pursuant to Subsection 2.18(h), such Lender (a "Purchasing
Lender") shall purchase a participation in all such Reimbursement Obligations in
an amount equal to the lesser of such payment and the amount of such
Reimbursement Obligations for which such Issuer has not so received payment in
full. If, after giving effect to the foregoing, any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise but other than pursuant to Section 2.12, 2.14 or 2.16) on
account of the Loans made by it in excess of its Ratable Portion of payments
obtained by all the Lenders on account of the Loans made by the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
their Loans as shall be necessary to cause such Purchasing Lender to share the
excess payment ratably with each of them.
(b) If all or any portion of any payment received by a
Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each selling Lender described in paragraph (a) above (a "Selling
Lender") shall be rescinded and such Selling Lender shall repay to the
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to (ii)
the total amount so recovered from the Purchasing Lender) of any interest or
other amount paid or payable by the Purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Purchasing Lender purchasing
a participation from another Selling Lender pursuant to this Section 2.17 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including, without limitation, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
2.18 Letter of Credit Facility. (a) On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to issue one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the date hereof and ending
seven calendar days prior to the Termination Date; provided, however, that no
Issuer shall be under any obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain such Issuer from
issuing such Letter of Credit or any Requirement of Law applicable to such
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
Issuer with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuer is not otherwise compensated) not in
effect on the date hereof or result in any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuer as of the date
hereof and which such Issuer in good faith deems material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the requested
date of issuance of such Letter of Credit, that one or more of the applicable
conditions contained in Article III is not then satisfied;
(iii) after giving effect to the issuance of such Letter of
Credit, the aggregate Letter of Credit Obligations, outstanding Swing Loans,
outstanding Competitive Loans and the outstanding Revolving Credit Loans would
exceed the Commitments;
(iv) after giving effect to the issuance of such Letter of
Credit, the sum of (A) the Letter of Credit Undrawn Amounts at such time and (B)
the Reimbursement Obligations at such time exceeds $100,000,000;
(v) after giving effect to the issuance of such Letter of
Credit, the sum of the Letter of Credit Undrawn Amounts and the Reimbursement
Obligations in respect of Letters of Credit denominated in a currency other than
United States Dollars exceeds $50,000,000; or
(vi) fees due in connection with a requested issuance have not
been paid.
None of the Lenders (other than the Issuers) shall have any obligation to issue
any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit be
(other than as a result of an extension thereof approved by the Issuer) more
than one year after the date of issuance thereof, nor shall the expiration date
of any Letter of Credit fall after seven calendar days preceding the Termination
Date unless on the date of issuance thereof, the Borrower shall have cash
collateralized such Letter of Credit to the reasonable satisfaction of the
Administrative Agent and the relevant Issuer. In no event shall any Letter of
Credit denominated in a currency other than United States Dollars be issued
unless the Borrower enters into prior to or simultaneously with the issuance
thereof one or more foreign currency futures, forward contracts or other similar
arrangements designed to provide protection against fluctuations in foreign
currency exchange rates, on a notional amount equal to at least 70% of the face
amount of such Letter of Credit, on terms and with counterparties reasonably
satisfactory to the Administrative Agent.
(c) Prior to the issuance of each Letter of Credit, and as a
condition of such issuance and of the participation of each Lender (other than
the Issuer of such Letters of Credit) in the Letter of Credit Obligations
arising with respect thereto, the Borrower shall have delivered to such Issuer a
letter of credit reimbursement agreement, in substantially the form of Exhibit D
(a "Letter of Credit Reimbursement Agreement"), signed by the Borrower, and such
other documents or items as may be required pursuant to the terms thereof. In
the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
govern.
(d) In connection with the issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice (a "Letter of Credit Request"), in
substantially the form of Exhibit E (or in such other written or electronic form
as is acceptable to the Issuer), of the requested issuance of such Letter of
Credit. Such notice shall be irrevocable and shall specify the Issuer of such
Letter of Credit, the stated amount of the Letter of Credit requested, which
stated amount shall not be less than $5,000, the date of issuance of such
requested Letter of Credit (which day shall be a Business Day), the date on
which such Letter of Credit is to expire (which date shall be a Business Day),
and the Person for whose benefit the requested Letter of Credit is to be issued.
Such notice, to be effective, must be received by the relevant Issuer and the
Administrative Agent not later than 11:00 A.M. (New York City time) on the last
Business Day on which notice can be given under the immediately preceding
sentence.
(e) Subject to the terms and conditions of this Section 2.18 and
provided that the applicable conditions set forth in Article III are satisfied,
the relevant Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Borrower in accordance with such Issuer's usual and customary
business practices. On the date of the proposed issuance of the Letter of
Credit, the Administrative Agent shall confirm to the relevant Issuer that the
applicable conditions in Article III are satisfied.
(f) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion of the Revolving Credit
Commitments, in such Letter of Credit and the obligations of the Borrower with
respect thereto (including, without limitation, all Letter of Credit Obligations
with respect thereto) and any security therefor and guaranty pertaining thereto.
(g) In determining whether to pay under any Letter of Credit, the
relevant Issuer shall not have any obligation relative to the Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the relevant Issuer under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuer under any resulting liability to
any Lender.
(h) In the event that any Issuer makes any payment under any Letter
of Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to Subsection 2.18(l), such Issuer shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of such Issuer the amount of such Lender's Ratable Portion
of such payment in Dollars and in immediately available funds. If the
Administrative Agent so notifies such Lender prior to 11:00 A.M. (New York City
time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. If
and to the extent such Lender shall not have so made such Lender's Ratable
Portion of the amount of such payment available to the Administrative Agent for
the account of such Issuer, such Lender agrees to pay to the Administrative
Agent for the account of such Issuer forthwith on demand such amount together
with interest thereon, for each day from such date until the date such amount is
repaid to the Administrative Agent for the account of such Issuer, at the
Federal Funds Rate. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
(i) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Administrative Agent has received for the account of
such Issuer any payment from a Lender pursuant to Section 2.17 or Subsection
2.18(h), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's pro rata share of such payment based on
the respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
(j) Upon the request of any Lender, the Issuer of any Letter of
Credit shall furnish to such Lender copies of any Letter of Credit Reimbursement
Agreement to which such Issuer is a party and such other documentation as may
reasonably be requested by such Lender.
(k) The obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances (except as expressly provided in Subsection
2.18(g)), including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Collateral Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, any Issuer, any Lender
or any other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transaction
(including, without limitation, any underlying transaction between the Borrower
and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Collateral
Documents; or
(v) the occurrence of any Default or Event of Default.
(l) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit no later than the time specified in the applicable Letter of
Credit Reimbursement Agreement, irrespective of any claim, set-off, defense or
other right which the Borrower may have at any time against such Issuer or any
other Person. If the Borrower does not pay (either from the proceeds of a
Borrowing or otherwise) any such Reimbursement Obligation when due, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from the date on which such Reimbursement Obligation arose to the date
of repayment in full of such loan, at the rate of interest applicable to past
due Revolving Credit Loans bearing interest at a rate based on the Base Rate
during such period. If any payment made by or on behalf of the Borrower and
received by such Issuer with respect to any Letter of Credit is rescinded or
must otherwise be returned by such Issuer for any reason and if such Issuer has
made payment to the Administrative Agent on account thereof pursuant to
Subsection 2.18(i), each Lender shall, upon notice by such Issuer, forthwith pay
over to such Issuer an amount equal to such Lender's pro rata share of the
amount which must be so returned by such Issuer based on the respective amounts
paid in respect thereof to the Lenders pursuant to Subsection 2.18(i).
(m) The Borrower agrees to pay the following amounts with respect to
Letters of Credit issued for its account:
(i) to the Administrative Agent for the account of the Issuer of
any Standby Letter of Credit, with respect to each Standby Letter of Credit
issued by such Issuer, an issuance fee equal to 0.125% per annum (or such lesser
percentage per annum as may be agreed to between the Borrower and such Issuer)
of the maximum amount available from time to time to be drawn under such Standby
Letter of Credit, payable quarterly in arrears on the first day of each Fiscal
Quarter and on the termination of such Standby Letter of Credit, and calculated
on the basis of a 360-day year and the actual number of days elapsed;
(ii) to the Administrative Agent for the account of the Issuer
of any Documentary Letter of Credit, with respect to each Documentary Letter of
Credit issued by such Issuer, an issuance fee equal to 0.10% per annum (or such
lesser percentage per annum as may be agreed to between the Borrower and such
Issuer) of the maximum amount available from time to time to be drawn under such
Documentary Letter of Credit, payable quarterly in arrears on the first day of
each Fiscal Quarter and on the termination of such Documentary Letter of Credit,
and calculated on the basis of a 360-day year and the actual number of days
elapsed;
(iii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Standby Letter of Credit, a fee equal to a
percentage, calculated as set forth on Schedule III, of the maximum amount
available from time to time to be drawn under such Standby Letter of Credit,
payable quarterly in arrears on the first day of each Fiscal Quarter and on the
termination of such Standby Letter of Credit, and calculated on the basis of a
360-day year and the actual number of days elapsed; provided that during the
continuance of an Event of Default, such fee shall be increased by 2.00% per
annum and shall be payable on demand;
(iv) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Documentary Letter of Credit, a fee equal to a
percentage, calculated as set forth on Schedule III, of the maximum amount
available from time to time to be drawn under such Documentary Letter of Credit
(in the case of any Letter of Credit denominated in a currency other than United
States Dollars, based on the average undrawn amount thereof, using the United
States Dollar equivalent at the then current spot exchange rate, as determined
by the Administrative Agent), payable quarterly in arrears on the first day of
each Fiscal Quarter and on the termination of such Documentary Letter of Credit,
and calculated on the basis of a 360-day year and the actual number of days
elapsed provided that during the continuance of an Event of Default, such fee
shall be increased by 2.00% per annum and shall be payable on demand; and
(v) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance with such Issuer's
standard schedule for such charges in effect at the time of issuance, amendment,
transfer or drawing, as the case may be.
(n) For purposes of this Agreement (including, without limitation,
Subsection 2.8(h)), the amount of the Letter of Credit Undrawn Amount and the
Reimbursement Obligation in respect of any Letter of Credit denominated in a
currency other than United States Dollars shall be equal to the United States
Dollar equivalent thereof on any date of determination, based on the then
current spot exchange rate, as determined by the Administrative Agent.
2.19 Substitution of Lenders. In the event that (a) (i) any Lender
makes a claim under Section 2.12 or 2.14, (ii) it becomes illegal for any Lender
to continue to fund or make any Eurodollar Rate Loan pursuant to Section 2.13,
(iii) the Borrower is required to make any payment pursuant to Section 2.16 that
is attributable to any Lender, or (iv) any Lender is in default of any of its
obligations hereunder or shall take or be the subject of any action or
proceeding of a type described in Subsection 8.1(f), (b) in the case of clause
(a)(i) above, as a consequence of increased costs in respect of which such claim
is made, the effective rate of interest payable to such Lender under this
Agreement with respect to its Loans materially exceeds the effective average
annual rate of interest payable to the Majority Lenders under this Agreement and
(c) Lenders holding at least 75% of the Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrower may upon reasonable prior written notice (which
written notice must be given within 90 days following the occurrence of any of
the events described in clauses (a)(i), (ii), (iii) or (iv)) to the
Administrative Agent and the Affected Lender that the Borrower intends to
substitute another financial institution for such Affected Lender hereunder,
which substitute financial institution must be an Eligible Assignee and, if not
a Lender, reasonably acceptable to the Administrative Agent, provided that if
more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower within 30 days of each other then the Borrower may substitute all, but
not (except to the extent the Borrower already substituted one of such Affected
Lenders before the Borrower's receipt of the other Affected Lenders' claim) less
than all, Lenders making such claims. In the event that the proposed substitute
financial institution is reasonably acceptable to the Administrative Agent and
the written notice was properly issued under this Section 2.19, the Affected
Lender shall sell at par plus accrued interest and the substitute financial
institution shall purchase, pursuant to an Assignment and Acceptance, the Notes
of the Affected Lender and all rights and claims of such Affected Lender under
the Loan Documents and the substitute financial institution shall assume and the
Affected Lender shall be relieved of its Commitments and all other theretofore
unperformed obligations of the Affected Lender under the Loan Documents (other
than in respect of any damages (other than exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed
obligations). Upon the effectiveness of such sale, purchase and assumption
(which, in any event shall be conditioned upon the payment in full by the
Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution shall become a "Lender" hereunder for all
purposes of this Agreement having a Revolving Credit Commitment in the amount of
such Affected Lender's Revolving Credit Commitment assumed by it and such
Revolving Credit Commitment of the Affected Lender shall be terminated, provided
that all indemnities under the Loan Documents shall continue in favor of such
Affected Lender.
2.20 The Swing Loans. (a) Each Swing Bank on the terms and subject
to the conditions contained in this Agreement (including Section 3.3), agrees to
make loans (each a "Swing Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date
as provided herein in an aggregate amount not to exceed at any time outstanding,
the lesser of (i) the difference between $20,000,000 and the sum of the
aggregate outstanding principal amount of the Swing Loans or (ii) the Available
Credit; provided, however, that at no time may the aggregate outstanding balance
of Swing Loans exceed $20,000,000; and provided, further, that each Swing Loan
must be repaid in full within 10 days of its making or upon any Revolving Credit
Borrowing hereunder and shall in any event mature no later than the Termination
Date. In no event shall any Swing Bank be obligated to make any Swing Loan or
Revolving Credit Loan if the sum of outstanding Swing Loans and Revolving Credit
Loans made or to be made by such Swing Bank would exceed its Revolving Credit
Commitment or if the Swing Loans made or to be made by such Swing Bank would
exceed its Swing Commitment. Within the limits set forth in the first sentence
of this Section 2.20, amounts prepaid pursuant to Section 2.8 may be reborrowed
under this Section 2.20. The Borrower shall notify promptly the Administrative
Agent by telecopier, in accordance with Section 10.2, upon any reduction in the
aggregate outstanding principal amount of the Swing Loans. The Available Credit
shall be reduced by the amount of any Swing Loan made and each Lender's Ratable
Portion of the Available Credit shall be reduced by its Ratable Portion of such
reduction. Conversely, the Available Credit shall be increased by the amount of
any repayment of any Swing Loan and each Lender's Ratable Portion of the
Available Credit shall be increased by its Ratable Portion of such repayment.
(b) In order to request a Swing Loan, the Borrower shall telecopy to
the Administrative Agent a duly completed request (a "Swing Loan Request"), to
be received by the Administrative Agent not later than 1:00 P.M., New York City
time, on the day of the proposed borrowing. The amount of each Swing Bank's
Swing Loan will be the proportion of the amount requested which its Swing
Commitment bears to the aggregate of the Swing Commitments of all Swing Banks on
the date of receipt of the Swing Loan Request. The Administrative Agent shall
promptly notify each Swing Bank of the details of the requested Swing Loan.
Subject to the terms of this Agreement, each Swing Bank shall make its Swing
Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request.
(c) Immediately upon any making of a Swing Loan by a Swing Bank, such
Swing Bank shall, so long as such Swing Bank believes in good faith that the
conditions to making such Swing Loan contained in this Agreement have been
satisfied, be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Swing Bank, without recourse or warranty, an undivided
participation in each Swing Loan, which participation shall be in a principal
amount equal to such Lender's Ratable Portion of such Swing Loan.
(d) During the continuance of an Event of Default under Section 8.1,
the Administrative Agent shall promptly notify each Lender and each Lender shall
promptly and unconditionally pay to the Administrative Agent for the account of
such Swing Bank the amount of such Lender's Ratable Portion of such Swing Loan
in Dollars and in immediately available funds. If the Administrative Agent so
notifies such Lender prior to 11:00 A.M. (New York City time) on any Business
Day, such Lender shall make available to the Administrative Agent for the
account of such Swing Bank its Ratable Portion of such Swing Loan on such
Business Day in immediately available funds. If and to the extent such Lender
shall not have so made such Lender's Ratable Portion of the amount of such
payment available to the Administrative Agent for the account of such Swing
Bank, such Lender agrees to pay to the Administrative Agent for the account of
such Swing Bank forthwith on demand such amount together with interest thereon,
for each day from such date until the date such amount is repaid to the
Administrative Agent for the account of such Swing Bank, at the Federal Funds
Rate. The failure of any Lender to make available to the Administrative Agent
for the account of such Swing Bank its Ratable Portion of any Swing Loan shall
not relieve any other Lender of its obligation hereunder to make available to
the Administrative Agent for the account of such Swing Bank its Ratable Portion
of any payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent for the account of the Swing Bank such other Lender's
Ratable Portion of any such payment.
(e) Whenever any Swing Bank receives a payment in respect of a Swing
Loan made by it as to which the Administrative Agent has received for the
account of such Swing Bank any payment from a Lender pursuant to Subsection
2.20(d), such Swing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's pro rata share of such payment based on
the respective amounts the Lenders have paid in respect of such payment.
2.21 The Competitive Loans. (a) On the terms and subject to the
Competitive Bid Procedure set forth in this Section 2.21, the Borrower may
request Competitive Bids of the Lenders and each Lender may make available to
the Borrower one or more Competitive Loans. The amount of any Competitive
Borrowing made at any time shall not exceed the Available Credit at such time.
Each such Competitive Borrowing shall be comprised of one or more Eurodollar
Competitive Loans or Fixed Rate Loans. The Competitive Loans made by each
Lender to the Borrower shall be evidenced by a Competitive Note duly executed on
behalf of the Borrower, payable to the order of such Lender in a principal
amount equal to the total Revolving Credit Commitment.
(b) In order to request Competitive Bids, the Borrower shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive Bid
Request, to be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:30 A.M., New York City time,
four Business Days before a proposed Competitive Borrowing and (ii) in the case
of a Fixed Rate Borrowing, not later than 10:30 A.M., New York City time, one
Business Day before a proposed Competitive Borrowing. Such Competitive Bid
Request shall be accompanied by a fee of $2,500 payable to the Administrative
Agent for its account. A Competitive Bid Request that does not conform
substantially to the format of Exhibit K may be rejected in the Administrative
Agent's discretion (exercised in good faith), and the Administrative Agent shall
promptly notify the Borrower of such rejection by telecopier. Each Competitive
Bid Request shall refer to this Agreement and specify (x) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing,
(y) the date of such Borrowing (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$1,000,000 or an integral multiple thereof and (z) the Interest Period with
respect thereto. After its receipt of a Competitive Bid Request that is not
rejected as aforesaid and receipt of payment of the $2,500 fee referred to
above, the Administrative Agent shall promptly (and in any event by 5:00 P.M.,
New York City time, on the date of such receipt if such receipt occurs by the
time specified in the first sentence of this paragraph), by sending a Notice of
Competitive Bid Request by telecopier, invite the Lenders to bid, on the terms
and subject to the conditions of this Agreement, to make Competitive Loans
pursuant to the Competitive Bid Request.
(c) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid must be in the form of Exhibit M hereto and be received by the
Administrative Agent via telecopier (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 A.M., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 A.M., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be acceptable. Competitive
Bids that do not conform substantially to the format of Exhibit M may be
rejected by the Administrative Agent after conferring with, and upon the
instruction of, the Borrower, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the principal
amount of the Competitive Loan or Loans that the Lender is willing to make to
the Borrower (which amount may exceed such Lender's Revolving Credit Commitment,
shall be in a minimum principal amount of $1,000,000 or an integral multiple
thereof and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower), (y) the Competitive Bid Rate or Rates at
which the Lender is prepared to make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. A Competitive Bid submitted pursuant
to this paragraph (c) shall be irrevocable (subject to the satisfaction of the
conditions to borrowing set forth in Article III).
(d) The Administrative Agent shall promptly (and in any event by
10:30 A.M., New York City time, on the date on which such Competitive Bids shall
have been made) notify the Borrower by telecopier of all the Competitive Bids
made, the Competitive Bid Rate and the principal amount of each Competitive Loan
in respect of which a Competitive Bid was made and the identity of the Lender
that made each bid. The Administrative Agent shall send a copy of all
Competitive Bids to the Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.21.
(e) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (e), accept or reject any Competitive
Bid referred to in paragraph (c) above. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopier in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has decided
to accept or reject any of or all the bids referred to in paragraph (c) above,
(x) in the case of a Eurodollar Competitive Borrowing, not later than 11:00
A.M., New York City time, four Business Days before a proposed Competitive
Borrowing, and (y) in the case of a Fixed Rate Borrowing, not later than 11:00
A.M., New York City time, one Business Day before a proposed Competitive
Borrowing; provided, however, that (i) the failure by the Borrower to give such
notice shall be deemed to be a rejection of all the bids referred to in
paragraph (c) above, (ii) the Borrower shall not accept a bid made at a
particular Competitive Bid Rate if it has decided to reject a bid made at a
lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids
accepted by the Borrower shall not exceed the principal amount specified in the
Competitive Bid Request, (iv) if the Borrower shall accept a bid or bids made at
a particular Competitive Bid Rate but the amount of such bid or bids shall cause
the total amount of bids to be accepted by it to exceed the amount specified in
the Competitive Bid Request, then the Borrower shall accept a portion of such
bid or bids in an amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted with respect to
such Competitive Bid Request, which acceptance, in the case of multiple bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the amount
of each such bid at such Competitive Bid Rate, and (v) except pursuant to clause
(iv) above, no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $1,000,000. A notice given
by the Borrower pursuant to this paragraph (e) shall be irrevocable.
(f) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Loan in respect of
which its bid has been accepted; provided, however, that at no time may the
aggregate outstanding principal amount of such Competitive Loans exceed the
Available Credit. The Available Credit shall be reduced by the amount of any
Competitive Loan made and each Lender's Ratable Portion of the Available Credit
shall be reduced by its Ratable Portion of such reduction. Conversely, the
Available Credit shall be increased by the amount of any repayment of any
Competitive Loan and each Lender's Ratable Portion of the Available Credit shall
be increased by its Ratable Portion of such repayment.
(g) A Competitive Bid request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless the Borrower
and the Administrative Agent shall mutually agree otherwise.
(h) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower at least fifteen minutes earlier than the latest time at which the
other Lenders are required to submit their bids to the Administrative Agent
pursuant to paragraph (c) above.
(i) All notices required by this Section 2.21 shall be given in
accordance with Section 10.2.
ARTICLE III
CONDITIONS
3.1 Conditions Precedent to Effectiveness. The amendments to the
Existing Credit Agreement effected by this Agreement shall become effective on
the date (the "Effective Date") on which the Administrative Agent shall have
received the following, each dated the Effective Date unless otherwise
indicated, in form and substance satisfactory to the Administrative Agent and
(except for the Notes) in sufficient copies for each Lender:
(a) The new Revolving Credit Notes and new Term Loan Notes to the
order of the Lenders, respectively.
(b) The Competitive Notes to the order of the Lenders, respectively.
(c) Certified copies of (i) the resolutions of the Board of Directors
of each Loan Party approving each Loan Document to which it is a party, and (ii)
all documents evidencing other necessary corporate action and required
governmental and third party approvals, licenses and consents required to be
obtained by any Loan Party with respect to each Loan Document and the
transactions contemplated thereby.
(d) A copy of the articles or certificate of incorporation of each
Loan Party, certified as of a recent date by the Secretary of State of the state
of incorporation of such Loan Party, together with certificates of such official
attesting to the good standing of each such Loan Party, and a copy of the
certificate of incorporation and the By-Laws of each Loan Party, certified as of
the Effective Date by the Secretary or an Assistant Secretary of each such Loan
Party.
(e) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of each officer of such Loan
Party who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party.
(f) The Guaranty, duly executed by each new Guarantor, and
confirmation by each existing Guarantor that its Guaranty remains in full force
and effect and applies to all Obligations as defined in this Agreement.
(g) An amendment to the Borrower Pledge Agreement, duly executed by
the Borrower and the Administrative Agent, (i) providing for the termination of
the security interests created thereby upon the Borrower's long-term senior
unsecured indebtedness achieving Investment Grade (as defined herein) and (ii)
confirming that the security interests created thereby remain in full force and
effect.
(h) An amendment to the Borrower Security Agreement, duly executed by
the Borrower and the Administrative Agent, providing for (i) the termination of
the security interests created thereby upon the Borrower's long-term senior
unsecured indebtedness being designated as Investment Grade (as defined herein)
and (ii) confirming that the security interests created thereby remain in full
force and effect.
(i) Amendments to each Subsidiary Security Agreement, duly executed
by each existing Guarantor and the Administrative Agent, (i) providing for the
termination of the security interests created thereby upon the Borrower's long-
term senior unsecured indebtedness being designated as Investment Grade (as
defined herein) and (ii) confirming that the security interests created thereby
remain in full force and effect, together with, in the case of the Subsidiary
Security Agreement executed by Nine West Development Corporation:
(i) acknowledgment copies of proper Financing Statements (Form
UCC-1) duly filed under the Uniform Commercial Code of the jurisdictions listed
on Schedule 3.1(i) (or oral confirmation thereof);
(ii) executed Financing Statements (Form UCC-1) in appropriate
form for filing under the Uniform Commercial Code of all other jurisdictions as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the Lien created by such Subsidiary Security Agreement; and
(iii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
which name Nine West Development Corporation (under its present name or any
previous name during the past five years) as of the date of such Requests for
Information or Copies as debtor which are filed in the jurisdictions referred to
in said paragraphs (i) and (ii) above, together with copies of such other
financing statements (none of which shall cover the Collateral purported to be
covered by such Subsidiary Security Agreement except to the extent any such
financing statement relates to a Lien permitted under Section 7.1).
(j) A favorable opinion of (i) Simpson, Thacher & Bartlett, special
counsel to the Loan Parties and (ii) Joel K. Bedol, Esq., general counsel to the
Loan Parties, in substantially the form of Exhibit I-1 and I-2, respectively,
and as to such other matters as any Lender through the Administrative Agent may
reasonably request.
(k) A certificate, signed by a Responsible Officer of the Borrower,
stating that each of the conditions specified in Subsections 3.2(a) and (b), and
3.3(a) and (b) has been satisfied or will be satisfied on the Effective Date.
(l) Such additional documents, information and materials as the
Administrative Agent may reasonably request.
3.2 Additional Conditions Precedent to Effectiveness. The
effectiveness of this Agreement is subject to the further conditions precedent
that:
(a) All costs and accrued and invoiced unpaid fees and expenses
(including, without limitation, legal fees and expenses of the Administrative
Agent) required to be paid to the Lenders and the Administrative Agent and its
Affiliates in connection with the financing contemplated hereby on or before the
Effective Date, including, without limitation, those referred to in Sections
2.5, 2.18 and 10.4, to the extent then due and payable, shall have been paid.
(b) Nothing shall have occurred since February 3, 1996 which any
Lender, in its reasonable judgment, shall have determined has had or can
reasonably be expected to have a material adverse effect on the rights and
remedies of the Lenders taken as a whole or on the ability of the Borrower to
perform its obligations under the Loan Documents.
(c) No Lender, in its reasonable judgment, shall have determined that
there is any claim, action, suit, investigation, litigation or proceeding
(including, without limitation, shareholder or derivative litigation) pending or
threatened in any court or before any arbitrator or Governmental Authority which
would have a material adverse effect on (i) the condition (financial or
otherwise), operations, business, properties or prospects of the Borrower and
its Subsidiaries taken as a whole, or (ii) the transactions contemplated by the
Loan Documents.
(d) No Lender, in its reasonable judgment, shall have determined that
there exists any judgment, order, injunction or other restraint prohibiting or
imposing materially adverse conditions upon or the transactions contemplated by
the Loan Documents.
(e) Each Lender shall be satisfied, in its reasonable judgment, that
there has been since the date hereof, no material adverse change in respect of
(i) the corporate, capital, legal and management structure of the Borrower and
its Subsidiaries, and (ii) the nature and status of all Contractual Obligations,
and all securities, labor, tax, ERISA, employee benefit, environmental, health
and safety matters, in each case, involving or affecting the Borrower or any of
its Subsidiaries.
(f) The conditions precedent in Section 3.3 shall have been
satisfied.
3.3 Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan and of each Issuer to issue any
Letter of Credit shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the Effective Date and
on the date of such Loan or issuance, before and after giving effect thereto and
to the application of the proceeds therefrom and to such issuance (and the
acceptance by the Borrower of the proceeds of such Loan or such Letter of Credit
shall constitute a representation and warranty by the Borrower that on the date
of such Loan or issuance such statements are true):
(i) The representations and warranties of the Borrower contained
in Article IV and of each Loan Party in the other Loan Documents are correct on
and as of such date as though made on and as of such date, except to the extent
such representations and warranties relate solely to an earlier date, in which
case such representations and warranties were correct on and as of such earlier
date; and
(ii) No Default or Event of Default will result from any Loan
being made or Letter of Credit being issued on such date.
(b) The making of such Loan or the issuance of such Letter of Credit
on such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
(c) The Administrative Agent shall have received such additional
documents, information and materials as any Lender or any Issuer, through the
Administrative Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, the Borrower represents and warrants to the Lenders and the
Administrative Agent that:
4.1 Corporate Existence; Compliance with Law. The Borrower and each
of its Subsidiaries (a) is a corporation or other type of Person duly
incorporated or otherwise duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (b) is
duly qualified as a foreign corporation or other Person and in good standing
under the laws of each jurisdiction where such qualification is necessary,
except for failures that in the aggregate have no Material Adverse Effect, (c)
has, in the case of the Borrower and each Guarantor, all requisite corporate or
other comparable power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted,
(d) is in compliance with its certificate of incorporation and by-laws or other
comparable governing documents, (e) is in compliance with all other applicable
Requirements of Law except for such non-compliances that in the aggregate have
no Material Adverse Effect, and (f) has all necessary licenses, permits,
consents or approvals from or by, has made all necessary filings with, and has
given all necessary notices to, each Governmental Authority having jurisdiction,
to the extent required for such ownership, operation and conduct, except for
licenses, permits, consents, approvals or filings which can be obtained or made
by the taking of ministerial action to secure the grant or transfer thereof and
such failures that in the aggregate have no Material Adverse Effect.
4.2 Corporate Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
(i) are within such Loan Party's corporate or other comparable
powers;
(ii) have been duly authorized by all necessary corporate or
other comparable action, including, without limitation, the consent of
stockholders where required;
(iii) do not and will not (A) contravene any Loan Party's
certificate of incorporation or by-laws or other comparable governing documents,
(B) violate any other applicable Requirement of Law applicable to any Loan Party
(including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), or any order or decree of any
Governmental Authority or arbitrator applicable to any Loan Party, (C) conflict
with or result in the breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any Contractual Obligation of any
Loan Party, other than any provision in any of the Collateral purporting to
prohibit the assignment thereof or the grant of a security interest therein, but
none of which provisions give rise to any liability of any Secured Party and all
of which provisions, in the aggregate, have no Material Adverse Effect to the
extent effective, or (D) result in the creation or imposition of any Lien upon
any of the property of any Loan Party, other than those in favor of the Secured
Parties pursuant to the Collateral Documents and other Liens permitted hereby;
and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority or any
other Person, other than those which have been obtained or made and copies of
which have been or will be delivered to the Administrative Agent pursuant to
Section 3.1, and each of which on the Effective Date will be in full force and
effect.
(b) Each Loan Document has been duly executed and delivered by each
Loan Party party thereto. Each Loan Document is the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against it in
accordance with its terms, except as such enforceability 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).
4.3 Taxes. (a) All federal, state, local and foreign tax returns,
reports and statements (collectively, the "Tax Returns") required to be filed by
the Borrower or any of its Tax Affiliates have been filed with the appropriate
governmental agencies in all jurisdictions in which such Tax Returns are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all taxes, charges and other impositions reflected therein or
otherwise due and payable have been paid, except (i) where contested in good
faith and by appropriate proceedings (unless the failure to contest has no
Material Adverse Effect), (ii) if adequate reserves therefor have been
established on the books of the Borrower or such Subsidiary in conformity with
GAAP, and (iii) where all such non-payments and non-filings in the aggregate
have no Material Adverse Effect.
(b) Proper and accurate amounts have been withheld by the Borrower
and each of its Tax Affiliates from their respective employees for all periods
in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities, except where the failures to so withhold or pay in the aggregate
have no Material Adverse Effect.
(c) Set forth on Schedule 4.3(c) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of the Borrower and each of
its Tax Affiliates for which federal income Tax Returns have been filed and for
which the expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an "Open
Year").
(d) The aggregate unpaid amount, as of the date hereof, of
adjustments to the federal income tax liability of the Borrower and each of its
Tax Affiliates proposed to the Borrower or its Tax Affiliates by the IRS with
respect to Open Years does not exceed $500,000. No issues have been raised by
the Internal Revenue Service in respect of Open Years that, in the aggregate,
have a Material Adverse Effect.
(e) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of the Borrower and
its Tax Affiliates proposed to the Borrower or its Tax Affiliates by all state,
local and foreign taxing authorities (other than amounts arising from
adjustments to federal income Tax Returns) does not exceed $500,000. No issues
have been raised by such taxing authorities that, in the aggregate, have a
Material Adverse Effect.
4.4 Full Disclosure. (a) The written statements prepared or
furnished by or on behalf of the Borrower or any of its Affiliates in connection
with any of the Loan Documents in respect of the Borrower or any of its
Subsidiaries do not, taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not misleading as of the respective dates when furnished and
in light of the circumstances existing when made.
(b) The consolidated statements of financial condition and
consolidated statements of operations of the Borrower and its Subsidiaries
previously delivered to each of the Lenders are the unaudited consolidated
financial statements of the Borrower and its Subsidiaries, as of the dates and
for the periods specified therein.
(c) As of the date hereof, all facts known to the Borrower which are
material to an understanding of the financial condition, business, properties
and prospects of the Borrower and its Subsidiaries taken as one enterprise, have
been disclosed to the Lenders.
4.5 Financial Matters. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries as at February 3, 1996, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Deloitte & Touche LLP, copies of which have been furnished to each Lender,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such dates, all in
conformity with GAAP.
(b) Since February 3, 1996, there has been no Material Adverse Change
and there have been no events or developments that in the aggregate have had a
Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries had at February
3, 1996 any material obligation, contingent liability or liability for taxes,
long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.
(d) The Borrower is, and on a consolidated basis the Borrower and its
Subsidiaries are, Solvent.
4.6 Litigation. There are no pending or, to the knowledge of the
Borrower, threatened actions, investigations or proceedings affecting the
Borrower, or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, other than those that in the aggregate, if adversely determined,
have no Material Adverse Effect. The performance of any action by any Loan
Party required or contemplated by any of the Loan Documents is not restrained or
enjoined (either temporarily, preliminarily or permanently), and no material
adverse condition has been imposed by any Governmental Authority or arbitrator
upon either of the foregoing transactions.
4.7 Margin Regulations. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.
4.8 Subsidiaries. (a) Set forth on Schedule 4.8 hereto is a complete
and accurate list showing all Subsidiaries of the Borrower as of the date hereof
and, as to each such Subsidiary, the jurisdiction of its incorporation, the
number of shares of each class of Stock authorized, the number outstanding on
the date hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by the Borrower. Except as set forth on Schedule
4.8 hereto, as of the Effective Date, no Stock of any Subsidiary of the Borrower
is subject to any outstanding option, warrant, right of conversion or purchase
or any similar right in favor of a Person other than the Borrower or any of its
Subsidiaries. All of the outstanding capital Stock of each Subsidiary of the
Borrower has been validly issued, is fully paid and non-assessable and, except
as set forth on Schedule 4.8 hereto, is owned as of the Effective Date by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Liens in favor of the Secured Parties created pursuant to the
Collateral Documents and other Liens permitted by Section 7.1).
(b) Pappagallo is not engaged in any business other than the direct
ownership of, and all or substantially all of its assets consist of, 100% of the
issued and outstanding Stock of Compania de Calzados de Exportacion, L.L., a
Spain corporation.
4.9 ERISA. (a) Each Qualified Plan is qualified under Section 401 of
the Code, and the trusts created thereunder are exempt from tax under the
provisions of Section 501 of the Code, except where all such failures to be
qualified or exempt, as the case may be, in the aggregate, have no Material
Adverse Effect.
(b) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate, with respect to any Qualified Plan, has failed to make any
contribution or pay any amount due as required by Section 412 of the Code or
Section 302 of ERISA.
(c) There has been no, nor is there reasonably expected to occur, any
ERISA Event or event described in Section 4068 of ERISA with respect to any
Title IV Plan which has a Material Adverse Effect.
(d) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits (other than claims for benefits in the
normal course), asserted or instituted against (i) any Qualified Plan or
Multiemployer Plan, or its assets, (ii) any fiduciary with respect to any
Qualified Plan or Multiemployer Plan, or (iii) the Borrower, any of its
Subsidiaries or any ERISA Affiliate with respect to any Qualified Plan or
Multiemployer Plan, other than those that in the aggregate, if adversely
determined, have no Material Adverse Effect.
(e) None of the Borrower, any of the Borrower's Subsidiaries or any
ERISA Affiliate has incurred or has any reasonable likelihood of incurring any
Withdrawal Liability under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in any such
liability) in excess of $5,000,000 or that have a Material Adverse Effect.
(f) Neither the Borrower nor any of its Subsidiaries has engaged in a
prohibited transaction, as defined in Section 4975 of the Code or Section 406 of
ERISA, in connection with any Qualified Plan or Multiemployer Plan, which would
subject or has any reasonable likelihood of subjecting the Borrower or any of
its Subsidiaries (after giving effect to any exemption) to a tax on prohibited
transactions imposed by Section 4975 of the Code or any other liability, in
either case, in excess of $5,000,000 or which in the aggregate have a Material
Adverse Effect.
4.10 Liens. There are no Liens of any nature whatsoever on any
properties of the Borrower or any of its Subsidiaries other than those permitted
by Section 7.1. The Liens granted by the Loan Parties to the Administrative
Agent pursuant to the Collateral Documents are (subject only to the due filing
with the appropriate Governmental Authorities of the financing statements and
other documents delivered pursuant to Subsection 3.1(i)) fully perfected first
priority Liens in and to the Collateral, other than (a) any Collateral covered
by any Collateral Document (other than the Mortgages) that is not subject to
Article 8 or 9 of the Uniform Commercial Code as in effect in any applicable
jurisdiction, and (b) any items of Collateral, if any, not required to be
delivered to the Administrative Agent on or prior to the Effective Date pursuant
to the Collateral Documents to the extent the possession thereof by a secured
party is required under the Uniform Commercial Code of any applicable
jurisdiction in order to perfect a Lien thereon.
4.11 No Burdensome Restrictions; No Defaults. (a) None of the
Borrower or any of its Subsidiaries is a party to any Contractual Obligation the
compliance with which has a Material Adverse Effect or the performance of which
by any thereof, either unconditionally or upon the happening of an event, will
result in the creation of a Lien (other than a Lien granted pursuant to a Loan
Document or otherwise permitted hereby) on the property or assets of any
thereof.
(b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of the Borrower, no other party is in default under or with respect to
any Contractual Obligation owed to the Borrower or any of its Subsidiaries,
other than, in either such case, those defaults which in the aggregate have no
Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) There is no Requirement of Law applicable to the Borrower or any
of its Subsidiaries, the compliance with which by the Borrower or any of its
Subsidiaries has a Material Adverse Effect.
(e) No Guarantor is subject to any Contractual Obligation restricting
or limiting its ability to declare or make any dividend payment or other
distribution on account of any shares of any class of its Stock or its ability
to purchase, redeem, or otherwise acquire for value or make any payment in
respect of any such shares or any shareholder rights.
(f) Neither the Borrower nor any Guarantor has entered into or become
subject to, directly or indirectly, including, without limitation, as a non-
party Subsidiary of a party to any agreement, any agreement (other than a Loan
Document) prohibiting or restricting in any manner (including, without
limitation, by way of covenant, representation or event of default) (i) the
incurrence, creation or assumption of any Indebtedness or of any Lien upon any
of its property or the property of any Guarantor which Indebtedness or Liens are
permitted by or arise pursuant to or in connection with any Loan Document,
except customary restrictions in a Capitalized Lease or other purchase money
financing agreement permitted hereunder and relating solely to the asset
financed thereunder and customary restrictions contained in any partnership or
shareholder agreement or similar agreement or instrument in respect of any Stock
or Stock Equivalents of any Foreign Venture or North American Venture owned by
the Borrower or any Guarantor, (ii) the sale, disposition or pledge of any of
its property or the property of any Guarantor, except customary restrictions in
a Capitalized Lease or other purchase money financing agreement permitted
hereunder and relating solely to the asset financed thereunder and customary
restrictions contained in any partnership or shareholder agreement or similar
agreement or instrument in respect of any Stock or Stock Equivalents of any
Foreign Venture or North American Venture owned by the Borrower or any
Guarantor, (iii) the making of any Capital Expenditure by the Borrower or any
Guarantor permitted hereby, or (iv) any amendment, supplement or modification
to, or waiver under, this Agreement or any other Loan Document.
4.12 No Other Ventures. Neither the Borrower nor any of its
Subsidiaries is engaged in any partnership or other joint venture with any other
Person other than those permitted by Section 7.6.
4.13 Investment Company Act; Public Utility Holding Company Act. (a)
Neither the Borrower nor any of its Subsidiaries is an "investment company," or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. The making
of the Loans by the Lenders, the application of the proceeds and repayment
thereof by the Borrower and the consummation of the transactions contemplated by
the Loan Documents will not result in a violation by the Borrower or any of its
Subsidiaries of any provision of such Act or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder.
(b) Neither the Borrower nor any of its Subsidiaries is a "holding
company" or an "affiliate" of a "holding company" or a "subsidiary company," of
a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.14 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower or any of its Subsidiaries, including,
without limitation, policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient in the
reasonable judgment of the Borrower and as is customarily carried by companies
of the size and character of such Person.
4.15 Labor Matters. (a) There are no strikes, work stoppages,
slowdowns or lockouts pending or threatened against or involving the Borrower or
any of its Subsidiaries, other than those which in the aggregate have no
Material Adverse Effect.
(b) There are no arbitrations or grievances pending against or
involving the Borrower or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving the Borrower or any of its
Subsidiaries, other than those which in the aggregate, if resolved adversely to
the Borrower or such Subsidiary, have no Material Adverse Effect.
4.16 Force Majeure. Neither the business nor the properties of the
Borrower or any of its Subsidiaries are currently suffering from the effects of
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), other than those which in the
aggregate have no Material Adverse Effect.
4.17 Use of Proceeds. This Agreement amends and restates the terms
of indebtedness outstanding under the Existing Credit Agreement and the proceeds
of the Loans and the Letters of Credit are being used by the Borrower solely as
follows: (i) to refinance such existing Indebtedness, (ii) for the payment of
related transaction costs, fees and expenses, and (iii) for general working
capital and general corporate purposes.
4.18 Environmental Protection. (a) The operations of the Borrower
and each of its Subsidiaries or tenants comply with all Environmental Laws other
than such non-compliances as, in the aggregate, have no Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries has obtained all
environmental, health and safety Permits necessary for its operations, and all
such Permits are in good standing, and the Borrower and each of its Subsidiaries
is in compliance with the terms and conditions of such Permits other than such
failures and non-compliances as, in the aggregate, have no Material Adverse
Effect.
(c) Neither the Borrower nor any of its Subsidiaries or any of their
respective currently or previously owned or leased property or operations is
subject to any threatened or outstanding order from or agreement with any
Governmental Authority or other Person or is subject to any judicial or docketed
administrative proceeding respecting (i) Environmental Laws, (ii) Remedial
Action or (iii) any Environmental Liabilities and Costs arising from a Release
or threatened Release, other than, in any such case, those which in the
aggregate have no Material Adverse Effect.
(d) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the Borrower
or any of its Subsidiaries which may give rise to any Environmental Liabilities
and Costs other than those which in the aggregate have no Material Adverse
Effect.
(e) Neither the Borrower nor any of its Subsidiaries is a treatment,
storage or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. #6901 et seq., the regulations thereunder or any
state analog. The Borrower and each of its Subsidiaries is in compliance with
all applicable financial responsibility requirements of all Environmental Laws,
including, without limitation, those contained in 40 C.F.R., parts 264 and 265,
subpart H, and any state equivalents.
(f) Except as specifically disclosed in the Environmental Reports or
disclosed to the Administrative Agent prior to the date hereof, there is not on
or in the property owned, leased or operated by the Borrower or any of its
Subsidiaries (i) any underground storage tanks or surface impoundments, (ii) any
exposed friable asbestos-containing materials or (iii) any polychlorinated
biphenyls ("PCBs") used in electrical or other equipment, other than, in any
such case, those which in the aggregate have no Material Adverse Effect.
(g) Neither the Borrower nor any of its Subsidiaries has filed or
failed to file any notice required under any applicable Environmental Law
reporting a Release (other than notices of Releases occurring in compliance with
a Permit issued pursuant to any Environmental Law).
4.19 Intellectual Property. The Borrower and Nine West Development
Corporation are the legal and beneficial owners of all of the "Intellectual
Property" and "Licenses" (as such terms are defined in the Borrower Security
Agreement and the Subsidiary Security Agreement executed by Nine West
Development Corporation), in which they purport to grant collateral assignments
and security interests, having good title thereto, except where the failure of
any of the foregoing to be true does not have in the aggregate a Material
Adverse Effect. All such Intellectual Property and Licenses owned by the
Borrower and Nine West Development Corporation are free and clear of any and all
Liens, except (a) Liens granted pursuant to the Collateral Documents and (b)
Liens permitted by Section 7.1. The Intellectual Property is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part, except for such
invalidities and unenforceabilities which in the aggregate have no Material
Adverse Effect. To the best of the Borrower's knowledge, there is no
infringement by any third party of the Intellectual Property or the rights
arising thereunder except for such infringements and claims which in the
aggregate have no Material Adverse Effect. No claim has been made that the use
of any of the Intellectual Property infringes the rights of any third party and,
to the best of the Borrower's knowledge, neither the operation of the Borrower's
business and the businesses of its Subsidiaries nor the use of any of the
Intellectual Property infringes any intellectual property rights owned or
possessed by any third party except, in any such case, for such infringements
which in the aggregate have no Material Adverse Effect. Neither the Borrower
nor Nine West Development Corporation has assigned, transferred, conveyed or
otherwise encumbered its right, title or interest in the Intellectual Property,
other than pursuant to the Licenses, the Collateral Documents or as otherwise
permitted hereby.
4.20 Title. (a) The Borrower and its Subsidiaries own good and
indefeasible title to, or valid leasehold interests in, all real and personal
properties and assets purported to be owned by the Borrower or any of its
Subsidiaries including, without limitation, those reflected on the Borrower's
most recent financial statements delivered pursuant to this Agreement and not
disposed of as permitted hereunder, except for failures which in the aggregate
have no Material Adverse Effect, and none of such properties and assets, is
subject to any Lien, except Liens granted to the Secured Parties pursuant to the
Loan Documents or otherwise permitted hereunder. The Borrower and its
Subsidiaries have received all deeds, assignments, waivers, consents, non-
disturbance and recognition or similar agreements, bills of sale and other
documents, and have duly effected all recordings, filings and other actions
necessary to establish, protect and perfect the Borrower's and its Subsidiaries'
right, title and interest in and to all such property, except for failures which
in the aggregate have no Material Adverse Effect.
(b) All Permits required to have been issued or appropriate to enable
all real property owned or leased by the Borrower or any of its Subsidiaries to
be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, except as in the aggregate, have no Material Adverse Effect.
4.21 Certain Indebtedness. Schedule 4.22 separately identifies all
Indebtedness (other than trade payables, the Obligations and Contingent
Obligations set forth on Schedule 7.11) of the Borrower and each Guarantor which
is outstanding on the date hereof and is to remain outstanding after the
Effective Date, and (a) is for borrowed money, (b) was incurred outside of the
ordinary course of the business or not in a manner and extent consistent with
past practice, or (c) is material to the financial condition, business,
operations or prospects of the Borrower or such Guarantor (or will be so
material to the financial condition, business, operations or prospects of the
Borrower or such Guarantor), $1,000,000 being hereby deemed material for
purposes of this Section 4.22.
4.22 Restricted Payments. Since February 3, 1996, except as
permitted by Section 7.4 or 7.5, the Borrower has not (a) declared or made any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its Stock, or
(b) purchased, redeemed, or otherwise acquired for value or made any payment in
respect of any of its Stock or Stock Equivalents.
ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing, or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
5.1 Maximum Leverage Ratio. The Borrower shall maintain at the end
of each Fiscal Quarter set forth below, a ratio of (a) Indebtedness for Borrowed
Money (determined on a consolidated basis for the Borrower and its Subsidiaries
as of the date of determination) to (b) EBITDA for the four Fiscal Quarters
ending on the date of determination, not in excess of the ratio set forth below,
with (i) EBITDA for the Fiscal Quarters ending prior to the third Fiscal Quarter
of the Borrower's 1995 Fiscal Year being determined on the basis of giving pro
forma effect to the Acquisition, including but not limited to, reserves for
discontinued brands and restructuring costs that were incurred by the Footwear
Business during the period prior to the Acquisition, and which would have been
included in the computation of goodwill had the Acquisition occurred at the
beginning of such period and, without duplicating any of the foregoing, (ii)
EBITDA for any such four Fiscal Quarters which include the fourth Fiscal Quarter
of the Borrower's 1995 Fiscal Year being computed by adding back to EBITDA up to
$60 million, on a pre-tax basis, of integration and restructuring charges
related to the Acquisition, as indicated in the Borrower's audited financial
statements for the 1995 Fiscal Year (to the extent such charges reduced EBITDA
for the fourth Fiscal Quarter of the Borrower's 1995 Fiscal Year): :
For the Fiscal Quarter Ending on
or Closest to Maximum Ratio
------------- -------------
July 31, 1996 3.75:1.00
October 31, 1996 3.75:1.00
January 31, 1997 3.75:1.00
April 30, 1997 3.75:1.00
July 31, 1997 3.00:1.00
October 31, 1997 3.00:1.00
January 31, 1997 3.00:1.00
April 30, 1998 3.00:1.00
July 31, 1998 2.50:1.00
October 31, 1998 2.50:1.00
January 31, 1998 2.50:1.00
April 30, 1999 2.50:1.00
July 31, 1999 2.50:1.00
October 31, 1999 2.50:1.00
January 31, 1999 2.50:1.00
April 30, 2000
and thereafter 2.00:1.00
5.2 Fixed Charge Coverage Ratio. The Borrower shall maintain at the
end of each Fiscal Quarter a ratio of (a) the sum of (i) EBITDA plus (ii) cash
rentals payable by the Borrower and its Subsidiaries for the applicable period
under leases of real, personal or mixed property to (b) Fixed Charges, in each
case determined on the basis of the four Fiscal Quarters ending on the date of
determination, not less than 1.00:1.00, with (i) EBITDA for the Fiscal Quarters
ending prior to the third Fiscal Quarter of the Borrower's 1995 Fiscal Year
being determined on the basis of giving pro forma effect to the Acquisition,
including but not limited to, reserves for discontinued brands and restructuring
costs that were incurred by the Footwear Business during the period prior to the
Acquisition, and which would have been included in the computation of goodwill
had the Acquisition occurred at the beginning of such period and, without
duplicating any of the foregoing, (ii) EBITDA for any such four Fiscal Quarters
which include the fourth Fiscal Quarter of the Borrower's 1995 Fiscal Year being
computed by adding back to EBITDA up to $60 million, on a pre-tax basis, of
integration and restructuring charges related to the Acquisition, as indicated
in the Borrower's audited financial statements for the 1995 Fiscal Year (to the
extent such charges reduced EBITDA for the fourth Fiscal Quarter of the
Borrower's 1995 Fiscal Year).
5.3 Maintenance of Net Worth. The Borrower shall at all times
maintain a Net Worth of not less than 75% of its Net Worth at December 31, 1994
plus 50% of the Net Income for each Fiscal Quarter ending thereafter without
deduction for any Net Loss from any such Fiscal Quarter.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
6.1 Compliance with Laws, Etc. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all applicable
Requirements of Law and Permits; provided, however, that the Borrower shall not
be deemed in default of this Section 6.1 if all such non-compliances in the
aggregate have no Material Adverse Effect.
6.2 Payment of Taxes, Etc. The Borrower shall pay and discharge, and
shall cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, all lawful governmental claims, taxes, assessments, charges
and levies, except (a) where contested in good faith, by proper proceedings
(unless the failure to contest has no Material Adverse Effect), (b) if adequate
reserves therefor have been established on the books of the Borrower or the
appropriate Subsidiary in conformity with GAAP, and (c) if all such non-payments
in the aggregate have no Material Adverse Effect.
6.3 Maintenance of Insurance. The Borrower shall maintain, and shall
cause to be maintained for each of its Subsidiaries, insurance with responsible
and reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates and such other insurance as may be reasonably requested
by the Majority Lenders, and, in any event, all insurance required by any
Collateral Document. All such general liability insurance shall name the
Secured Parties as additional insureds and all such property insurance shall
name the Administrative Agent as loss payee in respect of any incurrence
involving the payment of insurance proceeds equal to or greater than $2,000,000
in respect of the Collateral. Notwithstanding anything to the contrary
contained in any Collateral Document, as long as an Event of Default is not
continuing (including, without limitation, an Event of Default occurring by
reason of the Borrower's failure to comply with the provisions of Subsection
2.8(d)), the Administrative Agent shall promptly after its receipt thereof turn
over to the Borrower or the applicable Guarantor any proceeds of any such
property insurance paid to the Administrative Agent. The Borrower will furnish
to the Administrative Agent from time to time such information as may be
reasonably requested by any Lender through the Administrative Agent as to such
insurance.
6.4 Preservation of Corporate Existence, Etc. The Borrower shall
preserve and maintain, and shall cause each of its Subsidiaries to preserve and
maintain, its corporate (or other comparable) existence, rights (charter and
statutory) and franchises, except (a) with respect to any Guarantor, as
permitted by Section 7.5, and (b) the dissolution of Texas Boot and (c) to the
extent the Borrower or any such Subsidiary determines in its reasonable judgment
that it is not necessary or desirable to preserve or maintain any such franchise
or right (or in the case of a North American Venture or a Foreign Venture, its
existence).
6.5 Access. The Borrower shall, from time to time at any reasonable
time during normal business hours, permit the Administrative Agent or any agents
or representatives thereof within five Business Days after a written request
therefor (except that during a continuance of a Default or Event of Default, no
such prior request shall be necessary), to (a) examine and make copies of and
abstracts from the records and books of account of the Borrower and each of its
Subsidiaries, (b) visit the properties of the Borrower and each of its
Subsidiaries, (c) discuss the affairs, finances and accounts of the Borrower and
each of its Subsidiaries with any of their respective officers or directors, and
(d) as long as a Responsible Officer of the Borrower has been notified at least
one Business Day in advance in respect thereof and officers of the Borrower are
permitted to participate, communicate directly with the Borrower's independent
certified public accountants, in each of cases (a), (b) and (c) in a manner that
does not interfere in any material respect with the conduct of the Borrower's or
any such Subsidiary's business. The Borrower shall authorize its independent
certified public accountants to disclose to the Administrative Agent or any
Lender any and all financial statements and other information of any kind as the
Administrative Agent or any Lender (through the Administrative Agent) reasonably
requests from the Borrower and which such accountants have with respect to the
business, financial condition, results of operations or other affairs of the
Borrower or any of its Subsidiaries.
6.6 Keeping of Books. The Borrower shall keep, and shall cause each
of its Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the assets
and business of the Borrower and each such Subsidiary.
6.7 Maintenance of Properties, Etc. The Borrower shall maintain and
preserve, and shall cause each Guarantor to maintain and preserve, (a) all of
its properties which are necessary in the conduct of its business in good
working order and condition, and (b) all rights, permits, licenses, approvals
and privileges (including, without limitation, all Permits) which are necessary
in the conduct of its business; provided, however, that the Borrower shall not
be deemed in default of this Section 6.7 if all such failures in the aggregate
have no and would have no Material Adverse Effect.
6.8 Performance and Compliance with Other Covenants. The Borrower
shall perform and comply with, and shall cause each of its Subsidiaries to
perform and comply with each Contractual Obligation to which it or any of its
Subsidiaries is a party; provided, however, that the Borrower shall not be
deemed in default of this Section 6.8 if all such failures in the aggregate have
no Material Adverse Effect.
6.9 Application of Proceeds. The Borrower shall use the entire
amount of the proceeds of the Loans as provided in Section 4.17.
6.10 Financial Statements. The Borrower shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) as soon as available and in any event within 50 days after the
end of each Fiscal Quarter of each Fiscal Year, unaudited consolidated balance
sheets and statements of retained earnings and cash flow of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated and
consolidating (by wholesale and retail segments) statements of income of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, all
prepared in conformity with GAAP and certified by the chief financial officer of
the Borrower as fairly presenting the financial condition and results of
operations of the Borrower and its Subsidiaries at such date and for such
period, subject to normal year-end adjustments, together with (i) a certificate
of said officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with all financial covenants contained
herein, and (iii) a written discussion and analysis by the management of the
Borrower of the unaudited consolidated financial statements furnished in respect
of such Fiscal Quarter;
(b) as soon as available and in any event within 95 days after the
end of each Fiscal Year, consolidated balance sheets and statements of retained
earnings and cash flow of the Borrower and its Subsidiaries as of the end of
such year and consolidated and consolidating (by wholesale and retail segments)
statements of income of the Borrower and its Subsidiaries for such Fiscal Year,
all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit or as to the Borrower being a going concern by Deloitte & Touche LLP, any
other "Big Six" accounting firm or any other independent public accountants
reasonably acceptable to the Majority Lenders, together with (i) a report by
such accounting firm expressing negative assurance, based on its audit of the
consolidated financial statements of the Borrower, as to compliance with the
financial covenants contained in Article V and other covenants in this Agreement
relating to financial or accounting matters, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations prepared by the
Borrower and used in determining, as of the end of such Fiscal Year, the
Borrower's compliance with all financial covenants contained herein, and (iii) a
written discussion and analysis by the management of the Borrower of the
consolidated financial statements furnished in respect of such Fiscal Year; and
(c) promptly after the same are received by the Borrower, a copy of
each management letter provided to the Borrower by its independent certified
public accountants which refers in whole or in part to any material weakness in
the internal control structure of the Borrower and its Subsidiaries on a
consolidated basis.
6.11 Reporting Requirements. The Borrower shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) to the extent practicable prior to any Asset Sale anticipated to
generate in excess of $5,000,000 in Asset Sales Proceeds or any other
transaction anticipated to generate in excess of $5,000,000 of Debt Issuance
Proceeds or Equity Issuance Proceeds, a notice (i) describing the assets being
sold or the nature and material terms and conditions of such transaction, and
(ii) stating the estimated Asset Sales Proceeds, Debt Issuance Proceeds or
Equity Issuance Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries;
(b) as soon as available and in any event within the first 30 days of
each Fiscal Year, an annual budget, business and financial plan of the Borrower
and its Subsidiaries for such Fiscal Year, displaying on a quarterly basis
anticipated balance sheets, forecasted revenues, EBITDA, net income, Capital
Expenditures, cash flow, and working capital requirements all on a consolidated
(in the case of anticipated balance sheets, statements of retained earnings and
cash flow) and consolidated and consolidating (by wholesale and retail segments)
basis (in all other cases).
(c) (i) promptly and in any event within 30 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, and (ii) promptly and in any event within 10 days
after the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that a request for a minimum funding waiver under Section 412 of
the Code has been filed with respect to any Qualified Plan, a written statement
of the chief financial officer or other appropriate officer of the Borrower
describing such ERISA Event or waiver request and the action, if any, which the
Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto;
(d) promptly and in any event within 10 days after receipt thereof, a
copy of any correspondence the Borrower, any of its Subsidiaries or any ERISA
Affiliate receives from the plan sponsor (as defined by Section 4001 (a)(10) of
ERISA) of any Multiemployer Plan concerning potential withdrawal liability of
the Borrower, its Subsidiaries and ERISA Affiliates in excess of $5,000,000 in
the aggregate, or notice of any reorganization with respect to any Multiemployer
Plan, together with a written statement of the chief financial officer or other
appropriate officer of the Borrower of the action which the Borrower, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto;
(e) promptly and in any event within 30 days after the adoption
thereof, notice of (i) any amendment to a Title IV Plan which results in an
increase in benefits in excess of $5,000,000 or the adoption of any new Title IV
Plan that would provide benefits in excess of $5,000,000, and (ii) any amendment
to a, or adoption of a new, welfare benefit plan, which results in new or
increased benefits for retirees, their spouses or their beneficiaries in excess
of $5,000,000 in the aggregate;
(f) promptly and in any event within 30 days after notice or
knowledge thereof, notice that the Borrower or any of its Subsidiaries has
become subject to the tax on prohibited transactions imposed by Section 4975 of
the Code, together with a copy of Form 5330;
(g) promptly and in any event within 10 days after receipt thereof by
the Borrower, any of its Subsidiaries or any ERISA Affiliate, the Borrower shall
furnish to the Administrative Agent a copy of each notice from the PBGC,
received by the Borrower, any of its Subsidiaries or any ERISA Affiliate of the
PBGC's intention to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan;
(h) promptly and in any event within 10 days after the date that the
Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA, the Borrower shall furnish to the Administrative Agent
a copy of each such notice;
(i) promptly and in any event within 10 days after the date that the
Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Title IV Plan, if such termination would require
additional contributions in excess of $5,000,000 in order to be considered a
standard termination within the meaning of Section 4041(b) of ERISA, the
Borrower shall furnish to the Administrative Agent a copy of each notice;
(j) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries, except those
which, if adversely determined, would have no Material Adverse Effect;
(k) promptly and in any event within two Business Days after the
Borrower becomes aware of the existence of (i) any Default or Event of Default,
or (ii) any Material Adverse Change or any event, development or other
circumstance which has a reasonable likelihood of causing or resulting in a
Material Adverse Change, notice (which may be telephonic) in reasonable detail
specifying the nature of the Default, Event of Default, development or
circumstance, including, without limitation, the anticipated effect thereof,
which notice if telephonic shall be promptly confirmed in writing within five
days;
(l) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its security holders generally, and copies
of all reports and registration statements which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any national
securities exchange;
(m) upon the request of any Lender, through the Administrative Agent,
copies of all federal, state and local tax returns and reports filed by the
Borrower or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes);
(n) promptly and in any event within 30 days of the Borrower learning
of any of the following, written notice to the Administrative Agent of any of
the following:
(i) the Borrower or any Guarantor is or may be liable to any
Person as a result of a Release or threatened Release which could reasonably be
expected to subject the Borrower or any Guarantor to Environmental Liabilities
and Costs of $5,000,000 or more;
(ii) the receipt by the Borrower or any Guarantor of
notification that any real or personal property of the Borrower or any Guarantor
is subject to any Environmental Lien;
(iii) the receipt by the Borrower or any Guarantor of any notice
of violation of, or knowledge by the Borrower or any Guarantor that there exists
a condition which could reasonably be expected to result in a violation by the
Borrower or any of its Subsidiaries of, any Environmental Law, except for
violations the consequence of which in the aggregate would have no reasonable
likelihood of subjecting the Borrower and Guarantors collectively to
Environmental Liabilities and Costs of $5,000,000 or more;
(iv) the commencement of any judicial or administrative
proceeding or investigation alleging a violation of any Environmental Law, other
than those the consequences of which in the aggregate would have no reasonable
likelihood of subjecting the Borrower and Guarantors collectively to
Environmental Liabilities and Costs of $5,000,000 or more;
(v) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of property, or any other action by the Borrower or any of
its Subsidiaries the consequences of which in the aggregate have or would have
in the reasonable judgment of the Borrower no likelihood of subjecting the
Borrower and Guarantors collectively to Environmental Liabilities and Costs of
$5,000,000 or more; and
(vi) any proposed action taken by the Borrower or any of its
Subsidiaries to commence, recommence or cease manufacturing, industrial or other
operations other than those the consequences of which in the aggregate have or
would have in the reasonable judgment of the Borrower no likelihood of requiring
the Borrower and Guarantors to obtain additional environmental, health or safety
Permits that collectively require the expenditure of $5,000,000 or more or
become subject to additional Environmental Liabilities and Costs of $5,000,000
or more;
(o) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement, other than those which in the
aggregate have in the reasonable judgment of the Borrower no likelihood of
subjecting the Borrower and Guarantors to Environmental Liabilities and Costs of
$5,000,000 or more;
(p) promptly and in any event within two Business Days thereof,
notice of any (i) refusal of insurance for which the Borrower or any Guarantor
has applied or (ii) the termination of any insurance policy maintained by the
Borrower or any Guarantor, in each case, for reasons of uninsurability; and
(q) such other information respecting the business, properties,
condition, financial or otherwise, or operations of the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from time to
time reasonably request.
6.12 Employee Plans. With respect to any Pension Plan which is
intended to be a Qualified Plan hereafter adopted or maintained by the Borrower,
any of its Subsidiaries or any ERISA Affiliate, the Borrower shall (i) seek, and
cause such of its Subsidiaries and ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the Code, and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and Section
401(a) of the Code.
6.13 Interest Rate Contracts. The Borrower shall maintain an
Interest Rate Contract or Contracts, on terms and with counterparties reasonably
satisfactory to the Administrative Agent, to provide protection against interest
rates (exclusive of any applicable margin) exceeding 8% per annum on a notional
amount equal to at least 50% of the outstanding principal amount of the Term
Loans at any date of determination; provided, however, that the Borrower shall
have no obligation to (but may if it so elects) maintain any Interest Rate
Contract or Contracts if the aggregate outstanding principal amount of the Term
Loans is $200,000,000 or less.
6.14 Fiscal Year. The Borrower shall maintain as its Fiscal Year the
period of 52 or 53 weeks ending on the Saturday nearest to January 31 of each
year.
6.15 Environmental. The Borrower shall, at its cost, upon receipt of
any notification or otherwise obtaining knowledge of any Release or other event
that could reasonably be expected to result in the Borrower and the Guarantors
incurring Environmental Liabilities and Costs in excess of $5,000,000, conduct
or pay for consultants to conduct tests or assessments of environmental
conditions at such operations or properties, including, without limitation, the
investigation and testing of subsurface conditions, and shall take such
remedial, investigational or other action as required by Environmental Laws, as
any Governmental Authority requires pursuant to Environmental Laws, or as is
appropriate and consistent with good business practice.
6.16 Cash Management System. The Borrower and each of the Guarantors
shall establish and maintain a cash management system which provides for all
funds (subject to such exceptions as are reasonably satisfactory to the
Administrative Agent) received by, or payable to, the Borrower and the
Guarantors to be deposited in or forwarded in such manner as may be reasonably
requested by the Administrative Agent to cash concentration accounts maintained
at Citibank or any Lender.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
7.1 Liens, Etc. The Borrower shall not create or suffer to exist,
and shall not permit any of the Guarantors to create or suffer to exist, any
Lien upon or with respect to any of its or such Guarantor's properties, whether
now owned or hereafter acquired, or assign, or permit any of the Guarantors to
assign, any right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Purchase money Liens or purchase money security interests upon or
in any property (other than Collateral) acquired or held by the Borrower or any
Guarantor to secure the purchase price of such property or to secure Indebted-
ness incurred solely for the purpose of financing the acquisition of such
property, and Liens existing on such property at the time of its acquisition
(other than any such Lien created in contemplation of such acquisition);
provided, however, that (i) any such Lien is created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or refund,
the cost (including, without limitation, the cost of construction) of the
property subject thereto, (ii) the principal amount of the Indebtedness secured
by such Lien does not exceed 100% of such cost, (iii) such Lien does not extend
to or cover any other property other than such item of property and any
improvements on such item, and (iv) the aggregate principal amount of the
Indebtedness secured by the Liens permitted by this clause (b) and all
Capitalized Lease Obligations permitted by clause (g) of Section 7.2 shall not
exceed $15,000,000 in the aggregate at any time outstanding;
(c) Any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness or other Obligation secured by any Lien permitted
by subsections (b), (i), (j) or (k) of this Section 7.1 without any increase in
excess of costs and expenses associated therewith in the outstanding aggregate
principal amount of Indebtedness secured thereby or in the assets subject to
such Lien;
(d) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
the Borrower or any of its Subsidiaries in the ordinary course of business which
secure its obligations to such Person; provided, however, that (i) the Borrower
or such Guarantor is not in default in respect of such obligations in an
aggregate amount in excess of $5,000,000 or (ii) the Borrower or such Guarantor
is in good faith and by appropriate proceedings diligently contesting such
obligation, adequate provision is made for the payment thereof and all such
Liens in the aggregate have no Material Adverse Effect;
(e) Liens (excluding Environmental Liens) securing taxes, assessments
or governmental charges, claims or levies to the extent such items are not
required to be paid pursuant to Section 6.2;
(f) Liens incurred or pledges and deposits made in the ordinary
course of business (other than in respect of extensions of credit) in connection
with workers' compensation, unemployment insurance, old-age pensions, other
social security benefits and other obligations (other than Indebtedness)
incurred in the ordinary course of business;
(g) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business, and judgment
liens; provided, however, that all such Liens (i) in the aggregate do not have a
Material Adverse Effect and (ii) do not secure directly or indirectly judgments
(not covered by insurance or an indemnity from a creditworthy party who, in
either case, has acknowledged coverage or is required to honor the same pursuant
to a final judgment or order) in excess of $5,000,000;
(h) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate render title thereto unmarketable or
impair, in any material manner, the use of such property for the purposes for
which such property is held by the Borrower or any such Guarantor;
(i) Liens in favor of lessors securing operating leases;
(j) Liens existing on the date hereof and disclosed on Schedule 7.1;
(k) Liens arising under Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Subsection 7.2(g);
(l) expired financing statements, financing statements filed for
precautionary purposes in respect of operating leases, and financing statements
filed in respect of Liens permitted hereby;
(m) Liens not otherwise permitted by the foregoing clauses of this
Section 7.1 securing obligations or other liabilities (other than Indebtedness)
of the Borrower or any Guarantor; provided, however, that the aggregate amount
of such obligations and liabilities secured by such Liens shall not exceed
$1,000,000 at any time outstanding;
(n) Liens (i) if any, on Accounts arising by reason of the
recharacterization of the sale of such Accounts by the Borrower or a Guarantor
to Funding as part of the Receivables Securitization or pursuant to the
Factoring Program or (ii) by reason of the filing of a financing statement in
connection with the Receivables Securitization or the Factoring Program naming
the Borrower or such Guarantor as debtor; and
(o) Liens not otherwise permitted by the foregoing clauses of this
Section 7.1 which rank junior to or pari passu with the Liens created by the
Collateral Documents securing Indebtedness for Borrowed Money of the Borrower or
any Guarantor owed to any lender (other than a Lender); provided, however, that
the aggregate amount of such Indebtedness for Borrowed Money secured by such
Liens shall not exceed $25,000,000 at any time outstanding and with respect to
any Lien permitted under this Section 7.1(o) (an "Additional Lien"), the
Administrative Agent shall, at the request of the Borrower, enter into an
Intercreditor Agreement substantially in the form of Exhibit O with such lender,
providing for the Additional Lien to rank pari passu with the Liens created by
the Collateral Documents but only with respect to the property expressly covered
by the Additional Lien, notwithstanding the order of execution, creation, filing
or recording of the Collateral Documents and the documents creating the
Additional Lien or any Uniform Commercial Code financing statements or other
instruments or notices related thereto or the timing or any other method of
perfection of such Lien.
7.2 Indebtedness. The Borrower shall not create or suffer to exist,
or permit any Guarantor to create or suffer to exist, any Indebtedness except:
(a) the Obligations;
(b) Contingent Obligations permitted by Section 7.11;
(c) current liabilities for goods or services purchased in the
ordinary course of business;
(d) Indebtedness (i) owing to any Guarantor by the Borrower or any
other Guarantor, (ii) Indebtedness owing to the Borrower by any Guarantor, (iii)
Indebtedness in an aggregate principal amount at any time outstanding not in
excess of $25,000,000 owing to one or more North American Ventures, Foreign
Ventures or Minority Interest Ventures by the Borrower or any Guarantor which
Indebtedness, in the case of this clause (iii), is subordinated in right of
payment to the Obligations and (iv) arising pursuant to the Securitization
Documents and evidenced by a note or notes from the Borrower to Funding in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
(e) Indebtedness secured by Liens permitted by Subsection 7.1(b) and
Subsection 7.1(o);
(f) obligations pursuant to Interest Rate Contracts referred to in
Section 6.13;
(g) Indebtedness of the Borrower or any Guarantor under Capitalized
Lease Obligations; provided, however, that the aggregate amount of Capitalized
Lease Obligations incurred under this clause (g) and the aggregate amount of
Indebtedness incurred pursuant to clause (e) above by the Borrower and the
Guarantors shall not exceed $25,000,000 at any one time outstanding;
(h) subordinated Indebtedness of the Borrower, containing terms and
conditions satisfactory to the Majority Lenders, in their reasonable judgment,
provided that the Debt Issuance Proceeds thereof are used to prepay the Loans to
the extent required by Subsection 2.8(d);
(i) Indebtedness outstanding on the date hereof and listed on
Schedule 4.22 and refinancings thereof without any increase in the amount of
such Indebtedness;
(j) unsecured Indebtedness in an aggregate principal amount at any
time outstanding not in excess of $25,000,000;
(k) Indebtedness, if any, arising by reason of the recharacterization
of the sale of Accounts pursuant to the Receivables Securitization; and
(l) Indebtedness, if any, in an aggregate principal amount not to
exceed $10,000,000 at any time outstanding arising by reason of the
recharacterization of the sale of Accounts pursuant to the Factoring Program.
7.3 Sale/Leasebacks. The Borrower shall not, and shall not permit
any of the Guarantors to, become or remain liable as lessee or guarantor or
other surety with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed), whether
now owned or hereafter acquired, which (a) the Borrower or any of the Guarantors
has sold or transferred or is to sell or transfer to any other Person, or (b)
the Borrower or any of the Guarantors intends to use for substantially the same
purposes as any other property which has been or is to be sold or transferred by
that entity to any other Person in connection with such lease; provided,
however, that the Borrower and any of the Guarantors may become and remain so
liable if (i) the proceeds from such a sale or transfer or series of related
sales or transfers are applied in the same manner as if such proceeds
constituted Asset Sale Proceeds, or (ii) such sale/leaseback transaction is
between Guarantors or between the Borrower and a Guarantor.
7.4 Restricted Payments. The Borrower shall not and shall not permit
any of the Guarantors to (a) declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account or in respect of, or purchase, redeem or otherwise acquire for value,
any of its Stock or Stock Equivalents other than (i) as long as no Event of
Default is continuing, declarations and payments of dividends by the Borrower in
respect of its outstanding common stock and purchases, redemptions and other
acquisitions of Stock or Stock Equivalents of the Borrower, in an aggregate
amount in any Fiscal Year not in excess of 25% of the Net Income of the Borrower
for the previous Fiscal Year, (ii) purchases, redemptions and other acquisitions
of Stock (but not Stock Equivalents) for an aggregate amount from the Effective
Date of up to $10,000,000, (iii) declarations and payments of dividends by the
Borrower in respect of its outstanding common stock paid in, and purchases,
redemptions and other acquisitions of Stock or Stock Equivalents of the Borrower
effected with Stock or Stock Equivalents of the Borrower in respect of which the
Borrower has no purchase, redemption, retirement, defeasance or other
acquisition obligation, (iv) declarations and payments of dividends and other
distributions to the Borrower or any other Guarantor by any Guarantor, and (v)
the repurchase for $67,500,000 of all the USSC Warrants less $25,000,000
representing an adjustment to the purchase price of the Footwear Business
pursuant to the Asset Purchase Agreement, or (b) purchase, redeem, prepay,
defease or otherwise acquire for value or make any payment (other than required
purchases, mandatory redemptions and other required payments) on account or in
respect of any principal amount of Indebtedness for Borrowed Money, now or
hereafter outstanding, except (i) the Loans, (ii) in the case of a Guarantor,
payments to the Borrower or any other Guarantor on account of any Indebtedness
owing to the Borrower or such other Guarantor by such Guarantor and (iii) in
connection with a refinancing of any Indebtedness permitted by Section 7.2.
7.5 Mergers, Borrower Stock Issuances, Sale of Assets, Etc. (a) The
Borrower shall not and shall not permit any of the Guarantors to (i) merge with
any Person; provided, however, that any Guarantor may merge with and into the
Borrower or any other Guarantor, (ii) consolidate with any Person, (iii) except
in respect of (A) a transaction permitted by clause (i) of this Subsection
7.5(a), (B) an Investment permitted by Section 7.6, or (C) the dissolution of a
Guarantor, acquire all or substantially all of the Stock or Stock Equivalents of
any Person, (iv) except in respect of (A) a transaction permitted by clause (i)
of this Subsection 7.5(a), (B) an Investment permitted by Section 7.6, or (C)
the dissolution of a Guarantor, acquire all or substantially all of the assets
of any Person or all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any Person, (v) enter
into any joint venture or partnership with any Person except as permitted by
Section 7.6, or (vi) sell, lease, transfer or otherwise dispose of, whether in
one transaction or in a series of transactions any of its assets, including,
without limitation, substantially all assets constituting the business of a
division, branch or other unit operation except as permitted pursuant to
Subsection (c) below.
(b) The Borrower shall not (i) issue or sell any of its Stock or
Stock Equivalents unless (A) immediately after giving effect thereto such
issuance or sale does not result in a Change in Control and (B) any Equity
Issuance Proceeds of such issuance or sale are used to prepay the Loans to the
extent required by Subsection 2.8(d), or (ii) sell, convey, transfer, lease or
otherwise dispose of, or permit any of the Guarantors to sell, convey, transfer,
lease or otherwise dispose of, any Stock or Stock Equivalents of any Guarantor
except as permitted by Section 7.7.
(c) The Borrower shall not and shall not permit any of the Guarantors
to sell, convey, transfer, lease or otherwise dispose of any of its assets or
any interest therein to any Person, or permit or suffer any other Person to
acquire any interest in any of the assets of the Borrower or any such Guarantor
except (i) the sale or disposition of (A) inventory in the ordinary course of
business, or (B) equipment or motor vehicles which have become obsolete, are
replaced in the ordinary course of business, or which are no longer necessary or
useful in the reasonable judgment of the Borrower for the conduct of its or any
Guarantor's business, (ii) the lease or sublease of real or personal property
(including, without limitation, office and retail space), that is not part of a
sale and leaseback that is otherwise prohibited by this Agreement, (iii) any
such sale, conveyance, transfer, lease or other disposition to the Borrower or
to a Guarantor, (iv) licenses of intellectual property in the ordinary course of
business, to any Foreign Venture, North American Venture or Minority Interest
Venture, (v) Liens permitted by Section 7.1, (vi) Investments permitted by
Section 7.6 and sales, liquidations and other dispositions of Cash Equivalents
and Interest Rate Contracts in the ordinary course of business, (vii) the sale
or purported sale of Accounts to Funding in connection with the Receivables
Securitization and (viii) as long as no Default or Event of Default is
continuing or would result therefrom, any such sale of any assets for the Fair
Market Value thereof, payable at least 75% in cash upon such sale; provided,
however, that, with respect to any such sale pursuant to clause (vii) or (viii)
above, Asset Sale Proceeds in respect thereof are applied to the prepayment of
the Loans to the extent required by Subsection 2.8(d).
(d) The Borrower shall not sell or otherwise dispose of, or factor,
or permit any Guarantor to sell or otherwise dispose of, or factor, any Accounts
except, as long as no Event of Default is continuing or would result therefrom,
(i) as permitted by clause (vii) of the immediately preceding paragraph or (ii)
pursuant to the Factoring Program; provided, however, that with respect to
clause (ii) above, the outstanding face amount of Accounts included in the
Factoring Program shall not at any time exceed $10,000,000.
7.6 Investments in Other Persons. The Borrower shall not, directly
or indirectly, make or maintain, or permit any Guarantor to make or maintain,
any loan or advance to any Person or own, purchase or otherwise acquire, or
permit any Guarantor to own, purchase or otherwise acquire, any Stock, Stock
Equivalents, other equity interest, obligations or other securities of, or any
assets constituting the purchase of a business or line of business, or make or
maintain, or permit any Guarantor to make or maintain, any capital contribution
to, or otherwise invest in, any other Person (any such transaction being an
"Investment"), except:
(a) Investments expressly permitted or required hereunder;
(b) Investments in accounts, contract rights and chattel paper (each
as defined in the Uniform Commercial Code), notes receivable and similar items
arising or acquired in the ordinary course of business consistent with the past
practice of the Borrower and its Subsidiaries;
(c) Investments in Guarantors;
(d) Investments in North American Ventures made after the date
hereof, which, together with all Contingent Obligations permitted under Section
7.11(c) by the Borrower and each of the Guarantors in respect of Indebtedness of
all such North American Ventures, do not in the aggregate exceed $25,000,000 at
any time (exclusive of appreciation and depreciation in the value thereof);
(e) Investments in Foreign Ventures made after the date hereof,
which, together with all Contingent Obligations permitted under Section 7.11(d)
by the Borrower and each of the Guarantors in respect of Indebtedness of all
such Foreign Ventures, do not in the aggregate exceed $30,000,000 outstanding at
any time outstanding (exclusive of appreciation and depreciation in the value
thereof);
(f) personal loans or advances to employees of the Borrower or any of
the Guarantors which loans and advances do not in the aggregate exceed
$5,000,000 outstanding at any time;
(g) loans or advances to customers or suppliers of the Borrower or
any of the Guarantors in the ordinary course of business, which loans and
advances do not in the aggregate exceed $10,000,000 outstanding at any time;
(h) Investments in Cash Equivalents;
(i) Investments comprised of Interest Rate Contracts entered into in
accordance with Section 6.13;
(j) Investments constituting Other Obligations;
(k) Investments existing on the date hereof and set forth on Schedule
7.6;
(l) Investments made after the date hereof not otherwise permitted
hereby in an aggregate amount not in excess of $25,000,000 outstanding at any
time (exclusive of appreciation and depreciation in the value thereof);
(m) Investments in notes receivable and similar items received in
connection with sales and other dispositions of assets in accordance with the
terms hereof;
(n) Investments arising under hedging transactions to the extent
permitted under Section 7.15;
(o) Investments in Funding arising from the transfer by the Borrower
of Accounts to Funding or the issuance by the Borrower of one or more promissory
notes to Funding, in each case in connection with the Receivables
Securitization; provided, however, that at the time of and immediately after
giving effect to each such Investment, no Default or Event of Default exists or
would result and the aggregate amount of such Investments in Funding does not
exceed the amount necessary to consummate the transactions contemplated by the
Securitization Documents and that the aggregate outstanding principal amount of
the Indebtedness of the Borrower to Funding shall at no time exceed $5,000,000.
7.7 Maintenance of Ownership of Subsidiaries. The Borrower shall not
sell or otherwise dispose of any shares of Stock or any Stock Equivalent of any
Guarantor or Funding except for the sale of Texas Boot, or permit any Guarantor
or Funding to issue, sell or otherwise dispose of any shares of its Stock or any
Stock Equivalent or, in the case of any Guarantor, the Stock or any Stock
Equivalent of any other Guarantor except (a) to the Borrower or to a Guarantor
and then only if pledged to the Administrative Agent pursuant to the Borrower
Pledge Agreement or a pledge agreement that is substantially similar thereto, or
(b) as permitted by Subsections 7.5(a) and (c).
7.8 Change in Nature of Business. The Borrower shall not enter into,
and shall not permit any of the Guarantors to enter into, any type of business
other than one carried on at the date hereof and other businesses closely
related thereto.
7.9 Modification of Material Agreements. The Borrower shall not, and
shall not permit any of the Guarantors to, alter, amend, modify, rescind,
terminate or waive any of their respective rights under, or fail to comply in
all material respects with, any of its material Contractual Obligations;
provided, however, that the Borrower shall not be deemed in default of this
Section 7.9 if all such failures in the aggregate do not have a Material Adverse
Effect.
7.10 Accounting Changes. The Borrower shall not make, nor permit any
of the Guarantors to make any change in accounting treatment and reporting
practices or tax reporting treatment, except as required by GAAP or law and
disclosed in writing to the Administrative Agent.
7.11 Contingent Obligations. The Borrower shall not, and shall not
permit any of the Guarantors to, incur, assume, endorse, be or become liable
for, or guarantee, directly or indirectly, or permit or suffer to exist, any
Contingent Obligation, except for:
(a) Contingent Obligations evidenced by a Loan Document;
(b) Contingent Obligations incurred by the Borrower and any Guarantor
in respect of Indebtedness and other obligations and liabilities of the Borrower
or any Guarantor, to the extent such underlying Indebtedness, obligations and
liabilities are permitted hereby;
(c) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of any North American Venture which, together with all Investments
in North American Ventures made pursuant to Subsection 7.6(d), do not exceed
$25,000,000 at any time outstanding;
(d) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of Foreign Ventures which, together with all Investments in Foreign
Ventures made pursuant to Subsection 7.6(e), do not exceed $25,000,000 at any
time outstanding;
(e) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of Minority Interest Ventures which, together with all Investments
made pursuant to Subsection 7.6(l), do not exceed $15,000,000 at any time
outstanding; and
(f) Contingent Obligations in existence on the date hereof to the
extent listed on Schedule 7.11.
7.12 Transactions with Affiliates. The Borrower shall not, and shall
not permit any of the Guarantors, except as otherwise expressly permitted
herein, to do any of the following: (a) make any Investment in an Affiliate of
the Borrower (other than Funding) which Affiliate is not a Guarantor, (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate
of the Borrower (other than Funding) which is not a Guarantor, (c) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Borrower other than a Guarantor, (d) repay any Indebtedness to any Affiliate of
the Borrower (other than Indebtedness to Funding incurred in connection with the
Receivables Securitization in an aggregate principal amount not exceeding
$5,000,000) or (e) enter into any other transaction directly or indirectly with
or for the benefit of any Affiliate of the Borrower which is not a Guarantor
(including, without limitation, guaranties and assumptions of obligations of any
such Affiliate) except, in the case of each of clause (a) through (e) above, for
(i) transactions otherwise permitted herein, on a basis no less favorable to the
Borrower or such Guarantor as would be obtained in a comparable arm's length
transaction with a Person not an Affiliate, (ii) arrangements with Affiliates of
the Borrower or any of its Subsidiaries in existence on the date hereof, (iii)
salaries and other compensation of the Borrower's and its Subsidiaries'
respective directors, officers and employees, (iv) transactions and other
arrangements between (A) the Borrower and/or one or more Guarantors, on the one
hand, and (B) one or more North American Ventures, Foreign Ventures and/or
Minority Interest Ventures, on the other, to the extent that (1) such
transactions and other arrangements are not otherwise prohibited hereby and (2)
the business purpose achieved by such transaction or other arrangement renders,
in the good faith judgment of the Borrower and any applicable Guarantor, the
terms of such transaction reasonable and in furtherance of the Borrowers' or
such Guarantors' businesses, and (v) any transaction required or otherwise
expressly permitted by this Agreement.
7.13 No New Subsidiaries. The Borrower shall not, and shall not
permit any of the Guarantors to, incorporate or otherwise organize any Domestic
Subsidiary (other than a North American Venture) which was not in existence on
the Effective Date unless (a) such Domestic Subsidiary is a Wholly-Owned
Subsidiary, (b) all of the Stock and Stock Equivalents of such Domestic
Subsidiary are pledged to the Administrative Agent pursuant to the Borrower
Pledge Agreement or a pledge agreement that is substantially similar thereto,
(c) such Domestic Subsidiary (other than Funding) executes and delivers to the
Administrative Agent a Guaranty and a Subsidiary Security Agreement, and (d) if
such Domestic Subsidiary is Funding, the Borrower pledges to the Administrative
Agent, on behalf and for the ratable benefit of the Secured Parties, pursuant to
an amendment to the Borrower Pledge Agreement in form and substance satisfactory
to the Administrative Agent, any note of Funding received by the Borrower in
connection with the Receivables Securitization.
7.14 Terms of Guarantors' Stock. The Borrower shall not permit any
Guarantor to make any change in the terms of its outstanding Stock or Stock
Equivalents.
7.15 No Speculative Transactions. The Borrower shall not and shall
not permit any of the Guarantors to engage in any transaction involving
derivatives or commodity options, futures or forward contracts, except for the
sole purpose of hedging in the normal course of business and consistent with
past practices.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default. Each of the following events shall be an
Event of Default:
(a) The Borrower shall fail to pay any principal (including, without
limitation, mandatory prepayments of principal) of any Loan when the same
becomes due and payable; or
(b) The Borrower shall fail to pay any interest on any Loan, any fee
or any other amount due hereunder or under the other Loan Documents or any of
the other monetary Obligations within five days after the same becomes due and
payable; or
(c) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) Any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.4, 6.5, 6.9, 6.10 or
6.11 or Article VII, or (ii) any other term, covenant or agreement contained in
this Agreement or in any other Loan Document if such failure under this clause
(ii) shall remain unremedied for 15 days after the earlier of the date on which
(A) a Responsible Officer of the Borrower becomes aware of such failure or (B)
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(e) Any Loan Party shall fail to pay any payment in respect of any
Indebtedness for Borrowed Money of such Loan Party (or any Contingent Obligation
in respect of Indebtedness for Borrowed Money of any other Person) having a
principal amount of $5,000,000 or more (other than the Indebtedness evidenced by
the Notes), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) after giving
effect to any applicable grace period or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall become or be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), or any
Loan Party shall be required to repurchase or offer to repurchase such
Indebtedness, prior to the stated maturity thereof; or
(f) Any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against any Loan Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a custodian, receiver, trustee or other similar official for it
or for any substantial part of its property and, in the case of any such
proceedings instituted against any Loan Party (but not instituted by it), either
such proceedings shall remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceedings shall occur; or any Loan Party
shall take any corporate action to authorize any of the actions set forth above
in this subsection (e); or
(g) Any judgment or order for the payment of money (to the extent not
covered by insurance or an indemnity from a creditworthy party who, in either
case, has acknowledged coverage or is required to honor the same pursuant to any
final judgment or order) in excess of $5,000,000 shall be rendered against any
Loan Party and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be any period of
20 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) (i) With respect to any Plan, a prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA shall occur which in
the reasonable determination of the Majority Lenders has a reasonable likelihood
of resulting in direct or indirect liability to any Loan Party, (ii) with
respect to any Title IV Plan, the filing of a notice to voluntarily terminate
any such plan in a distress termination, (iii) with respect to any Multiemployer
Plan, any Loan Party or any ERISA Affiliate shall incur any Withdrawal
Liability, (iv) with respect to any Qualified Plan, any Loan Party or any ERISA
Affiliate shall incur an accumulated funding deficiency or request a funding
waiver from the IRS, or (v) with respect to any Title IV Plan or Multiemployer
Plan which has an ERISA Event not described in clauses (i) through (iv) hereof,
in the reasonable determination of the Majority Lenders there is a reasonable
likelihood for termination of any such plan by the PBGC; provided, however, that
the events listed in clauses (i) through (v) hereof shall constitute Events of
Default only if the liability, deficiency or waiver request of any Loan Party or
any ERISA Affiliate, whether or not assessed, exceeds $5,000,000 in any case set
forth in (i) through (v) above, or exceeds $5,000,000 for any three-year period
in the aggregate for all such cases;
(i) Any provision deemed material by the Majority Lenders in their
reasonable judgment of any Collateral Document or any Guaranty after delivery
thereof under Section 3.1 shall for any reason cease to be valid and binding on,
or enforceable against, any Loan Party party thereto, or any Loan Party shall so
state in writing; or
(j) Except as expressly set forth in any of the Collateral Documents
or Section 4.10, any Collateral Document after delivery thereof pursuant to
Section 3.1 shall, for any reason, cease to create valid Liens on any of the
Collateral purported to be covered thereby, or, except in respect of de minimis
portions of the Collateral, such Liens shall cease to be perfected and first
priority Liens, or any Loan Party shall so state in writing; or
(k) There shall occur any Change of Control; or
(l) There shall occur any change in the Borrower's arrangements in
respect of the Borrower's sourcing of its shoe inventory which has a Material
Adverse Effect; or
(m) Any Loan Party shall have entered into any consent or settlement
decree or agreement or similar arrangement with any Governmental Authority or
any judgment, order, decree or similar action shall have been entered against
any Loan Party, in either case based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and the Guarantors are likely to incur Environmental
Liabilities and Costs (to the extent not covered by insurance or an indemnity
from a creditworthy party who, in either case, has acknowledged coverage or is
required to honor the same pursuant to any final judgment or order) in excess of
$10,000,000 in the aggregate.
8.2 Remedies. If there shall occur and be continuing any Event of
Default, the Administrative Agent (a) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Borrower, declare the
obligation of each Lender to make Loans and each Issuer to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, and (b)
shall at the request, or may with the consent, of the Majority Lenders by notice
to the Borrower, declare the Loans, all interest thereon and all other amounts
and Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts and Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that upon the occurrence of the Event of
Default specified in Subsection 8.1(f), (A) the obligation of each Lender to
make Loans and of each Issuer to issue Letters of Credit shall automatically be
terminated and (B) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth in this
Agreement, the Administrative Agent may exercise any remedies provided for by
the Collateral Documents in accordance with the terms thereof or any other
remedies provided by applicable law.
8.3 Actions in Respect of Letters of Credit and Other Obligations.
(a) Upon the Termination Date, the Borrower shall pay to the
Administrative Agent in immediately available funds at the Administrative
Agent's office specified in the Notes, for deposit in a special interest-bearing
cash collateral account (the "L/C Cash Collateral Account") to be maintained
with and in the name of the Administrative Agent on behalf of the Secured
Parties at such place as shall be designated by the Administrative Agent, an
amount equal to the sum of all outstanding Letter of Credit Obligations plus all
outstanding Other Obligations less the then balance, if any, in the L/C Cash
Collateral Account.
(b) The Borrower hereby pledges, and grants to the Administrative
Agent a Lien on all of its right, title and interest in and to all funds held in
the L/C Cash Collateral Account from time to time, and all proceeds thereof, as
security for the payment of all amounts due and to become due from the Borrower
to the Lenders and the Issuers under the Loan Documents.
(c) The Administrative Agent may, from time to time after funds are
deposited in the L/C Cash Collateral Account, apply funds then held in the L/C
Cash Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become or shall become due and
payable by the Borrower to the Issuers or Lenders in respect of the Letter of
Credit Obligations and Other Obligations. The Administrative Agent shall
promptly give written notice of any such application; provided, however, that
the failure to give such written notice shall not invalidate any such
application.
(d) Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations.
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the L/C Cash Collateral Account or any funds held
therein or (ii) create or permit to exist any Lien upon or with respect to the
L/C Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
(f) The Administrative Agent may exercise, in its sole discretion, in
respect of the L/C Cash Collateral Account, in addition to the other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform Commercial Code in
effect in the State of New York at that time, and the Administrative Agent may,
without notice except as specified below, sell the L/C Cash Collateral Account
or any part thereof in one or more sales, at public or private sale, at any of
the Administrative Agent's offices or elsewhere, for cash, or credit or for
future delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of the L/C Cash Collateral Account, regardless
of notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the L/C Cash
Collateral Account or any of the assets contained therein, may, in the
discretion of the Administrative Agent, then or at any time thereafter be
applied (after all payments provided for in Subsection 8.3(c), the expiration of
all outstanding Letters of Credit and the payment of any amounts payable
pursuant to Section 10.4) in whole or in part by the Administrative Agent
against all or any part of the other Obligations in such order as the
Administrative Agent shall elect. Any surplus of such cash or cash proceeds
held by the Administrative Agent and remaining after the indefeasible cash
payment in full of all of the Obligations shall be paid over to the Borrower or
to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Authorization and Action. (a) Each Lender hereby 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 other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents.
(b) As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which the Administrative Agent in good faith believes exposes it to
personal liability or is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.
9.2 Administrative Agent's Reliance, Etc. Neither the Administrative
Agent, nor any of its Affiliates or any of the respective directors, officers,
agents or employees of the Administrative Agent or any such Affiliate shall be
liable for any action taken or omitted to be taken by it, him, her or them under
or in connection with this Agreement or the other Loan Documents, except for
its, his, her or their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent (a) may
treat the payee of any Note as the holder thereof until such note has been
assigned in accordance with Section 10.7, (b) may rely on the Register to the
extent set forth in Subsection 10.7(c), (c) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (d)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents, (e) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any of the other
Loan Documents on the part of the Borrower or any other Loan Party or to inspect
the property (including, without limitation, the books and records) of the
Borrower or any other Loan Party, (f) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto, and (g) shall incur
no liability under or in respect of this Agreement or any of the other Loan
Documents by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, cable, telex or facsimile transmission)
believed by it to be genuine and signed or sent by the proper party or parties.
9.3 Citibank and Affiliates. With respect to its Revolving Credit
Commitment, the Loans made by it and each Note issued to it and Letters of
Credit issued by it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower or any of its Subsidiaries and any Person who may do business with
or own securities of the Borrower or any of its Subsidiaries, all as if Citibank
were not the Administrative Agent and without any duty to account therefor to
the Lenders.
9.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements referred to in Article IV and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
9.5 Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Affiliates, and their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower or the other Loan Parties), ratably according to the respective
principal amounts of the Notes then held by each of them and Letter of Credit
Obligations (including, without limitation, participations therein) owing to
them (or if no Notes and Letter of Credit Obligations are at the time
outstanding, ratably according to the respective amounts of the aggregate of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including, without limitation, fees and disbursements of legal
counsel) of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against, the Administrative Agent in any way relating to or arising
out of this Agreement or the other Loan Documents or any action taken or omitted
by the Administrative Agent under this Agreement or the other Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's or
such Affiliate's gross negligence or wilful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including,
without limitation, fees and disbursements of legal counsel) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
its rights or responsibilities under, this Agreement or the other Loan
Documents, to the extent that the Administrative Agent is not reimbursed for
such expenses by the Borrower or another Loan Party.
9.6 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent that is reasonably satisfactory to
the Borrower. If no successor Administrative Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank organized 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
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
ARTICLE X
MISCELLANEOUS
10.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Article III except as otherwise provided therein, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Loans or any fees
or other amounts payable hereunder, (d) postpone any date fixed for any payment
of principal of, or interest on, the Loans or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or the aggregate unpaid
principal amount of the Loans or Letter of Credit Obligations which shall be
required for the Lenders or any of them to take any action hereunder, (f)
release all or substantially all of the Collateral except as shall otherwise be
provided in Section 7.5 or in the Collateral Documents, (g) release any
Guarantor from a Guaranty, except as shall otherwise be provided in such
Guaranty, or (h) amend this Section 10.1 or the definition of the term "Majority
Lenders" contained in Section 1.1; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent or the Issuers in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent or the Issuers,
respectively, under this Agreement or the other Loan Documents.
10.2 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Borrower, at its address at
11933 Westline Industrial Drive, St. Louis, Missouri 63146 (telecopy number:
(314) 434-0409) (telephone number: (314) 579-8812), Attention: Chief Financial
Officer, with a copy to the Borrower at its address at 9 West Broad Street,
Stamford, Connecticut 06902 (telecopy number: (203) 978-6020) (telephone
number: (203) 328-4386), Attention: General Counsel; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule II; if to
Citibank in its capacity as Issuer at its address at 399 Park Avenue, New York,
New York 10403 (telecopy number: (212) 793-7585) (telephone number: (212) 559-
3763), Attention: Arnold Ziegel; and if to the Administrative Agent, at its
address at One Court Square, Long Island City, New York 11120 (telecopy number
718-248-4844)(telephone number: 718-248-4479), Attention: Bruce McKenzie; or, as
to the Borrower, any Lender, any Issuer or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails, delivered to the telegraph company, confirmed by telex
answer back, telecopied with confirmation of receipt, delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, except
that notices and communications to the Administrative Agent pursuant to Article
II or IX shall not be effective until received by the Administrative Agent.
10.3 No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
10.4 Costs; Expenses; Indemnities. (a) The Borrower agrees to pay
promptly after a demand therefor (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, each of the other Loan Documents and each of the other documents
to be delivered hereunder and thereunder, including, without limitation, (A) the
reasonable fees and out-of-pocket expenses of Weil, Gotshal & Manges LLP,
counsel to the Administrative Agent but no other counsel to the Administrative
Agent, any Lender or any Issuer without the approval of the Borrower, (B) all
filing and recording fees, and all syndication (including printing, distribution
and bank meetings), transportation, computer, duplication, messenger, and audit
costs and expenses, and (ii) all costs and expenses of the Administrative Agent,
each Issuer and each Lender (including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel retained by the Administrative Agent, any
Issuer or any Lender) in connection with the restructuring or enforcement
(whether through negotiation, legal proceedings or otherwise) of this Agreement
and the other Loan Documents.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Issuer and each Lender and their respective
Affiliates, and the directors, officers, employees, agents, attorneys,
consultants and advisors of or to any of the foregoing (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including, without limitation,
fees and disbursements of counsel to any such Indemnitee, but subject to the
second proviso contained in this sentence) which may be imposed on, incurred by
or asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee is a
party thereto, whether direct, indirect, or consequential and whether based on
any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, or any act, event
or transaction related or attendant to any thereof, including, without
limitation, (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Borrower or any of
its Subsidiaries involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning the Borrower or any of its
Subsidiaries; (iii) any costs or liabilities incurred in connection with any
Environmental Lien; (iv) any costs or liabilities incurred in connection with
any other matter under any Environmental Law, including, without limitation,
CERCLA and applicable state property transfer laws, whether, with respect to any
of the foregoing, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Borrower
or any of its Subsidiaries, or the owner, lessee or operator of any property of
the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to any of the foregoing referred to in clauses (i), (ii), (iii) and
(iv), as set forth in the following proviso or to the extent (A) incurred
following foreclosure by the Administrative Agent, any Issuer or any Lender, or
the Administrative Agent, any Issuer or any Lender having become the successor
in interest to the Borrower or any of its Subsidiaries, and (B) attributable
solely to acts of the Administrative Agent, such Issuer or such Lender; or (v)
the use or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Borrower
shall not have any obligation under this Subsection 10.4(b) to an Indemnitee
with respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order, but in no
event shall any Indemnitee be liable for any exemplary or punitive damages to
the extent permitted by applicable law; and provided further, however, that in
connection with any investigation, litigation or proceeding of the type referred
to above, or the preparation of a defense with respect thereto, the Borrower
shall not be responsible for, or required to hold harmless any Indemnitee from
and against, the fees and disbursements of more than one counsel for all of the
Indemnified Parties taken together, except to the extent any such Indemnitee
requires its own counsel in order to be adequately represented in the reasonable
judgment of counsel for such Indemnitee.
(c) If any Lender receives any payment of principal of, or is subject
to a conversion of, any Eurodollar Rate Loan or Fixed Rate Loan other than on
the last day of an Interest Period relating to such Loan, as a result of any
payment or conversion made by the Borrower or acceleration of the maturity of
the Notes pursuant to Section 8.2 or for any other reason, the Borrower shall,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender all
amounts required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or
conversion, including, without limitation, any loss (including, without
limitation, loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Loan, assuming for such purpose that, in the
case of a Eurodollar Rate Loan, such Lender has funded such Eurodollar Rate Loan
in the London interbank eurodollar market with a loan of the same amount and
Interest Period as such Eurodollar Rate Loan.
(d) The Borrower shall indemnify the Administrative Agent, the
Issuers and the Lenders for, and hold the Administrative Agent and the Lenders
harmless from and against, any and all claims for brokerage commissions, fees
and other compensation made against the Administrative Agent, the Issuers and
the Lenders for any broker, finder or consultant with respect to any agreement,
arrangement or understanding made by or on behalf of the Borrower or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement.
(e) The Administrative Agent, each Issuer and each Lender agree that
in the event that any such investigation, litigation or proceeding set forth in
subparagraph (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrower in writing.
(f) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action, and the Borrower, in any event, may participate in
the defense thereof with legal counsel of the Borrower's choice. In the event
that such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee at its own cost and expense shall have the
right to have legal counsel of its choice participate in such defense. No
action taken by legal counsel chosen by such Indemnitee in defending against any
such investigation, litigation or proceeding or requested Remedial Action, shall
vitiate or in any way impair the Borrower's obligation and duty hereunder to
indemnify and hold harmless such Indemnitee.
(g) The Borrower agrees that any indemnification or rights in respect
thereof provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 10.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
10.5 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
Obligations now or hereafter existing irrespective of whether or not such Lender
shall have made any demand under this Agreement or any Note or any Reimbursement
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
the other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
10.6 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have been notified by each Lender and each Issuer
that such Lender and such Issuer has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent, each
Lender and each Issuer and their respective successors and permitted assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of all the Lenders.
10.7 Assignments and Participations. (a) Each Lender may sell,
transfer, negotiate or assign to one or more Eligible Assignees all or a portion
of its Commitments, commitment to issue Letters of Credit, the Loans and Letter
of Credit Obligations owing to it and the Notes held by it and a commensurate
portion of its rights and obligations hereunder and under the other Loan
Documents; provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of (A) all of the assigning Lender's
rights and obligations as a Lender making Revolving Credit Loans under this
Agreement and/or (B) all of the assigning Lender's rights and obligations as a
Lender making Term Loans under this Agreement, (ii) the aggregate amount of the
Commitment, Loans and participation in Letter of Credit Obligations being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event (if
less than the Assignor's entire interest) be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, except, in either case, (A)
with the consent of the Borrower and the Administrative Agent or (B) if such
assignment is being made to an existing Lender, (iii) if such Eligible Assignee
is not, prior to the date of such assignment, a Lender or an Affiliate of a
Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and the Borrower (which consent shall not be unreasonably
withheld) and (iv) in the case of any Initial Lender unless such assignment is
an assignment of such Initial Lender's entire interest in the Loans such Initial
Lender is required to retain an interest in the Loans equal to at least
$14,000,000 (except as such Initial Lender's interest in the Loans may be
reduced below $14,000,000 by scheduled repayments or prepayments, whether
mandatory or optional). The parties to each assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with the Notes (or an Affidavit of Loss and
Indemnity with respect to such Notes satisfactory to the Administrative Agent)
subject to such assignment. Upon such execution, delivery, acceptance and
recording and the receipt by the Administrative Agent from the assignee in
respect thereof of an assignment fee in the amount of $2,500, from and after the
effective date specified in such Assignment and Acceptance, (A) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender, and if such Lender was an Issuer, of such Issuer hereunder and
thereunder, and (B) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents, other than those relating to events or circumstances
occurring prior to such assignment (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document or of any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this Agreement
and each of the Loan Documents together with a copy of the most recent financial
statements delivered by the Borrower to the Lenders pursuant to each of the
clauses of Section 6.11 (or if no such statements have been delivered, the
financial statements referred to in Section 4.5 of this Agreement) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee
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 other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; (vii)
Subsection 2.16(f) and Section 10.7 have been complied with; and (viii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender and if such assignor Lender was the Issuer, as the Issuer.
(c) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, commitments to issue Letters of Credit,
Letter of Credit Obligations owing to, and principal amount of the Loans owing
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Loan Parties, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender or the Issuer, as the case
may be, for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Administrative Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with the Notes subject to such assignment, the Administrative , Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within 10
Business Days after its receipt of such notice and a request therefor, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for such surrendered Notes, new Notes to the order of such
Eligible Assignee in an amount equal to the Commitments assumed by it pursuant
to such Assignment and Acceptance and, if the assigning Lender has retained
Commitments hereunder, new Notes to the order of the assigning Lender in an
amount equal to the Commitments retained by it hereunder. Such new Notes shall
be dated the same date as the Surrendered Notes and be in substantially the form
of Exhibit A-1, A-2 or A-3, as applicable.
(e) In addition to the other assignment rights provided in this
Section 10.7, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including, without limitation, rights to payments
of principal or interest on the Notes) to any Federal Reserve Bank without
notice to or consent of the Borrower or the Administrative Agent; provided,
however, that no such assignment shall release the assigning Lender from any of
its obligations hereunder. The terms and conditions of any such assignment and
the documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
(f) Each Lender may sell participations to one or more banks or other
Persons in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitments,
commitment to issue Letters of Credit, the Letter of Credit Obligations owing to
it, the Loans owing to it and the Notes held by it). Each Lender will notify
the Administrative Agent (which shall promptly notify the Borrower) of any such
participations. The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including, without limitation, the right to enforce the
obligations of the Loan Parties), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with the Loan
Documents. In the event of the sale of any participation by any Lender, (A)
such Lender's obligations under the Loan Documents (including, without
limitation, its Commitments and commitment hereunder to issue Letters of Credit)
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (C) such Lender
shall remain the holder of such Notes and Obligations for all purposes of this
Agreement, and (D) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
(g) The Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Administrative Agent and the parties thereto.
(h) Subject to clause (D) of the last sentence of Subsection 10.7(f),
each participant shall be entitled to the benefits of Sections 2.12, 2.14 and
2.16 as if it were a Lender; provided, however, that anything herein to the
contrary notwithstanding, the Borrower shall not, at any time, be obligated to
pay, in the aggregate, to or for the benefit of the participants of the interest
of any Lender and such Lender, under Section 2.12, 2.14 or 2.16, any sum in
excess of the sum which the Borrower would have been obligated to pay to such
assigning Lender in respect of such interest had such participations not been
sold.
10.8 Governing Law. This Agreement and the Notes and the rights and
obligations of the parties hereto and thereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
10.9 Submission to Jurisdiction; Service of Process. (a) Any legal
action or proceeding with respect to this Agreement or the Notes or any document
related thereto may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which any of them may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) The Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the right of
the Administrative Agent, any Lender or any holder of a Note to serve process in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
10.10 Section Titles. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
10.11 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
10.12 Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder, and the fee agreements referred to in Section 2.5 embody the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.
10.13 Confidentiality. Each Lender and the Administrative Agent
agree to keep information (including, without limitation, the Environmental
Reports) obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Administrative Agent's, as
the case may be, customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's or the
Administrative Agent's, as the case may be, employees, representatives, agents
and affiliates who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender or the Administrative Agent, as the case may be, on a non-confidential
basis from a source other than the Borrower or any of its Subsidiaries, (c) to
the extent disclosure is required by law, regulation or judicial order or
requested or required by bank regulators or auditors, or (d) to assignees or
participants or potential assignees or participants who agree in writing for the
benefit of the Borrower to be bound by the provisions of this sentence.
10.14 Waiver of Jury Trial. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.
10.15 Surrender of original Notes. Each Lender shall surrender the
original Notes held by it with respect to the Term Loan and Revolving Credit
Commitments of such Lender outstanding under the Existing Credit Agreement as at
the Effective Date upon the issuance to such Lender of new Notes under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
NINE WEST GROUP INC.
By:
-----------------------------
Title:
CITIBANK, N.A.,
as Administrative Agent
By:
-----------------------------
Title:
Lenders
-------
CITIBANK, N.A.
as Lender and Issuer
By:
-----------------------------
Title:
SCHEDULE III
PERFORMANCE PRICING SCHEDULE
----------------------------
Applicable Base Rate Margin, Applicable Eurodollar
Rate Margin, Facility Fee and Letter of Credit Fees
---------------------------------------------------
During the period commencing on the Effective Date and ending on the
date on which audited financial statements for Fiscal Year 1996 that comply with
Section 6.10(a) are made available to the Administrative Agent, the Applicable
Base Rate Margin, the Applicable Eurodollar Rate Margin, Facility Fees and
Letter of Credit Fees shall be at the rates set forth in the column headed
"Level IV" below.
Thereafter, the Applicable Base Rate Margin, the Applicable Eurodollar
Rate Margin, Facility Fees and Letter of Credit Fees shall remain the same,
increase or decrease, as the case may be, in accordance with the following
schedule:
Facility Fee is payable quarterly in arrears on the first day of each
calendar quarter and computed on a 360-day basis.
Level I Level II Level III Level IV Level V
-------------------------------------------------------------
Basis for Pricing:
- -----------------
If the ratio of
Indebtedness for
Borrowed Money to =>1.75 and =>2.25 and =>2.50 and
EBITDA is: < 1.75 < 2.25 < 2.50 < 3.00 >3.00
or
Borrower's senior
unsecured long-term
debt rating is
Investment Grade (as
defined in the
Agreement)(1)
then then then then then
-----------------------------------------------------------
- ---------------
(1) Level I will apply if the Borrower attains Investment Grade
Level I Level II Level III Level IV Level V
-----------------------------------------------------------
the Applicable Base
Rate Margin shall
be equal to: 0.00% 0.00% 0.00% 0.00% 0.00%
the Applicable
Eurodollar Rate
Margin shall be
equal to: 0.275% 0.325% 0.425% 0.50% 0.6875%
the Facility Fee
shall be equal to: 0.15% 0.175% 0.20% 0.25% 0.3125%
the Drawn cost
(Facility Fee +
Applicable Euro-
dollar Rate
Margin) shall be: 0.425% 0.50% 0.625% 0.75% 1.00%
the fee in respect
of Standby Letters
of Credit shall
equal: 0.30% 0.375% 0.50% 0.625% 0.875%
the fee in respect
of Documentary
Letters of Credit
shall equal: 0.15% 0.20% 0.30% 0.35% 0.50%
SCHEDULES
Schedule I -- Commitments
Schedule II -- Applicable Lending Offices and
Addresses for Notices
Schedule III -- Applicable Base Rate Margin, Applicable Eurodollar Rate
Margin, Facility Fee and Letter of Credit Fees
Schedule 3.1(i) -- Real Property
Schedule 4.3(c) -- Tax Matters
Schedule 4.8 -- Subsidiaries
Schedule 4.22 -- Certain Indebtedness
Schedule 7.1 -- Existing Liens
Schedule 7.6 -- Existing Investments
Schedule 7.11 -- Contingent Obligations
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Loan Note
Exhibit A-3 - Form of Competitive Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or
Continuation
Exhibit D - Form of Letter of Credit Reimbursement
Agreement
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Borrower Pledge Agreement
Exhibit G-1 - Form of Borrower Security Agreement
Exhibit G-2 - Form of Subsidiary Security Agreement
Exhibit H - Form of Guaranty
Exhibit I-1 - Form of Opinion of Simpson, Thacher & Bartlett
Exhibit I-2 - Form of Opinion of Joel K. Bedol, Esq.
Exhibit J - Form of Assignment and Acceptance
Exhibit K - Form of Competitive Bid Request
Exhibit L - Form of Notice of Competitive Bid Request
Exhibit M - Form of Competitive Bid
Exhibit N - Form of Competitive Bid Accept/Reject Letter