[EXECUTION COPY]
U.S. $55,000,000
CREDIT AGREEMENT,
dated as of July 16, 1993
among
WARNACO INC.,
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
THE BANK OF NOVA SCOTIA,
as the Agent for the Lenders.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 16, 1993, among
WARNACO INC., a Delaware corporation (the "Borrower"), the
various financial institutions as are or may become parties
hereto (collectively, the "Lenders"), and THE BANK OF NOVA SCOTIA
("Scotiabank"), as agent (the "Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower and Scotiabank are parties to a letter
agreement, dated as of February 1, 1993 (the "Existing Letter of
Credit Facility"), pursuant to which Scotiabank provides a
documentary letter of credit facility in favor of the Borrower
and has issued those letters of credit (the "Existing Letters of
Credit") listed on Schedule A hereto;
WHEREAS, the Borrower has requested that the Lenders replace
the Existing Letter of Credit Facility with this Agreement by
providing a documentary letter of credit facility in an aggregate
principal amount not exceeding the Letter of Credit Commitment
Amount;
WHEREAS, the Borrower desires to obtain Commitments from the
Lenders pursuant to which
(a) Loans will be made by the RL Lenders to the
Borrower from time to time prior to the Loan Commitment
Termination Date; and
(b) documentary Letters of Credit will be issued by
the Issuer for the account of the Borrower and under the
several obligations hereunder of the Lenders from time to
time prior to the Letter of Credit Commitment Termination
Date;
WHEREAS, the Lenders are willing, on the terms and subject
to the conditions hereinafter set forth (including Article VI),
to extend such Commitments and issue and participate in such
Letters of Credit, and the RL Lenders are willing to make such
Loans to the Borrower; and
WHEREAS, the proceeds of Loans will be used to reimburse the
Issuer for payments made by the Issuer under the Letters of
Credit, and proceeds of Letters of Credit will be used in
connection with the Borrower's worldwide sourcing of merchandise;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether
or not underscored) when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise
requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor
Agent pursuant to Section 10.4.
"Agreement" means, on any date, this Credit Agreement as
originally in effect on the Effective Date and as thereafter from
time to time amended, supplemented, amended and restated, or
otherwise modified and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to
all Base Rate Loans, a fluctuating rate of interest per annum
equal to the higher of
(a) the rate of interest most recently announced by
Scotiabank at its Domestic Office as its base rate for
Dollar loans; and
(b) the Federal Funds Rate most recently determined by
the Agent plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by Scotiabank in connection
with extensions of credit. Changes in the rate of interest on
that portion of any Loans maintained as Base Rate Loans will take
effect simultaneously with each change in the Alternate Base
Rate. The Agent will give notice promptly to the Borrower of
changes in the Alternate Base Rate.
"Assignee Lender" is defined in Section 11.11.1.
"Authorized Officer" means, relative to the Borrower, those
of its officers whose signatures and incumbency shall have been
certified to the Agent and the Lenders pursuant to Section 6.1.1.
"Base Rate Loan" means a Loan bearing interest at a
fluctuating rate determined by reference to the Alternate Base
Rate.
"Borrower" is defined in the preamble.
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"Borrowing" means the making of Loans by the RL Lenders of
the same type and, in the case of LIBO Rate Loans, having the
same Interest Period in accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate
duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit C hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to
be closed in New York; and
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day on which dealings
in Dollars are carried on in the London interbank market.
"Commitment" means, as the context may require, a RL Lender's Loan
Commitment or the Issuer's or a Lender's Letter of Credit Commitment.
"Commitment Amount" means, as the context may require,
either the Loan Commitment Amount or the Letter of Credit
Commitment Amount.
"Commitment Termination Date" means, as the context may
require, either the Loan Commitment Termination Date or the
Letter of Credit Commitment Termination Date.
"Commitment Termination Event" means
(a) the occurrence of any event or condition described
in clauses (f) or (g) of Section 10.1 of the U.S. Credit
Agreement; or
(b) the occurrence and continuance of any other Event
of Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 9.3, or
(ii) in the absence of such declaration, the
giving of notice by the Agent, acting at the direction
of the Required Lenders, to the Borrower that the
Commitments have been terminated.
"Continuation/Conversion Notice" means a notice of
continuation or conversion and certificate duly executed by an
Authorized Officer of the Borrower, substantially in the form of
Exhibit D hereto.
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"Credit Extension" means and includes
(a) the advancing of any Loans by the RL Lenders in
connection with a Borrowing; and
(b) any issuance or extension by the Issuer of a
Letter of Credit.
"Default" means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or both,
would constitute an Event of Default.
"Disbursement" means any payment made under a Letter of
Credit by the Issuer to the beneficiary of such Letter of Credit.
"Disbursement Date" is defined in Section 4.5.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office
of such Lender designated as such below its signature hereto or
designated in the Lender Assignment Agreement or such other
office of a Lender (or any successor or assign of such Lender)
within the United States as may be designated from time to time
by notice from such Lender, as the case may be, to each other
Person party hereto.
"Draft" means and includes any draft, bill, cable or written
demand for payment or receipt drawn or issued under a Letter of
Credit.
"Effective Date" means the date this Agreement becomes
effective pursuant to Section 11.8.
"Event of Default" is defined in Section 9.1.
"Excess" is defined in Section 11.17.
"Existing Letter of Credit Facility" is defined in the first
recital.
"Existing Letters of Credit" is defined in the first
recital.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
(a) 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
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Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) 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 Agent from three
federal funds brokers of recognized standing selected by it.
If for any reason the Agent shall have determined (which
determination shall be conclusive, absent manifest error) that it
is unable to ascertain the Federal Funds Rate for any reason,
including without limitation, the inability or failure of the
Agent to obtain sufficient bids or publications in accordance
with the terms hereof, the rate announced by the Agent at its New
York Agency as its "Base Rate New York" shall be the Alternate
Base Rate until the circumstances giving rise to such inability
no longer exists.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Borrower ending
on or about December 31 of each year.
"F.R.S. Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"GAAP" has the meaning set forth in the U.S. Credit
Agreement.
"Goods" is defined in Section 8.1.3.
"herein", "hereof", "hereto", "hereunder" and similar terms
contained in this Agreement or any other Loan Document refer to
this Agreement or such other Loan Document, as the case may be,
as a whole and not to any particular Section, paragraph or
provision of this Agreement or such other Loan Document.
"including" means including without limiting the generality
of any description preceding such term.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not
drawn, and banker's acceptances issued for the account of
such Person;
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(c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with
GAAP, recorded as capitalized lease liabilities;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade
debt incurred in the ordinary course of business), and
indebtedness (excluding prepaid interest thereon) secured by
a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or
other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is
limited in recourse; and
(e) all contingent liabilities of such Person in
respect of any of the foregoing.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Initial Percentage" means, relative to any Lender, the
percentage set forth opposite its signature hereto or set forth
in a Lender Assignment Agreement, as such percentage may be
adjusted from time to time pursuant to the terms hereof or a
Lender Assignment Agreement executed by such Lender and its
Assignee Lender and delivered pursuant to Section 11.11.
"Intercreditor Agreement" means the Intercreditor Agreement
dated the date hereof executed and delivered by the Agent and the
Agent under the U.S. Credit Agreement pursuant to Section 6.1.6.
"Issuance Request" means either (a) a request delivered by
the Borrower to the Issuer in accordance with the provisions of
the Tradexpress Agreement or (b) a request and certificate duly
executed by an Authorized Officer of the Borrower, in
substantially the form of Exhibit B attached hereto (with such
changes thereto as may be agreed upon from time to time by the
Agent and the Borrower).
"Issuer" means any affiliate, unit or agency of Scotiabank.
"Interest Period" means, relative to any LIBO Rate Loans,
the period beginning on (and including) the date on which such
LIBO Rate Loan is made or continued as, or converted into, a LIBO
Rate Loan pursuant to Section 2.3 or 2.4 and ending on (but
excluding) the day which numerically corresponds to such date one
or two months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in
each case as such Loan may be made or as the Borrower may select
in its relevant notice pursuant to Section 2.3 or 2.4; provided,
however, that
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(a) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the
same duration;
(b) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless such next
following Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end
on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period may end later than the date set
forth in clause (a) of the definition of "Loan Commitment
Termination Date", as such date may be extended from time to
time pursuant to the terms of this Agreement.
"Lender Assignment Agreement" means a Lender Assignment
Agreement substantially in the form of Exhibit E hereto.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 4.1, and shall also
mean and include each Existing Letter of Credit.
"Letter of Credit Availability" means, at any time, the
lesser of
(a) $55,000,000, minus the sum of (i) the aggregate
outstanding principal amount of all Loans and (ii) the
aggregate amount of all Letter of Credit Outstandings, and
(b) $50,000,000.
"Letter of Credit Commitment" means, relative to the Issuer,
the Issuer's obligation to issue Letters of Credit pursuant to
Section 2.1.2 and, with respect to each of the other Lenders, the
obligations of each such Lender to participate in such Letter of
Credit pursuant to the terms of this Agreement.
"Letter of Credit Commitment Amount" means, on any date a
maximum amount of $50,000,000, as such amount may be reduced from
time to time pursuant to Section 2.2.
"Letter of Credit Commitment Termination Date" means the
earliest to occur of
(a) June 30, 1994 (as such date may be extended
pursuant to the terms of this Agreement);
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(b) the date on which the Letter of Credit Commitment
Amount is terminated in full or reduced to zero pursuant to
Section 2.2; and
(c) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described in clause (b) or (c),
the Letter of Credit Commitment shall terminate automatically and
without any further action.
"Letter of Credit Outstandings" means, at any time, an
amount equal to the sum of
(a) the aggregate Stated Amount at such time of all
Letters of Credit then outstanding and undrawn (as such
aggregate Stated Amount shall be adjusted, from time to
time, as a result of drawings, the issuance of Letters of
Credit, or otherwise),
plus
(b) the then aggregate amount of all unpaid and
outstanding Reimbursement Obligations.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed
rate of interest determined by reference to the LIBO Rate
(Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any RL Lender, the office
of such RL Lender designated as such below its signature hereto
or designated in the Lender Assignment Agreement or such other
office of any RL Lender as designated from time to time by notice
from such RL Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining
LIBO Rate Loans hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property
to secure payment of a debt or performance of an obligation or
other priority or preferential arrangement of any kind or nature
whatsoever.
"Loan" is defined in Section 2.1.1.
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"Loan Commitment" means, relative to any RL Lender, such RL
Lender's obligation to make Loans pursuant to Section 2.1.1.
"Loan Commitment Amount" means $20,000,000, as such amount
may be reduced by Section 2.2; provided, that notwithstanding
anything to the contrary contained in this Agreement, unless and
until (i) the RL Lenders receive a sole second priority Lien on
all or substantially all of the assets of Warner's (United
Kingdom) Limited and Warner's of Canada Ltd. located in the
United Kingdom and Canada, respectively and (ii) the Liens
securing the ASCO Debt (as defined in the U.S. Credit Agreement)
owing to ASCO International Sourcing Limited (or its affiliates
or assigns) are released, the Loan Commitment Amount shall not in
any event exceed $10,000,000, as such amount may be reduced
pursuant to Section 2.2. Notwithstanding anything to the
contrary contained in this Agreement (including Section 2.1.3) in
no event shall Scotiabank be required to make any Loans if and to
the extent that, after giving effect to such Loans (and any
adjustments to Scotiabank's Percentage (and its resulting pro
rata portion of Letter of Credit Outstandings) required pursuant
to the terms of this Agreement), the aggregate outstanding
principal amount of Loans made by Scotiabank together with
Scotiabank's Percentage of Letter of Credit Outstandings would
exceed $40,000,000.
"Loan Commitment Termination Date" means the earliest of
(a) June 30, 1994, as such date may be extended
pursuant to the terms of this Agreement;
(b) the date on which the Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section
2.2; and
(c) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described in clause (b) or (c),
the Loan Commitment shall terminate automatically and without any
further action.
"Loan Document" means this Agreement, each Note, the
Tradexpress Agreement, the Security Agreement and each other
agreement, document or instrument delivered in connection with
this Agreement, whether or not specifically mentioned herein.
"Maximum Rate" is defined in Section 11.17.
"Monthly Payment Date" means the last Business Day of each
calendar month.
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"Note" means any promissory note of the Borrower payable to
the order of a RL Lender, in the form of Exhibit A hereto (as
such promissory note may be amended, endorsed or otherwise
modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such RL Lender resulting from
outstanding Loans made by such RL Lender, and also means all
other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise)
of the Borrower arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"Order" is defined in Section 4.6.
"Organic Document" means, relative to the Borrower, its
certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to
any of its authorized shares of capital stock.
"Participant" is defined in Section 11.11.
"Percentage" means, on any date, relative to any Lender, its
Initial Percentage; provided, however, at any time (and during
any period) that the sum of (x) Scotiabank's Initial Percentage
(under the heading "Letter of Credit" on the signature pages
hereof) of the Letter of Credit Outstandings (after giving effect
to any Letters of Credit to be issued by Scotiabank on such date)
and (y) the aggregate outstanding principal amount of all Loans
exceeds $40,000,000, the Percentage (under the heading "Letter of
Credit" on the signature pages hereof) of each Lender other than
Scotiabank shall equal the percentage obtained by dividing
(a) the product of such Lender's Initial Percentage
(under the heading "Letter of Credit" on the signature pages
hereof) and $50,000,000;
by
(b) the excess of (i) $55,000,000 over (ii) the
aggregate outstanding principal amount of all Loans,
and the Percentage of Scotiabank shall equal the excess of 100%
over the sum of the Percentages of the Lenders other than
Scotiabank.
"Person" means any natural person, corporation, partnership,
firm, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other
capacity.
"Received Amount" is defined in Section 4.6.
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"Reimbursement Obligation" is defined in Section 4.6.
"Required Lenders" means, at any time,
(a) with respect to any provision of this Agreement
other than the declaration of the acceleration of the
maturity of all or any portion of the outstanding principal
amount of the Loans and other Obligations in respect of
Loans to be due and payable pursuant to Section 9.3,
Scotiabank and at least one other Lender; and
(b) with respect to the declaration of the
acceleration of the maturity of all or any portion of the
outstanding principal amount of the Loans to be due and
payable pursuant to Section 9.3, and other Obligations in
respect of Loans, RL Lenders holding Loans representing at
least 51% of the aggregate principal amount of the Loans
then outstanding.
"RL Lender" means each Lender that is committed to make
Loans to the Borrower pursuant to Section 2.1 to the extent set
forth opposite such Lender's name under the column heading
"Loans" on the signature pages hereto, as such percentage may be
modified from time to time by way of an assignment or transfer by
such RL Lender pursuant to Section 11.11.1 and reflected in a
Lender Assignment Agreement. On the Effective Date Scotiabank
was the only RL Lender and was the only Lender obligated to make
Loans to the Borrower under this Agreement.
"Scotiabank" is defined in the preamble.
"Security Agreement" means the Security Agreement executed
and delivered pursuant to Section 6.1.3, substantially in the
form of Exhibit F hereto, as amended, supplemented, restated or
otherwise modified from time to time.
"Stated Amount" of each Letter of Credit means the maximum
amount of such Letter of Credit that may then be drawn under such
Letter of Credit.
"Stated Expiry Date" is defined in Section 4.1.
"Stated Maturity Date" means, in the case of any Loan, the
date that is 60 days after the Loan Commitment Termination Date.
"Stated Rate" is defined in Section 11.17.
"Subject Property" is defined in Section 8.1.5.
"Subsidiary" means, with respect to any Person, any
corporation of which more than 50% of the outstanding capital
stock having ordinary voting power to elect a majority of the
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board of directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned
by such Person, by such Person and one or more other Subsidiaries
of such Person, or by one or more other Subsidiaries of such
Person.
"Taxes" is defined in Section 5.6.
"Tradexpress Agreement" means the Tradexpress Transmission
Agreement duly executed and delivered by the Borrower and the
Issuer pursuant to Section 6.1.8 in substantially the form of
Exhibit I hereto.
"type" means, relative to any Loan, the portion thereof, if
any, being maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCP" is defined in Section 11.16.
"United States" or "U.S." means the United States of
America, its fifty States and the District of Columbia.
"U.S. Credit Agreement" means the Credit Agreement, dated as
of March 26, 1992, as amended and restated as of October 1, 1992,
among the Borrower, The Warnaco Group, Inc., General Electric
Capital Corporation, individually and in its capacity as Agent,
Union Bank of Switzerland, individually and in its capacity as
Co-Agent, The Bank of Nova Scotia, individually and in its
capacity as Paying Agent and Term Loan B Co-Agent, Citibank,
N.A., individually and in its capacity as Term Loan B Co-Agent,
and certain other lenders and financial institutions parties
thereto, as such agreement was in effect on the Effective Date,
and as further amended, restated or waived from time to time with
the consent of the Required Lenders hereunder solely for purposes
of this Agreement, and regardless of whether such U.S. Credit
Agreement is terminated, unless in connection with such
termination a replacement credit facility satisfactory to the
Required Lenders hereunder is entered into in which case, the
affirmative and negative covenants in such facility shall become
the subject of this Agreement.
"Usury Restraint" is defined in Section 11.17.
SECTION 1.2. Use of Defined Terms. Unless otherwise
defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings
when used in each Note, Borrowing Request, Continuation/
Conversion Notice, Loan Document, notice and other communication
delivered from time to time in connection with this Agreement or
any other Loan Document.
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SECTION 1.3. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Loan Document to
any Article or Section are references to such Article or Section
of this Agreement or such other Loan Document, as the case may
be, and, unless otherwise specified, references in any Article,
Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations.
Unless otherwise specified, all accounting terms used herein
shall be interpreted, all accounting determinations and
computations hereunder shall be made, and all financial
statements required to be delivered hereunder or thereunder shall
be prepared in accordance with, GAAP.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the
conditions of this Agreement (including Article VI), each Lender
severally agrees as follows:
SECTION 2.1.1. Loan Commitment. From time to time on any
Business Day occurring prior to the Loan Commitment Termination
Date, each RL Lender severally agrees, subject to the terms of
this Agreement (including Article VI) that it will make loans
(relative to such RL Lender, its "Loans") to the Borrower equal
to its Percentage of the aggregate amount of the Borrowing of
Loans requested by the Borrower to be made on such day or
otherwise required to be made pursuant to the terms of Section
2.3. No RL Lender's obligation to make any Loan shall be
affected by any other RL Lender's failure to make any Loan. On
the terms and subject to the conditions hereof, the Borrower may
from time to time borrow, prepay and reborrow Loans.
Notwithstanding anything contained herein to the contrary, so
long as any RL Lender whose Percentage to make Loans is less than
51% shall be in default in its obligation to fund its pro rata
share of any Loans (as notified to such Lender by the Agent, the
Agent agreeing to use good faith efforts to give such
notification promptly following the occurrence of such default)
or shall have rejected its obligations under the Loan Commitment,
then such RL Lender whose Percentage to make Loans is less than
51% shall not be entitled to receive any payments of principal of
or interest on its pro rata share of the Loans or its share of
any commitment or other fees payable hereunder unless and until
(x) the Loans of all the other RL Lenders and all interest
thereon have been paid in full, (y) such failure to fulfill its
obligation to fund is cured or (z) the Obligations under this
Agreement shall have been declared or shall have become
immediately due and payable, and for purposes of voting or
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consenting to matters with respect to the Loan Documents, such RL
Lender shall be deemed not to be a "RL Lender" hereunder and such
RL Lender's Percentage shall each be deemed to be zero (0). No
Loan Commitment of any RL Lender shall be increased or otherwise
affected by any such failure or rejections by any other RL
Lender. Any payments of principal of or interest on Obligations
which would, but for this Section, be paid to any RL Lender,
shall be paid to the RL Lenders who shall not be in default under
their respective Loan Commitments and who shall not have rejected
any Loan Commitment, for application to the Obligations or cash
collateral in respect of Letters of Credit in such manner and
order (pro rata among such RL Lenders) as shall be determined by
the Agent. The parties hereto acknowledge and agree that a RL
Lender's failure to make a Loan based on the Borrower's failure
to satisfy one or more of the conditions precedent to the making
of Loans set forth in Article VI shall not be construed as such
RL Lender being in default of its obligations to fund its pro
rata share of Loans or a rejection of such RL Lender's
obligations under the Loan Commitment.
SECTION 2.1.2. Commitment to Issue Letters of Credit. From
time to time on any Business Day, the Issuer will issue, and each
Lender will participate in, the Letters of Credit, in accordance
with Article IV.
SECTION 2.1.3. Lenders Not Permitted or Required To Make
Loans or Issue Letters of Credit Under Certain Circumstances.
(a) No RL Lender shall be permitted or required to
make any Loan if, after giving effect thereto (and the
payment of any Reimbursement Obligations with the proceeds
of such Loans), the aggregate outstanding principal amount
of all Loans
(i) together with all Letter of Credit
Outstandings, would exceed $55,000,000, or
(ii) would exceed the then effective Loan
Commitment Amount.
(b) The Issuer shall not be permitted or required to
issue any Letter of Credit if, after giving effect thereto
(i) all Letter of Credit Outstandings together
with the aggregate outstanding principal amount of all
Loans would exceed the Letter of Credit Availability
amount, or
(ii) any Lender's Percentage (after giving effect
to any changes to such Percentage pursuant to the terms
of this Agreement) of all Letter of Credit Outstandings
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would exceed such Lender's then effective Percentage of
the Letter of Credit Commitment Amount.
SECTION 2.2. Reduction of Commitment Amounts. The Borrower
may, from time to time on any Business Day, voluntarily reduce
the amount of either Commitment Amount; provided, however, that
all such reductions shall require at least three Business Days'
prior notice to the Agent and be permanent.
SECTION 2.3. Borrowing Procedure. (a) Upon any
Disbursement being made in respect of a Letter of Credit, the
Borrower shall (unless it shall have given notice to the Agent to
the contrary prior to 3:00 p.m., New York time, three Business
Days prior to the date of such Disbursement) be deemed to have
delivered to the Agent a Borrowing Request pursuant to which the
Borrower shall have been deemed to irrevocably request that the
RL Lenders make a LIBO Rate Loan with a two month Interest Period
in a principal amount equal to the amount of the Disbursement
being made. The Borrower hereby acknowledges and agrees that
each Borrower Request deemed to be delivered hereunder and the
acceptance by the Borrower of the proceeds of the Borrowing shall
constitute a representation and warranty by the Borrower that on
the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the
proceeds thereof) the statements made in Section 6.2.1 and the
representations and warranties set forth in Section 3.1 of the
Security Agreement are in each case true and correct. Proceeds
of such Loans shall be used to fund the Reimbursement Obligations
in respect of Letters of Credit under which a Disbursement was
made on the date of the Loan. In addition, to the extent that
the amount available under the Loan Commitment is not sufficient
to fund the entire amount of the Disbursement made on the date
the Loans are being made, then the Borrower shall have been
deemed to request that Scotiabank, in its capacity as Swingline
Lender under the U.S. Credit Agreement, make a Swingline Loan (as
such term is defined in the U.S. Credit Agreement) in an amount
necessary to fund the remainder of such Disbursement (after
giving effect to the Loans being made hereunder).
Notwithstanding anything to the contrary contained herein,
Scotiabank shall only be required to make such Swingline Loans if
the Borrower has satisfied all of the conditions to making a
Swingline Loan under the U.S. Credit Agreement as in effect on
the date of the making of such Swingline Loans and the Borrower
hereby acknowledges and agrees that all the terms and conditions
(including as to repayment, accrual of interest and otherwise)
contained in the U.S. Credit Agreement shall be applicable to all
Swingline Loans made pursuant to this Section.
(b) In addition to the provisions of the making of Loans
set forth in clause (a), above, by delivering a Borrowing Request
to the Agent on or before 2:00 p.m., New York time, on a Business
Day, the Borrower may from time to time irrevocably request, on
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not less than three nor more than five Business Days' notice (in
the case of LIBO Rate Loans) and on the date of such Borrowing
(in the case of Base Rate Loans), that a Borrowing be made as
other than a LIBO Rate Loan having a two month Interest Period or
in an amount other than the full amount of Disbursement with
respect to which such Loan is to be made.
On the terms and subject to the conditions of this Agreement,
each Borrowing shall be comprised of the type of Loans, and shall
be made on the Business Day, specified in such Borrowing Request.
SECTION 2.4. Continuation and Conversion Elections. By
delivering a Continuation/Conversion Notice to the Agent on or
before 10:00 a.m., New York time, on a Business Day, the Borrower
may from time to time irrevocably elect, on not less than three
nor more than five Business Days' notice that all, or any portion
of any Loans be, in the case of Base Rate Loans, converted into
LIBO Rate Loans or, in the case of a LIBO Rate Loan, converted
into a Base Rate Loan or continued as a LIBO Rate Loan (in the
absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate Loan at least three Business Days before
the last day of the then current Interest Period with respect
thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan unless such Loan is
otherwise required to be paid pursuant to the terms of this
Agreement (including the first sentence of Section 3.1));
provided, however, that no portion of the outstanding principal
amount of any Loans may be continued as, or be converted into,
LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. Funding. Each RL Lender may, if it so elects,
fulfill its obligation to make, continue or convert LIBO Rate
Loans hereunder by causing one of its foreign branches or
affiliates (or an international banking facility all of the
capital stock or other ownership interests of which are wholly-
owned by such RL Lender) to make or maintain such LIBO Rate Loan;
provided, however, that such LIBO Rate Loan shall nonetheless be
deemed to have been made and to be held by such RL Lender, and
the obligation of the Borrower to repay such LIBO Rate Loan shall
nevertheless be to such RL Lender for the account of such foreign
branch, affiliate or international banking facility; provided,
further that the Borrower shall not be required to pay any amount
under this Section or Section 5.6 that is greater than the amount
which it would have been required to pay had such RL Lender not
caused such branch, affiliate or facility to make or maintain
such LIBO Rate Loan. In addition, the Borrower hereby consents
and agrees that, for purposes of any determination to be made for
purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be
conclusively assumed that such RL Lender elected to fund all LIBO
Rate Loans by purchasing Dollar deposits in its LIBOR Office's
interbank eurodollar market.
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SECTION 2.6. Notes. Each RL Lender's Loans under the Loan
Commitment shall be evidenced by a Note payable to the order of
such RL Lender in a maximum principal amount equal to such RL
Lender's Percentage of Loans multiplied by $20,000,000. The
Borrower hereby irrevocably authorizes each RL Lender to make (or
cause to be made) appropriate notations on the grid attached to
such RL Lender's Note (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the date
of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such
notations shall be conclusive and binding on the Borrower absent
manifest error; provided, however, that the failure of any RL
Lender to make any such notations shall not limit or otherwise
affect any Obligations of the Borrower.
SECTION 2.7. Extension of Commitment Termination Date. The
Letter of Credit Commitment Termination Date may be extended by
the Lenders in their sole and absolute discretion upon written
request of the Borrower received at least 60 days but not more
than 90 days prior to the then effective Letter of Credit
Commitment Termination Date (as such date may have been
extended). The Lenders shall give written notice to the Borrower
of their decision and, if approved, of the new Letter of Credit
Commitment Termination Date; provided, that if and when the
Lenders extend the Letter of Credit Commitment Termination Date,
the Loan Commitment Termination Date shall be also extended by
each RL Lender for the same number of days as the number of days
by which the Letter of Credit Commitment Termination Date is
extended; provided, further, that notwithstanding any other
provision in this Agreement to the contrary, in no event shall
the modified Letter of Credit Commitment Termination Date exceed
364 days from the then expiring Letter of Credit Commitment
Termination Date. The Lenders shall give written notice to the
Borrower of their decision within 30 days of request. In the
absence of notice by any one of the Lenders, neither the then
effective Letter of Credit Commitment Termination Date nor the
Loan Commitment Termination Date shall be extended and each shall
terminate and expire as otherwise provided in this Agreement.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower
shall repay in full the entire unpaid principal amount of each
Loan upon the earlier of (i) a date which is, at the election of
the Borrower, no later than sixty (60) days following the date of
the making of such Loan, and (ii) the Stated Maturity Date
therefor (provided, that Loans made pursuant to clause (a) of
Section 2.3 shall be payable on the termination of the two month
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Interest Period with respect to such Loan). Prior thereto, the
Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Loans; provided,
however, that
(i) no such prepayment of any LIBO Rate Loan may
be made on any day other than the last day of the
Interest Period for such Loan; and
(ii) all such voluntary prepayments shall require
at least one Business Day's prior written notice to the
Agent;
(b) shall, on each date when any reduction in the
Letter of Credit Commitment Amount shall become effective,
make a mandatory prepayment (which shall be applied (or held
as cash collateral for application, as the case may be) by
the Agent first to the payment of Reimbursement Obligations
of the then Letter of Credit Outstandings, and then to the
payment of the aggregate unpaid principal amount of Loans
then outstanding) equal to the excess, if any, of the
aggregate, outstanding principal amount of all Letter of
Credit Outstandings over the Letter of Credit Commitment
Amount as so reduced;
(c) shall, on each date when any reduction in the Loan
Commitment Amount shall become effective, make a mandatory
prepayment of the aggregate outstanding principal amount of
all Loans then outstanding in an amount equal to the excess,
if any, of the aggregate outstanding principal amount of all
Loans over the Loan Commitment Amount, as so reduced; and
(d) shall, immediately upon any acceleration of the
Stated Maturity Date of any Obligations pursuant to Section
9.2 or Section 9.3, repay all Obligations, unless, pursuant
to Section 9.3, only a portion of all Obligations is so
accelerated.
Each prepayment of any Loans made pursuant to this Section shall
be without premium or penalty, except as may be required by
Section 5.4. No voluntary prepayment of principal of any Loans
shall cause a reduction in the Loan Commitment Amount.
SECTION 3.2. Interest Provisions. Interest on the
outstanding principal amount of Loans shall accrue and be payable
in accordance with this Section 3.2.
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SECTION 3.2.1. Rates. Loans comprising a Borrowing shall
accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate
from time to time in effect plus a margin of 2 1/4%; or
(b) on that portion maintained as a LIBO Rate Loan
(whether made pursuant to clause (a) or clause (b) of
Section 2.3), during each Interest Period applicable
thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus a margin of 3 1/4%.
The "LIBO Rate (Reserve Adjusted)" means, relative to any
Loan to be made, continued or maintained as, or converted into, a
LIBO Rate Loan for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO
Rate Loans will be determined by the Agent on the basis of the
LIBOR Reserve Percentage in effect on, and the applicable rates
furnished to and received by the Agent from Scotiabank, two
Business Days before the first day of such Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO
Rate Loans, the rate of interest equal to the average of the
rates per annum at which Dollar deposits in immediately available
funds are offered to Scotiabank's LIBOR Office in the London
interbank market as at or about 11:00 a.m. London time two
Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an
amount approximately equal to the amount of Scotiabank's LIBO
Rate Loan and for a period approximately equal to such Interest
Period.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBO Rate Loans, the reserve percentage, if any
(expressed as a decimal) equal to the maximum aggregate reserve
requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve
requirements) specified under regulations issued from time to
time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency
Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such
Interest Period.
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All LIBO Rate Loans shall bear interest from and including
the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest
rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any
principal amount of any Loan is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become
due and payable, the Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the greater of (i) the
Alternate Base Rate plus a margin of 3%, and (ii) the then
applicable interest rate plus a margin of 1%.
SECTION 3.2.3. Payment Dates. Interest accrued on each
Loan shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any optional or required payment
or prepayment, in whole or in part, of principal
outstanding on such Loan (including, with respect to LIBO
Rate Loans, on the last day of each applicable Interest
Period for such LIBO Rate Loan);
(c) with respect to any Base Rate Loans converted
into LIBO Rate Loans on a day when interest would not
otherwise have been payable pursuant to the terms hereof,
on the date of such conversion; and
(d) on that portion of any Loans the Stated Maturity
Date of which is accelerated pursuant to Section 9.2 or
Section 9.3, immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date
such amount is due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise) shall be payable upon
demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees
set forth in this Section 3.3. All such fees shall be non-
refundable.
SECTION 3.3.1. Letter of Credit Face Amount Fee. The
Borrower agrees to pay to the Agent, for the account of the
Lenders, a fee for each Letter of Credit for the period from and
including the date of the issuance of such Letter of Credit to
(but not including) the earlier of (a) the date upon which such
Letter of Credit expires and (b) the date upon which the Stated
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Amount of such Letter of Credit is irrevocably reduced to zero
(by the making of a Disbursement by the Issuer or otherwise), of
1% per annum of the Stated Amount of such Letter of Credit,
calculated daily in arrears. Such fee shall be payable by the
Borrower in arrears on each Monthly Payment Date, and on the
Letter of Credit Commitment Termination Date for any period then
ending for which such fee shall not theretofore have been paid,
commencing on the first such date after the issuance of such
Letter of Credit.
SECTION 3.3.2. Letter of Credit Issuing Fee. The Borrower
agrees to pay to the Issuer an issuing fee in accordance with the
fees currently paid by the Borrower on the Effective Date for
each Letter of Credit for the period from and including the date
of issuance of such Letter of Credit to (but not including) the
date upon which such Letter of Credit expires.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1. Issuance Requests. By delivering to the
Agent and the Issuer an Issuance Request (such request being, in
the Borrower's sole discretion, either delivered (by telex,
teletransmission or otherwise) in accordance with the terms of
the Tradexpress Agreement or in the form attached hereto as
Exhibit B) on or before 3:00 p.m., New York time on the Business
Day on which a Letter of Credit is to be issued, the Borrower may
request, from time to time prior to the Letter of Credit
Commitment Termination Date that the Issuer issue an irrevocable
sight documentary letter of credit in such form as may be
requested by the Borrower and approved by the Issuer (each a
"Letter of Credit"), to facilitate the Borrower's worldwide
sourcing of merchandise. Upon receipt of an Issuance Request,
the Agent shall promptly notify the Lenders thereof. Each Letter
of Credit shall by its terms:
(a) be issued in a Stated Amount which does not
exceed (or would not exceed) the then Letter of Credit
Availability;
(b) be stated to expire on a date (its "Stated Expiry
Date") no later than the earlier of 180 days from its date
of issuance and the Letter of Credit Commitment Termination
Date; and
(c) on or prior to its Stated Expiry Date
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(i) terminate immediately upon notice to the
Issuer thereof from the beneficiary thereunder that
all obligations covered thereby have been terminated,
paid, or otherwise satisfied in full, and
(ii) reduce in part immediately and to the
extent the beneficiary thereunder has notified the
Issuer thereof that the obligations covered thereby
have been paid or otherwise satisfied in part.
So long as no Default has occurred and is continuing, by delivery
to the Issuer and the Agent of an Issuance Request (such request
being, in the Borrower's sole discretion, either delivered (by
telex, teletransmission or otherwise) in accordance with the
terms of the Tradexpress Agreement or in the form attached hereto
as Exhibit B) on or before 3:00 p.m., New York time, on the
Stated Expiry Date of any Letter of Credit, the Borrower may
request the Issuer to extend the Stated Expiry Date of such
Letter of Credit for an additional period not to exceed the
earlier of 180 days from its date of extension and the Letter of
Credit Commitment Termination Date. Notwithstanding any other
provision in this Agreement to the contrary, the Issuer may in
its discretion refuse to issue any Letter of Credit if such
issuance would, in the Issuer's reasonable determination,
contravene any sanctions, laws or regulations of any State of the
United States or any Federal body or authority of the United
States (including but not limited to the regulations of the
Federal Reserve Bank) or the laws, regulations or sanctions of
any other applicable jurisdiction or authority or if, in the
Issuer's reasonable determination, any of the above-mentioned
laws, regulations or sanctions would affect the Issuer's ability
to perform its obligations with respect to any such Letter of
Credit if issued.
SECTION 4.2. Issuances and Extensions. On the terms and
subject to the conditions of this Agreement (including Article
VI), the Issuer shall issue Letters of Credit, and extend the
Stated Expiry Dates of outstanding Letters of Credit, in
accordance with the Issuance Requests made therefor. The Issuer
will make available the original of each Letter of Credit which
it issues in accordance with the Issuance Request therefor to the
beneficiary thereof (and will promptly provide each of the
Lenders with a copy of such Letter of Credit) and will notify the
beneficiary under any Letter of Credit of any extension of the
Stated Expiry Date thereof.
SECTION 4.3. Destruction of Goods, etc. Neither the
Issuer nor its agents or correspondents shall be responsible for
the negligence or fraudulence of any beneficiary of a Letter of
Credit for the existence, nature, condition, description, value,
quality or quantity of the Goods, for the packing, shipment,
export, import, handling, storage or delivery thereof, or for the
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safety or preservation thereof at any time, and neither the
Issuer nor its agents or correspondents shall be liable for any
loss resulting from the total or partial destruction of or damage
to or deterioration or fall in value of the Goods, or from the
delay in arrival or failure to arrive of either the Goods or of
any of the documents relating thereto, or from the inadequacy or
invalidity of any document or insurance, or from the default or
insolvency of any insurer, carrier or other person issuing any
document with respect to the Goods, or from failure to give or
delay in giving notice of arrival of the Goods or any other
notice, or from any error in or misinterpretation of or default
or delay in the sending, transmission, arrival or delivery of any
message, whether in writing or not, by post, telegraph, cable,
wireless or otherwise, and the obligations hereunder of the
Borrower to the Issuer shall not be in any way lessened or
affected if any Draft or document accepted, paid or acted upon by
the Issuer or its agents or correspondents does not bear a
reference or sufficient reference to a Letter of Credit or if no
note thereof is made on a Letter of Credit.
SECTION 4.4. Other Lenders' Participation. Each Letter of
Credit issued pursuant to Section 4.2 shall, effective upon its
issuance and without further action, be issued on behalf of all
Lenders (including the Issuer thereof) according to their
respective Percentages. Each Lender shall, to the extent of its
Percentage, be deemed irrevocably to have participated in the
issuance of such Letter of Credit and shall be responsible to
reimburse promptly the Issuer thereof for Reimbursement
Obligations which have not been reimbursed by the Borrower in
accordance with Section 4.5, or which have been reimbursed by the
Borrower but must be returned, restored or disgorged by the
Issuer for any reason, and each Lender shall, to the extent of
its Percentage, be entitled to receive from the Agent a ratable
portion of the letter of credit fees received by the Agent
pursuant to Section 3.3.1, with respect to each Letter of Credit.
In the event that the Borrower shall fail to reimburse the
Issuer, or if for any reason Loans shall not be made to fund any
Reimbursement Obligation, all as provided in Section 4.5 and in
an amount equal to the amount of any drawing honored by the
Issuer under a Letter of Credit issued by it, or in the event the
Issuer must for any reason return or disgorge such reimbursement,
the Issuer shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to the
Issuer, whether or not any Default shall have occurred and be
continuing, an amount equal to its respective participation in
same day or immediately available funds at the office of the
Issuer specified in such notice not later than 11:00 a.m., New
York City time, on the Business Day after the date notified by
the Issuer. In the event that any Lender fails to make available
to the Issuer the amount of such Lender's participation in such
Letter of Credit as provided herein, the Issuer shall be entitled
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to recover such amount on demand from such Lender together with
interest at the daily average Federal Funds Rate for three
Business Days (together with such other compensatory amounts as
may be required to be paid by such Lender to the Agent pursuant
to the Rules for Interbank Compensation of the council on
International Banking or the Clearinghouse Compensation
Committee, as the case may be, as in effect from time to time)
and thereafter at the Alternate Base Rate plus 1%. Nothing in
this Section shall be deemed to prejudice the right of any Lender
to recover from the Issuer any amounts made available by such
Lender to the Issuer pursuant to this Section in the event that
it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuer in
respect of which payment was made by such Lender constituted
gross negligence or wilful misconduct on the part of the Issuer.
The Issuer shall distribute to each other Lender which has paid
all amounts payable by it under this Section with respect to any
Letter of Credit issued by the Issuer such other Lender's
Percentage of all payments received by the Issuer from the
Borrower in reimbursement of drawings honored by the Issuer under
such Letter of Credit when such payments are received.
SECTION 4.5. Disbursements. The Issuer will notify the
Borrower and the Agent promptly of the presentment for payment of
any Letter of Credit, together with notice of the date (a
"Disbursement Date") such payment shall be made. Subject to the
terms and provisions of such Letter of Credit, and the delivery
to the Issuer of all documents and instruments required as a
condition to making a Disbursement under such Letter of Credit,
the Issuer shall make such payment to the beneficiary (or its
designee) of such Letter of Credit (with proceeds of Loans (and,
if applicable, Swingline Loans) pursuant to Section 2.3 or
otherwise). If and to the extent that Loans (and, if applicable,
Swingline Loans) are not made to fund a Reimbursement Obligation
pursuant to Section 2.3, then the Borrower will reimburse the
Issuer within one Business Day following the Disbursement Date
for all amounts which the Issuer has disbursed under the Letter
of Credit. After a Disbursement under a Letter of Credit, the
Issuer shall only release and convey title to the Borrower in the
Goods delivered by virtue of such Letter of Credit if and when
the Borrower has (either through the making of Loans, Swingline
Loans or otherwise) repaid the Issuer in full all Reimbursement
Obligations in respect of such Letter of Credit.
SECTION 4.6. Reimbursement; Outstanding Letters, etc.
(a) The Borrower's obligation (a "Reimbursement Obligation")
under Section 4.5 to reimburse the Issuer with respect to each
Disbursement (including fees and interest thereon payable
pursuant to Section 3.2.2 and Section 3.3.1), and each Lender's
obligation to make participation payments in each drawing which
has not been reimbursed by the Borrower, shall be absolute
unconditional and irrevocable and shall not be reduced by any
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event or occurrence including, without limitation, any lack of
validity or enforceability of a Letter of Credit or any Draft
paid or acted upon by the Issuer or any of its correspondents
being fraudulent, forged, invalid or insufficient in any respect,
or be subject to any defense or be affected by any right of set-
off, counter-claim or recoupment, or any other claims which the
Borrower or any Lender may have against any beneficiary of any
Letter of Credit, the Issuer or the transferee of any Letter of
Credit or any other Person for any reason whatsoever. The
obligations of the Borrower and the Lenders hereunder shall
remain in full force and effect and shall apply to any alteration
to or extension of the expiration date of any Letter of Credit or
any Letter of Credit issued to replace, extend or alter any
Letter of Credit during the term of this Agreement.
(b) The Borrower shall pay to the Issuer an amount equal
to then Stated Amount and all unpaid fees in respect of (i) any
Letter of Credit outstanding under this Agreement upon any
termination of this Agreement and (ii) any Letter of Credit which
is affected by, or becomes the subject matter of, any order,
judgment, injunction or other such determination (an "Order") or
any petition or other application for any Order by the Borrower
or any other party, restricting payment by the Issuer under and
in accordance with such Letter of Credit or extending the
Issuer's or any Lender's liability under such Letter of Credit
beyond the expiration date stated therein, or if not stated
therein, which would otherwise apply to such Letter of Credit.
Payment in respect of each such Letter of Credit described in (i)
and (ii) in this clause shall be due forthwith upon demand and in
Dollars.
(c) The Issuer hereby agrees that it will, with respect to
each Letter of Credit subjected to any such demand for payment
under the preceding clause (b), upon the later of:
(i) the date on which any final and non-appealable
order, judgment or other such determination has been
rendered or issued either terminating any applicable Order
or permanently enjoining the Issuer from paying under such
Letter; and
(ii) the earlier of (x) the date on which either the
original counterpart of such Letter of Credit is returned
to the Issuer for cancellation or the Issuer is released by
the beneficiary thereof from any further obligations in
respect of such Letter of Credit, and (y) the expiry of
such Letter of Credit;
pay to the Borrower an amount in Dollars equal to any excess of
the amount received by the Issuer pursuant to clause (b) above in
respect of such Letter of Credit (the "Received Amount") over the
equivalent in Dollars of the total of amounts applied to
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reimburse the Issuer for amounts paid by it under such Letter of
Credit, if any (the Issuer having the right to so appropriate
such funds), together with an additional amount in Dollars
computed by applying to the amount of such excess from time to
time a per annum rate equal to 3% less than the Alternate Base
Rate. Such additional amount shall be calculated daily on the
basis of a 360 day year for the actual number of days elapsed
from and including the date of payment to the Issuer of the
Received Amount to (but not including) the date of return to the
Borrower of the excess.
SECTION 4.7. Deemed Disbursements. Upon the occurrence
and during the continuation of any event or condition specified
in clauses (f) or (g) of Section 10.1 of the U.S. Credit
Agreement or upon the occurrence and during the continuance of
any other Event of Default,
(a) an amount equal to that portion of Letter of
Credit Outstandings attributable to outstanding and undrawn
Letters of Credit shall, without demand upon or notice to
the Borrower, be deemed to have been paid or disbursed by
the Issuer under such Letters of Credit (notwithstanding
that such amount may not in fact have been so paid or
disbursed), and
(b) upon notification by the Issuer to the Agent and
the Borrower of its obligations under this Section, the
Borrower shall be immediately obligated to reimburse the
Issuer the amount deemed to have been so paid or disbursed
by the Issuer.
Any amounts so received by the Issuer from the Borrower pursuant
to this Section shall be held as collateral security for the
repayment of the Borrower's Obligations in connection with the
Letters of Credit issued by the Issuer. At any time when such
Letters of Credit shall terminate and all Obligations of the
Issuer are either terminated or paid or reimbursed to the Issuer
in full, the Obligations of the Borrower under this Section shall
be reduced accordingly (subject, however, to reinstatement in the
event any payment in respect of such Letters of Credit is
recovered in any manner from the Issuer), and the Issuer will
return to the Borrower the excess, if any, of
(c) the aggregate amount deposited by the Borrower
with the Issuer and not theretofore applied by the Issuer
to any Reimbursement Obligation
over
(d) the aggregate amount of all Reimbursement
Obligations to the Issuer pursuant to this Section, as so
adjusted.
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At such time when all Events of Default shall have been cured or
waived, the Issuer shall return to the Borrower all amounts then
on deposit with the Issuer pursuant to this Section together with
an additional amount in dollars computed by applying to the
amount so returned to the Borrower from time to time a per annum
rate equal to 3% less than the Alternate Base Rate. Such
additional amount shall be calculated daily on the basis of a 360
day year for the actual number of days elapsed from and including
the date of payment to the Issuer by the Borrower to (but not
including) the date of return to the Borrower of such amounts.
SECTION 4.8. Nature of Reimbursement Obligations. The
Borrower shall assume all risks of the acts, omissions, or misuse
of any Letter of Credit by the beneficiary thereof. Any action,
inaction or omission taken or suffered by the Issuer or any of
the Issuer's correspondents under or in connection with a Letter
of Credit or any Draft made thereunder or any document relating
thereto, if in good faith and in conformity with foreign or
domestic laws, regulations or customs applicable thereto shall be
binding upon the Borrower and shall not place the Issuer or any
of its correspondents under any resulting liability to the
Borrower. Without limiting the generality of the foregoing, the
Issuer and its correspondents may receive, accept or pay as
complying with the terms of a Letter of Credit, any Draft
thereunder, otherwise in order which may be signed by, or issued
to, the administrator or any executor of, or the trustee in
bankruptcy of, or the receiver for any property of, or other
Person or entity acting as the representative or in the place of,
such beneficiary or its successors and assigns. The Borrower
covenants that it will not take any steps, issue any instructions
to the Issuer or any of its correspondents or institute any
proceedings intended to derogate from the right or ability of the
Issuer or its correspondents to honor and pay any Draft or
Drafts.
SECTION 4.9. Existing Letters of Credit. Upon the payment
to Scotiabank of all fees and other amounts due and owing to
Scotiabank under the terms of the Existing Letter of Credit
Facility, such Existing Letters of Credit, and the amount and
payment date of fees on Letters of Credit (including Existing
Letters of Credit deemed to be Letters of Credit hereunder),
shall be governed by this Agreement. Simultaneously with the
effectiveness of this Agreement pursuant to Section 11.8, the
Existing Letter of Credit Facility shall be terminated and of no
further force and effect, except to the extent of any provisions
of the Existing Letter of Credit Facility which by their express
terms survive termination of the Existing Letter of Credit
Facility.
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ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 5.1. LIBO Rate Lending Unlawful. If any RL Lender
shall determine (which determination shall, upon notice thereof
to the Borrower, be conclusive and binding on the Borrower) that
the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such RL
Lender to make, continue or maintain any Loan as, or to convert
any Loan into, a LIBO Rate Loan, the obligations the RL Lenders
to make, continue, maintain or convert into any such Loans shall,
upon such determination, forthwith be suspended until such RL
Lender shall notify the Borrower that the circumstances causing
such suspension no longer exist, and all LIBO Rate Loans shall
automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 5.2. Deposits Unavailable. If any RL Lender shall
have determined that
(a) Dollar deposits in the relevant amount and for
the relevant Interest Period are not available to it in its
relevant market; or
(b) by reason of circumstances affecting such RL
Lender's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO
Rate Loans,
then, upon notice from such RL Lender to the Borrower and the
Agent, the obligations of the RL Lenders under Section 2.3 and
Section 2.4 to make or continue any Loans as, or to convert any
Loans into, LIBO Rate Loans shall forthwith be suspended until
such RL Lender shall notify the Borrower and the Agent that the
circumstances causing such suspension no longer exist.
SECTION 5.3. Increased LIBO Rate Loan Costs, etc. The
Borrower agrees to reimburse each RL Lender for any increase in
the cost to such RL Lender of, or any reduction in the amount of
any sum receivable by such RL Lender in respect of, making or
continuing (or of its obligation to make or continue) any Loans
as, or of converting (or of its obligation to convert) any Loans
into, LIBO Rate Loans. Each RL Lender shall promptly notify the
Borrower and the Agent in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate
such RL lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to
such RL Lender within five Business Days of its receipt of such
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notice, and such notice shall, in the absence of manifest error,
be conclusive and binding on the Borrower.
SECTION 5.4. Funding Losses. In the event any RL Lender
shall incur any loss or expense (including any loss or expense
incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such RL Lender to make, continue or
maintain any portion of the principal amount of any Loan as, or
to convert any portion of the principal amount of any Loan into,
a LIBO Rate Loan, but excluding the loss of any anticipated or
expected profits in respect of such LIBO Rate Loan) as a result
of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other
than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in
accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted
into, LIBO Rate Loans in accordance with the Continuation/
Conversion Notice therefor,
then, upon the written notice of such RL Lender to the Borrower
and the Agent, the Borrower shall, within five Business Days of
its receipt thereof, pay directly to such RL Lender such amount
as will (in the reasonable determination of such RL Lender)
reimburse such RL Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 5.5. Increased Capital Costs, etc. If the
implementation of or, after the date hereof, the introduction or
any change in the interpretation of, or any change in its
application to the Borrower, the Issuer and/or the Lenders of,
any law or any regulation or guideline issued by any central bank
or other governmental authority (whether or not having the force
of law), including any eurocurrency or other reserve or special
deposit requirement or any tax (other than tax which is on a
Lender's general net or gross income or in respect of a Lender's
franchise taxes) or any capital requirement, has, due to a
Lender's or the Issuer's compliance, the effect, directly or
indirectly, of (i) increasing the cost to such Lender or Issuer
of performing its obligations hereunder or under any Letter of
Credit or Loan; (ii) reducing any amount received or receivable
by such Lender or Issuer or its effective return hereunder or in
respect of any Letter of Credit or Loan or on its capital; or
(iii) causing such Lender or Issuer to make any payment or to
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forgo any return based on any amount received or receivable by
such Lender or Issuer hereunder or in respect of any Letter of
Credit or Loan, then upon demand from time to time the Borrower
shall pay such amount as shall compensate such Lender or Issuer
for any such cost, reduction, payment or foregone return upon
receipt of the certificate referred to in the last sentence of
this paragraph. The Borrower shall further indemnify the Issuer
for all costs, losses and expenses incurred by the Issuer in
connection with any Letter of Credit and agrees that the Issuer
shall have no liability to the Borrower for any reason in respect
of any Letter of Credit other than on account of the Issuer's
gross negligence or wilful misconduct. Any certificate of the
Issuer or any Lender in respect of the foregoing will be
conclusive and binding upon the Borrower, except for manifest
error, and shall set forth a determination of the amounts owing
to the Issuer or such Lender in good faith using any reasonable
averaging and attribution methods. Anything in this Agreement or
any Loan Document to the contrary notwithstanding, no Lender or
Issuer shall be indemnified for, exculpated from, or relieved
from liability, under this Agreement or any Loan Document, for
any act or omission constituting gross negligence or wilful
misconduct.
SECTION 5.6. Taxes. (a) Each payment made by the Borrower
under this Agreement shall be made free and clear of, and without
deduction for, any present or future withholding or other taxes
imposed on such payments by or on behalf of any government or any
political subdivision or agency thereof or therein, except for
any income, franchise and other taxes imposed on the Lender
(which for purposes of this Section 5.6 shall include any branch,
affiliate or international banking facility created by a RL
Lender to make or maintain a LIBO Rate Loan pursuant to Section
2.5) by the jurisdiction under the laws of which such Lender is
organized or any political subdivision or agency thereof or by
the jurisdiction of such Lender's branch or lending office or
principal place of business (all such non-excluded taxes being
hereinafter referred to as "Taxes"). Whenever any Taxes are
payable by the Borrower with respect to any payments hereunder,
the Borrower shall promptly furnish to the Agent for the account
of the applicable Lender official receipts (to the extent that
the relevant governmental authority delivers such receipts)
evidencing payment of any such Taxes so withheld or deducted.
(b) Each Lender that is not a "United States person" (as
such term is defined in Section 7701(a)(3) of the Internal
Revenue Code of 1986) shall submit to the Borrower on or before
the Effective Date (or, in the case of a Person that becomes a
Lender after the Effective Date by assignment or pursuant to
Section 2.5 promptly upon such assignment or funding) two duly
completed and signed copies of either (1) Form 1001 of the United
States Internal Revenue Service entitling such Lender to a
complete exemption from withholding on all amounts to be received
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by such Lender pursuant to this Agreement or (2) Form 4224 of the
United States Internal Revenue Service relating to all amounts to
be received by such Lender pursuant to this Agreement. Each such
Lender shall, from time to time after submitting either such
form, submit to the Borrower and the Agent such additional duly
completed and signed copies of one or the other such forms (or
such successor forms or other documents as shall be adopted from
time to time by the relevant United States taxing authorities) as
may be (1) reasonably requested in writing by the Borrower or the
Agent and (2) appropriate under then current United States law or
regulations to avoid United States withholding taxes on payments
in respect of any amounts to be received by such Lender pursuant
to this Agreement. Upon the reasonable request of the Borrower
or the Agent, each Lender that has not provided the forms or
other documents, as provided above, on the basis of being a
"United States person" shall submit to the Borrower and the Agent
a certificate to the effect that it is such a "United States
person".
(ii) If any Lender which is not a "United States person"
determines that it is unable to submit to the Borrower and the
Agent any form or certificate that such Lender is requested to
submit pursuant to the preceding paragraph, or that it is
required to withdraw or cancel any such form or certificate, or
that any such form or certificate previously submitted has
otherwise become ineffective or inaccurate, such Lender shall
promptly notify the Borrower and the Agent of such fact.
(iii) The Borrower shall not be required to pay any
additional amount in respect of Taxes to any Lender if and only
to the extent that (A) such Lender is subject to such Taxes on
the Effective Date (or in the case of a Person that became a
Lender after the Effective Date by assignment or pursuant to
Section 2.5 on the date of such assignment or funding) or would
be subject to such Taxes on such date if a payment under this
Agreement has been received by it on such date; (B) such Lender
becomes subject to such Taxes subsequent to the date referred to
in clause (A) above (or in the case of a Lender which is not a
"United States person", the first date on which it delivers the
appropriate form or certificate to the Borrower as referred to in
clause (b) of this Section) as a result of a change in the
circumstances of such Lender (other than a change in applicable
law), including without limitation a change in the residence,
place of incorporation or principal place of business of the
Lender, a change in the branch or lending office of the Lender
participating in the transactions set forth herein or as a result
of the sale by the Lender of participating interests in such
Lender's creditor position(s) hereunder; or (C) such Taxes would
not have been incurred but for the failure of such Lender to file
with the appropriate tax authorities and/or provide to the
Borrower any form or certificate that it was required so to do
pursuant to clause (b) of this Section, unless the Lender is not
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entitled to provide such form or certificate as a result of a
change in applicable law after the Effective Date (or in the case
of a Person that became a Lender after the Effective Date by
assignment or pursuant to Section 2.5 the date of such assignment
or funding).
(iv) Within thirty (30) days after the written reasonable
request of the Borrower, each Lender shall execute and deliver to
the Borrower such certificates, forms or other documents which
can be furnished consistent with the facts and which are
reasonably necessary to assist the Borrower in applying for
refunds of Taxes paid by the Borrower hereunder or making payment
of Taxes hereunder; provided, however, that no Lender shall be
required to furnish to the Borrower any financial information
with respect to itself or other information which it considers
confidential.
(v) The Borrower shall have the right to require any
Lender which is not a "United States person" to which the
Borrower is required to make additional payments pursuant to
Section 5.6 hereof on account of Taxes (or would, upon payment to
such Lender of an amount hereunder, be so required) to assign
such Lender's total Loans and Commitments to one or more banks or
financial institutions identified by the Borrower and acceptable
to the Agent at a purchase price equal to the then outstanding
amount of all principal, interest, fees and other amounts then
owed to such Lender.
SECTION 5.7. Payments, Computations, etc. Unless
otherwise expressly provided herein (including as set forth in
Section 2.3 and Section 4.5), all payments by the Borrower
pursuant to this Agreement, the Notes or any other Loan Document
shall be made by the Borrower to the Agent for the account of the
Lenders entitled to receive such payment. All such payments
required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 11:00 a.m., New York
time, on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to
time by notice to the Borrower. To the extent the Agent receives
such funds prior to 12:00 noon, New York time, the Agent shall
promptly remit in same day funds to each Lender its share, if
any, of such payments received by the Agent for the account of
such Lender. All interest and fees shall be computed on the
basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which
such interest or fee is payable over a year comprised of 360
days. Whenever any payment to be made shall otherwise be due on
a day which is not a Business Day, such payment shall (except as
otherwise required by clause (b) of the definition of the term
"Interest Period") be made on the next succeeding Business Day
and such extension of time shall be included in computing
interest and fees, if any, in connection with such payment.
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SECTION 5.8. Sharing of Payments. If any Lender shall
obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of
any Letter of Credit in excess of its Percentage of payments then
or therewith obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in Letters of Credit
as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender
shall repay to the purchasing Lender the purchase price to the
ratable extent of such recovery together with an amount equal to
such selling Lender's ratable share (according to the proportion
of
(a) the amount of such selling Lender's required
repayment to the purchasing Lender
to
(b) 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 Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including
pursuant to Section 5.9) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower
in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a setoff to which this Section
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section to share in the benefits of any recovery on such secured
claim.
SECTION 5.9. Setoff. Each Lender shall, upon the
occurrence of any event or condition described in clauses (f) and
(g) of Section 10.1 of the U.S. Credit Agreement or, with the
consent of the Required Lenders, upon the occurrence of any other
Event of Default, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due)
any and all balances, credits, deposits, accounts or moneys of
the Borrower then or thereafter maintained with or otherwise held
by such Lender; provided, however, that any such appropriation
and application shall be subject to the provisions of Section
5.8. Each Lender agrees promptly to notify the Borrower and the
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Agent after any such setoff and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights
of each Lender under this Section are in addition to other rights
and remedies (including other rights of setoff under applicable
law or otherwise) which such Lender may have.
SECTION 5.10. Use of Proceeds. The Borrower shall apply
the proceeds of each Credit Extension in accordance with the
fifth recital.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Initial Credit Extension. The obligations of
the Lenders to make the initial Credit Extension shall be subject
to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 6.1.
SECTION 6.1.1. Resolutions, etc. The Agent shall have
received from the Borrower four originally executed copies of a
certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in
full force and effect authorizing the execution, delivery
and performance of this Agreement, the Note and each other
Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement,
the Notes and each other Loan Document executed by it,
upon which certificate each Lender may conclusively rely until it
shall have received a further certificate of the Secretary of the
Borrower canceling or amending such prior certificate.
SECTION 6.1.2. Delivery of Note. Scotiabank shall have
received its Note duly executed and delivered by the Borrower.
SECTION 6.1.3. Security Agreement. The Agent shall have
received four originally executed copies of executed counterparts
of the Security Agreement, dated as of the date hereof, duly
executed by the Borrower, together with
(a) executed copies of Uniform Commercial Code
financing statements (Form UCC-1) or such other evidence of
filing as may be acceptable to the Agent, naming the
Borrower as the debtor and the Agent as the secured party,
or other similar instruments or documents, filed under the
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Uniform Commercial Code of all jurisdictions as may be
necessary or, in the opinion of the Agent, desirable to
perfect the security interest of the Agent pursuant to the
Security Agreement; and
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to
release all Liens and other rights of any Person (other
than under or in respect of the U.S. Credit Agreement) in
any collateral described in the Security Agreement
previously granted by any Person, together with such other
Uniform Commercial Code Form UCC-3 termination statements
as the Agent may reasonably request from such Persons.
SECTION 6.1.4. Certificates as to No Default, etc. No
default shall have occurred and be continuing in the performance
of any affirmative or negative covenants contained in the U.S.
Credit Agreement, none of the events described in clauses (a),
(b), (d), (f), (g), (h), (i), (j), (k), or (l) of Section 10.1 of
the U.S. Credit Agreement shall have occurred, and no Event of
Default shall have occurred or would occur under the U.S. Credit
Agreement or would result from the issuance of any Letter of
Credit or the making of any Loan, and the Agent shall have
received four originally executed certificates dated the
Effective Date from an Authorized Officer of the Borrower
certifying as to the above.
SECTION 6.1.5. ASCO Debt, etc. The Agent to the U.S.
Credit Agreement shall have consented to the partial replacement
of ASCO for purposes of the definition of "ASCO" in the U.S.
Credit Agreement and the Agent shall be satisfied that
Indebtedness under this Agreement will constitute permitted "ASCO
Debt" under the U.S. Credit Agreement or is otherwise permitted
under the U.S. Credit Agreement, all to be evidenced and
satisfied by the execution and delivery by the parties thereto of
a letter in substantially the form of Exhibit J hereto.
SECTION 6.1.6. Intercreditor Agreement. The Agent under
the U.S. Credit Agreement shall have entered into the ASCO
Intercreditor Agreement (as defined in the U.S. Credit Agreement)
with the Agent hereunder (with sufficient originally executed
copies for each Lender).
SECTION 6.1.7. No Material Adverse Change. Since
December 31, 1992, there shall have been no material adverse
change in the financial condition, operations, assets, business,
properties or prospects of the Borrower and its Subsidiaries,
taken as a whole, and the Agent shall have received four
originally executed certificates from an Authorized Officer of
the Borrower certifying as such.
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SECTION 6.1.8. Tradexpress Agreement. The Agent shall
have received a completed Tradexpress Transmission Agreement,
duly executed and delivered by the Borrower and the Issuer in
substantially the form of Exhibit I hereto.
SECTION 6.1.9. Opinions of Counsel. The Agent shall have
received opinions, dated the date of the initial Borrowing and
addressed to the Agent and all Lenders, from
(a) Skadden, Arps, Slate, Meagher & Flom, counsel to
the Borrower, substantially in the form of Exhibit G
hereto; and
(b) Mayer, Brown & Platt, counsel to the Agent,
substantially in the form of Exhibit H hereto.
SECTION 6.1.10. Closing Fees, Expenses, etc. The Agent
shall have received for its own account, or for the account of
each Lender, as the case may be, all fees, costs and expenses
(i) previously agreed to between the Agent and the Borrower,
(ii) as otherwise due and payable pursuant to Section 3.3 and, if
then invoiced, Section 11.3, and (iii) all fees and other amounts
payable to Scotiabank that have accrued through (and including)
the Effective Date or that are otherwise payable to Scotiabank
under the terms of the Existing Letter of Credit Facility.
SECTION 6.1.11. Delivery of Form 1001 or 4224. The Agent
shall have received two executed copies of either Internal
Revenue Service Form 1001 or Form 4224, as applicable, from each
Lender.
SECTION 6.2. All Credit Extensions. The obligation of
each Lender to make any Credit Extension (including the initial
Credit Extension) shall be subject to the satisfaction of each of
the conditions precedent set forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default,
etc. Both before and after giving effect to any Credit Extension
the following statements shall be true and correct
(a) no event or circumstances has occurred and is
continuing, or would result from the making of such Credit
Extension, which constitutes a Default, or which when
considered by itself or together with other past or then
existing events or circumstances, constitutes or would
constitute a material adverse change in the business
prospects or financial condition of the Borrower and its
Subsidiaries taken as a whole;
(b) no event of default or any condition, occurrence
or event which, after notice or lapse of time or both,
would constitute an event of default shall have occurred
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and be continuing in the performance of any affirmative and
negative covenants contained in Sections 8 and 9 of the
U.S. Credit Agreement and regardless of whether such U.S.
Credit Agreement is terminated, unless in connection with
such termination a replacement credit facility to which the
Required Lenders hereunder have approved is entered into in
which case, the affirmative and negative covenants in such
facility shall become the subject of this clause (b); and
(c) none of the events described in clauses (a), (b),
(d), (f), (g), (h), (i), (j), (k) or (l) of Section 10.1 of
the U.S. Credit Agreement (without giving effect to any
termination of the U.S. Credit Agreement, unless in
connection with such termination a replacement credit
facility to which the Required Lenders hereunder have
approved, in which case the analogous provisions of such
replacement credit facility shall become the subject of
this clause (c)), shall have occurred and be continuing.
SECTION 6.2.2. Credit Request. To the extent that Loans
are made in accordance with clause (b) of Section 2.3 or the
Borrower requests that the Issuer issue a Letter of Credit other
than by means of notification in accordance with the terms of the
Tradexpress Agreement, the Agent shall have received a Borrowing
Request or Issuance Request (in the form of Exhibit B hereto), as
the case may be, for such Credit Extension. Each of the delivery
of a Borrowing Request or an Issuance Request and the acceptance
by the Borrower of the proceeds of the Borrowing or the issuance
of the Letter of Credit, as applicable, shall constitute a
representation and warranty by the Borrower that on the date of
such Credit Extension (both immediately before and after giving
effect to such Credit Extension and the application of the
proceeds thereof) or the issuance of the Letter of Credit, as
applicable, the statements made in Section 6.2.1 and the
representations and warranties contained in Section 3.1 of the
Security Agreement are in each case true and correct.
SECTION 6.2.3. Satisfactory Legal Form. All documents
executed or submitted pursuant hereto by or on behalf of the
Borrower or any of its Subsidiaries shall be satisfactory in form
and substance to the Agent; the Agent shall have received all
information, approvals, opinions, documents or instruments as the
Agent may reasonably request.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into
this Agreement and to make Loans and issue Letters of Credit
hereunder, the Borrower represents and warrants unto the Agent
and each Lender as set forth in this Article VII.
SECTION 7.1. Organization, etc. The Borrower is a
corporation validly organized and existing and in good standing
under the laws of the State of its incorporation, is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business
requires such qualification, except where the failure to so
qualify would not have a Material Adverse Effect (as defined in
the U.S. Credit Agreement (provided, that clause (iii) of such
definition shall be deemed to refer to the first priority Lien in
favor of the Issuer on the Goods and the second priority Lien (if
any) on Inventory created by the Security Agreement)), and has
full power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform
its Obligations under this Agreement, the Notes and each other
Loan Document to which it is a party and to own and hold under
lease its property and to conduct its business substantially as
currently conducted by it.
SECTION 7.2. Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by the Borrower of this
Agreement, the Notes and each other Loan Document executed or to
be executed by it, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and
do not
(a) contravene the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on
or affecting the Borrower; or
(c) result in, or require the creation or imposition
of, any Lien on any of the Borrower's properties, except
pursuant to the terms of the Security Agreement.
SECTION 7.3. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or
other Person is required for the due execution, delivery or
performance by the Borrower of this Agreement, the Notes or any
other Loan Document to which it is a party. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a
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"holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 7.4. Validity, etc. This Agreement constitutes,
and the Note and each other Loan Document executed by the
Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors rights generally and by
general equity principles.
SECTION 7.5. No Material Adverse Change. Since
December 31, 1992, there has been no material adverse change in
the business, prospects or financial condition of the Borrower
and its Subsidiaries, taken a whole.
SECTION 7.6. Litigation, Labor Controversies, etc. There
is no pending or, to the knowledge of the Borrower, threatened
litigation, action, proceeding, or labor controversy affecting
the Borrower and its Subsidiaries, taken as a whole, or any of
their respective properties, businesses, assets or revenues,
which could reasonably be expected to materially adversely affect
the financial condition, business or prospects of the Borrower
and its Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document.
SECTION 7.7. Regulations G, U and X. The Borrower is not
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans
will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, U or X
or any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
SECTION 7.8. Accuracy of Information. All factual
information heretofore or contemporaneously furnished by or on
behalf of the Borrower in writing to the Agent or any Lender for
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Borrower
to the Agent or any Lender will be, true and accurate in every
material respect on the date as of which such information is
dated or certified and as of the date of execution and delivery
of this Agreement by the Agent and such Lender, and such
information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to
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make such information not misleading. The parties acknowledge
and agree that nothing contained in this Section shall constitute
a representation or warranty by the Borrower as to the future
financial performance or the results of operations of the
Borrower; provided, however, that any projections delivered
pursuant to this Agreement have been (and will be) prepared on
the basis of the assumptions accompanying them, and such
projections and assumptions, as of the date of preparation
thereof and as of the date hereof, are reasonable and represent
the Borrower's good faith estimate of its future financial
performance.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. The Borrower agrees
with the Agent and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in
full, the Borrower will perform the obligations set forth in this
Section 8.1.
SECTION 8.1.1. Financial Information, Reports, Notices,
etc. Unless the information set forth below is otherwise
delivered to a Lender under the terms of the U.S. Credit
Agreement, the Borrower will furnish, or will cause to be
furnished, to each Lender and the Agent copies of the following
financial statements, reports, notices and information:
(a) unaudited, quarterly, consolidated and/or
consolidating financial statements of the Borrower within
45 days of the end of each of the first 3 Fiscal Quarters
of each of its Fiscal Years, certified by the chief
financial Authorized Officer of the Borrower;
(b) audited, annual, consolidated and/or
consolidating financial statements of the Borrower within
90 days of each Fiscal year;
(c) on each date that a financial statement of the
Borrower is deliverable to the Lenders, the certificate of
the Borrower, signed by an Authorized Officer of the
Borrower certifying that no Default or Event of Default
under this Agreement has occurred and is continuing or, if
a Default or Event of Default has occurred and is
continuing, a statement setting forth details of such
Default or Event of Default and the actions that the
Borrower has taken or proposes to take with respect
thereto;
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(d) on each date that a financial statement of the
Borrower is deliverable to the Lenders such financial
calculations as are provided pursuant to the U.S. Credit
Agreement;
(e) as soon as possible and in any event within two
Business Days after the occurrence of each Default, a
statement of an Authorized Officer of the Borrower setting
forth details of such Default and the action which the
Borrower has taken and proposes to take with respect
thereto;
(f) as soon as possible and in any event within two
Business Days after (x) the occurrence of any adverse
development with respect to any litigation, action,
proceeding, or labor controversy described in Section 7.6
or (y) the commencement of any labor controversy,
litigation, action, proceeding of the type described in
Section 7.6, notice thereof and copies of all documentation
relating thereto;
(g) promptly after the sending or filing thereof,
copies of all Forms 10Q and 10K reports and registration
statements which the Borrower files with the Securities and
Exchange Commission or any national securities exchange;
and
(h) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or
any of its Subsidiaries as any Lender through the Agent may
from time to time reasonably request.
SECTION 8.1.2. Corporate Existence. The Borrower will at
all times maintain and preserve its corporate existence.
SECTION 8.1.3. Security. The Borrower covenants and
agrees to give to the Agent, for the benefit of the Lender
Parties (as defined in the Security Agreement), solely to secure
the Borrower's obligation to reimburse the Issuer for
Disbursements under a Letter of Credit (and to pay fees in
respect of such Letter of Credit), from time to time security by
way of the Goods (as such term is defined in the Security
Agreement) and with respect to any Goods, all documents of title
(including bills of lading, air way bills, ocean bills, warehouse
receipts and other documents, instruments and other evidence of
title) issued in respect of such Goods, all contracts, contract
rights and policies or certificates of insurance specifically
relating to such Goods.
SECTION 8.1.4. Insurance of Goods. The Borrower covenants
and agrees to keep the Goods insured in amounts, against risks,
and with companies satisfactory to the Agent (with loss payable
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to the Agent and the Agent under the U.S. Credit Agreement) and
covenants to deliver the policies or certificates of insurance to
the Agent, and in the event that the Borrower fails to keep the
Goods insured or the insurance is for any reason unsatisfactory
to the Agent, the Agent may, at the expense of the Borrower,
obtain insurance satisfactory to the Agent.
SECTION 8.1.5. Possession, etc. Until payment by the
Borrower to the Agent of all Obligations with respect to a
particular Letter of Credit secured by Goods, the Agent, on
behalf of the Lenders, shall, subject to the terms of the
Intercreditor Agreement, have the absolute right and title to and
the unqualified right to the possession and disposal of the Goods
covered by such Letter of Credit, whether or not released to the
Borrower on trust or bailee receipt or otherwise, and all
documents of title (including bills of lading, air way bills,
ocean bills, warehouse receipts and other documents, instruments
or other evidence of title) issued in respect of the Goods
relating to such Letter of Credit, all contracts, contract rights
and policies or certificates of insurance specifically relating
to such Goods under such Letter of Credit (all of the foregoing
shall be referred to herein as the "Subject Property" under such
Letter of Credit) and shall, subject to the terms of the
Intercreditor Agreement, be entitled to exercise all rights as an
unpaid seller of such Goods. As more fully set forth in the
Security Agreement, Goods as to a particular Letter of Credit
shall be assigned and pledged to the Agent for the benefit of the
Lender Parties (as defined in the Security Agreement) as security
for the fulfillment and payment of the Obligations in respect of
such Letter of Credit and Inventory (as defined in the Security
Agreement) shall be assigned and pledged to the Agent for the
benefit of the RL Lenders as security for the fulfillment and
payment of the Obligations in respect of the Loans made to
reimburse the Issuer in respect of any Letter of Credit, and the
Agent (for the benefit of the Lenders), whenever it thinks fit,
may without notice to the Borrower, without prejudice to any of
its claims or rights against the Borrower and at the cost and
expense of the Borrower, place the Goods in charge of any broker,
warehouseman or other agent, either for storage or for sale, and
the Agent (for the benefit of the Lenders) shall not incur any
liability whatever for the default of any such broker,
warehouseman or other agent.
SECTION 8.1.6. Partial Shipments. The Borrower covenants
and agrees that if a Letter of Credit does not specify the unit
price of the Goods and does not state that partial shipments are
not permitted, the Issuer shall be entitled to be paid the full
amount of any Draft honored in respect of a partial shipment
notwithstanding that it is for an amount that is disproportionate
to the relative partial shipment.
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SECTION 8.1.7. Licenses. The Borrower covenants and
agrees to obtain promptly all necessary permissions and licenses
in respect of the shipping, export and import of the Goods and
covenants to comply with all foreign and domestic governmental
requirements with regard thereto, the whole to the exoneration of
the Issuer and the Lenders, and covenants to deliver to the Agent
such certificates in respect thereof as it may require from time
to time.
SECTION 8.1.8. Sale Upon Default. As more fully set forth
in the Security Agreement, the Borrower agrees that the Agent, on
behalf of the Lenders, whenever in its discretion it deems it
necessary for its protection, so long as the Borrower is in
default of its repayment Obligations under a Letter of Credit or
with respect to a Loan (after giving effect to any grace period),
may, without regard to the maturity of any of the other
Obligations, and with notice to the Borrower of not less than 24
hours (but subject to the terms of the Intercreditor Agreement),
sell by public or private sale or realize in such other manner as
the Agent thinks fit all or any of the Goods in respect of such
Letter of Credit or Inventory (as defined in the Security
Agreement) in respect of any Loan, before or after arrival and
whether or not released to the Borrower on trust or bailee
receipt or otherwise, upon such terms and conditions and for such
price in money or other consideration as the Agent thinks fit;
and the Borrower covenants that, subject to the terms of the
Intercreditor Agreement, any moneys received by the Agent as
proceeds of any such sale, after deduction of all fees and
expenses in connection therewith which with interest shall be
borne by the Borrower, shall be applied against the Obligations
in respect of such Letter of Credit (in the case of Goods) or
Loans (in the case of Inventory) as the Agent thinks fit and the
Borrower shall remain liable for and covenants to pay to the
Agent (for the benefit of the Lenders) or the RL Lenders on
demand the balance of the Obligations in respect of such Letter
of Credit or Loans, as the case may be.
SECTION 8.1.9. Additional Security. The Borrower
covenants and agrees that it will cause Warner's of Canada Ltd.
and Warner's (United Kingdom) Limited each to use their best
efforts to provide the RL Lenders with a sole second priority
lien on all or substantially all of the assets that such Person
owns in Canada and the United Kingdom, respectively, as
additional security for the Loans and cause ASCO International
Sourcing Limited (or its applicable affiliates or assigns) to
release its liens on such assets as soon as possible following
the Effective Date.
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ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the
following events or occurrences described in this Section 9.1
shall constitute an "Event of Default".
SECTION 9.1.1. Non-Payment of Obligations. The Borrower
shall default in the payment or prepayment when due of (i) any
principal of or interest on any Loan, (ii) any Reimbursement
Obligation, or (iii) any fee or of any other Obligation, and in
each case such default in payment or prepayment shall continue
unremedied for more than one Business Day from the date such
payment or prepayment was due.
SECTION 9.1.2. Breach of Warranty. Any representation or
warranty of the Borrower made or deemed to be made hereunder or
in any other Loan Document executed by it (including any
certificates delivered pursuant to Article VI) is or shall be
incorrect when made or deemed made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and
Obligations. The Borrower shall default in the due performance
and observance of any of its obligations under Section 8.1.2 or
under any other covenant which is impossible to remedy.
SECTION 9.1.4. Non-Performance of Other Covenants and
Obligations. The Borrower shall default in the due performance
and observance of any other agreement contained herein or in any
other Loan Document executed by it, and such default shall
continue unremedied for a period of ten Business Days after
notice thereof shall have been given to the Borrower by the Agent
or any Lender.
SECTION 9.1.5. Default Under U.S. Credit Agreement. Any
Event of Default (as defined in the U.S. Credit Agreement) or any
replacement credit facility shall have occurred, and any or all
of the Indebtedness of the Borrower thereunder shall have become
due and payable in accordance with Section 10.1 thereof (or
similar section of any replacement credit facility).
SECTION 9.1.6. Bankruptcy, Insolvency, etc. Any event or
condition described in clauses (f) or (g) of Section 10.1 of the
U.S. Credit Agreement (or similar provision of any replacement
credit facility) shall have occurred and be continuing.
SECTION 9.1.7. Impairment of Security, etc. Any Loan
Document, or any Lien granted thereunder, shall (except in
accordance with its terms), in whole or in part, terminate, cease
to be effective or cease to be the legally valid, binding and
enforceable obligation of the Borrower; the Borrower or any other
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party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any
Lien securing any Obligation shall, in whole or in part, (i) with
respect to the Goods, cease to be a perfected first priority
Lien, and (ii) with respect to Inventory (as such term is defined
in the Security Agreement), cease to be a perfected, second
priority Lien, in each case subject only to those exceptions
expressly permitted by such Loan Document or pursuant to the
Intercreditor Agreement.
SECTION 9.2. Action Upon Bankruptcy. If any Event of
Default described in Section 9.1.6 shall occur, the Commitments
(if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately
due and payable, without notice or demand.
SECTION 9.3. Action Upon Other Event of Default. If any
Event of Default (other than any Event of Default described in
Section 9.1.6) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Agent, upon the direction of
the Required Lenders, shall by notice to the Borrower declare all
or any portion of the outstanding principal amount of the Loans
and other Obligations in respect of the Loans or otherwise to be
due and payable and/or the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the
case may be, the Commitments shall terminate.
ARTICLE X
THE AGENT
SECTION 10.1. Actions. Each Lender hereby appoints
Scotiabank as its Agent under and for purposes of this Agreement,
the Notes and each other Loan Document. Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement,
the Notes and each other Loan Document and, in the absence of
other written instructions from the Required Lenders received
from time to time by the Agent (with respect to which the Agent
agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental
thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata
according to such Lender's Percentage, from and against any and
all liabilities, obligations, losses, damages, claims, costs or
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expenses of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against, the Agent in any
way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys' fees,
and as to which the Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted
solely from the Agent's gross negligence or wilful misconduct.
The Agent shall not be required to take any action hereunder,
under the Notes or under any other Loan Document, or to prosecute
or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of the Agent shall be or
become, in the Agent's determination, inadequate, the Agent may
call for additional indemnification from the Lenders and cease to
do the acts indemnified against hereunder until such additional
indemnity is given.
SECTION 10.2. Copies, etc. The Agent shall give prompt
notice to each Lender of each notice or request required or
permitted to be given to the Agent by the Borrower pursuant to
the terms of this Agreement (unless concurrently delivered to the
Lenders by the Borrower). The Agent will distribute to each
Lender each document or instrument received for its account and
copies of all other communications received by the Agent from the
Borrower for distribution to the Lenders by the Agent in
accordance with the terms of this Agreement.
SECTION 10.3. Exculpation. Neither the Agent nor any of
its directors, officers, employees or agents shall be liable to
any Lender for any action taken or omitted to be taken by it
under this Agreement or any other Loan Document, or in connection
herewith or therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan
Document, nor for the creation, perfection or priority of any
Liens purported to be created by any of the Loan Documents, or
the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower of its obligations
hereunder or under any other Loan Document. Any such inquiry
which may be made by the Agent shall not obligate it to make any
further inquiry or to take any action. The Agent shall be
entitled to rely upon advice of counsel concerning legal matters
and upon any notice, consent, certificate, statement or writing
which the Agent believes to be genuine and to have been presented
by a proper Person.
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SECTION 10.4. Successor. The Agent may resign as such at
any time upon at least 30 days' prior notice to the Borrower and
all Lenders. If the Agent at any time shall resign, the Required
Lenders may appoint another Lender as a successor Agent which
shall thereupon become the Agent hereunder. If no successor
Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the
retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State
thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation hereunder as the Agent, the provisions of
(a) this Article X shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
the Agent under this Agreement; and
(b) Section 11.3 and Section 11.4 shall continue to
inure to its benefit.
SECTION 10.5. Loans or Letters of Credit Issued by
Scotiabank. Scotiabank shall have the same rights and powers
with respect to (x) the Loans made by it or any of its
affiliates, (y) the Notes held by it or any of its affiliates,
and (z) its participating interests in the Letters of Credit as
any other Lender and may exercise the same as if it were not the
Agent. Scotiabank and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if
Scotiabank were not the Agent hereunder.
SECTION 10.6. Credit Decisions. Each Lender acknowledges
that it has, independently of the Agent and each other Lender,
and based on such Lender's review of the financial information of
the Borrower, this Agreement, the other Loan Documents (the terms
and provisions of which being satisfactory to such Lender) and
such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to
extend its Commitment. Each Lender also acknowledges that it
will, independently of the Agent and each other Lender, and based
on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own
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credit decisions as to exercising or not exercising from time to
time any rights and privileges available to it under this
Agreement or any other Loan Document.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of
this Agreement and of each other Loan Document may from time to
time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the
Borrower and the Required Lenders; provided, however, that no
such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the
Required Lenders shall be effective unless consented to by
each Lender;
(b) modify this Section 11.1, change the definition
of "Required Lenders", increase any Commitment Amount or
(except as otherwise contemplated by this Agreement) the
Percentage of any Lender, reduce any fees described in
Article III, release any collateral security, except as
otherwise specifically provided in any Loan Document or
extend any Commitment Termination Date shall be made
without the consent of each Lender and each holder of a
Note;
(c) extend the due date for, or reduce the amount of,
any scheduled repayment or prepayment of principal of or
interest on any Loan (or reduce the principal amount of or
rate of interest on any Loan) shall be made without the
consent of the holder of that Note evidencing such Loan;
(d) affect adversely the interests, rights or
obligations of the Issuer in its capacity as the Issuer
shall be made without the consent of the Issuer; or
(e) affect adversely the interests, rights or
obligations of the Agent in its capacity as the Agent shall
be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the
holder of any Note in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand
on the Borrower in any case shall entitle it to any notice or
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demand in similar or other circumstances. No waiver or approval
by the Agent, any Lender or the holder of any Note under this
Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 11.2. Notices. All notices and other
communications provided to any party hereto under this Agreement
or any other Loan Document shall be in writing or by Telex or by
facsimile and addressed, delivered or transmitted to such party
at its address, Telex or facsimile number set forth below its
signature hereto or set forth in the Lender Assignment Agreement
or at such other address, Telex or facsimile number as may be
designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall
be deemed given when received; any notice, if transmitted by
Telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of Telexes).
SECTION 11.3. Payment of Costs and Expenses. The Borrower
agrees to pay on demand all reasonable expenses of the Agent
(including the reasonable fees and out-of-pocket expenses of
counsel to the Agent and of local counsel, if any, who may be
retained by counsel to the Agent) in connection with
(a) the negotiation, preparation, execution and
delivery of this Agreement and of each other Loan Document,
including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to
this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the
transactions contemplated hereby are consummated,
(b) the filing, recording, refiling or rerecording of
the Security Agreement and/or any Uniform Commercial Code
financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and
all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded
by the terms hereof or of the Security Agreement, and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any
other Loan Document.
The Borrower covenants to pay on demand all reasonable costs and
expenses of the Agent, the Issuer and the Lenders incurred in the
enforcement of the Agent's, the Issuer's or any Lender's rights
under this Agreement and any Loan Document and, further,
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covenants that it will indemnify the Agent, the Issuer and the
Lenders on demand against all loss or damage to such Persons
arising out of the issuance of or other action taken by such
Persons in connection with any Letter of Credit or Loan
including, without limitation, the costs relating to any legal
process instituted by any party restraining or seeking to
restrain the Issuer from accepting or paying any Letter of Credit
or Draft. The Borrower also agrees that neither the Agent, the
Issuer or any Lender shall have any liability to it for any
reason in respect of the issuance of any Letter of Credit or Loan
other than on account of such Agent's, Issuer's or Lender's gross
negligence or wilful misconduct. All payments to be made to the
Agent, the Issuer and the Lenders hereunder shall, subject to
Section 5.6, be made for value on the date due and free of any
withholding tax or levy, other than taxes imposed on the net
income of the Agent, the Issuer or a Lender, and the Borrower
covenants that such taxes or levies, other than as excepted,
shall be paid by the Borrower. The provisions of this paragraph
will survive payment in full hereunder.
SECTION 11.4. Indemnification. In consideration of the
execution and delivery of this Agreement by each Lender and the
extension of the Commitments, the Borrower hereby indemnifies,
exonerates and holds the Agent, the Issuer and each Lender and
each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and
harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any
such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds
of any Loan or the use of any Letter of Credit; or
(b) the entering into and performance of this
Agreement and any other Loan Document by any of the
Indemnified Parties (including any action brought by or on
behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article VI not to make
any Credit Extension);
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or wilful
misconduct.
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SECTION 11.5. Survival. The obligations of the Borrower
under Sections 5.3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the
obligations of the Lenders under Section 10.1, shall in each case
survive any termination of this Agreement, the payment in full of
all Obligations and the termination of all Commitments. The
representations and warranties made by the Borrower in this
Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan
Document.
SECTION 11.6. Severability. Any provision of this
Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or
affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 11.7. Headings. The various headings of this
Agreement and of each other Loan Document are inserted for
convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness,
etc. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be executed by the
Borrower and the Agent and be deemed to be an original and all of
which shall constitute together but one and the same agreement.
This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower and each Lender (or notice
thereof satisfactory to the Agent) shall have been received by
the Agent and notice thereof shall have been given by the Agent
to the Borrower and each Lender.
SECTION 11.9. Governing Law; Entire Agreement. THIS
AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK. This Agreement, the Notes and the
other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
SECTION 11.10. Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that:
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(a) the Borrower may not assign or transfer its
rights or obligations hereunder without the prior written
consent of the Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of
the Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes. Each Lender may assign, or
sell participations in, its Loans and Commitments to one or more
other Persons in accordance with this Section 11.11.
SECTION 11.11.1. Assignments. Any Lender,
(a) with the written consents of the Borrower and the
Agent (which consents shall not be unreasonably delayed or
withheld) may at any time assign and delegate to one or
more commercial banks or other financial institutions; and
(b) with the consent of the Issuer, and notice to the
Borrower and the Agent, but without the consent of the
Borrower or the Agent, may assign and delegate to any of
its affiliates or to any other Lender or any Lender under
the U.S. Credit Agreement
(each Person described in either of the foregoing clauses as
being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an "Assignee Lender"), all
or a fraction of such Lender's total Loans and Commitments;
provided, that after giving effect to such assignment or
transfer, such Lender and its Assignee Lender shall each hold not
less than $5,000,000 of Loans and/or Commitments; provided,
further, that the Borrower shall not be required to pay an amount
under Section 5.6 that is greater than the amount which it would
have been required to pay had no assignment been made and
further, provided, however, that, the Borrower and the Agent
shall be entitled to continue to deal solely and directly with
such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall
have been given to the Borrower and the Agent by such
Lender and such Assignee Lender,
(d) such Assignee Lender shall have executed and
delivered to the Borrower and the Agent a Lender Assignment
Agreement, accepted by the Agent, and
(e) the processing fees described below shall have
been paid.
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From and after the date that the Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the
extent that rights and obligations hereunder have been assigned
and delegated to such Assignee Lender in connection with such
Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights
and obligations hereunder have been assigned and delegated by it
in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan
Documents. Within five Business Days after its receipt of notice
that the Agent has received an executed Lender Assignment
Agreement with respect to the assignment of Loans, the Borrower
shall execute and deliver to the Agent (for delivery to the
relevant Assignee Lender) new Notes evidencing such Assignee
Lender's assigned Loans and Commitments and, if the assignor
Lender has Loans and Commitments hereunder, replacement Notes in
the principal amount of the Loans and Commitments retained by the
assignor Lender hereunder (such Notes to be in exchange for, but
not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the
predecessor Notes. The assignor Lender shall mark the
predecessor Notes "exchanged" and deliver them to the Borrower.
Accrued interest on that part of the predecessor Notes evidenced
by the new Notes, and accrued fees, shall be paid as provided in
the Lender Assignment Agreement. Accrued interest on that part
of the predecessor Notes evidenced by the replacement Notes shall
be paid to the assignor Lender. Accrued interest and accrued
fees shall be paid at the same time or times provided in the
predecessor Notes and in this Agreement. Such assignor Lender or
such Assignee Lender must also pay a processing fee to the Agent
upon delivery of any Lender Assignment Agreement in the amount of
$2,500. Any attempted assignment and delegation not made in
accordance with this Section 11.11.1 shall be null and void.
Nothing in this Section shall prevent or prohibit any Lender from
pledging its rights (but not its obligations to make Loans and to
issue or participate in Letters of Credit) under this Agreement
and/or its Loans and/or Notes hereunder to a Federal Reserve Bank
in support of borrowing made by such Lender from such Federal
Reserve Bank.
SECTION 11.11.2. Participations. Any Lender may at any
time sell to one or more commercial banks or other Persons (each
of such commercial banks and other Persons being herein called a
"Participant") participating interests (or a sub-participating
interest, in the case of a Lender's participating interest in a
Letter of Credit) in any of the Loans, Commitments, or other
interests of such Lender hereunder; provided, however, that
(a) no participation or sub-participation
contemplated in this Section 11.11 shall relieve such
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Lender from its Commitments or its other obligations
hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for
the performance of its Commitments and such other
obligations,
(c) the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement
and each of the other Loan Documents,
(d) no Participant, unless such Participant is an
affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from
taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any
Participant that such Lender will not, without such
Participant's consent, take any actions of the type
described in clause (b) or (c) of Section 11.1, and
(e) the Borrower shall not be required to pay any
amount under Section 5.6 that is greater than the amount
which it would have been required to pay had no
participating interest been sold.
SECTION 11.12. Acknowledgement. Notwithstanding anything
herein to the contrary, the Lenders hereby acknowledge and agree
that the obligations of the Borrower with respect to Letters of
Credit and Loans are not and shall not be guaranteed by The
Warnaco Group, Inc. or any of its Subsidiaries nor are any such
Obligations secured or to be secured by any assets of the
Borrower, The Warnaco Group, Inc. or any of its Subsidiaries,
other than (i) the security interest in Goods securing the
Borrower's Obligations in respect of the Letters of Credit
pursuant to which such Goods were financed, (ii) the security
interest in Inventory (as defined in the Security Agreement) to
the extent set forth in the Intercreditor Agreement in respect of
Loans made in respect to the Reimbursement Obligations related to
such Letters of Credit, and (iii) the security interest in all or
substantially all of the assets of Warner's (United Kingdom)
Limited and Warner's of Canada Ltd. as security only for the
Loans (and Obligations in respect of the Loans). The Lenders,
the Issuer and the Borrower acknowledge that the Lenders under
the U.S. Credit Agreement are relying on this paragraph and this
paragraph may not be amended or terminated (except as a result of
a termination of this Agreement) without the prior written
consent of the Agent and Paying Agent (as such terms are defined
in the U.S. Credit Agreement).
SECTION 11.13. Other Transactions. Nothing contained
herein shall preclude the Agent or any other Lender from engaging
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in any transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of
its affiliates in which the Borrower or such affiliate is not
restricted hereby from engaging with any other Person.
SECTION 11.14. Forum Selection and Consent to
Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR
THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
SECTION 11.15. Waiver of Jury Trial. THE PARTIES HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE AGENT, THE LENDERS, THE ISSUER OR THE BORROWER.
THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A
PARTY) AND THE BORROWER ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT, THE ISSUER AND THE LENDERS
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
-55-
SECTION 11.16. UCP; etc. (a) The Uniform Customs and
Practice for Documentary Credits as most recently published by
the International Chamber of Commerce (the "UCP") shall in all
respects apply to each Letter of Credit issued hereunder and
shall be deemed for such purpose to be a part hereof as if fully
incorporated herein. In the event of any conflict between the
UCP and the governing law of the Agreement, the UCP shall prevail
to the extent necessary to remove the conflict.
(b) In the event of any issuance of a further Letter of
Credit for which the Borrower may apply from time to time
hereafter, or, of any extension of the maturity or time for
presentation of any Draft, or, of any renewal, extension or
increase in the amount of a Letter of Credit or any other
modifications of its terms, in each case with the consent or at
the request of the Borrower, the terms of the Agreement shall
continue in force and apply to the further Letter of Credit so
issued, or, to a Letter of Credit so renewed, extended, increased
or otherwise modified, or, to any, Draft, document or property
covered thereby and to any action taken by the Issuer or its
agents or correspondents in accordance with such issuance,
renewal, extension, increase or other modification.
SECTION 11.17. Usury Restraint. The provisions of this
Agreement shall be subject to any applicable law, regulation,
order, rule or direction (a "Usury Restraint") which prohibits or
restricts the charging, receipt or retention of interest or other
amounts at the rates and amounts set forth herein (the "Stated
Rate") in excess (the "Excess") of the maximum rates or amount
(the "Maximum Rate") stipulated in the Usury Restraint. The
provisions of this Agreement shall not require the payment or
permit the collection of interest in excess of the Maximum Rate
from time to time. If the Lenders comply (whether or not
required to do so at law) with such Usury Restraint then, to the
extent permitted by law, a subsequent reduction in the Stated
Rate below the Maximum Rate shall be deemed not to reduce the
Stated Rate below the Maximum Rate until the total amount of
interest and other amounts earned and retained, measured by a
dollar amount, equals the amount of interest and other amounts
which would have been earned and retained hereunder, inclusive of
the Excess, measured by a dollar amount, if the Stated Rate had
not been held at the Maximum Rate or any amount had not been
refunded to the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
WARNACO INC.
By________________________________
Title:
Address: 90 Park Avenue
New York, New York 10016
Facsimile No.: 212-687-0480
Attention: Chief Financial Officer
THE BANK OF NOVA SCOTIA,
as Agent
By________________________________
Title:
Address: One Liberty Plaza
New York, New York 10006
Facsimile No.: 212-225-5090
Attention: Kevin Clark
-57-
INITIAL
PERCENTAGE LENDERS
LETTERS
LOANS OF CREDIT
100% 70.00000% THE BANK OF NOVA SCOTIA
By_________________________________
Title:
Domestic
Office: One Liberty Plaza
New York, New York 10006
Facsimile No.: 212-225-5090
Attention: Kevin Clark
LIBOR
Office: One Liberty Plaza
New York, New York 10006
Facsimile No.: 212-225-5090
Attention: Kevin Clark
-58-
LETTERS
LOANS OF CREDIT
0% 20.00000% MITSUI NEVITT CAPITAL CORPORATION
By_________________________________
Title:
Domestic
Office: 330 Madison Avenue
New York, New York 10017
Facsimile No.: 212-949-7205
Attention: Jerry Parisi
Vice President
0% 10.00000% SOCIETE GENERALE, NEW YORK BRANCH
By_________________________________
Title:
Domestic
Office: 50 Rockefeller Plaza
New York, New York 10020
Facsimile No.: 212-581-8752
Attention: Jan Wertlieb
Vice President
____ __________
100% 100%
-59-
SCHEDULE A
EXISTING LETTERS OF CREDIT
AMOUNT DATE BENEFICIARY L/C NO.
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . 2
1.2. Use of Defined Terms . . . . . . . . . . . . . . . 12
1.3. Cross-References . . . . . . . . . . . . . . . . . 13
1.4. Accounting and Financial Determinations. . . . . . 13
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments. . . . . . . . . . . . . . . . . . . . 13
2.1.1. Loan Commitment. . . . . . . . . . . . . . . . . . 13
2.1.2. Commitment to Issue Letters of Credit. . . . . . . 14
2.1.3. Lenders Not Permitted or Required To Make Loans or
Issue Letters of Credit Under Certain
Circumstances . . . . . . . . . . . . . . . . . . 14
2.2. Reduction of Commitment Amounts. . . . . . . . . . 15
2.3. Borrowing Procedure. . . . . . . . . . . . . . . . 15
2.4. Continuation and Conversion Elections. . . . . . . 16
2.5. Funding. . . . . . . . . . . . . . . . . . . . . . 16
2.6. Notes. . . . . . . . . . . . . . . . . . . . . . . 17
2.7. Extension of Commitment Termination Date . . . . . 17
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments . . . . . . . . . . . . 17
3.2. Interest Provisions. . . . . . . . . . . . . . . . 18
3.2.1. Rates. . . . . . . . . . . . . . . . . . . . . . . 19
3.2.2. Post-Maturity Rates. . . . . . . . . . . . . . . . 20
3.2.3. Payment Dates. . . . . . . . . . . . . . . . . . . 20
3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . 20
3.3.1. Letter of Credit Face Amount Fee . . . . . . . . . 20
3.3.2. Letter of Credit Issuing Fee . . . . . . . . . . . 21
ARTICLE IV
LETTERS OF CREDIT
4.1. Issuance Requests. . . . . . . . . . . . . . . . . 21
4.2. Issuances and Extensions . . . . . . . . . . . . . 22
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PAGE
4.3. Destruction of Goods, etc. . . . . . . . . . . . . 22
4.4. Other Lenders' Participation . . . . . . . . . . . 23
4.5. Disbursements. . . . . . . . . . . . . . . . . . . 24
4.6. Reimbursement; Outstanding Letters, etc. . . . . . 24
4.7. Deemed Disbursements . . . . . . . . . . . . . . . 26
4.8. Nature of Reimbursement Obligations. . . . . . . . 27
4.9. Existing Letters of Credit . . . . . . . . . . . . 27
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
5.1. LIBO Rate Lending Unlawful . . . . . . . . . . . . 28
5.2. Deposits Unavailable . . . . . . . . . . . . . . . 28
5.3. Increased LIBO Rate Loan Costs, etc. . . . . . . . 28
5.4. Funding Losses . . . . . . . . . . . . . . . . . . 29
5.5. Increased Capital Costs, etc . . . . . . . . . . . 29
5.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . 30
5.7. Payments, Computations, etc. . . . . . . . . . . . 32
5.8. Sharing of Payments. . . . . . . . . . . . . . . . 33
5.9. Setoff . . . . . . . . . . . . . . . . . . . . . . 33
5.10. Use of Proceeds. . . . . . . . . . . . . . . . . . 34
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Initial Credit Extension . . . . . . . . . . . . . 34
6.1.1. Resolutions, etc . . . . . . . . . . . . . . . . . 34
6.1.2. Delivery of Note . . . . . . . . . . . . . . . . . 34
6.1.3. Security Agreement . . . . . . . . . . . . . . . . 34
6.1.4. Certificates as to No Default, etc . . . . . . . . 35
6.1.5. ASCO Debt, etc . . . . . . . . . . . . . . . . . . 35
6.1.6. Intercreditor Agreement. . . . . . . . . . . . . . 35
6.1.7. No Material Adverse Change . . . . . . . . . . . . 35
6.1.8. Tradexpress Agreement. . . . . . . . . . . . . . . 36
6.1.9. Opinions of Counsel. . . . . . . . . . . . . . . . 36
6.1.10. Closing Fees, Expenses, etc. . . . . . . . . . . . 36
6.1.11. Delivery of Form 1001 or 4224. . . . . . . . . . . 36
6.2. All Credit Extensions. . . . . . . . . . . . . . . 36
6.2.1. Compliance with Warranties, No Default, etc. . . . 36
6.2.2. Credit Request . . . . . . . . . . . . . . . . . . 37
6.2.3. Satisfactory Legal Form. . . . . . . . . . . . . . 37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc. . . . . . . . . . . . . . . . . 38
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PAGE
7.2. Due Authorization, Non-Contravention, etc. . . . . 38
7.3. Government Approval, Regulation, etc . . . . . . . 38
7.4. Validity, etc. . . . . . . . . . . . . . . . . . . 39
7.5. No Material Adverse Change . . . . . . . . . . . . 39
7.6. Litigation, Labor Controversies, etc . . . . . . . 39
7.7. Regulations G, U and X . . . . . . . . . . . . . . 39
7.8. Accuracy of Information. . . . . . . . . . . . . . 39
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants. . . . . . . . . . . . . . . 40
8.1.1. Financial Information, Reports, Notices, etc . . . 40
8.1.2. Corporate Existence. . . . . . . . . . . . . . . . 41
8.1.3. Security . . . . . . . . . . . . . . . . . . . . . 41
8.1.4. Insurance of Goods . . . . . . . . . . . . . . . . 41
8.1.5. Possession, etc. . . . . . . . . . . . . . . . . . 42
8.1.6. Partial Shipments. . . . . . . . . . . . . . . . . 42
8.1.7. Licenses . . . . . . . . . . . . . . . . . . . . . 43
8.1.8. Sale Upon Default. . . . . . . . . . . . . . . . . 43
8.1.9. Additional Security. . . . . . . . . . . . . . . . 43
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default . . . . . . . . . . . 44
9.1.1. Non-Payment of Obligations . . . . . . . . . . . . 44
9.1.2. Breach of Warranty . . . . . . . . . . . . . . . . 44
9.1.3. Non-Performance of Certain Covenants and
Obligations . . . . . . . . . . . . . . . . . . . 44
9.1.4. Non-Performance of Other Covenants and Obligations 44
9.1.5. Default Under U.S. Credit Agreement. . . . . . . . 44
9.1.6. Bankruptcy, Insolvency, etc. . . . . . . . . . . . 44
9.1.7. Impairment of Security, etc. . . . . . . . . . . . 44
9.2. Action Upon Bankruptcy . . . . . . . . . . . . . . 45
9.3. Action Upon Other Event of Default . . . . . . . . 45
ARTICLE X
THE AGENT
10.1. Actions. . . . . . . . . . . . . . . . . . . . . . 45
10.2. Copies, etc . . . . . . . . . . . . . . . . . . . 46
10.3. Exculpation . . . . . . . . . . . . . . . . . . . 46
10.4. Successor . . . . . . . . . . . . . . . . . . . . 47
10.5. Loans or Letters of Credit Issued by Scotiabank. . 47
10.6. Credit Decisions . . . . . . . . . . . . . . . . . 47
-iii-
PAGE
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc . . . . . . . . . . . . . 48
11.2. Notices . . . . . . . . . . . . . . . . . . . . . 49
11.3. Payment of Costs and Expenses. . . . . . . . . . . 49
11.4. Indemnification . . . . . . . . . . . . . . . . . 50
11.5. Survival . . . . . . . . . . . . . . . . . . . . . 51
11.6. Severability . . . . . . . . . . . . . . . . . . . 51
11.7. Headings . . . . . . . . . . . . . . . . . . . . . 51
11.8. Execution in Counterparts, Effectiveness, etc . . 51
11.9. Governing Law; Entire Agreement. . . . . . . . . . 51
11.10. Successors and Assigns . . . . . . . . . . . . . . 51
11.11. Sale and Transfer of Loans and Notes; Participations
in Loans and Notes . . . . . . . . . . . . . . . 52
11.11.1. Assignments . . . . . . . . . . . . . . . . . . . 52
11.11.2. Participations . . . . . . . . . . . . . . . . . . 53
11.12. Acknowledgement. . . . . . . . . . . . . . . . . . 54
11.13. Other Transactions . . . . . . . . . . . . . . . . 54
11.14. Forum Selection and Consent to Jurisdiction. . . . 55
11.15. Waiver of Jury Trial . . . . . . . . . . . . . . . 55
11.16. UCP; etc . . . . . . . . . . . . . . . . . . . . . 56
11.17. Usury Restraint. . . . . . . . . . . . . . . . . . 56
-iv-
SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Form of Issuance Request
EXHIBIT C - Form of Borrowing Request
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Lender Assignment Agreement
EXHIBIT F - Form of Security Agreement
EXHIBIT G - Form of Opinion of Counsel to the Borrower
EXHIBIT H - Form of Opinion of Counsel to the Agent
EXHIBIT I - Form of Tradexpress Transmission Agreement
EXHIBIT J - Form of Side Letter
-v-
[CONFORMED COPY]
(EXHIBIT F)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement"), dated
as of July 16, 1993, made by WARNACO INC., a Delaware corporation
(the "Grantor"), in favor of THE BANK OF NOVA SCOTIA, as agent
(together with any successor(s) thereto in such capacity, the
"Agent") for each of the Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of the
date hereof (together with all amendments and other
modifications, if any, from time to time thereafter made thereto,
the "Credit Agreement"), among the Grantor, the various
commercial lending institutions (individually a "Lender" and
collectively the "Lenders") as are, or may from time to time
become, parties thereto and the Agent, the Lenders have extended
Commitments to make Credit Extensions to the Grantor;
WHEREAS, as a condition precedent to the making of the
initial Credit Extensions under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in
order to induce the Lenders to make Credit Extensions (including
the initial Credit Extensions) to the Grantor pursuant to the
Credit Agreement, the Grantor agrees, for the benefit of each
Lender Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether
or not underscored) when used in this Security Agreement,
including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the
singular and plural forms thereof):
"Agent" is defined in the preamble.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in the first recital.
"Goods" is defined in clause (a) of Section 2.1.
"Grantor" is defined in the preamble.
"Inventory" is defined in clause (b) of Section 2.1
"Lender" is defined in the first recital.
"Lender Party" means, as the context may require, any
Lender, the Issuer or the Agent and each of its respective
successors, transferees and assigns.
"Lenders" is defined in the first recital.
"Security Agreement" is defined in the preamble.
"U.C.C." means the Uniform Commercial Code, as in effect in
the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, terms
used in this Security Agreement, including its preamble and
recitals, have the meanings provided in the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined
herein or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security
Agreement, including its preamble and recitals, with such
meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. The Grantor hereby assigns
and pledges to the Agent for its benefit and the benefit of each
of the Lender Parties, and hereby grants to the Agent for its
benefit and the benefit of each of the Lender Parties, a security
interest in all of the following, whether now owned or hereafter
existing or acquired (the "Collateral"):
(a) all goods (including, without limitation, all
inventory (the "Inventory")), wares, merchandise and other
commodities purchased by or shipped to or to the order of
(i) Scotiabank on behalf of the Grantor or (ii) the Grantor
under or by virtue of or in connection with the issuance of
a Letter of Credit (collectively being, in respect of each
such Letter of Credit, the "Goods"); and
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(b) with respect to any Goods, all documents of title
(including bills of lading, air way bills, ocean bills,
warehouse receipts and other documents, instruments or other
evidence of title) issued in respect of such Goods, all
contracts, contract rights and policies or certificates of
insurance specifically relating to such Goods.
Proceeds of clauses (a) and (b) shall not in any event constitute
Collateral.
SECTION 2.2. Security for Obligations. The Collateral in
respect of any Letter of Credit shall secure all Letter of Credit
Obligations in respect of such Letter of Credit and no other
Letter of Credit Obligations. "Letter of Credit Obligations"
shall mean in respect of any Letter of Credit, all Obligations,
including without limitation Reimbursement Obligations, of the
Grantor incurred in connection with the issuance of such Letter
of Credit, together with the Loans (and Obligations in respect
thereof), if any, made to refund such Reimbursement Obligations.
To the extent that a Reimbursement Obligation is funded or repaid
with the proceeds of a Loan made by the RL Lenders, the specific
Collateral that theretofore secured the payment of such
Reimbursement Obligation shall thereafter solely secure the Loan
made by the RL Lenders, notwithstanding any provisions to the
contrary contained in the Credit Agreement (including the
provisions of Section 5.8 of the Credit Agreement). After a
disbursement under a Letter of Credit, the Issuer shall only
release and convey title to the Borrower in the Goods delivered
by virtue of such Letter of Credit if and when the Borrower has
(either through the making of Loans, Swingline Loans or
otherwise) repaid the Issuer in full all Reimbursement
Obligations in respect of such Letter of Credit.
SECTION 2.3. Continuing Security Interest; Transfer of
Notes. This Security Agreement shall create a continuing
security interest in the Collateral and shall
(a) remain in full force and effect until payment in
full of all Obligations and the termination of all
Commitments,
(b) be binding upon the Grantor, its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent and each
other Lender Party.
Without limiting the generality of the foregoing clause (c), any
Lender may assign or otherwise transfer (in whole or in part) any
Note or Loan held by it to any other Person or entity, and such
other Person or entity shall thereupon become vested with all the
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rights and benefits in respect thereof granted to such Lender
under any Loan Document (including this Security Agreement) or
otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 11.11
and Article X of the Credit Agreement. Upon the later to occur
of the payment in full of all Obligations with respect to (i)
payments due to the Issuer under a specific Letter of Credit or
(ii) any Loan that has been made to refund or repay a
Reimbursement Obligation attributable to such Letter of Credit,
the security interest granted hereunder in the Collateral that
was purchased or shipped by virtue of such Letter of Credit or
Loan, as the case may be, and all related Collateral shall
terminate and all rights to such Collateral shall revert to the
Grantor. Upon such termination, the Agent will, at the Grantor's
sole expense, execute and deliver to the Grantor such documents
as the Grantor shall reasonably request to evidence the release
of the security interest in the Collateral that was so purchased
or shipped. In addition, the Agent hereby acknowledges and
agrees that upon the repayment of all Obligations and the
termination of all Commitments, all security interests granted
hereunder or under any Uniform Commercial Code financing (or
other) statements shall cease to be effective and shall thereupon
be released, without any further action on the part of the Agent,
and the Agent shall execute and deliver to the Borrower all UCC-3
or similar termination statements necessary to reflect such
termination.
SECTION 2.4. Grantor Remains Liable. Anything herein to
the contrary notwithstanding
(a) the Grantor shall remain liable under the
contracts and agreements included in the Collateral to the
extent set forth therein, and shall perform all of its
duties and obligations under such contracts and agreements
to the same extent as if this Security Agreement had not
been executed,
(b) the exercise by the Agent of any of its rights
hereunder shall not release the Grantor from any of its
duties or obligations under any such contracts or agreements
included in the Collateral, and
(c) neither the Agent nor any other Lender Party shall
have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this
Security Agreement, nor shall the Agent or any other Lender
Party be obligated to perform any of the obligations or
duties of the Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Grantor
represents and warrants unto each Lender Party as set forth in
this Article.
SECTION 3.1.1. Location of Collateral, etc. All of the
Inventory with a fair market value individually or in the
aggregate in excess of $1,000,000 is located at the places
specified in Item A of Schedule I hereto. Other than in
connection with the transit of such Inventory, none of the
Inventory has, within the four months preceding the date of this
Security Agreement, been located at any place other than the
places specified in Item A of Schedule I hereto. The Grantor has
no trade names on the Effective Date other than those set forth
in Item B of Schedule I hereto. The Grantor has not changed its
legal name to a name different from the one set forth on the
signature page hereto, nor has the Grantor been the subject of
any merger or other corporate reorganization within the last
year. If the Collateral includes any Inventory located in the
State of California, the Grantor is not a "retail merchant"
within the meaning of Section 9102 of the Uniform Commercial Code
- - - - Secured Transactions of the State of California.
SECTION 3.1.2. Ownership, No Liens, etc. The Grantor owns
the Collateral free and clear of any Lien, security interest,
charge or encumbrance except for the security interests created
by this Security Agreement and under the U.S. Credit Agreement or
related document. No effective financing statement or other
instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may
have been filed in favor of the Agent relating to this Security
Agreement or in respect of the U.S. Credit Agreement.
SECTION 3.1.3. Validity, etc. This Security Agreement
creates a valid security interest in the Collateral, securing the
payment of the Obligations.
SECTION 3.1.4. Authorization, Approval, etc. No
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required either
(a) for the grant by the Grantor of the security
interest granted hereby or for the execution, delivery and
performance of this Security Agreement by the Grantor, or
(b) for the perfection of or the exercise by the Agent
of its rights and remedies hereunder, other than the filing
of UCC-1 financing statements.
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ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. The Grantor covenants and
agrees that, so long as any portion of the Obligations shall
remain unpaid or any Lender shall have any outstanding
Commitment, the Grantor will perform the obligations set forth in
this Section.
SECTION 4.1.1. As to Inventory. The Grantor hereby agrees
that it shall keep all the Inventory (other than Inventory sold
in the ordinary course of business) at the places therefor
specified in Section 3.1.1 or, upon 30 days' prior written notice
to the Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III
(including Section 3.1.3) shall be true and correct, and all
action required pursuant to the first sentence of Section 4.1.2
shall have been taken with respect to such Inventory.
SECTION 4.1.2. Further Assurances, etc. The Grantor agrees
that, from time to time at its own expense, the Grantor will
promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable, or that the Agent may request, in order to perfect,
preserve and protect any security interest granted or purported
to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any
Collateral, including delivery to the Agent of all Goods as is
necessary to provide the Agent with a possessory security
interest in such Goods. With respect to the foregoing and the
grant of the security interest hereunder, the Grantor hereby
authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of the
Grantor where permitted by law, provided, that the Agent agrees
to deliver copies of such documents promptly after filing them
with the applicable filing offices. A carbon, photographic or
other reproduction of this Security Agreement or any financing
statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE V
THE AGENT
SECTION 5.1. Agent Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Agent the Grantor's attorney-in-
fact, with full authority in the place and stead of the Grantor
and in the name of the Grantor or otherwise, from time to time in
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the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Security Agreement. The Grantor
hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and
coupled with an interest.
SECTION 5.2. Agent May Perform. If the Grantor fails to
perform any agreement contained herein, the Agent may itself
perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be
payable by the Grantor.
SECTION 5.3. Agent Has No Duty. In addition to, and not in
limitation of, Section 2.4, the powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the
Lender Parties) in the Collateral and shall not impose any duty
on it to exercise any such powers.
SECTION 5.4. Reasonable Care. The Agent is required to
exercise reasonable care in the custody and preservation of any
of the Collateral in its possession; provided, however, the Agent
shall be deemed to have exercised reasonable care in the custody
and preservation of any of the Collateral, if it takes such
action for that purpose as the Grantor reasonably requests in
writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Agent to
comply with any such request at any time shall not in itself be
deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default
shall have occurred and be continuing the Agent may exercise in
respect of the Collateral, in addition to other rights and
remedies provided for herein, under the terms of the Credit
Agreement or otherwise available to it, all the rights and
remedies of a secured party on default under the U.C.C.
SECTION 6.2. Indemnity and Expenses. The Grantor agrees to
indemnify the Agent from and against any and all claims, losses
and liabilities arising out of or resulting from this Security
Agreement (including, without limitation, enforcement of this
Security Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or wilful misconduct.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a
Loan Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of
any provision of this Security Agreement nor consent to any
departure by the Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given. Furthermore, this Security Agreement may not be amended
without the written consent of the Agent under the U.S. Credit
Agreement.
SECTION 7.3. Addresses for Notices. All notices and other
communications provided to any party hereto under this Security
Agreement shall be in writing or by Telex or by facsimile and
addressed, delivered or transmitted to such party at its address,
Telex or facsimile number set forth below its signature in the
Credit Agreement or at such other address, Telex or facsimile
number as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice,
if transmitted by Telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of Telexes).
SECTION 7.4. Section Captions. Section captions used in
this Security Agreement are for convenience of reference only,
and shall not affect the construction of this Security Agreement.
SECTION 7.5. Severability. Wherever possible each
provision of this Security Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if
any provision of this Security Agreement shall be prohibited by
or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Security Agreement.
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SECTION 7.6. Governing Law, Entire Agreement, etc. THIS
SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THAT THE PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL
ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.7. Intercreditor Agreement. This Security
Agreement and the Liens, security interests, rights and remedies
provided hereunder are subject to the terms of the Intercreditor
Agreement.
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IN WITNESS WHEREOF, the Grantor has caused this Security
Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
WARNACO INC.
By: /s/ Dariush Ashrafi
Title: Senior Vice President
& Chief Financial Officer
THE BANK OF NOVA SCOTIA,
New York Agency, as Agent
By: /s/ Terry K. Fryett
Title: Vice President
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SCHEDULE I
to Security Agreement
Item A. Location of Inventory.
1. 10 Water Street
Waterville, ME 04901
2. Intersection of Rts. 22 & 220
Duncansville, PA 16635
3. 47-44 31st Street
Long Island City, NY 11101
Item B. Trade Names as of Effective Date.
Blanche
C.D. et Cie
C.F. Hathaway
Chaps & Co.
Chaps by Ralph Lauren
Christian Dior
Exclusive Apparel
Fruit of the Loom Bras
Golden Bear
Hathaway
Jack Nicklaus/Golden Bear
Jack Nicklaus
Olga
Olga's Christina
Puritan
Puritan Sportswear
Scassi
Valentino
Warner's
White Stag
White Stag Sportswear
Ungaro Lingerie