$250,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 26, 1996
Among
AUTHENTIC FITNESS PRODUCTS INC.,
as Borrower,
and
AUTHENTIC FITNESS CORPORATION
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
and
THE BANK OF NOVA SCOTIA
and
CITICORP USA, INC.,
as Agents,
and
THE BANK OF NOVA SCOTIA,
as Administrative Agent, Paying Agent, Swing Line Bank and Fronting Bank,
and
CITICORP USA, INC.,
as Documentation Agent and Collateral Agent
and
CHEMICAL BANK, SOCIETE GENERALE and THE BANK OF NEW YORK
as Co-Agents
T A B L E O F C O N T E N T S
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms .............................................. 2
1.02. Computation of Time Periods ........................................ 25
1.03. Accounting Terms ................................................... 25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances ....................................................... 25
2.02. Making the Advances ................................................ 26
2.03. Repayment .......................................................... 29
2.04. Reduction of the Commitments ....................................... 30
2.05. Prepayments ........................................................ 30
2.06. Interest ........................................................... 31
2.07. Fees ............................................................... 32
2.08. Conversion of Advances ............................................. 33
2.09. Increased Costs, Etc ............................................... 33
2.10. Payments and Computations .......................................... 35
2.11. Taxes .............................................................. 36
2.12. Sharing of Payments, Etc ........................................... 38
2.13. Letters of Credit .................................................. 39
2.14. Use of Proceeds .................................................... 43
2.15. Defaulting Lenders ................................................. 43
ARTICLE III
CONDITIONS OF EFFECTIVENESS
3.01. Conditions Precedent to Effective Date ............................. 45
3.02. Conditions Precedent to Each Borrowing and Issuance ................ 49
3.03. Determinations Under Section 3.01 .................................. 50
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of Parent and the Borrower .......... 50
ii
Section Page
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ARTICLE V
COVENANTS OF PARENT AND THE BORROWER
5.01. Affirmative Covenants .............................................. 56
5.02. Negative Covenants ................................................. 61
5.03. Reporting Requirements ............................................. 72
5.04. Financial Covenants ................................................ 76
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default .................................................. 79
6.02. Actions in Respect of the Letters of Credit upon Default ........... 82
ARTICLE VII
THE FACILITY AGENTS
7.01. Authorization and Action ........................................... 83
7.02. Facility Agents' Reliance, Etc ..................................... 83
7.03. Scotiabank, Citicorp and Affiliates ................................ 83
7.04. Lender Credit Decision ............................................. 84
7.05. Indemnification .................................................... 84
7.06. Successor Facility Agents .......................................... 85
7.07. Co-Agents .......................................................... 85
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc .................................................... 85
8.02. Notices, Etc ....................................................... 86
8.03. No Waiver; Remedies ................................................ 86
8.04. Costs and Expenses ................................................. 87
8.05. Right of Setoff .................................................... 88
8.06. Binding Effect ..................................................... 88
8.07. Assignments and Participations ..................................... 88
8.08. Governing Law ...................................................... 92
8.09. Execution in Counterparts .......................................... 92
8.10. No Liability of the Fronting Bank .................................. 92
8.11. Confidentiality .................................................... 92
8.12. Release of Collateral .............................................. 92
iii
Section Page
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8.13. Merger or Consolidation of Parent and the Borrower ................. 93
8.14. Effective Date Assignments; Etc .................................... 93
8.15. Waiver of Jury Trial ............................................... 94
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 26,
1996 among AUTHENTIC FITNESS PRODUCTS INC., a Delaware corporation (the
"Borrower"), AUTHENTIC FITNESS CORPORATION, a Delaware corporation ("Parent"),
the financial institutions listed on the signature pages hereof as the
Restatement Lenders (the "Restatement Lenders"), THE BANK OF NOVA SCOTIA
("Scotiabank") and CITICORP USA, INC. ("Citicorp"), as Agents (the "Agents") for
the Lenders hereunder, SCOTIABANK, as Administrative Agent (the "Administrative
Agent"), as Paying Agent (the "Paying Agent") for the Lenders hereunder and as
Swing Line Bank and the Fronting Bank hereunder, CITICORP, as Documentation
Agent (the "Documentation Agent") and Collateral Agent (the "Collateral Agent")
for the Lenders hereunder and CHEMICAL BANK, SOCIETE GENERALE and THE BANK OF
NEW YORK, as co-agents (the "Co-Agents").
PRELIMINARY STATEMENTS:
(1) The Borrower and Parent have previously entered into a
Credit Agreement dated as of April 28, 1994 (as amended, supplemented or
otherwise modified through but not including the date hereof, the "Existing
Credit Agreement") with the lenders party thereto (the "Existing Lenders"),
Citicorp, Scotiabank and Chemical Bank, as managing agents, Citicorp, as
documentation agent and collateral agent, and Scotiabank, as paying agent, swing
line bank and the fronting bank.
(2) The Borrower has requested that the Restatement Lenders
enter into this Agreement to amend and restate the Existing Credit Agreement and
the Borrower and Parent have agreed to amend and restate the Existing Credit
Agreement in order to (i) refinance the amounts outstanding under the Existing
Credit Agreement, (ii) pay transaction fees and expenses in connection with the
transactions contemplated hereunder, (iii) provide working capital for the
Borrower and its Subsidiaries and (iv) provide funds for other general corporate
purposes permitted herein, including, without limitation, permitted acquisitions
and the repurchase of Series A Warrants by Parent and certain acquisitions by
the Borrower. The Restatement Lenders have indicated their willingness to amend
and restate the Existing Credit Agreement and to provide such additional
financing on the terms and conditions of this Agreement.
(3) Simultaneously with the execution of this Agreement, the
Existing Lenders have agreed to sell and assign to the Restatement Lenders, and
the Restatement Lenders have agreed to purchase and assume, as of the Effective
Date, all of such Existing Lenders' rights and obligations under the Existing
Credit Agreement on the terms set forth herein. After giving effect to such sale
and assignment, the Commitments of, and the amount of Advances owing to, each of
the Restatement Lenders will be as set forth on Schedule I hereto.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree that, subject to the satisfaction of the conditions set forth in Article
III, the Existing Credit Agreement is amended and restated in its entirety to
read as follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Accounts" has the meaning specified in the Security Agreement.
"Adjusted Net Worth" at any time means Net Worth at such time
plus extraordinary or non-recurring non-cash losses of Parent and its
Subsidiaries on a Consolidated basis in an aggregate amount not to
exceed $20,000,000 during the period from the Effective Date to the
Termination Date plus the aggregate amount (not to exceed $44,000,000)
applied to repurchase the Series A Warrants.
"Advance" means a Revolving Credit Advance, a Swing Line
Advance or a Letter of Credit Advance, provided that, if any Advance or
Advances of the same Class (or portions thereof) are combined or
subdivided pursuant to a Conversion or a selection of Interest Periods
after the initial Interest Period with respect thereto, the term
"Advance" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting
from such subdivision, as the case may be.
"AF Canada" means Authentic Fitness of Canada Inc., a Canadian
federal corporation.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling," "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 5% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"Agents" has the meaning specified in the recital of parties
to this Agreement.
"Amended and Restated Trademark, Patent and Copyright Security
Agreement" has the meaning specified in Section 3.01(g)(iv).
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the ratio of (i) Average Debt as of
such date to (ii) Consolidated EBITDA of Parent
3
and its Subsidiaries for the four Fiscal Quarters ended on or most
recently prior to such date as set forth below:
=================================================================
Average Debt to EBITDA Base Rate Eurodollar Rate
Ratio Advances Advances
-----------------------------------------------------------------
Level I
less than or equal to
2.00 to 1.00 0.000% 0.500%
-----------------------------------------------------------------
Level II
less than or equal to
2.50 to 1.00 but greater
than 2.00 to 1.00 0.000% 0.750%
-----------------------------------------------------------------
Level III
less than or equal to
3.00 to 1.00 but greater
than 2.50 to 1.00 0.000% 1.000%
-----------------------------------------------------------------
Level IV
greater than 3.00 to 1.00 0.250% 1.250%
=================================================================
The Applicable Margin for each Advance shall be determined by
reference to the ratio in effect from time to time; provided, however,
that (A) no change in the Applicable Margin shall be effective until
three Business Days after the date on which the Agents receive
financial statements pursuant to Section 5.03(b) or (c) and a
certificate of the chief financial officer of the Borrower
demonstrating such ratio and (B) if the Borrower has not submitted to
the Agents the information described in clause (A) of this proviso as
and when required under Section 5.03(b), or (c), as the case may be,
the Applicable Margin shall be at Level IV for so long as such
information has not been received by the Agents.
"Appropriate Lender" means, at any time, with respect to any
of the Letter of Credit Facility, the Swing Line Facility or the
Revolving Credit Facility, a Lender which has a Commitment with respect
to such Facility at such time.
"ASCO" means ASCO International Sourcing Limited or any of its
Subsidiaries or Affiliates or any other Person which, with the prior
written consent of the Agents, provides trade credit to the Borrower
and/or trade letters of credit on behalf of the Borrower in replacement
of the credit facility provided by ASCO International Sourcing Limited
or any of its Subsidiaries or Affiliates to the Borrower (including any
replacement facility which is temporarily being provided concurrently
with the trade credit facility provided by ASCO International Sourcing
Limited or any of its Subsidiaries or Affiliates so long as no new
financial accommodations or extensions or increases of existing
financial accommodations are being provided under such facility with
ASCO International Sourcing Limited or any of its Subsidiaries or
Affiliates (except as part of a replacement facility) beyond 12 months
after the date such replacement facility becomes effective).
"ASCO Debt" means at any time all Debt of the Borrower owing
to ASCO International Sourcing Limited or any of its Subsidiaries or
Affiliates (including, without limitation, the
4
aggregate amount of all trade payables and undrawn letters of credit)
and all Debt of the Borrower owing to any other Person falling within
the meaning of "ASCO" under the credit facilities provided by such
Person to the Borrower with the prior written consent of the Agents for
trade credit to the Borrower and/or trade letters of credit on behalf
of the Borrower in replacement of the facility provided by ASCO
International Sourcing Limited or any of its Subsidiaries or Affiliates
(including any replacement facility which is temporarily being provided
concurrently with the trade credit facility provided by ASCO
International Sourcing Limited or any of its Subsidiaries or Affiliates
so long as no new financial accommodations or extensions or increases
of existing financial accommodations are being provided under such
facility with ASCO International Sourcing Limited or any of its
Subsidiaries or Affiliates (except as part of a replacement facility)
beyond 12 months after the date such replacement facility becomes
effective).
"Asset Sale" means any sale, lease, transfer or other
disposition of any asset by Parent or any of its Subsidiaries, other
than (i) sales of assets in the ordinary course of business (including,
without limitation, sales and other dispositions of assets pursuant to
Section 5.02(e)(ii), (iv), (vii)(B) or (viii)), (ii) sales of assets to
the extent the aggregate purchase price therefor (including, without
limitation, all assumption of Debt and the fair market value (as
determined in good faith by a Designated Officer of Parent or the
Borrower, as the case may be) of all noncash consideration) does not
exceed $7,500,000 in the aggregate from the Effective Date through the
Termination Date and (iii) sales of assets pursuant to Section
5.02(e)(v).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Paying Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit B hereto.
"Assignment of Life Insurance Policy" means an amended and
restated assignment of the key person life insurance policy on Linda J.
Wachner assigned by the Borrower to the Collateral Agent for the
benefit of the Secured Parties in accordance with Section 5.01(d) and
in substantially the form of Exhibit I hereto.
"Available Amount" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"Average Debt" means, as of any date, the daily arithmetic
average Total Debt outstanding during the four Fiscal Quarters most
recently ended on or prior to such date.
"Base Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest established by Scotiabank,
from time to time, at its Domestic Lending Office as its base
rate for loans in United States dollars; and
(b) 1/2 of one percent per annum above the Federal
Funds Rate.
5
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties
to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank at its office at New York
Account No. 4063-8965.
"Borrowing" means a Revolving Credit Borrowing or a Swing Line
Borrowing, provided that, if pursuant to any Conversion or any
selection of Interest Periods after the initial Interest Period with
respect to any Advances comprising a Borrowing, Advances of the same
Class (or portions thereof) are combined or subdivided, the term
"Borrowing" shall refer to the group of combined Advances of the same
Class and Type and (in the case of Eurodollar Rate Advances) having the
same Interest Period resulting from such combination or to each such
group of Advances resulting from such subdivision.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Buying Agency Agreement" means the Buying Agency Agreement,
dated as of May 14, 1990, together with the other related documents,
agreements and security agreements, all as the same may be amended,
supplemented or otherwise modified from time to time, between the
Borrower, AF Canada and ASCO, as amended by the amendment thereto dated
as of June 1, 1992, pursuant to which ASCO has agreed to provide
financing for the purchase of inventory by the Borrower and certain of
its Subsidiaries on the terms set forth in such Agreement.
"Canadian Subsidiary" means any Subsidiary of Parent organized
under the laws of Canada or any province or territory thereof.
"Capital Expenditures" means, for any Person, any expenditures
or costs made by such Person for the acquisition, maintenance or repair
of fixed or capital assets (which are required to be capitalized on the
balance sheet of such Person in accordance with GAAP), including,
without limitation, the incurrence or assumption of any Debt (other
than Capitalized Lease Obligations) in respect of such fixed or capital
asset, and, without double counting, any payment made in respect of
such incurrence or assumption.
"Capital Issuance" means the sale or issuance by any Loan
Party or any of its Subsidiaries of any Debt or capital stock, any
securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock by Parent or any
of its Subsidiaries other than any such sale or issuance by a wholly
owned Subsidiary of the Borrower to the Borrower or to another wholly
owned Subsidiary of the Borrower.
6
"Capitalized Lease Obligations" of any Person shall at any
time mean all Obligations under Capitalized Leases of such Person, in
each case taken at the amount thereof accounted for as liabilities in
accordance with GAAP at such time.
"Capitalized Leases" has the meaning specified in clause (e)
of the definition of "Debt".
"Cash Collateral Account" has the meaning specified in the
Security Agreement.
"Cash Equivalents" means any of the following, to the extent
owned by any Loan Party or any Subsidiary of a Loan Party free and
clear of all Liens (except those created by the Collateral Documents):
(a) securities issued, or that are directly and fully guaranteed or
insured, by the United States Government or any agency or
instrumentality thereof having maturities of not more than 12 months
from the date of acquisition, (b) time deposits and certificates of
deposit having maturities of not more than 12 months from the date of
acquisition of (i) any Lender, (ii) any other domestic commercial bank
having capital and surplus in excess of $500,000,000, the holding
company of which has outstanding commercial paper meeting the
requirements specified in clause (d) below or (iii) any foreign bank
which (1) has the credit rating under a rating service of recognized
standing of the jurisdiction of its organization that is at least the
equivalent of an investment grade rating, or, if such credit rating is
not available, is a first class foreign bank which has capital and
surplus in excess of $200,000,000 or (2) which has been approved by the
Agents, (c) repurchase agreements with a term of not more than seven
days for underlying securities of the types described in clauses (a)
and (b) above entered into with any Lender or any other bank meeting
the qualifications specified in clause (b) above or with securities
dealers of recognized national standing; and (d) commercial paper rated
(as of the date of acquisition thereof) at least A-1 or the equivalent
thereof by S&P and at least P-1 or the equivalent thereof by Moody's
and maturing within 12 months after the date of its acquisition.
"Cash Interest Expense" means, for any period, interest
expense net of interest income on all Debt of Parent and its
Subsidiaries, in each case determined for such period on a Consolidated
basis for Parent and its Subsidiaries in accordance with GAAP and
including, without limitation, to the extent not otherwise included in
accordance with GAAP, (a) interest expense in respect of Debt resulting
from Advances, (b) the interest component of obligations as lessee
under Capitalized Leases, (c) commissions, discounts and other fees and
charges payable in connection with letters of credit, (d) the net
payment, if any, payable in connection with interest rate hedge
agreements and other interest rate protection contracts and (e) fees
paid pursuant to Section 2.07(a), but excluding, in each case, (x)
amortization of original issue discount, (y) the interest portion of
any deferred payment obligation and (z) other interest not payable in
cash.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Citibank" means Citibank, N.A., a national banking
association.
"Citicorp" has the meaning specified in the recital of parties
to this Agreement.
7
"Class" means, with respect to any Advance or Borrowing,
whether such Advance or Borrowing is a Revolving Credit Advance or
Borrowing, a Swing Line Advance or Borrowing or a Letter of Credit
Advance.
"Co-Agents" has the meaning specified in the recital of
parties to this Agreement.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property of Parent or any of its
Subsidiaries that is subject to any Lien in favor of the Collateral
Agent, the Lenders or any other Secured Party securing or purporting to
secure the Obligations of the Loan Parties under the Loan Documents and
the Hedge Agreements.
"Collateral Agent" has the meaning specified in the recital of
the parties to this Agreement.
"Collateral Documents" means the Security Agreement, the
Amended and Restated Trademark, Patent and Copyright Security
Agreement, the Assignment of Life Insurance Policy, the Lockbox Account
Letters (as defined in the Security Agreement), the Intercreditor
Agreement, the Trade Credit Intercreditor Agreement and any other
agreements in respect of the Collateral for the benefit of the Secured
Parties.
"Collateral Release Date" has the meaning specified in Section
8.12.
"Commitment" means a Revolving Credit Commitment or a Letter
of Credit Commitment.
"Confidential Information" means information that the Borrower
or Parent furnishes to any Facility Agent or Lender on a confidential
basis, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to
such Facility Agent or Lender from a source other than the Borrower or
Parent.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"Current Liabilities" of any Person means (a) all Debt of such
Person except Funded Debt and Debt in respect of Revolving Credit
Advances, Letter of Credit Advances and Swing Line Advances, (b) all
amounts of Funded Debt of such Person required to be paid or prepaid
within one year after the date of determination and (c) all other items
(including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person other than
Debt of such Person of the type referred to in clauses (f) and (h) in
the definition of Debt (or in clauses (i) and (j) in the definition of
Debt to the extent that the underlying Debt of other Persons in respect
of which such Debt arises is Debt of the type referred to in such
clauses (f) and (h)).
"Debt" of any Person means, without duplication, the
following:
(a) all indebtedness of such Person for borrowed
money,
8
(b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade
payables not overdue by more than 90 days incurred in the
ordinary course of such Person's business), including, without
limitation, the ASCO Debt and the Trade Credit Facility,
(c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments,
(d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement
with respect to property acquired by such Person (other than
trade payables not overdue by more than 90 days incurred in
the ordinary course of such Person's business) even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property,
(e) all Obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP,
recorded as capital leases ("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar
facilities,
(g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in
respect of any capital stock of or other ownership or profit
interest in such Person or any other Person or any warrants,
rights or options to acquire such capital stock, valued, in
the case of Redeemable Preferred Stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued
and unpaid dividends,
(h) all Obligations of such Person in respect of
Hedge Agreements,
(i) all Debt of others of the kinds referred to in
clauses (a) through (h) above guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (B) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (C) to supply funds to
or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (D) otherwise to assure a creditor against loss
(all of the foregoing being "Guarantee Obligations"), and
(j) all Debt referred to in clauses (a) through (h)
above secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any
Lien on property (including, without limitation, accounts and
contract rights)
9
owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any
time, the amount of any Advance required to be made by such Lender to
the Borrower pursuant to Section 2.01 at or prior to such time which
has not been so made as of such time; provided, however, any Advance
made by the Paying Agent for the account of such Lender pursuant to
Section 2.02(e) shall not be considered a Defaulted Advance even if, at
such time, such Lender shall not have reimbursed the Paying Agent
therefor as provided in Section 2.02(e). In the event that a portion of
a Defaulted Advance shall be deemed made pursuant to Section 2.15(a),
the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to any Facility
Agent or any other Lender hereunder or under any other Loan Document at
or prior to such time which has not been so paid as of such time,
including, without limitation, any amount required to be paid by such
Lender to (a) the Swing Line Bank pursuant to Section 2.02(b) to
purchase a portion of a Swing Line Advance made by the Swing Line Bank,
(b) the Fronting Bank pursuant to Section 2.13(c) to purchase a portion
of a Letter of Credit Advance made by the Fronting Bank, (c) the Paying
Agent pursuant to Section 2.02(e) to reimburse the Paying Agent for the
amount of any Advance made by the Paying Agent for the account of such
Lender, (d) any other Lender pursuant to Section 2.12 to purchase any
participation in Advances owing to such other Lender and (e) any
Facility Agent pursuant to Section 7.05 to reimburse such Facility
Agent for such Lender's ratable share of any amount required to be paid
by the Lenders to such Facility Agent as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall
be considered a Defaulted Amount originally required to be paid
hereunder or under any other Loan Document on the same date as the
Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take or be the subject of any action or proceeding of a type
described in Section 6.01(f).
"Designated Officer" of any Loan Party means the chief
executive officer, chief financial officer, chief operating officer or
treasurer of such Loan Party.
"Disclosed Litigation" means the litigation described on
Schedule 4.01(i).
"Documentary Letter of Credit" means any Letter of Credit that
is issued under the Letter of Credit Facility for the benefit of a
supplier of Inventory to the Borrower or any of its Subsidiaries to
effect payment for such Inventory, the conditions to drawing under
which include
10
the presentation to the Fronting Bank of negotiable bills of lading,
invoices and related documents sufficient, in the reasonable judgment
of the Fronting Bank, to create a valid and perfected Lien on such
Inventory.
"Documentation Agent" has the meaning specified in the recital
of parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Paying Agent.
"Domestic Subsidiary" means any Subsidiary of Parent that is
not a Foreign Subsidiary.
"EBITDA" means, for any period, net income (or net loss) from
operations (determined without giving effect to extraordinary or
nonrecurring non cash gains or losses (which include, without
limitation, (i) such losses incurred as a result of the write-down of
assets and (ii) charges for special executive compensation)) plus, to
the extent deducted in calculating such net income (loss), the sum of
(a) Interest Expense, (b) income tax expense, (c) depreciation expense
and (d) amortization expense, in each case determined in accordance
with GAAP.
"Effective Date" means the first date on which the conditions
specified in Sections 3.01 and 3.02 have been satisfied.
"Eligible Assignee" means (i) a wholly owned Subsidiary of a
Lender or of any Person that directly or indirectly controls a Lender;
and (ii) any other Person approved by the Paying Agent and the Fronting
Bank and the Borrower, such approval not to be unreasonably withheld;
provided, however, that an Affiliate of the Borrower shall not qualify
as an Eligible Assignee.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
noncompliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law or any
Environmental Permit including, without limitation, (a) any claim by
any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
Environmental Law and (b) any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree or award
relating to the environment, human exposure to chemical substances or
Hazardous Materials, including, without limitation, CERCLA, the
Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy
Act and the Federal Insecticide, Fungicide and Rodenticide Act.
11
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" of any Person means any other
Person that for purposes of Title IV of ERISA is a member of such
Person's controlled group, or under common control with such Person,
within the meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a)(i) the
occurrence of a reportable event, within the meaning of Section 4043 of
ERISA, with respect to any Plan of such Person or any of its ERISA
Affiliates unless the 30-day notice requirement with respect to such
event has been waived by the PBGC, or (ii) the requirements of
subsection (1) of Section 4043(b) of ERISA (without regard to
subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan of such
Person or any of its ERISA Affiliates, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the provision by the administrator of any Plan
of such Person or any of its ERISA Affiliates of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (c) the cessation of operations at a facility of
such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA; (e) the failure by such Person or any
of its ERISA Affiliates to make a payment to a Plan required under
Section 302(f)(1) of ERISA; (f) the adoption of an amendment to a Plan
of such Person or any of its ERISA Affiliates requiring the provision
of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such
Person or any of its ERISA Affiliates, pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA, other than subsection (a)(4) thereof, that could
constitute grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Paying Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum
12
equal to the rate per annum obtained by dividing (a) the rate per annum
at which deposits in U.S. dollars are offered by the principal office
of Scotiabank in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to
Scotiabank's Eurodollar Rate Advance comprising part of such Borrowing
to be outstanding during such Interest Period and for a period equal to
such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Taxes" means, in the case of each Lender, franchise
taxes and taxes upon or determined by reference to such Lender's net
income (including, without limitation, branch profit taxes), in each
case imposed by the United States or any political subdivision or
taxing authority thereof or therein or by any jurisdiction in which
such Lender has its Applicable Lending Office, is resident or in which
such Lender is organized or has its principal or registered office and,
in the case of each Facility Agent, franchise taxes and net income
taxes (including, without limitation, branch profits taxes) imposed by
the United States or by the state or foreign jurisdiction under the
laws of which such Facility Agent is organized (or by any political
subdivision of such state or foreign jurisdiction).
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the
Preliminary Statements.
"Existing Letters of Credit" has the meaning specified in
Section 2.13(a).
"Existing Revolving Credit Lenders" means each "Revolving
Credit Lender" under the Existing Credit Agreement.
"Facility" means the Revolving Credit Facility, the Swing Line
Facility or the Letter of Credit Facility.
13
"Facility Agents" means each of the Agents, the Administrative
Agent, the Paying Agent, the Documentation Agent and the Collateral
Agent, together in each case with any successor or successors of any
thereof appointed pursuant to Article VII.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Paying Agent from three federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of Parent and its
Consolidated Subsidiaries ending on or about March 31, June 30,
September 30 or December 31 of each year.
"Fiscal Year" means a fiscal year of Parent and its
Consolidated Subsidiaries ending on or about June 30 of each year.
"Foreign Subsidiary" means a Subsidiary of Parent other than a
Subsidiary organized under the laws of the United States or any state
or territory thereof.
"Fronting Bank" means Scotiabank or any other Lender approved
by the Borrower and the Paying Agent, such approval not to be
unreasonably withheld, that is a commercial bank, acting through a
domestic branch, and has a Letter of Credit Commitment, as issuer of a
Letter of Credit.
"Funded Debt" of any Person means Debt of such Person that by
its terms matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year after such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of
more than one year after such date, including, without limitation, all
amounts of Funded Debt of such Person required to be paid or prepaid
within one year after the date of its creation.
"GAAP" has the meaning specified in Section 1.03.
"Guarantee Obligations" has the meaning specified in clause
(i) of the definition of Debt.
"Guaranties" means the Parent Guaranty and the Subsidiary
Guaranties.
"Guarantors" means Parent and each of its Domestic
Subsidiaries (other than the Borrower).
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and
14
radon gas, (b) any substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants" or "pollutants," or
words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Person with which the Borrower enters
into a Hedge Agreement permitted under Article V that, at the time of
entering such interest rate Hedge Agreement is, or subsequently
becomes, (i) a Lender, (ii) a wholly owned Subsidiary of a Lender or of
any Person that directly or indirectly controls a Lender or (iii) an
Affiliate of a Lender, provided that with respect to any Hedge Bank
described in clause (iii) above that is not also described in clause
(ii) above, the obligations of such Hedge Bank under any such Hedge
Agreement to which it is a party shall be fully guaranteed by the
Lender of which it is an Affiliate.
"Implied Debt Rating" means the rating assigned by S&P to
Parent's "implied senior debt" from time to time, as notified to Parent
by S&P in a letter issued by S&P, or, if such rating is unavailable,
the equivalent rating assigned by Moody's to Parent's "implied senior
debt", as notified in writing to Parent by Moody's. For purposes of
this Agreement, the following is the equivalent rating by Moody's for
each rating by S&P:
S&P Moody's
--- -------
BB- Ba3
BB Ba2
BB+ Ba1
BBB- Baa3
BBB Baa2
"Indebtedness for Borrowed Money" of any Person means all Debt
of such Person for borrowed money or evidenced by notes, bonds,
debentures or other similar instruments, all Obligations of such Person
for the deferred purchase price of any property, service or business
(other than trade accounts payable not overdue by 90 days except for
ASCO Debt and the Trade Credit Facility) incurred in the ordinary
course of business and constituting Current Liabilities, and all
Obligations of such Person under Capitalized Leases and finance leases
and including, in any event, without duplication, ASCO Debt and the
Trade Credit Facility.
"Indemnified Party" has the meaning specified in Section
8.04(b).
15
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Intercreditor Agreement" has the meaning specified in Section
3.01(g)(v).
"Interest Expense" means, with respect to any Person for any
period, the excess, if any, of (i) interest expense (whether cash or
accretion) of such Person during such period determined in accordance
with GAAP, and shall include in any event, without limitation, interest
expense with respect to Indebtedness for Borrowed Money and payments
under Hedge Agreements with respect to interest rates over (ii)
interest income of such Person for such period, including payments
received under Hedge Agreements with respect to interest rates.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice
received by the Paying Agent not later than 1:00 P.M. (New York City
time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period
that ends after the Termination Date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day, unless the Borrower and the Paying Agent
otherwise agree; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month unless the Borrower and the Paying
Agent otherwise agree.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
16
"Inventory" has the meaning specified in the Security
Agreement.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations, other securities or the assets
comprising a substantial part or all of a business of such Person, any
capital contribution to such Person or any other investment in such
Person, including, without limitation, any arrangement pursuant to
which the investor incurs Debt of the types referred to in clauses (i)
and (j) of the definition of "Debt" in respect of such Person.
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.13(d).
"Lease Obligations" of any Person means obligations as lessee
for the rental or hire of real or personal property (other than
Capitalized Lease Obligations) as determined in accordance with GAAP
and consistent with all regular, periodic and special reports, and all
registration statements, that such Person or any of its Subsidiaries
files with the Securities and Exchange Commission, or any governmental
authority that may be substituted therefor, or with any national
securities exchange.
"Lenders" means the Restatement Lenders listed on the
signature pages hereof and each Eligible Assignee that shall become a
party hereto pursuant to Section 8.07.
"Letter of Credit Advance" means an advance made by the
Fronting Bank, including, for purposes of Section 2.03(c), any such
Advance (or portion thereof) assigned to any Lender pursuant to Section
2.13(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.13(b).
"Letter of Credit Commitment" means, with respect to the
Fronting Bank at any time, the amount set forth opposite the Fronting
Bank's name on Schedule I hereto under the caption "Letter of Credit
Commitment" or, in the case of any other Lender approved by the
Borrower and the Paying Agent (such approval not to be unreasonably
withheld), set forth for
such Lender in the Register maintained by the Paying Agent pursuant to
Section 8.07(c) as such Lender's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section
2.04.
"Letter of Credit Facility" means the amount of the Letter of
Credit Commitment of the Fronting Bank.
"Letters of Credit" has the meaning specified in Section
2.13(a).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security
17
title of a conditional vendor and any easement, right of way or other
encumbrance on title to real property.
"Loan Documents" means (a) for purposes of this Agreement, the
Notes and any amendments, supplements or other modifications hereof or
thereof and for all other purposes other than for purposes of the
Collateral Documents and the Guaranties, (i) this Agreement, (ii) the
Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) each
Letter of Credit Agreement and (vi) each L/C Related Document and (b)
for purposes of the Collateral Documents and the Guaranties, (i) this
Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral
Documents, (v) each Letter of Credit Agreement, (vi) each L/C Related
Document, (vii) the interest rate Hedge Agreements entered into by the
Borrower with Hedge Banks, and (viii) the Trade Refinancing Facility,
in the case of each of the foregoing agreements referred to in clause
(a) or (b) as it may be amended, supplemented or otherwise modified
from time to time and any facilities or agreements in replacement
thereof.
"Loan Parties" means the Borrower and the Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Parent and
its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Parent and
its Subsidiaries taken as a whole, (b) the rights and remedies of any
Facility Agent or Lender under any Loan Document or (c) the ability of
any Loan Party to perform its Obligations under any Loan Document to
which it is or is to be a party.
"Material Contracts" means the Buying Agency Agreement, the
Speedo License Agreements and the Warrant Purchase Agreement.
"Material Subsidiary" means, at any time, a Subsidiary of
Parent (other than the Borrower) having (i) at least $1,000,000 in
total assets (determined as of the last day of the
most recent Fiscal Quarter of such Subsidiary) or (ii) EBITDA of at
least $500,000 for the 12-month period ending on the last day of the
most recent Fiscal Quarter of such Subsidiary.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, to which such Person or any
of its ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
18
"Multiple Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and at least one Person other than such Person and its ERISA Affiliates
or (b) was so maintained and in respect of which such Person or any of
its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any Asset Sale or
Capital Issuance, the aggregate amount of cash received from time to
time by or on behalf of Parent or any of its Subsidiaries in connection
with such transaction after deducting therefrom only (a) reasonable and
customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions, (b) the
amount of taxes payable in connection with or as a result of such
transaction, (c) appropriate amounts to be provided by such Loan Party
or Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such
transaction and retained by such Loan Party or Subsidiary after such
transaction, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations
associated with the assets sold or disposed of in such transaction and
(d) the amount of any Debt secured by a Lien on such asset that, by the
terms of such transaction, is required to be repaid upon such
disposition, provided that (i) in each case, the amounts so deducted
are, at the time of receipt of such cash, properly attributable to such
transaction or to the asset that is the subject thereof and (ii) in
each case (A) with respect to clauses (a) and (d), the amounts so
deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of Parent and (B) with respect to
clause (c), to the extent, but only to the extent, the amounts so
deducted are in respect of existing or potential liabilities or
obligations, payable to a Person that is not an Affiliate of Parent.
"Net Worth" at any time means the excess of total assets of
Parent and its Subsidiaries at such time over total liabilities of
Parent and its Subsidiaries at such time, in each case as determined on
a Consolidated basis in accordance with GAAP.
"Note" means a Revolving Credit Note.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.13(b)(i).
"Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).
"Obligation" means, with respect to any Person, any obligation
of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under
the Loan Documents include (a) the obligation to pay principal,
interest, Letter of
19
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation to reimburse any amount
in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Parent" has the meaning specified in the recital of parties
to this Agreement.
"Parent Guaranty" has the meaning specified in Section
3.01(g)(ii).
"Paying Agent" has the meaning specified in the recital of
parties to this Agreement.
"Paying Agent's Account" means the account of the Paying Agent
maintained by the Paying Agent with Scotiabank at its office at One
Liberty Plaza, New York, New York 10006, Loan Management Account No.
1561-16, Reference: Authentic Fitness.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Foreign Debt Issuances" means any issuance of
Indebtedness for Borrowed Money by Foreign Subsidiaries owing to
non-Affiliates of Parent.
"Permitted Liens" means the following:
(a) Liens, other than in favor of the PBGC, arising
out of judgments or awards in respect of which Parent or any
of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review and in respect of which there
shall not have occurred a period of 10 consecutive days during
which a stay of enforcement of such judgment or award shall
not have been in effect pending such appeal or proceedings for
review, provided it shall have set aside on its books adequate
reserves, in accordance with GAAP, with respect to such
judgment or award and provided further that the aggregate
amount secured by such Liens does not exceed $1,000,000 in any
one case or $2,000,000 in the aggregate;
(b) Liens for taxes, assessments or governmental
charges or levies, provided payment thereof shall not at the
time be required in accordance with the provisions of Section
5.01(b);
(c) deposits, Liens or pledges to secure payments of
workmen's compensation and other payments, unemployment and
other insurance, old-age pensions or other social security
obligations, or the performance of bids, tenders, leases,
contracts (other than contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds,
or other similar obligations arising in the ordinary course of
business;
20
(d) mechanics', workmen's, repairmen's,
warehousemen's, vendors' or carriers' Liens or other similar
Liens arising in the ordinary course of business and securing
sums which are not past due, or deposits or pledges to obtain
the release of any such Liens;
(e) statutory landlord's Liens under leases to which
Parent or any of its Subsidiaries is a party; and
(f) zoning restrictions, easements, rights of way,
licenses and restrictions on the use of real property or minor
irregularities in title thereto, which do not materially
impair the use of such property in the normal operation of the
business of Parent or any of its Subsidiaries or the value of
such property for the purpose of such business.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit
Commitment at such time and the denominator of which is the Revolving
Credit Facility at such time.
"Redeemable" means, with respect to any capital stock, Debt or
other right or Obligation, any such right or Obligation that (a) the
issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer
or (b) is redeemable at the option of the holder.
"Register" has the meaning specified in Section 8.07(c).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Amount" has the meaning set forth in Section
2.05(b)(i).
"Required Lenders" means, at any time, Lenders owed, allocated
or holding more than 51% of the sum of (a) the aggregate principal
amount of the Advances outstanding at such time, (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time and
(c) the aggregate Unused Revolving Credit Commitments at such time;
provided, however, if any Lender shall be a Defaulting Lender at such
time, there shall be excluded from the determination of
21
Required Lenders at such time (i) the aggregate principal amount of the
Advances owed to such Lender outstanding at such time, (ii) the
aggregate Available Amount of all Letters of Credit outstanding at such
time which is allocable to such Lender and (iii) the aggregate Unused
Revolving Credit Commitments of such Lender at such time. For purposes
of this definition, the Available Amount of each Letter of Credit shall
be considered allocated, and the outstanding principal amount of each
Letter of Credit Advance and each Swing Line Advance shall be
considered to be owed, to the Lenders ratably in accordance with their
respective Revolving Credit Commitments then outstanding or, if the
Revolving Credit Commitments shall have been terminated in their
entirety, their respective Revolving Credit Commitments outstanding
immediately prior to such termination.
"Restatement Lenders" has the meaning specified in the recital
of parties to this Agreement.
"Revolving Credit Advance" has the meaning specified in
Section 2.01(b).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Lenders.
"Revolving Credit Commitment" means, with respect to any
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or,
if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by
the Paying Agent pursuant to Section 8.07(c) as such Lender's
"Revolving Credit Commitment," as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"Revolving Credit Facility" means, at any time, the aggregate
amount of the Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender, in substantially the form
of Exhibit C hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Revolving Credit Advances
made by such Lender.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies.
"Scotiabank" has the meaning specified in the recital of
parties to this Agreement.
"Secured Parties" means the Facility Agents, the Lenders, the
Hedge Banks and the Trade Refinancing Lenders.
"Security Agreement" has the meaning specified in Section
3.01(g)(iv).
"Series A Warrants" means the Series A Warrants for 1,809,179
shares of common stock of Parent owned by General Electric Capital
Corporation.
22
"Single Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and no Person other than such Person and its ERISA Affiliates or (b)
was so maintained and in respect of which such Person or any of its
ERISA Affiliates could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
"Speedo License Agreements" means (i) the License Agreement
dated May 10, 1990, as amended and assigned, among Speedo Holdings,
B.V., a company incorporated under the laws of the Netherlands
("SHBV"), as successor-in-interest to Speedo International Limited and
Speedo International B.V., Warnaco, Inc., a Delaware corporation
("Warnaco") and Warnaco International Inc., a Delaware corporation
("WII") and (ii) the License Agreement dated May 10, 1990, as amended
and assigned, between SHBV, as successor-in-interest to Speedo Knitting
Mills Pty. Limited, Warnaco and WII pursuant to which the Borrower
(pursuant to an assignment thereof from Warnaco and WII to the
Borrower) has an exclusive, in-perpetuity license to use the SPEEDO
trademarks and trade names (as defined therein) in the United States,
Canada, Mexico and the Caribbean Islands.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Documentary Letter of
Credit.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of
(a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the 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), (b) the interest in the capital or
profits of such partnership or joint venture or (c) the beneficial
interest in such trust or estate is at the time directly or indirectly
owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(g)(iii).
23
"Supermajority of Lenders" means, at any time, Lenders owed,
allocated or holding more than 75% of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time and (c) the aggregate Unused Revolving Credit Commitments at such
time; provided, however, if any Lender shall be a Defaulting Lender at
such time, there shall be excluded from the determination of
Supermajority of Lenders at such time (i) the aggregate principal
amount of the Advances owed to such Lender outstanding at such time,
(ii) the aggregate Available Amount of all Letters of Credit
outstanding at such time which is allocable to such Lender and (iii)
the aggregate Unused Revolving Credit Commitments of such Lender at
such time. For purposes of this definition, the Available Amount of
each Letter of Credit shall be considered allocated, and the
outstanding principal amount of each Letter of Credit Advance and each
Swing Line Advance shall be considered to be owed, to the Lenders
ratably in accordance with their respective Revolving Credit
Commitments then outstanding or, if the Revolving Credit Commitments
shall have been terminated in their entirety, their respective
Revolving Credit Commitments outstanding immediately prior to such
termination.
"Swing Line Advance" means an advance made by the Swing Line
Bank pursuant to Section 2.01(c).
"Swing Line Bank" means Scotiabank (and its successors and
assigns), provided that Scotiabank (and any such successors and assigns
as Swing Line Bank hereunder) may resign, and thereupon be released
from its obligations, as Swing Line Bank under this Agreement upon
receipt by the Borrower and the Agents, in writing and in a form
reasonably satisfactory to the Borrower and the Paying Agent, of the
assumption by another Lender of the rights and obligations of the Swing
Line Bank hereunder.
"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section
2.01(c).
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the earlier of March 26, 2001 and the
date of termination in whole of all of the Commitments and the Swing
Line Facility pursuant to Section 2.04 or 6.01.
"Total Debt" outstanding on any date means the aggregate
principal amount of all Debt of the Parent and its Subsidiaries on a
Consolidated basis, outstanding on such date, other than ASCO Debt and
the Trade Credit Facility and Debt of the type referred to in clauses
(f) and (h) of the definition of Debt (or in clauses (i) and (j) of the
definition of Debt to the extent that the underlying Debt of other
Persons in respect of which such Debt arises is Debt of the type
referred to in such clauses (f) and (h)).
"Trade Credit Facility" means a Trade L/C Facility and a Trade
Refinancing Facility entered into by the Borrower and one or more
Lenders party thereto.
24
"Trade Credit Intercreditor Agreement" means an intercreditor
agreement to be entered into between the Collateral Agent and the Agent
under the Trade Credit Facility in form and substance satisfactory to
the Required Lenders.
"Trade L/C Facility" means a letter of credit facility on
terms and conditions reasonably acceptable to the Collateral Agent and
Paying Agent between the Borrower and one or more Lenders pursuant to
which one or more issuing banks thereunder shall issue trade letters of
credit for the account of the Borrower for a period not to exceed three
months.
"Trade Refinancing Facility" means a revolving credit facility
on terms and conditions reasonably acceptable to the Collateral Agent
and Paying Agent between the Borrower and one or more Lenders pursuant
to which such Lenders shall make advances with a maturity for any such
advance not to exceed 120 days from time to time to finance outstanding
reimbursement obligations arising under the Trade L/C Facility.
"Trade Refinancing Lenders" means the lenders party to the
Trade Refinancing Facility.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unused Revolving Credit Commitment" means, with respect to
any Lender at any time, (a) such Lender's Revolving Credit Commitment
at such time minus (b) the sum of (i) the aggregate principal amount of
all outstanding Revolving Credit Advances, Letter of Credit Advances
and Swing Line Advances made by such Lender (in its capacity as a
Lender) plus (ii) such Lender's Pro Rata Share of (A) the aggregate
Available Amount of all Letters of Credit outstanding at such time, (B)
the aggregate principal amount of all outstanding Letter of Credit
Advances made by the Fronting Bank pursuant to Section 2.13(c) and (C)
the aggregate principal amount of all outstanding Swing Line Advances
made by the Swing Line Bank pursuant to Section 2.01(c).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the
happening of such a contingency.
"Warrant Purchase Agreement" means the amended and restated
agreement dated as of February 13, 1996 between Parent and General
Electric Capital Corporation pursuant to which Parent has an option to
repurchase from General Electric Capital Corporation the Series A
Warrants.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
25
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the audited and unaudited financial statements referred to in Section 4.01(f)
("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) Purchase of Advances. Each
Restatement Lender severally agrees, on the terms and conditions hereinafter set
forth, to purchase and assume on the Effective Date an undivided interest in the
rights and obligations of the Existing Lenders under the Existing Credit
Agreement in an amount equal to such Restatement Lender's Pro Rata Share
thereof, such purchase to be effected by payment to the Paying Agent for the
account of the Existing Lenders of an amount equal to such Restatement Lender's
Pro Rata Share of the aggregate principal amount of "Term A Advances," "Term B
Advances," "Revolving Credit Advances," "Letter of Credit Advances" and "Swing
Line Advances" (as defined in the Existing Credit Agreement), together with all
accrued interest and fees through the Effective Date. Such purchase shall be
made on such notice, and otherwise on such terms, as are provided under this
Agreement as though such purchase were a Borrowing hereunder. The "Term A
Advances," "Term B Advances," "Revolving Credit Advances," "Letter of Credit
Advances" and "Swing Line Advances," together with all accrued interest and
fees, so purchased shall be deemed to be Revolving Credit Advances hereunder.
(b) The Revolving Credit Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances
(each a "Revolving Credit Advance") to the Borrower from time to time on any
Business Day during the period from the Effective Date until the Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Revolving Credit Commitment on such Business Day. Each Revolving Credit
Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances
made by the Lenders ratably according to their Revolving Credit Commitments.
Within the limits of each Lender's Unused Revolving Credit Commitment in effect
from time to time, the Borrower may borrow under this Section 2.01(b), prepay
pursuant to Section 2.05(a) and reborrow under this Section 2.01(b).
(c) The Swing Line Advances. The Swing Line Bank agrees, on
the terms and conditions hereinafter set forth, to make Swing Line Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until the Termination Date (i) in an aggregate amount for all
such Advances not to exceed at any time outstanding $10,000,000 (the "Swing Line
26
Facility") and (ii) in an amount for each such Advance not to exceed the
aggregate of the Unused Revolving Credit Commitments of the Lenders on such
Business Day. No Swing Line Advance shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance. Each Swing Line Borrowing
shall be in a minimum amount of $100,000 or an integral multiple of $10,000 in
excess thereof and shall be made as a Base Rate Advance. Within the limits of
the Swing Line Facility and within the limits referred to in clause (ii) above,
the Borrower may borrow under this Section 2.01(c), repay pursuant to Section
2.03 or prepay pursuant to Section 2.05(a) and reborrow under this Section
2.01(c).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.13, each Borrowing shall be made on notice,
given not later than 1:00 P.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of Eurodollar Rate
Advances, or on the Business Day prior to the date of the proposed Borrowing in
the case of Base Rate Advances, by the Borrower to the Paying Agent, which shall
give to each Appropriate Lender prompt notice thereof by telephone, telex,
telecopier or cable. Each such notice of a Borrowing (a "Notice of Borrowing")
shall be by telephone, telex, telecopier or cable, confirmed immediately in
writing, in substantially the form of Exhibit A hereto, specifying therein the
requested (i) date of such Borrowing, (ii) Facility under which such Borrowing
is to be made, (iii) Type of Advances comprising such Borrowing, (iv) aggregate
amount of such Borrowing and (v) in the case of a Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such Advance. In the
case of a proposed Borrowing comprised of Eurodollar Rate Advances, the Paying
Agent shall promptly notify each Appropriate Lender of the applicable interest
rate under Section 2.06(a)(ii). Each Appropriate Lender shall, before 2:00 P.M.
(New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Paying Agent at the Paying
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments of such Lender and the
other Appropriate Lenders. After the Paying Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Paying Agent will make such funds available to the Borrower by crediting the
Borrower's Account; provided, however, that, in the case of any Revolving Credit
Borrowing, the Paying Agent shall first make a portion of such funds equal to
the aggregate principal amount of any Swing Line Advances and Letter of Credit
Advances made by the Swing Line Bank or the Fronting Bank, as the case may be,
and by any other Lender and outstanding on the date of such Revolving Credit
Borrowing, plus interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank or the Fronting Bank, as the case may be, and
such other Lenders for repayment of such Swing Line Advances and Letter of
Credit Advances.
(b) (i) Each Swing Line Borrowing shall be made on notice,
given not later than 1:00 P.M. (New York City time) on the date of the proposed
Swing Line Borrowing, by the Borrower to the Swing Line Bank and the Paying
Agent. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line
Borrowing") shall be by telephone, telex or telecopier, confirmed immediately in
writing, specifying therein the requested (A) date of such Borrowing and (B)
amount of such Borrowing and shall constitute a representation and warranty by
the Borrower (upon which the Swing Line Bank may conclusively rely, in the
absence of prior receipt by the Swing Line Bank of written notice to the
contrary from a Facility Agent or Lenders holding at least 51% of the Revolving
Credit Commitments) that the conditions precedent to the making of Swing Line
Advances have been satisfied or duly waived. Upon fulfillment of the applicable
conditions set forth in Article III and to the extent the Swing Line Bank has
not received written notice from a Facility Agent or the Required Lenders that
the conditions to making such
27
Swing Line Advances have not been satisfied or duly waived, the Swing Line Bank
will make the amount thereof available to the Borrower by crediting the
Borrower's Account.
(ii) (A) (1) Subject to clause (ii)(B) below, in the event
that on any Business Day the Swing Line Bank desires that all or any portion of
one or more Swing Line Advances be paid, the Swing Line Bank shall promptly
notify the Paying Agent to that effect and indicate the portion of the Swing
Line Advances to be paid.
(2) The Paying Agent agrees to promptly transmit to the
Lenders the information contained in each notice received by the Paying Agent
under clause (ii)(A)(1) above, and shall concurrently notify the other Facility
Agents and the Lenders of each Lender's Pro Rata Share of the Swing Line
Advances (or portion thereof) to be paid.
(3) Each Lender hereby unconditionally and irrevocably agrees
to fund to the Paying Agent for the benefit of the Swing Line Bank, in lawful
money of the United States and in same day funds, not later than 12:00 Noon (New
York City time) on the Business Day immediately following the Business Day of
such Lender's receipt of such notice from the Paying Agent (provided that if any
Lender shall receive such notice at or prior to 1:00 P.M. (New York City time)
on a Business Day, such funding shall be made by such Lender on such Business
Day), a Revolving Credit Advance in the amount of such Lender's Pro Rata Share
of the payment of the Swing Line Advances to be made on such date, regardless,
however, of whether (x) the conditions precedent thereto set forth in Article
III are then satisfied, (y) the Borrower has provided a notice of borrowing
under Section 2.02(a) hereof and (z) the Revolving Credit Facility has been
terminated or all or any of the Notes have been accelerated, but subject to
clause (B) below and subject to the requirements contained in Section 2.01(b)
(except that such Lender shall be required to make such Advance notwithstanding
the fact that such Lender may not otherwise have an obligation to make Advances
hereunder). The proceeds of each such Revolving Credit Advance shall be
immediately paid over to the Paying Agent for the benefit of the Swing Line Bank
for application to the Swing Line Facility. Each such Revolving Credit Advance
shall initially be a Base Rate Advance and shall be deemed to have been timely
requested by the Borrower pursuant to Section 2.02(a).
(B) In the event that Commitments of the Lenders shall have
terminated pursuant to Section 6.01 following an Event of Default, no further
Revolving Credit Advances of the type described in clause (ii)(A) above shall be
made, and each of the Lenders (other than the Swing Line Bank) shall be deemed
to have irrevocably, unconditionally and immediately purchased from the Swing
Line Bank such Lender's Pro Rata Share of the principal amount of the Swing Line
Advances outstanding as of the date of the occurrence of such Event of Default.
Each Lender shall effect such purchase by making available an amount equal to
its participation on the date of such purchase in U.S. dollars in immediately
available funds at the office of the Swing Line Bank located at One Liberty
Plaza, New York, New York 10006 or such other office as the Swing Line Bank may
from time to time direct for the account of such office of the Swing Line Bank.
(C) Each purchase made pursuant to clause (ii)(B) above by a
Lender shall be made without recourse to the Swing Line Bank, and, except as to
the absence of liens created by the Swing Line Bank on the Swing Line Advance
and the Swing Line Bank's right to effect such sale, without
28
representation or warranty of any kind, and shall be effected and evidenced
pursuant to documents reasonably acceptable to the Swing Line Bank.
(D) The obligations of the Lenders under this Section
2.02(b)(ii) shall be absolute, irrevocable and unconditional, shall be made
under all circumstances and shall not be affected, reduced or impaired for any
reason whatsoever, including (without limitation): (1) any Default,
misrepresentation, negligence, misconduct or other action or inaction of any
kind by any of the Loan Parties or any other Person, whether in, under or in
connection with this Agreement, the Guaranties or any of the other Loan
Documents; (2) any extension, renewal, release or waiver of the time of
performance of or compliance with any of the obligations or other provisions
hereof or of any other Loan Document; (3) any settlement, compromise or
subordination of any or all of the obligations to the claims of others, or any
failure by any Facility Agent, the Swing Line Bank or any other Lender to
mitigate damages; (4) any amendment, modification or other waiver of any one or
more of the Loan Documents; (5) the insolvency, bankruptcy, reorganization or
cessation of existence of any of the Loan Parties; (6) any impossibility or
illegality of performance or the lack of genuineness, validity, legality or
enforceability of any of this Agreement or the other Loan Documents, or any term
thereof or any other agreement or instrument relating thereto for any reason, or
the lack of power or authority of any party to enter into any of the Loan
Documents; (7) any defect in the title to or lien on the Collateral in favor of
the Collateral Agent; (8) any dispute, setoff, recoupment, counterclaim or other
defense or right any Lender may have at any time, whether against any Facility
Agent, the Swing Line Bank, any other Lender or any of the Loan Parties; (9) any
merger or consolidation of any of the Loan Parties or any Lender, or any sale,
lease or transfer of any or all of the assets of any such Person; or (10) any
other circumstances whether similar or dissimilar to any of the foregoing.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder or for any Borrowing if the aggregate amount of
such Borrowing is less than $5,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 and (ii) the Revolving Credit Advances made on any date may not be
outstanding as part of more than 10 separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to comprise
Eurodollar Rate Advances, the Borrower shall indemnify each Appropriate Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Paying Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Paying Agent such Lender's ratable portion of such Borrowing, the Paying
Agent may assume that such Lender has made such portion available to the Paying
Agent on the
29
date of such Borrowing in accordance with subsection (a) or (b) of this
Section 2.02 and the Paying Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Paying Agent, such Lender and the Borrower severally agree to
repay or pay to the Paying Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Paying Agent, at (i) in the case of the Borrower, the interest rate applicable
at such time under Section 2.06 to Advances comprising such Borrowing and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to
the Paying Agent such corresponding amount, such amount so paid shall constitute
such Lender's Advance as part of such Borrowing for purposes of this Agreement.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Repayment. (a) Revolving Credit Advances. The
Borrower shall repay to the Paying Agent for the ratable account of the Lenders
on the Termination Date the aggregate outstanding principal amount of the
Revolving Credit Advances.
(b) Swing Line Advances. The Borrower shall repay to the
Paying Agent for the account of the Swing Line Bank and each other Lender which
has purchased a Swing Line Advance or portion thereof pursuant to Section
2.02(b) the outstanding principal amount of each Swing Line Advance at the times
and in the manner and amounts specified in Section 2.02(b) and on the
Termination Date.
(c) Letter of Credit Advances. The Borrower shall, on demand,
repay to the Paying Agent for the account of the Fronting Bank and each Lender
that has purchased a Letter of Credit Advance or portion thereof in accordance
with Section 2.13(c) the outstanding principal amount of each Letter of Credit
Advance.
SECTION 2.04. Reduction of the Commitments. (a) Optional. The
Borrower may, upon at least three Business Days' notice to the Paying Agent,
terminate in whole or reduce in part the Unused Revolving Credit Commitments,
the unused portion of the Letter of Credit Commitments or the unused portion of
the Swing Line Facility; provided, however, that, except in the case of the
termination of a Facility, each partial reduction of a Facility (i) shall be in
an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, and (ii) with respect to the Revolving Credit Facility, shall be
made ratably among the Lenders in accordance with their Revolving Credit
Commitments; provided further that after giving effect to any such reduction,
each of the commitment of the Swing Line Bank pursuant to Section 2.01(c) and
the Letter of Credit Commitments shall be less than or equal to the Revolving
Credit Commitments.
(b) Mandatory. The Revolving Credit Commitments shall be
permanently reduced on the date of each prepayment required to be made in
accordance with Section 2.05(b)(i) and (iv) in an amount equal to the Required
Amount of such prepayment and the Letter of Credit Facility and the Swing Line
Facility shall be permanently reduced on such date in an amount, if any, such
that after giving effect
30
to such reduction, the Letter of Credit Commitments and the Swing Line
Facility, respectively, shall not exceed the Revolving Credit Commitments.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may,
upon at least three Business Days' notice to the Paying Agent in the case of the
Eurodollar Rate Advances under the Revolving Credit Facility, and upon at least
one Business Day's notice to the Paying Agent in the case of Base Rate Advances
under the Revolving Credit Facility and upon notice prior to 1:00 p.m. on the
date of any prepayment in the case of the Swing Line Facility, in each case such
notice to state the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid; provided,
however, that (x) each partial prepayment under the Revolving Credit Facility
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate
Advance is made other than on the last day of an Interest Period therefor, the
Borrower shall also pay any amounts owing pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, by 11:00 A.M. (New York
City time) on the Business Day immediately following the date of receipt of Net
Cash Proceeds (the "Required Prepayment Date") by Parent, the Borrower or any of
the Borrower's Subsidiaries from any Asset Sale or from the Capital Issuance of
any Debt by Parent, the Borrower or any of the Borrower's Subsidiaries (other
than Debt incurred or issued pursuant to Section 5.02(b)(i) through (xii) or
5.02(b)(xiv)), prepay an aggregate principal amount of the Advances comprising
part of the same Borrowings equal to 100% of such Net Cash Proceeds (such amount
of Net Cash Proceeds being the "Required Amount"). Each such prepayment shall be
applied to the permanent reduction of the Revolving Credit Commitments and each
such prepayment shall be applied to prepay first, the aggregate principal amount
of outstanding Swing Line Advances, second the aggregate principal amount of
outstanding Letter of Credit Advances and third, the aggregate principal amount
of outstanding Revolving Credit Advances; provided that no such prepayment shall
be required to be applied to the prepayment of Advances pursuant to this clause
(i) to the extent of the amount of a Borrowing that the Borrower has requested
to be made on the Required Prepayment Date and all conditions to such Borrowing
have been satisfied.
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Revolving Credit Advances comprising part of
the same Borrowings, the Letter of Credit Advances and the Swing Line Advances
equal to the amount by which (A) the aggregate principal amount of the Revolving
Credit Advances, Letter of Credit Advances and Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of Credit then
outstanding exceeds (B) the Revolving Credit Commitments on such Business Day.
(iii) The Borrower shall, on each Business Day, pay to the
Collateral Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(iv) On the date of receipt by Parent, the Borrower or the
Collateral Agent of proceeds from the key person life insurance policy on Linda
J. Wachner required pursuant to Section 5.01(d), such
31
proceeds shall be applied to prepay an aggregate principal amount of the
Advances comprising part of the same Borrowings equal to the amount of such
proceeds. Each such prepayment shall be applied to the permanent reduction of
the Revolving Credit Commitments.
(v) The Borrower hereby irrevocably authorizes the Paying
Agent to apply on a daily basis all funds on deposit in the Cash Collateral
Account to the prepayment of Advances then outstanding in accordance with
Section 8 of the Security Agreement.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(x) the Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
first day of each January, April, July and October during such periods
and on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x)
the Eurodollar Rate for such Interest Period for such Advance plus (y)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder which is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrower shall pay
to the Paying Agent for the account of the Lenders a commitment fee on the
average daily Unused Revolving Credit Commitment of such Lender from the
Effective Date in the case of each Restatement Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date at a rate per
annum equal, as of any date, to a percentage determined by reference to the
ratio of (i) Average Debt as of such date to (ii) Consolidated EBITDA of
32
Parent and its Subsidiaries for the four Fiscal Quarters ended on or most
recently prior to such date as set forth below:
================================================================
Average Debt to EBITDA
Ratio Commitment Fee
-----------------------------------------------------------------
Level I
less than or equal to
2.00 to 1.00 0.250%
-----------------------------------------------------------------
Level II
less than or equal to
2.50 to 1.00 but 0.350%
greater than 2.00 to 1.00
-----------------------------------------------------------------
Level III
less than or equal to
3.00 to 1.00 but 0.400%
greater than 2.50 to 1.00
-----------------------------------------------------------------
Level IV
greater than 3.00 to 1.00 0.450%
=================================================================
The commitment fee shall be determined by reference to such ratio in effect from
time to time; provided, however, that (A) no change in such fee shall be
effective until three Business Days after the date on which the Agents receive
financial statements pursuant to Section 5.03(b) or (c) and a certificate of the
chief financial officer of the Borrower demonstrating such ratio and (B) if the
Borrower has not submitted to the Agents the information described in clause (A)
of this proviso as and when required under Section 5.03(b) or (c), as the case
may be, the commitment fee shall be at Level IV for so long as such information
has not been received by the Agents. Such commitment fee shall in all cases be
payable in arrears quarterly on the first day of each January, April, July and
October, commencing July 1, 1996 and on the Termination Date; provided, however,
that any commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided further that no commitment fee shall accrue on
any of the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Facility Agents' Fees. The Borrower shall pay to the
Facility Agents for their respective accounts such fees as may from time to time
be agreed between the Borrower and the Facility Agents.
SECTION 2.08. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Paying Agent not
later than 1:00 P.M. (New York City time) on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of
33
Section 2.09, Convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; provided, however, that (x)
if any Conversion of Eurodollar Rate Advances into Base Rate Advances is made
other than on the last day of an Interest Period for such Eurodollar Rate
Advances, the Borrower shall also pay any amounts owing pursuant to Section
8.04(c) and (y) any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(c) and (z) no Conversion of any Advances shall result in more
separate Borrowings than permitted under Section 2.02(c). Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Paying Agent will forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost (other than in taxes, including
interest, additions to tax and penalties relating thereto, which shall be
governed by Section 2.11) to any Lender of agreeing to make or of making,
funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Paying
Agent), pay to the Paying Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided,
however, that, before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend or to issue Letters of Credit hereunder and other commitments of such
type or the issuance or maintenance of the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender (with a copy of such
demand to the Paying Agent), the
34
Borrower shall pay to the Paying Agent for the account of such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend or to issue Letters of Credit hereunder or
to the issuance or maintenance of any Letters of Credit; provided, however,
that, before making any such demand, such Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, the
payment by the Borrower of such amounts and would not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. A certificate as to such
amounts submitted to the Borrower by such Lender shall be conclusive and binding
for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, Lenders
owed at least a majority of the then aggregate unpaid principal amount thereof
notify the Paying Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost (other than in taxes,
including interest, additions to tax and penalties relating thereto, which shall
be governed by Section 2.11) to such Lenders of making, funding or maintaining
their Eurodollar Rate Advances for such Interest Period, the Paying Agent shall
forthwith so notify the Borrower and the Appropriate Lenders, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Paying Agent shall notify
the Borrower that such Lenders have determined that the circumstances causing
such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Paying Agent, (i) each Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate Advance and (ii) the obligation of
such Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Paying Agent shall notify the Borrower that such Lender
has determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office if
the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.
(e) Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
35
SECTION 2.10. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 1:00 P.M.
(New York City time) on the day when due in U.S. dollars to the Paying Agent at
the Paying Agent's Account in same day funds. The Paying Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender,
to such Lenders for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lenders and (ii) if such payment by the Borrower is in respect
of any Obligation then payable hereunder to one Lender, to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date of
such Assignment and Acceptance, the Paying Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) If the Paying Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Paying Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
outstanding Advances and the Available Amount of all Letters of Credit then
outstanding, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender, and for application to such principal
installments, as the Paying Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time, to the extent permitted
under applicable law, against any or all of the Borrower's accounts with such
Lender any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Paying Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Paying Agent of an interest
rate, fee or commission hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Paying Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
hereunder that the Borrower will not make such payment
36
in full, the Paying Agent may assume that the Borrower has made such payment in
full to the Paying Agent on such date and the Paying Agent may, in reliance upon
such assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Paying Agent, each
such Lender shall repay to the Paying Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Paying Agent, at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and Facility Agent,
Excluded Taxes (all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities other than Excluded Taxes being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Lender or Facility Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such Lender or
Facility Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and Facility
Agent for the full amount of Taxes and Other Taxes, and for the full amount of
Taxes imposed by any jurisdiction on amounts payable under this Section 2.11,
paid by such Lender or Facility Agent (as the case may be) and any liability
(including penalties, additions to Tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender or Facility Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Paying Agent and the Documentation Agent, at their
respective addresses referred to in Section 8.02, the original receipt of
payment thereof or a certified copy of such receipt (to the extent that the
relevant governmental authority delivers such receipts). Within 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. In the case of any
payment hereunder or under the Notes by the Borrower through an account or
branch outside the United States or on behalf of the Borrower by a payor that is
not a United States person, if the Borrower determines that no Taxes are payable
in respect thereof, the Borrower shall furnish, or shall cause such
37
payor to furnish, to the Paying Agent and the Documentation Agent, at such
address, an opinion of counsel acceptable to such Agents stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Restatement Lender, and on the
date of the Assignment and Acceptance pursuant to which it became a Lender in
the case of each other Lender, and from time to time thereafter if requested in
writing by the Borrower or the Documentation Agent (but only so long thereafter
as such Lender remains lawfully able to do so), provide the Documentation Agent
and the Borrower with two duly completed and signed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under this Agreement or the
Notes or certifying that the income receivable pursuant to this Agreement or the
Notes is effectively connected with the conduct of a trade or business in the
United States. Upon the reasonable request of the Borrower or the Documentation
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 Documentation Agent a certificate to the effect that it is such
a "United States person" (as defined in Section 7701(a)(30) of the Internal
Revenue Code). If any Lender which is not a "United States person" determines
that it is unable to submit to the Borrower or the Documentation Agent any form
or certificate that such Lender is requested to submit pursuant to this Section
2.11(e), 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 Documentation Agent of such fact. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes for all purposes of this
Agreement unless and until such Lender subsequently provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for subsequent periods
governed by such subsequent form; provided, however, that, if at the date of the
Assignment and Acceptance pursuant to which a Lender assignee becomes a party to
this Agreement the Lender assignor was entitled to payments under subsection (a)
in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to and paid by or withheld with respect to the Lender assignee on such
date.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes that would not
have been imposed but for such failure; provided, however, that should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
38
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.11 shall survive the payment in full of principal
and interest hereunder and under the Notes.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) (a) on account of Obligations due
and payable to such Lender hereunder and under the Notes at such time in excess
of its ratable share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii) the aggregate
amount of the Obligations due and payable to all Lenders hereunder and under the
Notes at such time) of payments on account of the Obligations due and payable to
all Lenders hereunder and under the Notes at such time obtained by all the
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender hereunder and under the Notes at such time in excess of
its ratable share (according to the proportion of (i) the amount of such
Obligations owing (but not due and payable) to such Lender at such time to (ii)
the aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time) of payments on account of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Notes at such time obtained by all the Lenders at such time, such
Lender shall forthwith purchase from the other Lenders such participations in
the Obligations due and payable or owing to them, as the case may be, as shall
be necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such other Lender's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.12 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.13. Letters of Credit. (a) The Letter of Credit
Facility. Pursuant to the Existing Credit Agreement, the Fronting Bank has
issued Letters of Credit (such Letters of Credit as are outstanding on the date
hereof under the Existing Credit Agreement and set forth on Schedule II being
the "Existing Letters of Credit") for the account of the Borrower. Effective as
of the Effective Date, each Existing Letter of Credit shall be deemed to be a
Letter of Credit under this Agreement and each Existing Revolving Credit Lender
will be deemed to have sold and transferred an undivided interest and
participation, pro rata based upon such Existing Revolving Credit Lender's
Commitment under the Existing
39
Credit Agreement, in respect of the Existing Letters of Credit and each
Restatement Lender will be deemed to have purchased and received, without
further action on the part of any party, an undivided interest and participation
in such Existing Letters of Credit, based upon such Lender's Pro Rata Share of
its Revolving Credit Commitment under this Agreement. Any such interest and
participation so purchased shall automatically become an undivided interest and
participation in such Letters of Credit. In addition, the Fronting Bank agrees,
on the terms and conditions hereinafter set forth, to issue letters of credit
(together with the Existing Letters of Credit, the "Letters of Credit") for the
account of the Borrower or any of its Subsidiaries (it being understood that the
Obligations with respect to such Letters of Credit shall be Obligations of the
Borrower notwithstanding that such Letters of Credit shall be for the account of
its Subsidiaries) from time to time on any Business Day during the period from
the date of the initial Borrowing until 30 days before the Termination Date (i)
in an aggregate Available Amount for all Letters of Credit issued by the
Fronting Bank not to exceed at any time the Letter of Credit Facility and (ii)
in an Available Amount for each such Letter of Credit not to exceed the Unused
Revolving Credit Commitments of the Lenders on such Business Day. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or
the beneficiary to require renewal) later than the earlier of 30 days before the
Termination Date and, in the case of a Documentary Letter of Credit, 180 days
after the date of issuance thereof. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.13(a), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.13(c) and request the issuance of additional Letters of Credit under this
Section 2.13(a).
(b) Request for Issuance. (i) Each Letter of Credit shall be
issued upon notice, given not later than 1:00 P.M. (New York City time) on the
first Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Fronting Bank, which shall give to the Paying
Agent prompt notice thereof by telex, telecopier or cable. Each such notice of
issuance from the Borrower of a Letter of Credit (a "Notice of Issuance") shall
be by telex, telecopier or cable, confirmed immediately in writing, specifying
therein the requested (A) date of such issuance (which shall be a Business Day),
(B) Available Amount of such Letter of Credit, (C) expiration date of such
Letter of Credit, (D) name and address of the beneficiary of such Letter of
Credit and (E) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit (a "Letter of Credit Agreement")
as the Fronting Bank may specify to the Borrower for use in connection with such
requested Letter of Credit. If (x) the requested form of such Letter of Credit
is acceptable to the Fronting Bank in its sole discretion and (y) it has not
received written notice from a Facility Agent or the Required Lenders that the
conditions to issuing such Letter of Credit have not been satisfied or duly
waived, the Fronting Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 8.02 or as otherwise agreed with the
Borrower in connection with such issuance. In the event and to the extent that
the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern as among the parties to
the Loan Documents.
(ii) The Fronting Bank shall furnish (A) to the Paying Agent
and the Documentation Agent and each Lender on the first Business Day of each
month a written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding month and drawings during such month under
all Letters of Credit and (B) to the Paying Agent and the Documentation Agent
and each Lender on
40
the first Business Day of each calendar quarter a written report setting forth
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Fronting
Bank of a draft drawn under any Letter of Credit shall constitute for all
purposes of this Agreement the making by the Fronting Bank of a Letter of Credit
Advance, which shall be a Base Rate Advance, in the amount of such draft. Upon
written demand by the Fronting Bank with an outstanding Letter of Credit
Advance, with a copy of such demand to the Paying Agent, each Lender shall
purchase from the Fronting Bank, and the Fronting Bank shall sell and assign to
such Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Paying Agent for the account of the
Fronting Bank, by deposit to the Paying Agent's Account, in same day funds, an
amount equal to the portion of the outstanding principal amount of such Letter
of Credit Advance to be purchased by such Lender. The Borrower hereby agrees to
each such sale and assignment. Each Lender agrees to purchase its Pro Rata Share
of an outstanding Letter of Credit Advance on (i) the Business Day on which
demand therefor is made by the Fronting Bank, provided notice of such demand is
given not later than 1:00 P.M. (New York City time) on such Business Day or (ii)
the first Business Day next succeeding such demand if notice of such demand is
given after such time. Upon any such assignment by the Fronting Bank to any
Lender of a portion of a Letter of Credit Advance, the Fronting Bank represents
and warrants to such other Lender that the Fronting Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of Liens,
but makes no other representation or warranty and assumes no responsibility with
respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.
If and to the extent that any Lender shall not have so made the amount of such
Letter of Credit Advance available to the Paying Agent, such Lender agrees to
pay to the Paying Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Fronting Bank until the
date such amount is paid to the Paying Agent, at the Federal Funds Rate. If such
Lender shall pay to the Paying Agent such amount for the account of the Fronting
Bank on any Business Day, such amount so paid in respect of principal shall
constitute a Letter of Credit Advance made by such Lender on such Business Day,
and the outstanding principal amount of the Letter of Credit Advance made by the
Fronting Bank shall be reduced by such amount on such Business Day.
(d) Obligations Absolute. The Obligations of the Borrower
under this Agreement, any Letter of Credit Agreement and any other agreement or
instrument, in each case, relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
the Fronting Bank of any draft or the reimbursement by the Borrower thereof):
(i) any lack of validity or enforceability of this Agreement,
any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (this Agreement and all of the
other foregoing being, collectively, the "L/C Related Documents");
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other
41
amendment or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Fronting Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Fronting Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Guaranties or any other guaranty, for all
or any of the Obligations of the Borrower in respect of the L/C Related
Documents; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
(e) Compensation. (i) The Borrower shall pay to the Paying
Agent for the account of each Lender a commission on such Lender's Pro Rata
Share of the average daily aggregate Available Amount of (A) all Documentary
Letters of Credit outstanding from time to time at a rate per annum as
determined, as of any date, by reference to the ratio of (i) Average Debt as of
such date to (ii) Consolidated EBITDA of Parent and its Subsidiaries, for the
four Fiscal Quarters ended on or most recently prior to such date as set forth
below and (B) all Standby Letters of Credit outstanding from time to time at a
rate per annum as determined, as of any date, by reference to the ratio of (i)
Average Debt as of such date to (ii) Consolidated EBITDA of Parent and its
Subsidiary for the four Fiscal Quarters ended on or most recently prior to such
date as set forth below:
42
===========================================================================
Rate for Rate for Standby
Average Debt to EBITDA Documentary Letters of Credit
Ratio Letters of Credit
---------------------------------------------------------------------------
Level I
less than or equal to
2.00 to 1.00 0.375% 0.500%
----------------------------------------------------------------------------
Level II
less than or equal to
2.50 to 1.00 but greater than
2.00 to 1.00 0.625% 0.750%
---------------------------------------------------------------------------
Level III
less than or equal to
3.00 to 1.00 but greater than
2.50 to 1.00 0.750% 1.000%
---------------------------------------------------------------------------
Level IV
greater than 3.00 to 1.00 1.000% 1.250%
===========================================================================
The Letter of Credit rate shall be determined by reference to the ratio in
effect from time to time; provided, however, that (A) no change in such rate
shall be effective until three Business Days after the date on which the Agents
receive financial statements pursuant to Section 5.03(b) or (c) and a
certificate of the chief financial officer of the Borrower demonstrating such
ratio and (B) if the Borrower has not submitted to the Agents the information
described in clause (A) of this proviso as and when required under Section
5.03(b) or (c), as the case may be, the Letter of Credit rate shall be at Level
IV for so long as such information has not been received by the Agents. Such
letter of credit fees shall in all cases be payable in arrears quarterly on the
first day of each January, April, July and October, commencing July 1, 1996 and
on the Termination Date.
(ii) The Borrower shall pay to the Fronting Bank, for its own
account, (A) for each Letter of Credit an amount equal to 0.250% per annum on
the Available Amount of each Letter of Credit, payable in arrears quarterly on
the first day of each January, April, July and October, commencing July 1, 1996
and 30 days prior to the Termination Date of issuance and (B) such standard
commissions, issuance fees, transfer fees and other fees, charges and expenses
as the Fronting Bank may impose, pay or incur in connection with the issuance,
amendment, administration, transfer or cancellation of each Letter of Credit and
in connection with any payment by the Fronting Bank thereunder. Where such are
determined on a per annum basis, the determination thereof shall be made by the
Fronting Bank on the basis of a year of 360 days for the actual number of days
elapsed.
SECTION 2.14. Use of Proceeds. The proceeds of each of the
Revolving Credit Advances, the Swing Line Advances and the Letter of Credit
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) to (i) refinance the amounts outstanding under the Existing Credit
Agreement, (ii) pay transaction fees and expenses in connection with the
transactions contemplated hereunder, (iii) provide working capital for the
Borrower and its Subsidiaries and (iv) provide funds for other general corporate
purposes permitted herein, including, without limitation, permissible
acquisitions
43
and dividends or loans to Parent for the repurchase of the Series A Warrants
subject to the terms and conditions of this Agreement.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the Obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the Obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set off and otherwise apply the
Obligation of the Borrower to make any such payment against the Obligation of
such Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set off and otherwise applied by the Borrower shall constitute for all
purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01. Such Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01 and shall be
of the Type of Advance of such Borrowing and, if such Advance shall be a
Eurodollar Rate Advance, the Interest Period shall end on the date that the
Interest Period of such Borrowing shall end. The Borrower shall notify the
Paying Agent at any time the Borrower reduces the amount of the Obligation of
the Borrower to make any payment otherwise required to be made by it hereunder
or under any other Loan Document as a result of the exercise by the Borrower of
its right set forth in this subsection (a) and shall set forth in such notice
(A) the name of the Defaulting Lender and the Defaulted Advance required to be
made by such Defaulting Lender and (B) the amount set off and otherwise applied
in respect of such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by the Borrower to or for
the account of such Defaulting Lender which is paid by the Borrower, after
giving effect to the amount set off and otherwise applied by the Borrower
pursuant to this subsection (a), shall be applied by the Paying Agent as
specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to any Facility Agent or Lender and (iii) the Borrower shall make any payment
hereunder or under any other Loan Document to the Paying Agent for the account
of such Defaulting Lender, then the Paying Agent may, on its behalf or on behalf
of such other Facility Agents or Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the Borrower to or for
the account of such Defaulting Lender to the payment of each such Defaulted
Amount to the extent required to pay such Defaulted Amount. In the event that
the Paying Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Paying Agent shall
constitute, as among the Lenders and the Paying Agent, for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Paying Agent
shall be retained by the Paying Agent or distributed by the Paying Agent to such
other Facility Agents or Lenders, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Paying Agent and
such other Facility Agents or Lenders and, if the amount of such payment made by
the Borrower shall at such
44
time be insufficient to pay all Defaulted Amounts owing at such time to the
Paying Agent and the other Lenders, in the following order of priority:
(x) first, to the Facility Agents for any Defaulted Amount
then owing to the Facility Agents, ratably in accordance with such
respective Defaulted Amounts then owing to the Facility Agents; and
(y) second, to the Lenders for any Defaulted Amounts then
owing to the Lenders, ratably in accordance with such respective
Defaulted Amounts then owing to the Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Paying Agent pursuant to this subsection (b), shall be applied by the Paying
Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, any Facility Agent or any
Lender shall be required to pay or distribute any amount hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then the
Borrower or such other Lender shall pay such amount to the Paying Agent to be
held by the Paying Agent, to the fullest extent permitted by applicable law, in
escrow or the Paying Agent shall, to the fullest extent permitted by applicable
law, hold in escrow such amount otherwise held by it. Any funds held by the
Paying Agent in escrow under this subsection (c) shall be deposited by the
Paying Agent in an account with Scotiabank, in the name and under the control of
the Paying Agent, but subject to the provisions of this subsection (c). The
terms applicable to such account, including the rate of interest payable with
respect to the credit balance of such account from time to time, shall be
Scotiabank's standard terms applicable to escrow accounts maintained with it.
Any interest credited to such account from time to time shall be held by the
Paying Agent in escrow under, and applied by the Paying Agent from time to time
in accordance with the provisions of, this subsection (c). The Paying Agent
shall, to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to any
Facility Agent or Lender, as and when such Advances or amounts are required to
be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(x) first, to the Facility Agents for any amount then due and
payable by such Defaulting Lender to the Facility Agents hereunder,
ratably in accordance with such respective amounts then due and payable
to the Facility Agents;
(y) second, to the Lenders for any amount then due and payable
by such Defaulting Lender to the Lenders hereunder, ratably in
accordance with such respective amounts then due and payable to the
Lenders; and
(z) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
45
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Paying Agent in escrow at such time
with respect to such Defaulting Lender shall be distributed by the Paying Agent
to such Defaulting Lender and applied by such Defaulting Lender to the
Obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies which the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and which any Facility Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF EFFECTIVENESS
SECTION 3.01. Conditions Precedent to Effective Date. The
amendment and restatement of the Existing Credit Agreement pursuant hereto shall
become effective on and as of the date (the "Effective Date") on which each of
the following conditions precedent (or in the case of Section 3.01(a),
concurrent) shall have been satisfied or duly waived:
(a) The obligations under the Existing Letters of Credit of
each Existing Lender shall have been sold and transferred to the
Restatement Lenders pursuant to Section 2.13(a).
(b) The Restatement Lenders shall be satisfied that all
Obligations (other than any Existing Letters of Credit) of the Borrower
under the Existing Credit Agreement, whether for principal, interest,
fees, expenses or otherwise, have been or, concurrently with the making
of the initial Borrowing, will be paid in full.
(c) The Borrower shall have paid all accrued fees and expenses
of the Facility Agents and the Restatement Lenders (including all
invoiced fees and expenses of counsel to the Facility Agents and of
trademark counsel and local counsel to the Lenders).
(d) The Agents shall have received Commitments from the
Restatement Lenders in the aggregate amount of $250,000,000.
(e) There shall have occurred no Material Adverse Change since
July 1, 1995.
(f) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that would be reasonably likely to have a Material
Adverse Effect.
(g) The Documentation Agent shall have received on or before
the Effective Date the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to
46
the Documentation Agent (unless otherwise specified) and (except for
the Notes) in sufficient copies for each Restatement Lender:
(i) The Notes to the order of the Restatement
Lenders.
(ii) An amended and restated parent guaranty in
substantially the form of Exhibit D-1 (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Parent Guaranty"), duly
executed by Parent.
(iii) An amended and restated subsidiary guaranty in
substantially the form of Exhibit D-2 (together with each
other guaranty delivered pursuant to 5.01(o), in each case as
amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Subsidiary Guaranty"), duly
executed by the Guarantors (other than Parent).
(iv) (A) An amended and restated security agreement
in substantially the form of Exhibit E-1 (together with each
other security agreement delivered pursuant to 5.01(o), in
each case as amended, supplemented or otherwise modified from
time to time in accordance with its terms, the "Security
Agreement"), duly executed by each Loan Party, together with:
(1) evidence that (x) certificates
representing the Pledged Shares referred to in the
Security Agreement, accompanied by undated stock
powers executed in blank, and (y) instruments
evidencing the Pledged Indebtedness referred to in
the Security Agreement, duly endorsed in blank, have
been delivered to the Collateral Agent,
(2) duly executed proper financing
statements, if any, to be filed under the Uniform
Commercial Code of all jurisdictions that the
Collateral Agent may deem necessary or desirable in
order to maintain the perfection and priority of the
Liens existing under the Security Agreement, covering
the Collateral described in the Security Agreement,
(3) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement, if any, that the Collateral Agent
may reasonably deem necessary or desirable in order
to maintain the perfection and priority of the Liens
existing thereunder,
(4) confirmation of the insurance required
to be maintained by the terms of the Security
Agreement,
(5) evidence that the Lockbox Letters
referred to in the Security Agreement, have been duly
executed by each Lockbox Bank referred to in the
Security Agreement,
47
(6) confirmation that such action that the
Collateral Agent may deem necessary or desirable in
order to maintain the perfection and priority of the
Liens on the capital stock held by any Loan Party in
any of its Foreign Subsidiaries has been taken, and
(7) evidence that all other action that the
Collateral Agent may reasonably deem necessary or
desirable in order to maintain the perfection and
priority of the Liens existing under the Security
Agreement has been taken.
(B) An amended and restated trademark, patent and
copyright security agreement in substantially the form of
Exhibit E-2 (together with each other trademark, patent and
copyright security agreement delivered pursuant to Section
5.01(o), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Amended and Restated Trademark, Patent and Copyright Security
Agreement"), duly executed by each of the parties indicated on
the signature pages thereof, together with evidence that all
other action, if any, that the Collateral Agent may deem
necessary or desirable in order to maintain the perfection and
priority of the Liens existing under the Amended and Restated
Trademark, Patent and Copyright Security Agreement has been
taken.
(v) An amended and restated intercreditor agreement
in substantially the form of Exhibit F (as amended,
supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), duly executed by the ASCO Parties
(as defined therein).
(vi) Certified copies of the resolutions of the Board
of Directors of the Borrower and each other Loan Party
approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement, the Notes and each other Loan Document.
(vii) A copy of a certificate of the Secretary of
State of the jurisdiction of incorporation of each Loan Party,
dated reasonably near the Effective Date, listing the charter
of such Loan Party and each amendment thereto on file in his
office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter on file in his office,
(B) such Loan Party has paid all franchise taxes to the date
of such certificate and (C) such Loan Party is duly
incorporated and in good standing under the laws of such
jurisdiction.
(viii) A certificate of the Borrower and each other
Loan Party, signed on behalf of the Borrower and such other
Loan Party by its President or a Vice President and its
Secretary or any Assistant Secretary, dated the Effective Date
(the statements made in which certificate shall be true on and
as of the Effective Date), certifying as to (A) the absence of
any amendments to the charter of the Borrower or such other
Loan Party since the Effective Date of the Secretary of
State's certificate referred to in Section 3.01(g)(vii), (B) a
true and correct copy of the by-laws of the Borrower and such
other Loan Party as in
48
effect on the date of the initial Borrowing, (C) the due
incorporation and good standing of the Borrower and such other
Loan Party as a corporation organized under the laws of the
applicable jurisdiction, and the absence of any proceeding for
the dissolution or liquidation of the Borrower or such other
Loan Party, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on
and as of the Effective Date and (E) the absence of any event
occurring and continuing, or resulting from the initial
Borrowing, that constitutes a Default.
(ix) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying
the names and true signatures of the officers of the Borrower
and such other Loan Party authorized to sign this Agreement
and each other Loan Document to which they are or are to be
parties and the other documents to be delivered hereunder and
thereunder.
(x) Certificates, in substantially the form of
Exhibit G, attesting to the Solvency, after giving effect to
the transactions contemplated hereby, of each Loan Party, from
the chief financial officer or treasurer of such Loan Party.
(xi) Certified copies of all Material Contracts.
(xii) A favorable opinion of Davis, Polk & Wardwell,
New York counsel for the Loan Parties, in substantially the
form of Exhibit H-1 hereto and as to such other matters as any
Restatement Lender through the Agents may reasonably request.
(xiii) A favorable opinion of Skadden, Arps, Slate,
Meagher & Flom, California counsel for the Loan Parties, in
substantially the form of Exhibit H-2 hereto and as to such
other matters as any Restatement Lender through the Agents may
reasonably request.
(xiv) A favorable opinion of Stanley Silverstein,
Esq., general counsel of each of the Loan Parties, in
substantially the form of Exhibit H-3 hereto and as to such
other matters as any Restatement Lender through the Agents may
reasonably request.
(xv) A favorable opinion of Amster, Rothstein &
Ebenstein, intellectual property counsel to the Loan Parties,
in substantially the form of Exhibit H-4 hereto and as to such
other matters as any Restatement Lender through the Agents may
reasonably request.
(xvi) A favorable opinion of Shearman & Sterling,
counsel for the Agents, in form and substance satisfactory to
the Agents.
(xvii) An Assignment of Life Insurance Policy,
assigned by the Borrower to the Collateral Agent for the
benefit of the Secured Parties.
49
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance and other than a Revolving Credit Advance made by a Lender
pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
initial Borrowing on the Effective Date), and the right of the Borrower to
request a Swing Line Borrowing or the issuance of Letters of Credit, shall be
subject to the further conditions precedent that on the date of such Borrowing
or issuance (a) the following statements shall be true (and each of the giving
of the applicable Notice of Borrowing, Notice of Swing Line Borrowing or Notice
of Issuance and the acceptance by the Borrower of the proceeds of such Borrowing
or of such Letter of Credit shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing or issuance such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or
issuance, before and after giving effect to such Borrowing or issuance
and to the application of the proceeds therefrom, as though made on and
as of such date other than any such representations or warranties that,
by their terms, refer to a date other than the date of such Borrowing
or issuance;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
(iii) if the proceeds of such Advances are to be used to pay
dividends or make loans to Parent for purposes of repurchasing Series A
Warrants pursuant to the Warrant Purchase Agreement, certificates in
substantially the form of Exhibit G, attesting to the solvency of
Parent, the Borrower and each other Loan Party of the Borrower, from
the chief financial officer or treasurer of the Borrower or such
subsidiary, as applicable, have been delivered;
and (b) the Documentation Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender or the Fronting Bank through the
Documentation Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Restatement Lender shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Restatement
Lenders unless an officer of the Administrative Agent or the Documentation Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Restatement Lender prior to the Effective Date
specifying its objection thereto and such Restatement Lender shall not have made
available to the Paying Agent such Lender's ratable portion of such Borrowing.
50
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Parent and the
Borrower. Each of Parent and the Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse Effect and
(iii) has all requisite corporate power and authority to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding
capital stock of the Borrower has been validly issued, is fully paid
and non-assessable and is owned by Parent free and clear of all Liens,
except those created by the Collateral Documents and, prior to the
Effective Date, those securing Obligations in respect of the Existing
Credit Agreement.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
Effective Date (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the Effective Date and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the Effective Date. All of the outstanding capital
stock of all of such Subsidiaries has been validly issued, is fully
paid and non-assessable and is owned by such Loan Party or one or more
of its Subsidiaries free and clear of all Liens, except those created
by the Collateral Documents and, prior to the Effective Date, those
securing Obligations in respect of the Existing Credit Agreement. Each
such Subsidiary (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes and each other Loan Document to which it
is or is to be a party, and the consummation of the transactions
contemplated hereby and thereby, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party's charter or by-laws, (ii)
violate any law (including, without limitation, the Securities Exchange
Act of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation X of the Board of Governors
of the Federal Reserve System), order, writ, judgment,
51
injunction, decree, determination or award, (iii) so long as the
conditions set forth in Section 3.01(b) shall be satisfied prior to or
simultaneously with the making of the initial Advances hereunder,
conflict with or result in the breach of, or constitute a default
under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created by the Collateral Documents, result in or
require the creation or imposition of any Lien upon or with respect to
any of the properties of any Loan Party or any of its Subsidiaries. No
Loan Party or any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which is or would be reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes or any other Loan Document to which it is or is to
be a party, or for the consummation of the transactions contemplated
hereby and thereby, (ii) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by any Facility Agent or Lender of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents.
(e) This Agreement has been, and each of the Notes and each
other Loan Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement
is, and each of the Notes and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance
with its terms except to the extent that enforceability thereof may be
limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights generally.
(f) The Consolidated balance sheets of Parent and its
Subsidiaries as at July 1, 1995, and the related Consolidated
statements of operations, stockholders' equity (deficit) and cash flow
of Parent and its Subsidiaries for the fiscal years then ended,
accompanied by an opinion of Ernst & Young, independent public
accountants, and the Consolidated balance sheet of Parent and its
Subsidiaries as at December 30, 1995, and the related Consolidated
statements of operations, stockholders' equity (deficit) and cash flow
of Parent and its Subsidiaries for the six months then ended, duly
certified by the chief financial officer of Parent, copies of which
have been furnished to each Lender, fairly present, subject, in the
case of said balance sheet as at December 30, 1995, and said statements
of operations, stockholders' equity (deficit) and cash flow for the six
months then ended, to year-end audit adjustments, the Consolidated
financial condition of Parent and its Subsidiaries as at such dates and
the Consolidated results of the operations of Parent and its
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and since July 1, 1995, there has been no Material Adverse
Change.
52
(g) The Consolidated forecasted balance sheets and statements
of operations, stockholders' equity (deficit) and cash flows of Parent
and its Subsidiaries delivered to the Lenders pursuant to Section
5.03(e) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and represented, at
the time of delivery, the Borrower's best estimate of its future
financial performance, provided, however, that such forecasts do not
constitute a guaranty of future financial performance.
(h) No written information, exhibit or report furnished by any
Loan Party to any Facility Agent or Lender in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or, when
taken together with all other such information, exhibits and reports so
furnished, omitted to state a material fact necessary to make the
statements made therein not misleading (after giving effect to any
supplemental information that is furnished to such Facility Agent or
Lender which updates, amends or modifies the information set forth
therein).
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) purports to affect
the legality, validity or enforceability of this Agreement, any Note or
any other Loan Document or the consummation of the transactions
contemplated hereby or (ii) except as set forth on Schedule 4.01(i)
(the "Disclosed Litigation"), is or would be reasonably likely to have
a Material Adverse Effect. There has been no adverse change in the
status, or financial effect on any Loan Party or any of their
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 4.01(i) on the Effective Date or except as has been disclosed
to the Facility Agents and the Lenders.
(j) No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (other than (i) as
permitted in Section 5.02(g) and (ii) to the extent applicable, in
connection with an acquisition of a company, so long as (x) the board
of directors of such company shall have approved such acquisition at
the time such acquisition is first publicly announced, (y) if such
company shall have been soliciting bids for its acquisition, the board
of directors of such company shall not have determined either to accept
no offer or to accept an offer other than the Borrower's offer or (z)
if such company shall not have been soliciting bids for its acquisition
or if the board of directors of such company shall have solicited bids
for its acquisition but shall have initially determined either to
accept no offer or to accept an offer other than a Borrower's offer,
the existence, amount and availability for the acquisition of such
company of the Commitments hereunder shall not have been disclosed,
orally or in writing, to such company or its advisors, provided, that
the public filing of this Agreement shall not be deemed to be
disclosure of the Commitments hereunder to such company or its
advisors, until after such time as the board of directors of such
company shall have approved such acquisition by the Borrower and so
long as, in any case, such acquisition is otherwise permitted
hereunder).
53
(k) 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 Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock except as otherwise permitted in Section
4.01(j) and other than to pay dividends or make a loan by or from the
Borrower to Parent for the repurchase by Parent of the Series A
Warrants pursuant to the Warrant Purchase Agreement as in effect on the
Effective Date.
(l) Following application of the proceeds of each Advance, not
more than 25% of the value of the assets (either of the Borrower only
or of the Borrower and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or 5.02(e) or subject to
any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender relating to Debt
within the scope of Section 6.01(e) will be Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans with
respect to any employees of any Loan Party or any of its Subsidiaries.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates.
(o) Schedule B (Actuarial Information) to the 1995 annual
report (Form 5500 Series) for each Plan of any Loan Party or any of its
ERISA Affiliates, copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders, is complete and accurate
and fairly presents the funding status of such Plan as of the date of
such report, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(p) Neither any Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(q) Neither any Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of any Loan Party
or any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV
of ERISA, and no such Multiemployer Plan is reasonably expected to be
in reorganization or to be terminated, within the meaning of Title IV
of ERISA.
(r) As of the Effective Date, the aggregate annualized cost
(including, without limitation, the cost of insurance premiums) with
respect to post-retirement benefits under Welfare Plans for which the
Loan Parties and their Subsidiaries are liable does not exceed
$1,000,000.
(s) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that is or would be
reasonably likely to have a Material Adverse Effect.
54
(t) Except as described on Schedule 4.01(t), the operations
and properties of each Loan Party and each of its Subsidiaries comply
with all applicable Environmental Laws and all Environmental Permits
have been obtained and are in effect for the operations and properties
of each Loan Party and its Subsidiaries and each Loan Party and its
Subsidiaries are in compliance with all such Environmental Permits,
except for such noncompliance or failure to have obtained Environmental
Permits as would not be reasonably likely to have a Material Adverse
Effect individually or in the aggregate. No circumstances exist that
are or would be reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries
or any of their properties or (ii) cause any such property to be
subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law, that, in each case, could
individually or in the aggregate have a Material Adverse Effect.
(u) Except as described on Schedule 4.01(t), none of the
properties of any Loan Party or any of its Subsidiaries is listed or,
to the Borrower's knowledge, proposed for listing on the National
Priorities List under CERCLA or any analogous state list of sites
requiring investigation or cleanup or is adjacent to any such property,
and no underground storage tanks, as such term is defined in 42 U.S.C.
ss. 6991, are located on any property of any Loan Party or any of its
Subsidiaries.
(v) Except as described on Schedule 4.01(t), neither any Loan
Party nor any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is
listed or proposed for listing on the National Priorities List under
CERCLA or any analogous state list, Hazardous Materials have not been
generated, used, treated, handled, stored or disposed of on, or
released or transported to or from, any property of any Loan Party or
any of its Subsidiaries, except in material compliance with all
applicable Environmental Laws and Environmental Permits, and all other
wastes generated at any such properties have been disposed of in
compliance with all Environmental Laws and Environmental Permits.
(w) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that is or would be reasonably likely to have a Material
Adverse Effect.
(x) The Loan Parties are the legal and beneficial owners of
the Collateral free and clear of any Lien, except for the security
interest created by the Collateral Documents, Permitted Liens, such
other Liens as are described on Schedule 4.01(x) and, prior to the
Effective Date, Liens securing Obligations in respect of the Existing
Credit Agreement. The Collateral Documents and the pledge and
assignment of the Collateral pursuant thereto create a valid and
perfected first priority security interest in the Collateral, securing
the payment of the Obligations of the Loan Parties under the Loan
Documents, and all filings and other actions necessary or desirable to
maintain the perfection and priority of such security interest have
been duly taken.
(y) Each of Parent and each of its Subsidiaries has filed all
income tax returns (federal, state, local and foreign) required to be
filed by it, and all other material tax returns (federal, state, local
and foreign), and has paid or caused to be paid all taxes shown thereon
to be due for the periods covered thereby, including interest and
penalties, or provided reserves for
55
payment thereof to the extent required under GAAP, other than taxes
being contested in good faith and by appropriate proceedings with
respect to which adequate reserves in accordance with GAAP have been
established and except where failure to so file or pay would not have a
Material Adverse Effect.
(z) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by the Borrower,
nor the consummation of the other transactions contemplated hereby,
will violate any provision of such Act or any rule, regulation or order
of the Securities and Exchange Commission thereunder.
(aa) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(bb) Set forth on Schedule 4.01(bb) hereto is a complete and
accurate list, as of the Effective Date, of all real property owned by
any Loan Party or any of its Subsidiaries, showing as of the Effective
Date the street address, county or other relevant jurisdiction, state,
record owner and book and estimated fair value thereof. Each such Loan
Party or Subsidiary has good, marketable and insurable fee simple title
to such real property, free and clear of all Liens, other than Liens
created or permitted by the Loan Documents and, prior to the Effective
Date, those securing Obligations in respect of the Existing Credit
Agreement.
(cc) Set forth on Schedule 4.01(cc) hereto is a complete and
accurate list, as of the Effective Date, of all leases of real property
under which any Loan Party or any of its Subsidiaries is the lessee
and, showing as of the Effective Date the street address, county or
other relevant jurisdiction, state, lessor, lessee and expiration date
thereof. Each such lease is the legal, valid and binding obligation of
the lessor thereof, enforceable in accordance with its terms.
(dd) Set forth on Schedule 4.01(dd) hereto is a complete and
accurate list, as of the Effective Date, of all United States patents,
trademarks, trade names, service marks and registered copyrights, and
all applications therefor and licenses thereof, of each Loan Party or
any of its Subsidiaries, showing as of the Effective Date the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
ARTICLE V
COVENANTS OF PARENT AND THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, Parent and the Borrower will, unless the
Required Lenders shall otherwise consent in writing:
56
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime Control Act of
1970, except where the failure so to comply would not have a Material
Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each
of its Subsidiaries and all lessees and other Persons occupying its
properties to comply, in all material respects, with all Environmental
Laws and Environmental Permits applicable to its operations and
properties; obtain and renew all Environmental Permits necessary for
its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, to the extent required by applicable Environmental
Laws; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any action to the extent
that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with
respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates, and naming the Collateral Agent
as loss payee or additional insured, as appropriate; and maintain key
person life insurance on Linda J. Wachner in an amount not less than
$10,000,000, for the period from the Effective Date until the
Termination Date, with insurance carriers and pursuant to insurance
policies reasonably satisfactory to the Collateral Agent, which
policies shall at all times be subject to an Assignment of Life
Insurance Policy to the Collateral Agent for the benefit of the Secured
Parties.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises,
provided, however, that the Borrower and its Subsidiaries may
consummate any merger, liquidation or consolidation permitted under
Section 5.02(d) or 8.13.
(f) Visitation Rights. At any reasonable time and from time to
time, permit the Facility Agents or any of the Lenders or any agents or
representatives thereof, upon reasonable
57
notice to the Borrower, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent certified
public accountants; and at least once during each Fiscal Year, permit
the Collateral Agent, at the Borrower's expense, to conduct a field
examination of all Inventory and Accounts, and of the Borrower's books
and records, accounting and inventory systems and related matters.
(g) Preparation of Environmental Reports. During the
continuance of a Default or upon the reasonable belief of the
Collateral Agent that a potential material environmental risk may exist
with respect to any properties of the Borrower or any of its
Subsidiaries, at the request of the Collateral Agent from time to time,
provide to the Lenders within 60 days after such request, at the
expense of the Borrower, (i) in the event of a Default, an
environmental site assessment report for all of its and its
Subsidiaries' properties or (ii) in the event of a potential material
environmental risk, a report on the risk described in such request,
prepared by an environmental consulting firm acceptable to the Agents,
indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; provided
that if such report is not provided within the time referred to above,
the Collateral Agent may retain an environmental consulting firm to
prepare such report at the expense of the Borrower, and the Borrower
hereby grants and agrees to cause any Subsidiary which owns any
property described in such request to grant at the time of such
request, to the Agents, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject
to the rights of tenants, to enter onto their respective properties to
undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or cancelled, notify the Agents of any default by any
party with respect to such leases and cooperate with the Agents in all
respects to cure any such default, and cause each of its Subsidiaries
to do so, in each case except where failure to do so would not be
reasonably likely to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, (i) other than with respect to
transactions among Parent and its Subsidiaries, all transactions
otherwise permitted under the Loan Documents with any of their
Affiliates on terms
58
that are fair and reasonable and no less favorable to Parent, the
Borrower or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate and (ii) with
respect to transactions among the Borrower and its Domestic
Subsidiaries, on the one hand, and the Foreign Subsidiaries, on the
other hand, all transactions otherwise permitted under the Loan
Documents on terms that are no less favorable to Parent and its
Domestic Subsidiaries than they would obtain in a comparable
arm's-length transaction with a Person not an Affiliate, provided,
however, that Parent and its Subsidiaries shall not engage in any such
transaction that would render Parent or any such Subsidiary insolvent
or cause a default under, or a breach of, any material contract to
which Parent or such Subsidiary is a party.
(l) Performance of Material Contracts. Perform and observe in
all material respects the terms and provisions of each Material
Contract to be performed or observed by it, maintain each such Material
Contract in full force and effect (except to the extent such Material
Contract lapses or expires by its terms), enforce each such Material
Contract in all material respects in accordance with its terms, take
all such action to such end as may be from time to time requested by
the Agents and, upon the request of the Agents, make to each other
party to each such Material Contract such demands and requests for
information and reports or for action as Parent or the Borrower is
entitled to make under such Material Contract, and cause each of its
Subsidiaries to do so.
(m) Cash Concentration Accounts. Maintain main cash
concentration accounts with the Collateral Agent and Lockbox Accounts
into which proceeds of Collateral are paid in accordance with the terms
of the Security Agreement with the Collateral Agent or one or more
banks acceptable to the Agents that have accepted the assignment of
such accounts to the Collateral Agent pursuant to the Security
Agreement.
(n) Implied Debt Rating. From and after the date on which it
shall have obtained an Implied Debt Rating, no less frequently than
once during every Fiscal Year, obtain from S&P (or, if unavailable,
from Moody's) an update of the Implied Debt Rating and deliver a letter
to the Agents from S&P (or Moody's, as the case may be) advising the
Agents of the current Implied Debt Rating.
(o) Covenant to Guarantee Obligations and to Give Security.
(i) At such time as any new direct or indirect Domestic Subsidiary is
formed or acquired, cause such new Subsidiary to (A) within 10 days
thereafter or such later time as the Borrower and the Collateral Agent
shall agree (but in any event no later than 30 additional days
thereafter), duly execute and deliver to the Collateral Agent
guarantees, in substantially the form of Exhibit D-2 and otherwise in
form and substance reasonably satisfactory to the Collateral Agent,
guaranteeing the Borrower's Obligations under the Loan Documents and
(B) within 30 days thereafter or such later time as the Borrower and
the Collateral Agent shall agree (but in any event no later than 30
additional days thereafter), deliver to the Collateral Agent a signed
copy of a favorable opinion, addressed to the Collateral Agent, of
counsel for the Loan Parties acceptable to the Collateral Agent as to
the documents contained in clause (A) above, as to such guarantees
being legal, valid and binding obligations of such Subsidiaries
enforceable in accordance with their terms and as to such other matters
as the Collateral Agent may reasonably request.
59
(ii) Prior to the Collateral Release Date, and at the expense
of the Borrower, at such time as any new direct or indirect Subsidiary
is formed or acquired (A) within 10 days thereafter or such later time
as the Borrower and the Collateral Agent shall agree (but in any event
no later than 30 additional days thereafter), furnish, or cause such
new Subsidiary to furnish, as the case may be, to the Collateral Agent
a description of the real and personal properties of such new
Subsidiary in detail satisfactory to the Collateral Agent, (B) within
30 days thereafter or at such later time as the Borrower and the
Collateral Agent shall agree (but in any event no later than 30
additional days thereafter), duly execute and deliver or cause such new
Subsidiary or the Person acquiring such assets to duly execute and
deliver, as the case may be, to the Collateral Agent pledges,
assignments and other security agreements, in substantially the form of
Exhibits E-1 and E-2 or otherwise in form and substance reasonably
satisfactory to the Collateral Agent, securing payment of all the
Obligations of the Loan Parties under the Loan Documents and
constituting Liens on all such properties, (C) within 45 days
thereafter or at such later time as the Borrower and the Collateral
Agent shall agree (but in any event no later than 30 additional days
thereafter), take, or cause such new Subsidiary to take, as the case
may be, whatever action (including, without limitation, the filing of
Uniform Commercial Code financing statements, the giving of notices and
the endorsement of notices on title documents) may be necessary or
advisable in the reasonable opinion of the Collateral Agent to vest in
the Collateral Agent (or in any representative of the Collateral Agent
designated by it) valid and subsisting Liens on the properties
purported to be subject to the security agreements delivered pursuant
to this Section 5.01(o), enforceable against all third parties in
accordance with their terms, (D) within 60 days thereafter or at such
later time as the Borrower and the Collateral Agent shall agree (but in
any event no later than 30 additional days thereafter), deliver, or
cause such new Subsidiary to deliver, as the case may be, to the
Collateral Agent a signed copy of a favorable opinion, addressed to the
Collateral Agent, of counsel for the Loan Parties acceptable to the
Collateral Agent as to the matters contained in clauses (B) and (C)
above, as to such security agreements being legal, valid and binding
obligations of the Borrower and its Subsidiaries enforceable in
accordance with their terms and as to such other matters as the
Collateral Agent may reasonably request and (E) at any time and from
time to time, promptly execute and deliver, or cause such new
Subsidiary to execute and deliver, as the case may be, any and all
further instruments and documents and take all such other action as the
Collateral Agent may deem desirable in obtaining the full benefits of,
or in preserving the Liens of, such security agreements, subject,
however, to the provisions of clause (iii) below; provided, however,
that no Foreign Subsidiary of Parent shall be required to comply with
this Section 5.01(o); provided further that neither Parent nor any of
its Subsidiaries shall be required to pledge to the Collateral Agent
for the benefit of the Secured Parties more than 66-2/3% of the shares
of capital stock held by it in any of its Foreign Subsidiaries.
(iii) Prior to the Collateral Release Date, with respect to
the shares of capital stock of any Foreign Subsidiary that have been
pledged to the Collateral Agent for the benefit of the Secured Parties,
within 60 days after such shares are pledged to the Collateral Agent
(or such later time as the Borrower and the Collateral Agent shall
agree), take, and cause each of its Subsidiaries to take, such action
as may be necessary (in addition to delivery to the Collateral Agent of
the certificates, if any, representing such shares) under the laws of
the jurisdiction under which such Foreign Subsidiary is organized to
perfect and protect the security interest granted to the Collateral
60
Agent in such shares, provided, however, that if such action would
require undue expense, such action shall only be required to be taken
at such time as the Investment by Parent, the Borrower and any of their
respective Subsidiaries in such Foreign Subsidiary equals or exceeds
$1,000,000.
(iv) Upon the request of the Collateral Agent, prior to the
Collateral Release Date, and at the expense of the Borrower, (A) within
30 days after such request, duly execute and deliver or cause its
Subsidiaries to duly execute and deliver to the Collateral Agent
mortgages on real property owned by the Parent or its Subsidiaries
having a book value of $1,000,000 or more, as specified by and in form
and substance satisfactory to the Collateral Agent, securing payment of
all the Obligations of the Loan Parties under the Loan Documents and
constituting Liens on all such properties, (B) within 45 days after
such request, take, or cause its Subsidiaries to take, whatever action
(including, without limitation, the recording of mortgages, the filing
of Uniform Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) may be necessary or
advisable in the opinion of the Collateral Agent to vest in the
Collateral Agent (or in any representative of the Collateral Agent
designated by it) valid and subsisting Liens on the properties
purported to be subject to the mortgages delivered pursuant to this
Section 5.01(o), enforceable against all third parties in accordance
with their terms, (C) within 60 days after such request, deliver to the
Collateral Agent a signed copy of a favorable opinion, addressed to the
Collateral Agent, of counsel for the Loan Parties acceptable to the
Collateral Agent as to the matters contained in clauses (A) and (B)
above, as to such mortgages being legal, valid and binding obligations
of Parent and its Subsidiaries enforceable in accordance with their
terms and as to such other matters as the Collateral Agent may
reasonably request, (D) as promptly as practicable after such request,
deliver to the Collateral Agent American Land Title Association surveys
in form and substance, and by a land surveyor, acceptable to the
Collateral Agent and American Land Title Association Lender's Extended
title insurance policies, in form and substance, with endorsements and
in amount, and issued by insurers, acceptable to the Collateral Agent,
as to each parcel of real property subject to such request and (E) at
any time and from time to time, promptly execute and deliver any and
all further instruments and documents and take all such other action as
the Collateral Agent may deem desirable in obtaining the full benefits
of, or in preserving the Liens of, such mortgages.
(p) Conditions Subsequent. Immediately after the repurchase
thereof, cause to be retired or cancelled all of the Series A Warrants
and perform such acts as may be required to properly effect such
retirement or cancellation.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, neither Parent nor the Borrower will, at any
time, without the written consent of the Required Lenders or, if required under
Section 8.01, of all of the Lenders (other than any Lender which is, at such
time, a Defaulting Lender):
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file, or permit any of its
Subsidiaries to sign or file, under the
61
Uniform Commercial Code of any jurisdiction, a financing statement that
names Parent or any of its Subsidiaries as debtor, or sign, or permit
any of its Subsidiaries to sign, any security agreement authorizing any
secured party thereunder to file such financing statement, or assign,
or permit any of its Subsidiaries to assign, any accounts or other
right to receive income, excluding, however, from the operation of the
foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) existing Liens set forth in Schedule 4.01(x)
hereof and any renewals, extensions or replacements thereof,
but not any increase in the amount of Debt secured thereby and
not any extension thereof to other property;
(iv) purchase money mortgages or other purchase money
Liens (including, without limitation, Capitalized Leases) in
favor of non-Affiliates of Parent and its Subsidiaries upon
any fixed or capital assets hereafter acquired by the Borrower
or any other Loan Party constituting real property interests
or related machinery and equipment, or purchase money
mortgages (including, without limitation, Capitalized Leases)
on any such assets hereafter acquired or existing at the time
of acquisition of such assets by the Borrower or any such
other Loan Party, whether or not assumed, so long as (A) any
such Lien does not extend to or cover any other asset of
Parent or any of its Subsidiaries, (B) such Lien secures the
obligation to pay the purchase price of such asset (or the
obligation under such Capitalized Leases), interest thereon
and other customary incidental obligations relating thereto
only and (C) the principal amount outstanding from time to
time (or in the case of Capitalized Leases, notional principal
amount) of the aggregate Debt secured by all such purchase
money Liens (and Capitalized Leases) shall not exceed the
amounts specified in Section 5.02(b)(iii);
(v) Liens in favor of non-Affiliates of Parent
covering the assets of Foreign Subsidiaries (other than
Canadian Subsidiaries) solely to secure Permitted Foreign Debt
Issuances;
(vi) Liens securing Obligations of the Borrower under
the Trade L/C Facility; provided, however, such Liens shall
cover only the goods and documents for which a trade letter of
credit has been issued under the Trade L/C Facility, and shall
not extend to cover any other assets of any Loan Party or any
of its Subsidiaries; and
(vii) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the
Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower; provided, that such Liens were not
created in contemplation of such merger, consolidation or
investment and do not extend to any assets other than those of
the Person merged into or consolidated with the Borrower or
such Subsidiary or acquired by the Borrower or such
Subsidiary.
62
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) Debt under the Loan Documents;
(ii) unsecured Current Liabilities incurred in the
ordinary course of business other than unsecured Current
Liabilities for Indebtedness for Borrowed Money or which are
evidenced by bonds, debentures, notes or other similar
instruments;
(iii) Debt secured by Liens permitted by (A) Section
5.02(a)(ii), the outstanding principal amount of which shall
not exceed $10,000,000 outstanding at any time and (B) Section
5.02(a)(iv), the outstanding principal amount of which Debt
shall not exceed at any time (i) $25,000,000 from the
Effective Date until September 30, 1997, (ii) $30,000,000 from
September 30, 1997 until September 30, 1998, (iii) $35,000,000
from September 30, 1998 until September 30, 1999, (iv)
$40,000,000 from September 30, 1999 until September 30, 2000
and (v) $45,000,000 from September 30, 2000 until the
Termination Date;
(iv) Debt to the extent expressly permitted by
Section 5.02(c) hereof;
(v) Debt of the Borrower in respect of (A) interest
rate Hedge Agreements in an aggregate notional amount not to
exceed $150,000,000 at any time outstanding provided that the
maximum term of such Hedge Agreements shall not exceed five
years and that the aggregate notional amount of Debt in
respect of such interest rate Hedge Agreements does not exceed
the aggregate amount of Debt under the Loan Documents at the
time the Borrower enters into such interest rate Hedge
Agreement and (B) foreign exchange Hedge Agreements in an
aggregate notional amount not to exceed $50,000,000 at any
time outstanding;
(vi) Debt of (A) the Borrower owed to any Guarantor
to the extent permitted by Section 5.02(f)(i), (ii), (iii) and
(iv), provided that such Debt owed shall have been pledged to
the Lenders pursuant to the Security Agreement, and (B)
Parent, any other Guarantor or Foreign Subsidiary owing to the
Borrower or any other Guarantor to the extent permitted by
Section 5.02(f)(i), (ii), (iii) and (iv), provided that such
Debt of any Guarantor shall have been pledged to the Lenders
pursuant to the Security Agreement;
(vii) Debt of Foreign Subsidiaries in respect of
Permitted Foreign Debt Issuances; provided, however, that the
aggregate outstanding principal amount of all such Debt owed
by all Foreign Subsidiaries to non-Affiliates of Parent after
giving effect to such issuance shall not exceed at any time
(i) $25,000,000 from the Effective Date until September 30,
1997, (ii) $30,000,000 from September 30, 1997 until September
30, 1998, (iii) $35,000,000 from September 30, 1998 until
September 30, 1999, (iv) $40,000,000 from September 30, 1999
until September 30, 2000 and (v) $45,000,000 from September
30, 2000 until the Termination Date (or, at the time of
issuance of such Debt, the foreign currency equivalent thereof
for any such issuance in a foreign currency (net of any
foreign
63
currency hedge coverage available to the Borrower or such
Foreign Subsidiary and which can be netted in accordance
with GAAP) at such time);
(viii) Debt of the Borrower under any revolving
credit or similar facility that constitutes ASCO Debt;
provided, however, that the aggregate principal amount of all
such Debt shall not exceed $50,000,000 at any time
outstanding; provided further, however, that the aggregate
principal amount of such Debt, together with the aggregate
amount of Debt of the Borrower pursuant to Section
5.02(b)(xiv) shall not exceed at any time outstanding (i) from
the Effective Date until September 30, 1997, $70,000,000 and
(ii) thereafter, $80,000,000;
(ix) unsecured Debt of the Borrower or any Domestic
Subsidiary incurred in the ordinary course of business for the
deferred purchase price of property or services, maturing
within one year from the date created; provided, however, that
the aggregate amount of all such Debt under this clause (ix)
shall not exceed $10,000,000 at any one time outstanding for
the Borrower and such Domestic Subsidiaries;
(x) Debt of any Canadian Subsidiary owing to the
Borrower in an aggregate principal amount outstanding at any
time not to exceed $10,000,000;
(xi) indorsements of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business;
(xii) existing Debt listed on Schedule 5.02(b) hereto
and any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, any such existing Debt,
provided that the terms of any such extending, refunding or
refinancing Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are otherwise
permitted by the Loan Documents and provided further that the
principal amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed, as a result
of or in connection with such extension, refunding or
refinancing;
(xiii) Debt (except for Guarantee Obligations) of the
Parent in an amount not to exceed $100,000,000; provided,
however, that (A) the Net Cash Proceeds thereof are used
promptly to prepay the Facilities in accordance with Section
2.05(b)(i) hereof and (B) such Debt shall be unsecured and
subordinated to the repayment in full of the Facilities, shall
not have a maturity date nor any scheduled amortization of
principal earlier than March 31, 2001 and shall be under terms
reasonably acceptable to the Required Lenders;
(xiv) Debt of the Borrower (A) under the Trade L/C
Facility in an aggregate principal amount not to exceed at any
time outstanding (i) from the Effective Date until September
30, 1997, $20,000,000 and (ii) thereafter, $25,000,000 and (B)
under the Trade Refinancing Facility in an aggregate amount
not to exceed (i) from the Effective Date until September 30,
1997, $20,000,000 and (ii) thereafter, $25,000,000; provided,
however, that the aggregate principal amount of such Debt,
together with the aggregate amount of Debt of the Borrower
pursuant to Section 5.02(b)(viii) shall not exceed at any
64
time outstanding (i) from the Effective Date until September
30, 1997, $70,000,000 and (ii) thereafter, $80,000,000;
provided further, that the Trade Credit Intercreditor
Agreement shall have been duly executed and delivered by the
Trade Refinancing Lenders or their authorized representatives
and by the Collateral Agent with the consent of the Required
Lenders prior to the creation, assumption or incurrence of
such Debt;
(xv) Guarantee Obligations of the Borrower or Parent
in an aggregate amount not to exceed $25,000,000 at any time
outstanding; and
(xvi) Debt of any Person that becomes a Subsidiary of
the Borrower after the date hereof in accordance with the
terms of Section 5.02(f) that is existing at the time such
Person becomes a Subsidiary of the Borrower; provided that the
aggregate amount of such Debt shall not exceed that amount
permitted under Section 5.02(f)(ii).
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lease Obligations, other than pursuant to (i)
leases existing on the date hereof and any extensions, renewals or
replacements thereof or (ii) leases (including all leases described in
clause (i) above) that do not in the aggregate require the Borrower and
its Subsidiaries to make payments in any Fiscal Year in excess of the
amounts set forth below:
Fiscal Year Annual Payments
----------- ---------------
1996 $25,000,000
1997 $35,000,000
1998 $40,000,000
1999 $45,000,000
2000
and thereafter $45,000,000
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that (i) any Domestic Subsidiary of the Borrower may
merge into or consolidate with any other Domestic Subsidiary of the
Borrower; provided that, in the case of any such consolidation, the
Person formed by such consolidation shall be a wholly owned Domestic
Subsidiary of the Borrower, (ii) any Foreign Subsidiary (other than a
Canadian Subsidiary) of the Borrower may merge into or consolidate with
any other Foreign Subsidiary (other than a Canadian Subsidiary) of the
Borrower; provided that, in the case of any such consolidation, the
Person formed by such consolidation shall be a wholly owned Foreign
Subsidiary of the Borrower, (iii) any of the Borrowers' Domestic
Subsidiaries may merge into the Borrower; provided, however, that in
each case, immediately after giving effect thereto, no event shall
occur and be continuing that constitutes a Default and, in the case of
any such merger to which the Borrower is a party, the Borrower is the
surviving corporation and (iv) after the Collateral Release Date, and
subject to the provisions of Section 8.13, Parent may consolidate with
or merge into the Borrower or the Borrower may consolidate with or
merge into Parent.
65
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of its
business;
(ii) sales of assets and properties of the Borrower
and its Subsidiaries no longer used or useful in the proper
conduct of their respective businesses having a value,
together with the value of all other such property of the
Borrower and its Subsidiaries so sold in the same Fiscal Year,
of not greater than $1,000,000;
(iii) sales of other assets, the higher of book value
and fair market value of which at the time of such sale does
not in the aggregate exceed the lesser of (A) 10% of the
aggregate amount of the book value of assets of the Borrower
at any time of determination and (B) $50,000,000 (less, in
each case, the trade-in value of all such other assets traded
in for replacement assets during such Fiscal Year and less the
amount of the proceeds from such other dispositions that are
expected to be and are used within ninety (90) days to acquire
replacement assets);
(iv) sales at not less than fair market value of the
assets identified on Schedule 5.02(e), such amount not to
exceed $2,000,000 (such assets being the "Checotah Assets");
(v) the sale or other disposition of assets to Parent
or any of its Subsidiaries to the extent permitted by Sections
5.01(k) and 5.02(f);
(vi) the sale or discount of accounts (A) owing by
Persons incorporated, residing or having their principal place
of business in the United States in an aggregate amount not
exceeding $5,000,000 in face amount per calendar year or (B)
that are past due by more than 90 days in an aggregate amount
not exceeding $5,000,000 in face amount per calendar year,
provided that the sale or discount of such accounts shall be
in the ordinary course of the Borrower's business and
consistent with prudent business practices; provided further,
that the Borrower may make a one time sale of accounts in an
aggregate amount not to exceed $15,000,000 during the period
from the Effective Date to the Termination Date, provided that
such sale shall be consistent with prudent business practices;
(vii) (A) the licensing by the Borrower of trademarks
and trade names with respect to those lines of business in
which the Borrower is engaged as of the date hereof for
consideration consisting of an upfront payment with respect
thereto and (B) all other licensing by the Borrower of
trademarks and trade names, provided in each case, that such
licensing shall take place on an arm's-length basis,
consistent with the provisions of the Amended and Restated
Trademark, Patent and Copyright Security Agreement; and
66
(viii) the sale or other disposition of assets for
fair value to entities in the business of arranging barter
transactions for consideration consisting of trade credits for
goods and services to be used by the Borrower and its
Subsidiaries in the ordinary course of business.
(f) Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment with respect to any Person
other than:
(i) Investments by the Borrower and the Guarantors in
any Person that (prior to such Investment) is the Borrower or
a Guarantor; provided, however, that:
(A) each such Investment which shall be made
other than in the form of equity shall be evidenced
by a promissory note that constitutes part of the
Collateral,
(B) such Investments shall not be made after
the continuance of a Default or if a Default would
result therefrom,
(C) the aggregate amount of loans and
advances made to Parent, other than those made
pursuant to clause (D) below, together with the
aggregate amount of dividends paid to Parent pursuant
to Section 5.02(g)(iii), shall not exceed those
amounts set forth in Section 5.02(g)(iii) and shall
be for those purposes set forth in Section
5.02(g)(iii), and
(D) the aggregate amount of loans and
advances made to Parent, other than those made
pursuant to clause (C) above, shall be made only to
the extent that the proceeds of such loans and
advances are applied to the making of Investments
permitted pursuant to Section 5.02(f)(ii).
(ii) Investments by Parent and its Subsidiaries in
Parent and its Subsidiaries outstanding on the date hereof and
additional Investments, together with Debt permitted under
Section 5.02(b)(xvi), in an aggregate amount invested from the
date hereof not to exceed the sum of (x) $50,000,000 and (y)
to the extent that the Borrower does not pay a dividend or
make a loan to Parent for the repurchase of any Series A
Warrants, additional Investments in an amount not to exceed
50% of the aggregate amount by which $44,000,000 exceeds the
aggregate amount of such dividends or loans; provided that the
amount of any one such additional Investment (together with
any Guarantee Obligations of the Borrower or Parent in
connection therewith) shall not exceed $25,000,000; provided,
however, that:
(A) in the case of any such Investment by a
Person in another Person, each such additional
Investment shall be made by means of a loan or
advance (and, if such additional Investment shall be
in a Domestic Subsidiary, shall be evidenced by a
promissory note that constitutes a part of the
Collateral) or in equity up to an aggregate amount of
all such additional equity Investments equal
67
to $10,000,000 (it being understood that for purposes
of this clause (A), an Investment shall not include
the purchase or acquisition of any capital stock,
warrants, rights, options, obligations, other
securities or the assets comprising a substantial
part or all of a business),
(B) immediately before and after giving
effect thereto, Parent and the Borrower shall be in
pro forma compliance, based on historical financial
statements, with the covenants contained in the Loan
Documents (including, without limitation, Section
5.04 (other than Section 5.04(e) to the extent (1)
Capital Expenditures were made by the Person in whom
the Investment permitted hereunder was made at a time
when such Person was not a Subsidiary of Parent and
(2) such Capital Expenditures were not otherwise made
in connection with such Investment)), taking into
account such adjustments as may reasonably be
required to reflect expenses not reasonably expected
to be incurred after such Investment is made,
(C) such additional Investments shall not be
made during the continuance of a Default or if a
Default would result therefrom,
(D) such additional Investments shall be in
activewear apparel manufacturing or wholesaling or
activewear apparel accessories manufacturing or
wholesaling businesses (or in related retail
businesses on a basis consistent with past
practices),
(E) in the case of any such Investment by a
Person in a Foreign Subsidiary or by any Person in a
joint venture, each such additional Investment,
together with any Guarantee Obligations of the
Borrower or Parent in connection therewith, shall not
exceed the sum of (i) $25,000,000 and (ii) to the
extent that the Borrower does not pay a dividend or
make a loan to Parent for the repurchase of any
Series A Warrants, 25% of the aggregate amount by
which $44,000,000 exceeds the aggregate amount of
such dividends or loans,
(F) the amount of Capital Expenditures
permitted in Section 5.04(e) plus the aggregate
amount of such additional Investments shall not
exceed $50,000,000 in any Fiscal Year of the
Borrower;
(iii) Investments made with common stock of Parent or
from the Net Cash Proceeds of any Capital Issuance of common
stock of Parent in activewear apparel manufacturing or
wholesaling or activewear apparel accessories manufacturing or
wholesaling businesses (or in related retail businesses on a
basis consistent with past practices), provided, however,
that:
(A) immediately before and after giving
effect thereto, no Default shall have occurred and be
continuing or would result therefrom,
68
(B) immediately before and after giving
effect thereto, Parent and the Borrower shall be in
pro forma compliance, based on historical financial
statements, with the covenants contained in the Loan
Documents (including, without limitation, Section
5.04 (other than Section 5.04(e) to the extent (1)
Capital Expenditures were made by the Person in whom
the Investment permitted hereunder was made at a time
when such Person was not a Subsidiary of Parent and
(2) such Capital Expenditures were not otherwise made
in connection with such Investment)), taking into
account such adjustments as may reasonably be
required to reflect expenses not reasonably expected
to be incurred after such Investment is made, and
(C) the business acquired shall be acquired
directly by Parent or one of its existing
Subsidiaries or shall become a new Subsidiary of
Parent,
(iv) Investments by Parent and its Subsidiaries in
their Subsidiaries consisting of the Net Cash Proceeds of any
Capital Issuance of common stock by Parent solely to the
extent necessary to effectuate the Investments permitted by
clause (iii) above;
(v) endorsement of negotiable instruments for deposit
or collection in the ordinary course of business;
(vi) Investments in Cash Equivalents;
(vii) Investments representing stock or obligations
issued to Parent or any of its Subsidiaries in settlement of
claims against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of
Parent or such Subsidiary;
(viii) the Guaranties;
(ix) Investments represented by the Cash Collateral
Account, the L/C Cash Collateral Account and the other bank
accounts permitted hereunder;
(x) loans or advances, not to exceed $2,000,000 in
the aggregate at any one time outstanding, to (A) employees of
the Borrower and its Subsidiaries as travel advances,
short-term loans or relocation expenses, and (B) to employees
and independent sales representatives as commission advances;
(xi) Investments representing the Debt of any Person
owing as a result of the sale by Parent or any of its
Subsidiaries in the ordinary course of business of its
products or services (on customary trade terms);
(xii) Investments evidenced by promissory notes
representing the unpaid purchase price of assets and property
of the Borrower and its Subsidiaries permitted to be sold (and
so sold) under Section 5.02(e); provided, however, that for
each such sale, the original principal amount of the
promissory note or notes representing the unpaid purchase
69
price for such sale shall not exceed fifteen percent (15%) of
the total purchase price therefor, with the remaining purchase
price therefor to be paid in cash; and
(xiii) Investments by the Borrower in Herman's
Sporting Goods, Inc. of 137 shares of common stock of Herman's
Sporting Goods, Inc.
(g) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any capital
stock of any Loan Party or any warrants, rights or options to acquire
such capital stock, now or hereafter outstanding, return any capital to
the stockholders of any Loan Party as such, make any distribution of
assets, capital stock, warrants, rights, options, obligations or
securities to stockholders of any Loan Party as such or issue or sell
any capital stock or any warrants, rights or options to acquire capital
stock of any Loan Party, or permit any of its Subsidiaries to do so,
except that:
(i) any Subsidiary of the Borrower may declare or pay
cash dividends to the Borrower or to any other wholly owned
Subsidiary of the Borrower which is its stockholder;
(ii) so long as no Default shall have occurred and be
continuing, or would result therefrom, Parent may (A) declare
and make any dividend payment or other distribution payable in
its common stock (including, without limitation, a stock
split); (B) at any time after (I) the Effective Date, declare
and make in any Fiscal Quarter any dividend payment or other
distribution in cash on its common stock or retire common
stock in an aggregate amount for all dividends, other
distributions and retirements for such Fiscal Quarter,
together with all dividends, other distributions and
retirements made in the immediately preceding three Fiscal
Quarters, not to exceed 15% of the cumulative Consolidated net
income of Parent and its Subsidiaries during the four Fiscal
Quarters immediately preceding the Fiscal Quarter in which
such dividend payment or other distribution is made or (II)
the date on which the Implied Debt Rating shall be BBB-,
declare and make in any Fiscal Quarter any dividend payment or
other distribution payable in cash on its common stock or
retire common stock in an aggregate amount for all dividends,
other distributions and retirements for such Fiscal Quarter,
together with all dividends, other distributions and
retirements made in the immediately preceding three Fiscal
Quarters, not to exceed 25% of the cumulative Consolidated net
income of Parent and its Subsidiaries during the period
beginning with the Fiscal Quarter ended immediately prior to
the date that is one year prior to such date on which the
Implied Debt Rating shall be BBB- and ending with the Fiscal
Quarter immediately preceding the Fiscal Quarter in which such
dividend payment or other distribution is made; (C) perform
its obligations or exercise its rights under the Series A
Warrants pursuant to the Warrant Purchase Agreement as in
effect as of the date hereof; (D) repurchase shares of its
common stock held by employees of the Borrower and its
Subsidiaries, provided that upon reissuance for cash of any
shares so repurchased to any employee of the Borrower, the
cash proceeds of such issuance shall immediately be
contributed by Parent to the common equity of the Borrower,
and provided further that the aggregate amount so used for the
repurchase of shares (X) from any one employee of the Borrower
or any of its Subsidiaries shall not
70
exceed $100,000 and (Y) from all employees shall not exceed
$200,000 (less any amounts contributed by Parent to the
Borrower in respect of shares previously repurchased by
Parent); (E) issue common stock for cash; and (F) issue stock
to effect acquisitions permitted by and subject to Section
5.02(f)(iii); and
(iii) so long as no Default shall have occurred and
be continuing, or would result therefrom, the Borrower may (A)
declare and pay dividends to Parent (I) to be used by Parent
solely to pay (x) reasonable and customary directors' fees of
Parent, (y) operating and administrative expenses of Parent
incurred in the ordinary course of business and (z) taxes
required to be paid by Parent and (II) to be used by Parent to
repurchase Series A Warrants from General Electric Capital
Corporation for an aggregate purchase price not to exceed
$44,000,000 pursuant to the terms of the Warrant Purchase
Agreement as in effect on the date hereof, and to pay
transaction costs in connection therewith; provided, however,
that as at the date any such dividend is paid, (1) the
aggregate amount of dividends that the Borrower may declare
pursuant to clause (iii)(A)(II) shall be reduced by an amount
equal to two times the amount of Investments made pursuant to
Section 5.02(f)(ii)(y), and (2) the Parent and Borrower shall
each deliver to the Lenders a certificate dated as of such
date, of the type required by Section 3.01(g)(x), and (B) in
addition to the dividends permitted by clause (A) above,
declare and pay dividends to Parent solely to the extent
necessary to pay dividends permitted to be paid by Parent
under clause (ii)(B) above to perform its obligations or
exercise its rights under the Series A Warrants as permitted
under clause (ii)(C) above or to purchase shares of stock of
Parent permitted to be purchased by Parent under clause
(ii)(D) above; provided, however, that the aggregate amount of
dividends declared and paid pursuant to this clause (iii)
together with any loans or advances made to Parent by the
Borrower or any of the Guarantors pursuant to Section
5.02(f)(i)(C) shall be for the purposes set forth in this
clause (iii) and shall not exceed the amount set forth in this
clause (iii);
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as
carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or by-laws in a
manner adverse to the Facility Agents and the Lenders except that
Parent or any of its Subsidiaries may change its name, provided that,
in the case of Parent or the Borrower, the Agent shall have received 30
days' prior notice from the Borrower and, in the case of any Domestic
Subsidiary (other than the Borrower), the Agents shall have received 10
days' prior notice from the Borrower, provided further that, on or
prior to the effectiveness of any such change, Parent and its
Subsidiaries shall execute all documentation reasonably requested by
the Collateral Agent or otherwise required under the Loan Documents in
order (A) so long as the Collateral Release Date shall not have
occurred, to protect the Liens created under the Collateral Documents
and (B) to protect the other interests of the Agents and the Lenders
under the Loan Documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies
(except as required or permitted by the Financial
71
Accounting Standards Board or generally accepted accounting
principles), reporting practices or Fiscal Year.
(k) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Facility
Agents and the Lenders or (ii) in connection with any Debt listed on
Schedule 5.02(b), any Debt under Capitalized Leases permitted under
Section 5.02(b)(iii), any Debt outstanding on the date such Subsidiary
first becomes a Subsidiary and any Permitted Foreign Debt Issuance by a
Foreign Subsidiary other than a Canadian Subsidiary.
(l) Partnerships. Become a general partner in any general or
limited partnership, or permit any of its Subsidiaries to do so, other
than any Subsidiary the sole assets of which consist of its interest in
such partnership.
(m) Amendment, Etc. of Material Contracts. Cancel or terminate
any Material Contract or consent to or accept any cancellation or
termination thereof or, where a Material Adverse Change would result,
amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any default under or any breach of
any Material Contract, agree in any manner to any other amendment,
modification or change of any term or condition of any Material
Contract or take any other action in connection with any Material
Contract that would impair the value of the interest or rights of the
Borrower thereunder or that would impair the rights or interests of any
Facility Agent or any Lender, or permit any of its Subsidiaries to do
any of the foregoing.
(n) Margin Stock. Permit at any time the value (as determined
in accordance with Regulation U) of the Margin Stock owned by any Loan
Party or any Loan Party and its Subsidiaries, as the case may be, to
exceed 25% of the value (as determined in accordance with Section
221.2(g)(2) of Regulation U) of the assets of such Loan Party, or such
Loan Party and its Subsidiaries, as the case may be.
SECTION 5.03. Reporting Requirements. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, Parent will, unless the Required Lenders
shall otherwise consent in writing, furnish to the Agents and each Lender:
(a) Monthly Financials. At the request of the Agent, within 45
days after the end of any fiscal month of Parent, (i) a copy of the
unaudited Consolidated and consolidating balance sheets of Parent and
its Subsidiaries as of the end of such month and the related
Consolidated and consolidating statements of operations and cash flow
(but with respect to the statement of cash flow, only on a Consolidated
basis) for that portion of the Fiscal Year ending as of the end of such
month, (ii) a copy of the unaudited Consolidated and consolidating
statements of operations and cash flow (but with respect to the
statement of cash flow, only on a Consolidated basis) of Parent and its
Subsidiaries for such month and (iii) a copy of the unaudited
Consolidated and consolidating statements of operations of Parent and
its Subsidiaries setting forth the actual year to date figures on a
monthly basis combined with the budgeted figures for each of the
remaining
72
months of that Fiscal Year, setting forth in comparative form in each
case referred to in clauses (i), (ii) and (iii) above, actual figures
for such period as against budgeted figures (including variances in
dollars and percent) for such period in the current Fiscal Year (such
budgeted figures for the Fiscal Year ending on or about June 30, 1996
to be comprised of projections previously delivered to the Agents and
thereafter, as delivered pursuant to clause (e) below) and actual
figures as against actual figures (including variances in dollars and
percent) for the comparable period during the prior Fiscal Year and
accompanied by (A) management letters prepared by Designated Officers
of Parent and the Borrower explaining the variances in the
corresponding budgets and prior Fiscal Years' figures related to the
foregoing and (B) the certification of Designated Officers of Parent
and the Borrower certifying that (i) all such financial statements are
complete and correct and present fairly in all material respects the
Consolidated and consolidating financial position and the Consolidated
and consolidating results of operations and cash flows (but with
respect to cash flows, only on a Consolidated basis) of Parent and its
Subsidiaries as at the end of such month, and (ii) no Default exists as
of such time or, if any Default then exists, specifying the details and
anticipated effect thereof.
(b) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each Fiscal Quarter of Parent,
(i) a copy of the unaudited Consolidated and, upon the request of the
Agent, consolidating balance sheets of Parent and its Subsidiaries as
of the end of such quarter and the related Consolidated and
consolidating statements of operations and cash flow (but with respect
to the cash flow, only on a Consolidated basis) for that portion of the
Fiscal Year ending as of the end of such quarter, each prepared in
accordance with GAAP (subject to normal year end adjustments and
without footnotes), (ii) a copy of the unaudited Consolidated and, upon
the request of the Agent, consolidating statements of operations and
cash flow (but with respect to the cash flow, only on a Consolidated
basis) of Parent and its Subsidiaries for such quarter, prepared in
accordance with GAAP (subject to normal year end adjustments and
without footnotes) and (iii) a copy of the unaudited Consolidated and,
upon the request of the Agent, consolidating statements of income of
Parent and its Subsidiaries setting forth the actual year to date
figures on a quarterly basis combined with the budgeted figures for
each of the remaining quarters of that Fiscal Year, setting forth in
comparative form in each case referred to in clauses (i), (ii) and
(iii) above, actual figures for such period as against budgeted figures
(including variances in dollars and percent) for such period in the
current Fiscal Year (such budgeted figures for the Fiscal Year ending
on or about June 30, 1996 to be comprised of projections previously
delivered to the Agents and thereafter, as delivered pursuant to clause
(e) below) and actual figures as against actual figures (including
variances in dollars and percent) for the comparable period during the
prior Fiscal Year and accompanied by (A) management letters prepared by
Designated Officers of Parent and the Borrower explaining the variances
in the corresponding budgets and prior Fiscal Years' figures related to
the foregoing, (B) the certification of Designated Officers of Parent
and the Borrower certifying that (i) all such financial statements are
complete and correct and present fairly in all material respects in
accordance with GAAP (subject to normal year end adjustments and
without footnotes), the Consolidated and, upon the request of the
Agent, consolidating financial position and the Consolidated and
consolidating results of operations and cash flows (but with respect to
the cash flows, only on a Consolidated basis) of Parent and its
Subsidiaries as at the end of such quarter and (ii) no Default exists
as of such time or, if any Default then exists, specifying
73
the details and anticipated effect thereof and (C) a schedule showing
in reasonable detail the calculations used in determining compliance
with the covenants under Sections 5.02(b) and 5.04.
(c) Annual Financials. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
audited Consolidated financial statements of Parent and its
Subsidiaries, consisting of the annual Consolidated balance sheet,
statement of operations, stockholders' equity (deficit) and cash flow,
setting forth in comparative form, in each case, Consolidated figures
for the prior Fiscal Year, which financial statements shall be prepared
in accordance with GAAP, certified without qualification (other than a
qualification approved by the Agents) by Ernst & Young or other
independent certified public accountants of recognized national
standing selected by Parent and acceptable to the Agents, and
accompanied by (i) a schedule prepared by the chief financial officer,
showing in reasonable detail the calculations used in determining
compliance with the financial covenants under Sections 5.02(b) and 5.04
hereof, (ii) a report from such accountants to the effect that in
connection with their audit examination, nothing has come to their
attention to cause them to believe that a Default had occurred or, if
they believe a Default has occurred, specifying the details thereof;
provided that such report shall not, and shall not be deemed to,
contain any conclusion by such accountants with respect to (x) whether
any event, act or condition has or is expected to have a Material
Adverse Effect or (y) any Default the existence of which is subject to
the determination or opinion of the Agents, the Lenders or the Required
Lenders, provided further, however, that such report shall describe in
reasonable detail any event, act or condition that is, or is reasonably
expected to be, required under generally accepted auditing standards to
be mentioned in an auditor's opinion on the financial statements of
Parent and its Subsidiaries, taken as a whole, and (iii) a
certification of Designated Officers of Parent and the Borrower
certifying that (A) all such financial statements are complete and
correct and present fairly in all material respects in accordance with
GAAP the Consolidated financial position and the Consolidated results
of operations and cash flows of Parent and its Subsidiaries as at the
end of such Fiscal Year and (B) no Default exists as of such time or,
if any Default then exists, specifying the details and anticipated
effect thereof.
(d) Default Notices. As soon as practicable, but in any event
not later than two Business Days after any officer of any Loan Party
becomes aware of the existence of any Default, or any development or
other information which might reasonably be expected to have a Material
Adverse Effect, telephonic or telegraphic notice specifying the nature
of such Default or development or information, including the
anticipated effect thereof, and the action that the Loan Parties have
taken or propose to take in respect thereof which notice shall be
promptly confirmed in writing within five days.
(e) Annual Business Plan. Not later than 45 days after the
beginning of each Fiscal Year, an annual business plan for Parent and
its Subsidiaries for the immediately succeeding Fiscal Year, in form,
scope and substance reasonably satisfactory to the Agents, setting
forth:
(i) projected Consolidated and consolidating balance
sheets of Parent and its Subsidiaries for such Fiscal Year, on
a monthly basis;
74
(ii) projected Consolidated and consolidating
statements of income of Parent and its Subsidiaries for such
Fiscal Year, on a monthly and quarterly basis; and
(iii) projected Consolidated statements of cash flow
of Parent and its Subsidiaries, including summary details of
cash disbursements, including Capital Expenditures, projected
operating profit of Parent and its Subsidiaries and summary of
personnel and physical plant requirements, for such Fiscal
Year, on a monthly basis;
together with (x) projections of the nature requested in clauses (i)
through (iii) above, computed on an annual basis for each Fiscal Year
remaining until the Termination Date and (y) appropriate supporting
details as reasonably requested by any Lender. The annual business plan
delivered in connection with this Section 5.03(e) shall be accompanied
by evidence satisfactory to the Agents that such plan shall have been
approved by the board of directors of Parent.
(f) Tax Returns. Promptly upon request by the Agents, copies
of all federal, state, local and foreign tax returns and reports in
respect of income, franchise or other taxes on or measured by income
(excluding sales, use or like taxes) filed by Parent or any of its
Subsidiaries.
(g) ERISA Events. Promptly and in any event within 10 days
after any Loan Party or any of its ERISA Affiliates knows or has reason
to know that any ERISA Event with respect to any Loan Party or any of
its ERISA Affiliates has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto.
(h) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any of its
ERISA Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan of any Loan Party or any of its ERISA
Affiliates or to have a trustee appointed to administer any such Plan.
(i) Plan Annual Reports. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan of each Loan Party or any of its
ERISA Affiliates.
(j) Multiemployer Plan Notices. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any of its ERISA Affiliates from the sponsor of a Multiemployer Plan of
any Loan Party or any of its ERISA Affiliates, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii)
the amount of liability incurred, or that may be incurred, by such Loan
Party or any of its ERISA Affiliates in connection with any event
described in clause (i) or (ii).
(k) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan
75
Party or any of its Subsidiaries of the type described in Section
4.01(i), and promptly after the occurrence thereof, notice of any
adverse change in the status or the financial effect on any Loan Party
or any of its Subsidiaries of the Disclosed Litigation from that
described on Schedule 4.01(i).
(l) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that Parent sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements,
that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that
may be substituted therefor, or with any national securities exchange.
(m) Agreement Notices. Promptly upon receipt thereof, copies
of all material notices, requests and other documents received by any
Loan Party or any of its Subsidiaries under or pursuant to any Material
Contract and, from time to time upon request by the Administrative
Agent, such information and reports regarding the Material Contracts as
the Agents may reasonably request.
(n) Environmental Conditions. Promptly after the occurrence
thereof, notice of any condition or occurrence on any property of any
Loan Party or any of its Subsidiaries that results in a material
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit or would be reasonably likely
to (i) form the basis of an Environmental Action against any Loan Party
or any of its Subsidiaries or such property that could have a Material
Adverse Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(o) Auditor Reports. Within 15 days after receipt thereof but
in no event later than June 30 of each year, a copy of all management
reports and management letters prepared for Parent and its Subsidiaries
(other than those management reports and management letters which deal
solely with Foreign Subsidiaries) by Ernst & Young or other independent
certified public accountants of recognized national standing selected
by Parent and acceptable to the Administrative Agent.
(p) Implied Debt Rating. Within two Business Days after
receipt thereof by any Loan Party, copies of each notice from S&P (or
Moody's, if S&P has ceased to provide Implied Debt Ratings) indicating
any change in the Implied Debt Rating.
(q) Owned Real Property. Within 45 days of the end of each
Fiscal Quarter, a complete and accurate list of all real property
having a book value of $1,000,000 or more, owned by any Loan Party or
any of their Domestic Subsidiaries, showing as of the end of such
Fiscal Quarter the street address, county or other relevant
jurisdiction, state, record owner and book and estimated fair value
thereof.
(r) Other Information. Promptly upon request, such other
information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects of any
Loan Party or any of its Subsidiaries as any Lender through the
Documentation Agent or the Paying Agent may from time to time
reasonably request.
76
SECTION 5.04. Financial Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, Parent and the Borrower will, unless the
Required Lenders, or in the case of Section 5.04(c), the Supermajority of
Lenders, otherwise consent in writing:
(a) Interest and Lease Expense Coverage Ratio. Maintain, as of
the end of each period of four Fiscal Quarters, a ratio of (i) the sum
of Consolidated EBITDA of Parent and its Subsidiaries plus payments on
Consolidated Lease Obligations of Parent and its Subsidiaries to (ii)
the sum of Cash Interest Expense plus payments on Consolidated Lease
Obligations of Parent and its Subsidiaries of not less than the amount
set forth below for each period set forth below:
Four Fiscal Quarter
Period Ending On or About Ratio
------------------------- -----
March 31, 1996 2.40:1.00
June 30, 1996 2.40:1.00
September 30, 1996 2.40:1.00
December 31, 1996 2.40:1.00
March 31, 1997 2.40:1.00
June 30, 1997 2.40:1.00
September 30, 1997 2.50:1.00
December 31, 1997 2.50:1.00
March 31, 1998 2.50:1.00
June 30, 1998 2.50:1.00
September 30, 1998 2.50:1.00
December 31, 1998 2.50:1.00
March 31, 1999 2.50:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.75:1.00
December 31, 1999 2.75:1.00
March 31, 2000 2.75:1.00
June 30, 2000 2.75:1.00
September 30, 2000 2.75:1.00
December 31, 2000
and thereafter 3.00:1.00
(b) Minimum Adjusted Net Worth. Maintain at all times Adjusted
Net Worth of not less than $145,000,000 plus 85% or, after the
Collateral Release Date, 75% of the Consolidated net income (if any) of
the Parent and its Subsidiaries for each Fiscal Quarter beginning with
the Fiscal Quarter ending on or about March 31, 1996 plus the aggregate
amount of any additions to the Consolidated stockholders' equity of the
Parent made after the Effective Date as a result of any Capital
Issuance of common stock or Preferred Stock by Parent.
77
(c) Maximum Total Debt to EBITDA Ratio. Maintain, as of the
end of each period of four Fiscal Quarters, a ratio of Total Debt to
Consolidated EBITDA of Parent and its Subsidiaries for such period of
four Fiscal Quarters of not greater than the amount set forth below for
each period set forth below:
Four Fiscal Quarter
Period Ending On or About Ratio
------------------------- -----
March 31, 1996 3.25:1.00
June 30, 1996 3.25:1.00
September 30, 1996 3.25:1.00
December 31, 1996 3.25:1.00
March 31, 1997 3.25:1.00
June 30, 1997 3.25:1.00
September 30, 1997 3.00:1.00
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 3.00:1.00
September 30, 1998
and thereafter 2.75:1.00
(d) Minimum EBITDA. Maintain, as of the end of each Fiscal
Quarter, Consolidated EBITDA of Parent and its Subsidiaries for the
four Fiscal Quarters then ended of not less than the amount set forth
below for such Fiscal Quarter:
Four Fiscal Quarter Minimum
Ending On Or About EBITDA
-------------------- ------
March 31, 1996 $40,000,000
June 30, 1996 $40,000,000
September 30, 1996 $45,000,000
December 31, 1996 $45,000,000
March 31, 1997 $45,000,000
June 30, 1997 $45,000,000
September 30, 1997 $55,000,000
December 31, 1997 $55,000,000
March 31, 1998 $55,000,000
June 30, 1998 $55,000,000
September 30, 1998
and thereafter $66,000,000
(e) Capital Expenditures. Not make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures (other than those Capital
Expenditures which shall otherwise be considered to be Investments to
the extent
78
permitted by 5.02(f)) made by Parent and its Subsidiaries during any
Fiscal Year to exceed the amount set forth below for such Fiscal Year:
Fiscal Year Amount
----------- -------
1996 $20,000,000
1997 $25,000,000
1998 $25,000,000
1999 $25,000,000
2000
and thereafter $20,000,000
provided that 50% of the amount of Capital Expenditures permitted
hereunder to be made in any Fiscal Year that are not made in such
Fiscal Year may be carried forward to the next (but not any subsequent)
Fiscal Year and provided further that for purposes of this subsection
(e), Capital Expenditures made in any Fiscal Year shall be deemed to be
made first as a use of Capital Expenditures permitted to be made
pursuant to the first proviso of this subsection (e) and thereafter as
a use of the limit of Capital Expenditures set forth above for such
Fiscal Year; provided, however, that the aggregate amount of Capital
Expenditures during any Fiscal Year after giving effect to the first
proviso of this subsection (e) shall not exceed $30,000,000.
(f) Total Assets. Not permit at any time Parent and its
Subsidiaries (other than the Borrower) to own more than 25% in the
aggregate of the total assets of Parent and its Subsidiaries (without
regard to the ownership of capital stock by Parent and its Subsidiaries
in any Subsidiary of Parent) determined on a Consolidated basis in
accordance with GAAP.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any
Advance as the same becomes due and payable, or the Borrower or any
other Loan Party shall fail to pay any interest on any Advance or make
any other payment under any Loan Document within three Business Days
after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
79
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(e), 5.01(g), 5.01(o),
5.02, 5.03 (other than Sections 5.03(e) and 5.03(o)) or 5.04; or
(d) any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed, if such failure shall remain unremedied for 10
days and, in the case of any term, covenant or agreement contained in
Section 5.03(e), if such failure shall remain unremedied for 15 days,
(i) after written notice thereof shall have been given to the Borrower
by any Facility Agent or Lender or (ii) after any officer of the
Borrower obtains knowledge thereof; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on, or any other amount
payable in respect of, any Debt that is outstanding in a principal or
notional amount of at least $2,000,000 in the aggregate (but excluding
Debt outstanding hereunder) of such Loan Party or such Subsidiary (as
the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt
or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) Parent, the Borrower, any other Loan Party or any of its
Subsidiaries having EBITDA in excess of $500,000 for the most recent
period of four consecutive Fiscal Quarters then ended shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any such Loan Party or Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it) that is being diligently contested by it in
good faith, either such proceeding shall remain undismissed or unstayed
for a period of 30 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) shall
occur; or any such Loan Party or Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this
subsection (f); or
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(g) any judgment or order for the payment of money in excess
of $3,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless the payment of such judgment
or order is covered by insurance and such insurance coverage is not in
dispute; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and there shall be any period
of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(i) any provision of any Loan Document, after delivery thereof
pursuant to Section 3.01 or 5.01(o), shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(j) any Collateral Document, after delivery thereof pursuant
to Section 3.01 or 5.01(o), shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first
priority Lien on the Collateral purported to be covered thereby; or
(k) (i) Parent shall at any time cease to have legal and
beneficial ownership of 100% of the capital stock of the Borrower; or
(ii) any Person (other than Linda J. Wachner), which Persons shall not
be acting in concert with any other Person), or two or more Persons
acting in concert, shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934), directly or indirectly, of Voting
Stock of Parent (or other securities convertible into such Voting
Stock) representing 25% (or in the case of Pentland Ventures Limited,
50%) or more of the combined voting power of all Voting Stock of
Parent; or (iii) any Person (other than Linda J. Wachner), which
Persons shall not be acting in concert with any other Person), or two
or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of, the
power to exercise, directly or indirectly, a controlling influence over
the management or policies of Parent, or control over Voting Stock of
Parent (or other securities convertible into such securities)
representing 25% (or in the case of Pentland Ventures Limited, 50%) or
more of combined voting power of all Voting Stock of Parent; or (iv)
Linda J. Wachner (or, in the case of her death or disability, another
officer or officers of comparable experience and ability selected by
the Borrower within 180 days thereafter after consultation with the
Facility Agents) shall cease to be Chairman and Chief Executive Officer
of Parent and the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan
of any Loan Party or any of its ERISA Affiliates, and the sum
(determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other
Plans of the Loan Parties and their ERISA Affiliates with respect to
which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and their ERISA Affiliates related to
such ERISA Event) exceeds $3,000,000; or
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(m) any Loan Party or any of its ERISA Affiliates shall be in
default, as defined in Section 4219(c)(5) of ERISA, with respect to any
payment of Withdrawal Liability, and the sum of the outstanding balance
of such Withdrawal Liability and the outstanding balance of any other
Withdrawal Liability that any Loan Party or any of its ERISA Affiliates
has incurred exceeds $3,000,000; or
(n) any Loan Party or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of any Loan Party
or any of its ERISA Affiliates, that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, and, as a result of such reorganization or termination, the
aggregate annual contributions of the Loan Parties and their ERISA
Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans, for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs, by an amount exceeding
$3,000,000;
then, and in any such event, the Agents (i) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Appropriate Lender (other than a Lender in accordance with
Section 2.02(b) or 2.13(c)) to make Advances, of the Fronting Bank to issue
Letters of Credit and of the Swing Line Bank to make Swing Line Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, (A) by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and (B) by notice to each party required under the terms of any
agreement in support of which a Standby Letter of Credit is issued, request that
all Obligations under such agreement be declared to be due and payable;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to Parent, the Borrower or any other Loan Party which is
a Material Subsidiary under the Federal Bankruptcy Code, 11 U.S.C. ss.ss. 101 et
seq., (x) the obligation of each Lender (other than a Lender in accordance with
Section 2.02(b) or 2.13(c)) to make Advances, of the Fronting Bank to issue
Letters of Credit and of the Swing Line Bank to make Swing Line Advances shall
automatically be terminated and (y) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Paying Agent may, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower will, pay to the Collateral Agent on
behalf of the Lenders, in same day funds at the Collateral Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Agents and the Lenders or that the total
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amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrower will, forthwith upon demand by the Facility Agents, pay
to the Collateral Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Facility Agents determine to be free and
clear of any such right and claim.
ARTICLE VII
THE FACILITY AGENTS
SECTION 7.01. Authorization and Action. Each Lender (in its
capacities as a Lender and as a Hedge Bank) hereby appoints and authorizes each
Facility Agent to take such action as agent on behalf of such Lender and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to such Facility Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), no
Facility Agent shall be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lenders and
all holders of Notes; provided, however, that no Facility Agent shall be
required to take any action that exposes such Facility Agent to personal
liability or that is contrary to this Agreement or applicable law. Each Facility
Agent agrees to give to each Lender prompt notice of each notice given to it by
the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Facility Agents' Reliance, Etc. None of the
Facility Agents nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Facility Agent: (i) may treat the payee of any Note as the
holder thereof until the Paying Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it, and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with the Loan Documents; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
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SECTION 7.03. Scotiabank, Citicorp and Affiliates. With
respect to its Commitments and the Advances made by it and the Notes issued to
it, each of Scotiabank and Citicorp shall have the same rights and powers under
the Loan Documents as any other Lender and may exercise the same as though it
were not an Facility Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Scotiabank and Citicorp in their
individual capacities. Each of Scotiabank and Citicorp and their respective
affiliates may accept deposits from, lend money to, act, to the extent permitted
under applicable law, as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any such Subsidiary, all as if Scotiabank and
Citicorp were not Facility Agents and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Facility Agent or
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Facility
Agent or Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. Each Lender severally agrees to
indemnify each Facility Agent (to the extent not promptly reimbursed by the
Borrower), from and against such Lender's ratable share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
reasonable costs, expenses or disbursements, of any kind or nature whatsoever,
that may be imposed on, incurred by, or asserted against such Facility Agent in
any way relating to or arising out of the Loan Documents or any reasonable
action taken or omitted by such Facility Agent under the Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Facility Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse each Facility Agent promptly upon demand for such
Lender's ratable share of any reasonable costs and expenses payable by the
Borrower under Section 8.04, to the extent that such Facility Agent is not
promptly reimbursed for such costs and expenses by the Borrower or Parent. For
purposes of this Section 7.05, the Lenders' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lenders, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, plus (c)
their respective Unused Revolving Credit Commitments at such time. In the event
that any Defaulted Advance shall be owing by any Defaulting Lender at any time,
such Lender's Commitment with respect to the Facility under which such Defaulted
Advance was required to have been made shall be considered to be unused for
purposes of this Section 7.05, to the extent of the amount of such Defaulted
Advance. The failure of any Lender to reimburse any Facility Agent promptly upon
demand for such Lender's ratable share of any amount required to be paid by the
Lenders to such Facility Agent as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse such Facility Agent for such
other Lender's ratable share of such amount, but no Lender shall be responsible
for the failure of any other Lender to reimburse such Facility Agent for such
other Lender's ratable share of such amount.
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SECTION 7.06. Successor Facility Agents. Any Facility Agent
may resign as to any or all of the Facilities at any time by giving written
notice thereof to the other Facility Agents, the Lenders and the Borrower and
may be removed as to all of the Facilities at any time with or without cause by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Facility Agent as to such of the
Facilities as to which such Facility Agent has resigned or been removed,
provided that so long as no Default has occurred and is continuing, in the case
of a successor Facility Agent that was not prior to such appointment a Lender
hereunder, such appointment shall be subject to the approval of the Borrower,
such approval not to be unreasonably withheld. If no successor Facility Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Facility Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring Facility
Agent, then the retiring Facility Agent may, on behalf of the Lenders, appoint a
successor Facility Agent, which shall be a commercial bank organized or licensed
under the laws of the United States, or of any State thereof, and having a
combined capital and surplus of at least $250,000,000, subject to the proviso
contained in the immediately preceding sentence. Upon the acceptance of any
appointment as Facility Agent hereunder by a successor Facility Agent as to all
of the Facilities and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Facility Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Facility Agent, and the retiring Facility Agent shall
be discharged from its duties and obligations under the Loan Documents. After
any retiring Facility Agent's resignation or removal hereunder as Facility Agent
as to all of the Facilities, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Facility Agent as to any Facilities under this Agreement.
SECTION 7.07. Co-Agents. Each of the Co-Agents has been
designated a Co-Agent in recognition of its respective Commitment, and the use
of such title does not impose on such Co- Agent any duties or obligations
greater than those of any other Lender.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower or Parent therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders (other than any
Lender which is, at such time, a Defaulting Lender), do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01 or, in the
case of the initial Borrowing, Section 3.02, (ii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Lenders, that shall be required for the Lenders or any of them to take
any action hereunder, (iii) release all or substantially all of the Collateral
(other than pursuant to Section 8.12 hereof), (iv) permit the creation,
incurrence, assumption or existence of any Lien on any material portion of
Collateral to secure any Obligations other than (A) Obligations owing to the
Lenders and the Facility Agents under the Loan Documents and (B) other Debt
secured thereby pursuant to the terms of the Collateral Documents as in effect
on the date of the initial Borrowing, (v) release any Guaranty of any Guarantor
other than in connection with the sale of such Guarantor as permitted under this
Agreement or permitted by a duly executed waiver or consent hereunder or (vi)
amend this Section 8.01 or Section 8.12, (b) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and each Lender
affected by such amendment, waiver or consent, (i) reduce the principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender, (ii) postpone any date fixed for any payment of
principal of, or interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender or (iii) change the order of
application of any prepayment set forth in Section 2.05 in any manner that
materially affects such Lender, (c) no amendment, waiver or consent shall,
unless in writing and signed by the Required Lenders and, for each Facility
directly affected by such amendment, waiver or consent, each Lender that has a
Commitment under such Facility, (i) increase the Commitments of such Lender or
subject such Lender to any additional obligations or (ii) amend Section 2.03(c)
or 2.05(b)(ii) and (d) no amendment, waiver or modification of Section 5.04(c)
shall be effective unless in writing and signed by a Supermajority of Lenders;
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank or the Fronting Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Bank or of the Fronting Bank, as the case may be,
under this Agreement; and provided further that no amendment, waiver or consent
shall, unless in writing and signed by a Facility Agent in addition to the
Lenders required above to take such action, affect the rights or duties of such
Facility Agent under this Agreement or any Note. Any request by any Loan Party
for an amendment or waiver of any provision of any Loan Document shall be made
by such Loan Party by giving a written request therefor to the Documentation
Agent.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy, telex or cable communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, if to either of Parent or the
Borrower, at its address at 90 Park Avenue, New York, New York 10016, Attention:
Chief Financial Officer; if to any Restatement
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Lender or Facility Agent, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or cabled,
be effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, except that notices and communications to a
Facility Agent pursuant to Article II, III or VII shall not be effective until
received by such Facility Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or Facility Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) Parent and the Borrower
agree to pay on demand (i) all reasonable costs and expenses (other than taxes,
including interest, additions to tax and penalties relating thereto, except to
the extent that the same are required to be paid pursuant to Section 2.11
hereof) of the Facility Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and all other out-of-pocket expenses and (B) the reasonable fees
and expenses of counsel for the Facility Agents with respect thereto, with
respect to advising the Facility Agents as to their respective rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally, and any proceeding ancillary thereto) and (ii) all
reasonable costs and expenses (other than taxes, including interest, additions
to tax and penalties relating thereto, except to the extent that the same are
required to be paid pursuant to Section 2.11 hereof) of the Facility Agents and
the Lenders in connection with the enforcement of the Loan Documents, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable fees and expenses of counsel for the Facility
Agents and each Lender with respect thereto).
(b) Parent and the Borrower agree to indemnify and hold
harmless each Facility Agent and each Lender and each of its respective
Affiliates, officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel, but other than taxes, including interest, additions to tax
and penalties relating thereto, except to the extent that the same are required
to be paid pursuant to Section 2.11 hereof) that may be incurred by or asserted
or awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related
to or in connection with (i) the Facilities and any of the transactions
contemplated by this Agreement or (ii) the
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actual or alleged presence of Hazardous Materials on any property of any Loan
Party or any of its Subsidiaries, or any Environmental Action relating in any
way to any Loan Party or any of its Subsidiaries, in each case whether or not
such investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto, and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. Each of the Borrower and Parent also
agrees, to the fullest extent permitted under applicable law, not to assert any
claim against any Facility Agent, any Lender, any of their respective
Affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in any other Loan Document or the actual or proposed use
of the proceeds of the Advances, except in the event of gross negligence or
willful misconduct on the part of such Facility Agent, Lender or Affiliate.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a prepayment pursuant to Section 2.05, a payment or Conversion
pursuant to Section 2.08(b)(i) or 2.09(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason, or by an Eligible
Assignee to a Lender other than on the last day of the Interest Period for such
Advance upon an assignment of rights and obligations under this Agreement
pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to
Section 8.07(a), the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Paying Agent), pay to the Paying Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment, including, without limitation, any loss (including loss of anticipated
profits, but excluding taxes, including interest, additions to tax and penalties
relating thereto, which shall be governed by Section 2.11), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, reasonable fees and expenses of counsel and indemnities,
such amount may be paid on behalf of such Loan Party by any Facility Agent or
Lender, in its sole discretion.
SECTION 8.05. Right of Setoff. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the Agents
to declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and otherwise
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
or such Affiliate to or for the credit or the account of the Borrower against
any and all of the Obligations of the Borrower now or hereafter existing under
this Agreement and the Note or Notes held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or such Note
or Notes and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such setoff and application; provided,
however, that the failure to give such
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notice shall not affect the validity of such setoff and application. The rights
of each Lender and its Affiliates under this Section 8.05 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, Parent and the
Facility Agents and when the Agents shall have been notified by each Restatement
Lender that such Restatement Lender has executed it and the Effective Date shall
have occurred and thereafter shall be binding upon and inure to the benefit of
the Borrower, Parent, each Facility Agent and each Lender and its respective
successors and assigns, except that neither the Borrower nor Parent shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may assign, and, if (i) demanded by the Borrower following (x) a payment by the
Borrower of Taxes with respect to such Lender in accordance with Section 2.11,
(y) the occurrence of an event that would, upon payment to such Lender of
amounts hereunder, require a payment by the Borrower of Taxes with respect to
such Lender in accordance with Section 2.11 or (z) a demand by such Lender
pursuant to Section 2.09(a), (b) or (d) and (ii) upon at least 30 Business Days'
notice to such Lender and the Paying Agent, will assign, to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it (including accrued interest) and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a fixed percentage of all rights and obligations of the assigning Lender
under and in respect of one or more Facilities under which it has a Commitment,
(ii) except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
effective date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $10,000,000, and the amount of the Commitment of
the assigning Lender being retained by such Lender immediately after giving
effect to such assignment (determined as of the effective date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$10,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv)
each such assignment made as a result of a demand by the Borrower pursuant to
this Section 8.07(a) shall be arranged by the Borrower after consultation with
the Agents and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall be
obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 8.07(a) unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement and (vi) the parties to each
such assignment shall execute and deliver to the Paying Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and, for each Assignment and
Acceptance other than an Assignment and Acceptance between a Lender and an
assignee which satisfies the requirements of clause (i) of the definition of
"Eligible Assignee", a processing and recordation fee of $3,500. Upon such
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execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
such documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon any Facility Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes each Facility Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Facility Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.
(c) The Paying Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment under each Facility of, and principal amount of
the Advances owing under each Facility to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Facility Agents and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Paying Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit B hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the
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Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Paying Agent in exchange for the
surrendered Note or Notes a new Note to the order of such Eligible Assignee in
an amount equal to the Commitment assumed by it under a Facility pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment under such Facility, a new Note to the order of the assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit C.
(e) Each Lender may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Facility Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release (other than as
provided by the terms of this Agreement and other Loan Documents) all or
substantially all of the Collateral.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any other Loan Party
furnished to such Lender by or on behalf of the Borrower or any other Loan
Party; provided, however, that prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
(h) In the event that S&P, Moody's or Thompson's BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not rated
by InsuranceWatch Ratings Service)) shall, after the date that any Lender
becomes a Lender, downgrade the long-term certificate of deposit ratings of such
Lender, and the resulting ratings shall be below BBB- by S&P, Baa3 by Moody's
and B by Thompson's BankWatch (or BB, in the case of a Lender that is an
insurance company (or, in the case of an insurance company not rated by
91
InsuranceWatch Ratings Service, B by Best's Insurance Reports)), then the
Fronting Bank or the Borrower shall have the right, but not the obligation, upon
notice to such Lender, to replace (or, in the case of a request by the Fronting
Bank, to request the Borrower to use its reasonable efforts to replace) such
Lender with an assignee Lender (in accordance with and subject to the
restrictions contained in Section 8.07(a)), and such affected Lender hereby
agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 8.07(a)) all of its interests, rights
and obligations in respect of its Commitment, Advances and other Obligations
owing to it, together with the obligations of such affected Lender hereunder, to
such assignee Lender; provided, however, that (i) no such assignment shall
conflict with any law, rule and regulation or order of any governmental
authority and (ii) such assignee Lender shall pay to such affected Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Advances made by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to it
hereunder.
SECTION 8.08. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. No Liability of the Fronting Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Fronting Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Fronting Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Fronting Bank, and the Fronting Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) the Fronting Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Fronting Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Fronting Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.11. Confidentiality. Neither any Facility Agent nor
any Lender shall disclose any Confidential Information to any Person without the
consent of Parent or the Borrower, other than (a) to such Facility Agent's or
Lender's Affiliates and its officers, directors, employees, agents and advisors
and to actual or prospective Eligible Assignees and participants, and then only
on a confidential basis, (b) as
92
required by any law, rule or regulation or judicial process and (c) as requested
or required by any state, federal or foreign authority or examiner regulating
banks or banking.
SECTION 8.12. Release of Collateral. Within three Business
Days after the date on which the Documentation Agent receives evidence
reasonably satisfactory to it from Parent or the Borrower that an Implied Debt
Rating of (i) BBB- from S&P and Baa3 from Moody's or (ii) BBB from S&P or (iii)
Baa2 from Moody's is currently in effect, the Documentation Agent shall so
notify the Collateral Agent and the Lenders, and upon receipt of such notice,
the Collateral Agent shall, as soon as practicable, release all of the
Collateral from the lien of the Collateral Documents (the date on which the
Collateral Agent receives such notice being the "Collateral Release Date");
provided, however, that such release shall not be effective to Collateral which
constitutes Inventory unless and until all Liens on any of the assets of Parent
or any of its Subsidiaries securing obligations under or created in connection
with that portion of ASCO Debt representing refinancing obligations thereunder
and the Trade Refinancing Facility shall have been released.
SECTION 8.13. Merger or Consolidation of Parent and the
Borrower. From and after the Collateral Release Date, Parent may consolidate
with or merge into the Borrower or the Borrower may consolidate with or merge
into Parent, provided that the corporation formed by such consolidation or into
which the Borrower or Parent shall be merged shall, at the effective time of
such consolidation or merger, assume the Borrower's Obligations on the Notes and
under the other Loan Documents to which it is a party and assume the performance
of the Borrower's covenants under the Loan Documents to which it is a party in a
writing satisfactory in form and substance to the Required Lenders, provided
further that the Loan Documents shall at the effective time of such
consolidation or merger be amended, supplemented or otherwise modified as
necessary to provide such consolidation or merger on terms and conditions
consistent with the Loan Documents and satisfactory to the Required Lenders,
provided, however, that immediately prior to and after giving effect thereto, no
event shall occur and be continuing that constitutes a Default.
SECTION 8.14. Effective Date Assignments; Etc. (a) As of the
Effective Date, prior to giving effect to any assignment under this Agreement as
of such date, each Existing Lender represents and warrants, as to the assignment
effected by such Existing Lender by this Agreement that as of the Effective Date
(i) its existing Commitment is in the dollar amount specified as its existing
Commitment on Schedule 8.14 hereto; and (ii) that such Existing Lender is the
legal and beneficial owner of such interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim created by such
Existing Lender.
(b) Each Existing Lender and Restatement Lender confirms to,
and agrees with, each of the other Restatement Lenders as to the assignment
effected by this Agreement by such Existing Lender or Restatement Lender, as the
case may be, as follows: (i) each such Existing Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Existing Credit
Agreement or this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Existing Credit
Agreement or this Agreement or any other instrument or document furnished
pursuant thereto or hereto; (ii) each such Existing Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of either Loan Party or any of its Subsidiaries or the
performance of observance by either Loan Party or any of its Subsidiaries of any
of its obligations under the Existing Credit
93
Agreement or this Agreement or any other instrument or document furnished
pursuant thereto or hereto; (iii) each Restatement Lender confirms that it has
received such documents and information as it has deemed appropriate to make its
own credit analysis and decision to execute and deliver this Agreement and
agrees that it shall have no recourse against any Facility Agent, any Existing
Lender, or any other Restatement Lender with respect to any matters relating to
the Existing Credit Agreement or this Agreement; and (iv) each Restatement
Lender will, independently and without reliance upon any Facility Agent, any
Existing Lender, or any other Restatement Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, the Note
or Notes held by it and the other documents executed in connection herewith.
(c) As of the Effective Date, (i) each Restatement Lender
shall be a party to this Agreement and, to the extent provided herein, have the
rights and obligations of a Restatement Lender hereunder and (ii) each Existing
Lender shall, to the extent provided herein, relinquish its rights and be
released from its obligations under this Agreement as to any assignment effected
herein.
(d) From and after the Effective Date, the Paying Agent shall
make all payments under this Agreement in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Restatement Lenders hereunder.
(e) On or before the Effective Date, the Borrower shall have
paid all accrued interest, fees and other amounts payable and owing to the
Existing Lenders, the existing Fronting Bank and the Facility Agents as of the
Effective Date in connection with the Existing Credit Agreement. Without
prejudice to the survival of any other agreement of the Borrower or the
Guarantor under the Existing Credit Agreement, all amounts that would be payable
under Sections 2.09, 2.11 and 8.04 of the Existing Credit Agreement shall be
payable under this Agreement to the extent that such amounts have not been paid
as of the Effective Date.
(f) As of the Effective Date, (i) the Existing Credit
Agreement is amended and restated in full as set forth in this Agreement, (ii)
the existing Commitments (as defined in the Existing Credit Agreement) are
terminated, (iii) the Notes (as defined in the Existing Credit Agreement) are
cancelled and replaced by the Notes and (iv) all obligations which, by the terms
of the Existing Credit Agreement, are evidenced by the Notes (as defined in the
Existing Credit Agreement) are evidenced by the Notes.
SECTION 8.15. Waiver of Jury Trial. EACH OF THE BORROWER,
PARENT, THE FACILITY AGENTS AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY FACILITY AGENT OR LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
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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 date first above written.
AUTHENTIC FITNESS PRODUCTS INC.
By
---------------------------------
Title:
AUTHENTIC FITNESS CORPORATION
By
---------------------------------
Title:
THE BANK OF NOVA SCOTIA,
as Agent, Administrative Agent, Paying
Agent, Swing Line Bank and Fronting
Bank
By
---------------------------------
Title:
CITICORP USA, INC., as
Agent, Documentation Agent
and Collateral Agent
By
---------------------------------
Title:
95
Co-Agents
CHEMICAL BANK,
as Co-Agent
By
---------------------------------
Title:
SOCIETE GENERALE,
as Co-Agent
By
---------------------------------
Title:
THE BANK OF NEW YORK,
as Co-Agent
By
---------------------------------
Title:
96
Restatement Lenders and Hedge Banks
THE BANK OF NOVA SCOTIA
By
---------------------------------
Title:
CITICORP USA, INC.
By
---------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By
---------------------------------
Title:
CHEMICAL BANK
By
---------------------------------
Title:
COMMERZBANK
By
---------------------------------
Title:
97
CREDIT SUISSE
By
---------------------------------
Title:
By
---------------------------------
Title:
FIRST UNION NATIONAL BANK
By
---------------------------------
Title:
THE FUJI BANK, LIMITED,
NEW YORK BRANCH
By
---------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By
---------------------------------
Title:
SOCIETE GENERALE
By
---------------------------------
Title:
THE BANK OF NEW YORK
By
---------------------------------
Title:
98
THE BANK OF CALIFORNIA, N.A.
By
---------------------------------
Title:
THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By
---------------------------------
Title:
THE SUMITOMO BANK, LIMITED
By
---------------------------------
Title:
By
---------------------------------
Title: