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Exhibit 10.12
CREDIT AGREEMENT
dated as of
November 15, 1993
among
THE TIMBERLAND COMPANY
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
Table of Contents
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS
Section 1.01. Definitions 1
Section 1.02. Accounting Terms 13
ARTICLE 2. THE CREDIT
Section 2.01. The Revolving Credit Loans 13
Section 2.02. The Term Loans 14
Section 2.03. The Notes 14
Section 2.04. Purpose 14
Section 2.05. Borrowing Procedures 15
Section 2.06. Prepayments and Conversions 15
Section 2.07. Interest Periods: Renewals 15
Section 2.08. Changes of Commitments 16
Section 2.09. Certain Notices 16
Section 2.10. Minimum Amounts 17
Section 2.11. Interest 17
Section 2.12. Fees 17
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Section 2.13. Payments Generally 18
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs 18
Section 3.02. Limitation of Types of Loans 20
Section 3.03. Illegality 21
Section 3.04. Certain Conversions pursuant to
Sections 3.01 and 3.03 21
Section 3.05. Certain Compensation 22
Section 3.06. Indemnification for Taxes 23
Section 3.07. Foreign Subsidiary Costs 24
ARTICLE 4. CONDITIONS PRECEDENT
Section 4.01. Documentary Conditions
Precedent 25
Section 4.02. Additional Conditions
Precedent 25
Section 4.03. Deemed Representations 26
Section 4.04. First Borrowing by
Each Eligible Subsidiary 26
Section 4.05. Representations of
Eligible Subsidiaries 27
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
Section 5.01. Incorporation, Good Standing and
Due Qualification 28
Section 5.02. Corporate Power and
Authority; No Conflicts 28
Section 5.03. Legally Enforceable
Agreements 28
Section 5.04. Litigation 28
Section 5.05. Financial Statements 29
Section 5.06. Taxes 29
Section 5.07. ERISA 29
Section 5.08. Subsidiaries and
Ownership of Stock 30
Section 5.09. Credit Arrangements 30
Section 5.10. No Default on Outstanding
Judgments or Orders 30
Section 5.11. Governmental Regulation 30
Section 5.12. Environmental Matters 30
Section 5.13. Full Disclosure 31
ARTICLE 6. AFFIRMATIVE COVENANTS
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Section 6.01. Reporting Requirements 31
Section 6.02. Payment of Obligations 34
Section 6.03. Maintenance of Property;
Insurance 34
Section 6.04. Conduct of Business and
Maintenance of Existence 35
Section 6.05. Compliance with Laws 35
Section 6.06. Inspection of Property, Books
and Records 35
Section 6.07. Maintenance of Ownership of
Subsidiaries 36
ARTICLE 7. NEGATIVE COVENANTS
Section 7.01. Debt 36
Section 7.02. Restricted Payments 37
Section 7.03. Investments 38
Section 7.04. Negative Pledge 38
Section 7.05. Consolidations, Mergers and
Sales of Assets 39
Section 7.06. No Prepayment of Note
Agreement Debt; Amendments
to Debt Documentation 40
Section 7.07. Transactions with Affiliates 40
Section 7.08 Borrowing Base Compliance 40
ARTICLE 8. FINANCIAL COVENANTS
Section 8.01. Fixed Charge Coverage Ratio 41
Section 8.02. Minimum Consolidated Tangible
Net Worth 41
ARTICLE 9. EVENTS OF DEFAULT
Section 9.01. Events of Default 41
Section 9.02. Remedies 43
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER
Section 10.01. Appointment, Powers and
Immunities of Agent 43
Section 10.02. Reliance by Agent 44
Section 10.03. Defaults 44
Section 10.04. Rights of Agent as a Bank 45
Section 10.05. Indemnification of Agent 45
Section 10.06. Documents 46
Section 10.07. Non-Reliance on Agent and
Other Banks 46
Section 10.08. Failure of Agent to Act 46
Section 10.09. Resignation or Removal of Agent 46
Section 10.10. Amendments Concerning Agency
Function 47
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Section 10.11. Liability of Agent 47
Section 10.12. Transfer of Agency Function 47
Section 10.13. Non-Receipt of Funds by the Agent 48
Section 10.14. Withholding Taxes 48
Section 10.15. Several Obligations and
Rights of Banks 48
Section 10.16. Pro Rata Treatment of Loans, Etc 49
Section 10.17. Sharing of Payments Among Banks 49
ARTICLE 11. GUARANTY
Section 11.01. The Guaranty 49
Section 11.02. Guaranty Unconditional 50
Section 11.03. Discharge Only upon Payment
in Full; Reinstatement in Certain
Circumstances 50
Section 11.04. Waiver by the Company 51
Section 11.05. Subrogation 51
Section 11.06. Stay of Acceleration 51
ARTICLE 12. MISCELLANEOUS
Section 12.01. Amendments and Waivers 51
Section 12.02. Usury 52
Section 12.03. Expenses 52
Section 12.04. Survival 52
Section 12.05. Assignments; Participations 52
Section 12.06. Notices 53
Section 12.07. Setoff 53
Section 12.08. Jurisdiction; Immunities 54
Section 12.09. Judgment Currency 54
Section 12.10. Confidentiality 55
Section 12.11. Table of Contents: Headings 55
Section 12.12. Severability 55
Section 12.13. Counterparts 55
Section 12.14. Integration 56
Section 12.15. Governing Law 56
EXHIBITS
Exhibit A Promissory Note
Exhibit B Authorization Letter
Exhibit C Election to Participate
Exhibit D Election to Terminate
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Exhibit E Opinion of Counsel for the Company
Exhibit F Opinion of Counsel for Each Eligible Subsidiary
SCHEDULES
Schedule I Subsidiaries of the Company
Schedule II Credit Arrangements
CREDIT AGREEMENT dated as of November 15,
1993 among THE TIMBERLAND COMPANY, a corporation
organized under the laws of the State of Delaware (the
"Company"), each of the banks which is a signatory
hereto (individually a "Bank" and collectively the
"Banks") and THE CHASE MANHATTAN BANK, N.A., a national
banking association organized under the laws of the
United States of America, as agent for the Banks (in
such capacity, together with its successors in such
capacity, the "Agent").
The Company desires that the Banks extend
credit as provided herein, and the Banks are prepared
to extend such credit. Accordingly, the Company, the
Banks and the Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used
in this Agreement the following terms have the
following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and
vice versa);
"Additional Costs" shall have the meaning set
forth in Section 3.01(a).
"Affiliate" means (i) any Person that
directly, or indirectly through one or more
intermediaries, controls the Company (a "Controlling
Person") or (ii) any Person (other than the Company or
a Subsidiary) which is controlled by or is under common
control with a Controlling Person. As used herein, the
term "control" means possession, directly or
indirectly, of the power to direct or cause the
direction of the management or
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policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means The Chase Manhattan Bank, N.A.
"Aggregate Positive Consolidated Net Income"
means the aggregate amount of consolidated net income
for each fiscal quarter commencing on or after December
31, 1992 and ending on or prior to the date as of which
Aggregate Positive Consolidated Net Income is
determined (with no deduction for consolidated net
losses for any such fiscal quarter).
"Agreement" means this Credit Agreement, as
amended or supplemented from time to time. References
to Articles, Sections, Exhibits, Schedules and the like
refer to the Articles, Sections, Exhibits, Schedules
and the like of this Agreement unless otherwise
indicated.
"Alternative Currency" means Sterling,
Deutschemarks, Lira or Francs.
"Alternative Currency Equivalent" means with
respect to an amount of Dollars on any date in relation
to any specific Alternative Currency, the amount of
such Alternative Currency that may be purchased with
such amount of Dollars at the Spot Exchange Rate with
respect to Dollars on such date.
"Alternative Currency Loan" means any Loan
denominated in an Alternative Currency.
"Authorization Letter" means the letter
agreement executed by any Borrower in the form of
Exhibit B.
"Banking Day" means any day on which
commercial banks are not authorized or required to
close in New York City and whenever such day relates to
a Eurocurrency Loan or notice with respect to any
Eurocurrency Loan, a day on which dealings in Dollar
deposits are also carried out in the London interbank
market.
"Benefit Arrangement" means at any time an
employee benefit plan within the meaning of Section
3(3) of ERISA which is not a Plan or Multiemployer Plan
and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Borrower" means the Company or any Eligible
Subsidiary, as the context may require, and their
respective successors and assigns, and "Borrowers"
means all of the foregoing.
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"Borrowing" means a Loan or group of Loans of
a single type as to which a single Interest Period is
in effect.
"Borrowing Request" means a request by a
Borrower in accordance with Section 2.05.
"Cash Flow" means for any periods, the sum of
(a) consolidated net income of the Company and its
Consolidated Subsidiaries for such period, plus (b) to
the extent deducted in determining such consolidated
net income, the sum of Consolidated Interest Expense,
consolidated taxes, consolidated depreciation and
goodwill amortization for such periods, minus
Consolidated Capital Expenditures for such period.
"Capital Expenditures" means for any period,
the Dollar amount of gross expenditures (including
obligations under Capital Leases made for fixed assets,
real property, plant and equipment, and all renewals,
improvements and replacement thereto (but not repairs
thereof)) incurred during such period.
"Capital Lease" means any lease which has
been or should be capitalized on the books of the
lessee in accordance with generally accepted accounting
principles.
"Closing Date" means the date this Agreement
has been executed by the Company, the Banks and the
Agent.
"Code" means the Internal Revenue Code of
1986, as amended from time to time.
"Commitment" means with respect to each Bank,
the obligation of such Bank to make Loans under this
Agreement in the aggregate principal amount following,
as such amount may be reduced or otherwise modified
from time to time:
The Chase Manhattan Bank, N.A.: $20,000,000;
Fleet Bank of Massachusetts, N.A.: $15,000,000;
IBJ Schroder Bank and Trust Company: $15,000,000;
Total: $50,000,000.
"Company" means The Timberland Company, a
Delaware corporation, and its successors and assigns.
"Consolidated Capital Expenditures" means
Capital Expenditures of the Company and its
Consolidated Subsidiaries on a consolidated basis.
"Consolidated EBITR" means, for any period,
the sum of (a) consolidated net income of the Company
and its Consolidated Subsidiaries for such period, plus
(b) to the extent deducted in
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determining such consolidated net income, the sum of (i) Consolidated
Interest Expense, (ii) Consolidated Rental Expense and
(iii) consolidated taxes of the Company and its
Consolidated Subsidiaries for such period.
"Consolidated Interest Expense" means, for
any period, the interest expense of the Company and its
Consolidated Subsidiaries determined on a consolidated
basis for such period.
"Consolidated Net Worth" means at any date
the consolidated stockholders' equity of the Company
and its Consolidated Subsidiaries (without giving
effect to any write-ups or write-downs resulting from
foreign currency translations after December 31, 1992)
as of such date.
"Consolidated Rental Expense" means, for any
period, the rental expense of the Company and its
Consolidated Subsidiaries (other than with respect to
Capital Leases) determined on a consolidated basis for
such period.
"Consolidated Subsidiary" means any
Subsidiary whose accounts are or are required to be
consolidated with the accounts of the Company in
accordance with generally accepted accounting
principles.
"Consolidated Tangible Net Worth" means at
any date Consolidated Net Worth less the consolidated
Intangible Assets of the Company and its Consolidated
Subsidiaries, all determined as of such date. For the
purposes of this definition "Intangible Assets" means
the amount (to the extent reflected in determining such
Consolidated Net Worth) of (i) all write-ups (other
than write-ups of assets of a going concern business
made within twelve months after the acquisition of such
business) subsequent to December 31, 1992 in the book
value of any asset owned by the Company or a
Consolidated Subsidiary, (ii) all Investments in
unconsolidated Subsidiaries and all equity investments
in Persons which are not Subsidiaries and (iii) all
unamortized debt discount and expenses, unamortized
deferred charges, goodwill, patents, trademarks,
service marks, trade names, anticipated future benefit
of tax loss carry-forwards, copyrights, organization or
developmental expenses and other intangible assets.
"Conversion Date" means May 15, 1996;
provided that if such date is not a Banking Day, the
Conversion Date shall be the next succeeding Banking
Day (or if such next succeeding Banking Day falls in
the next calendar month, the next preceding Banking
Day).
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"Debt" means, with respect to any Person at
any date, without duplication: (a) all obligations of
such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or
other similar instruments, (c) all obligations of such
Person to pay the deferred purchase price of property
or services, except trade accounts payable arising in
the ordinary course of business, (d) all obligations of
such Person as lessee which are capitalized in
accordance with generally accepted accounting
principles, (e) all non-contingent obligations of such
Person to reimburse or prepay any bank or other Person
in respect of amounts paid under a letter of credit,
banker's acceptance or similar instrument, whether
drawn or undrawn, (f) all Debt of others secured by a
Lien on any asset of such Person, whether or not such
Debt is assumed by such Person, and (g) all Debt of
others Guaranteed by such Person.
"Default" means any event which constitutes
an Event of Default or which with the giving of notice
or lapse of time, or both, would become an Event of
Default.
"Default Rate" means, with respect to an
amount of any Loan not paid when due, a rate per annum
equal to: (a) if such Loan is a Variable Rate Loan, a
variable rate 2% above the rate of interest thereon;
(b) if such Loan is a Eurocurrency Loan, a fixed rate
2% above the rate of interest in effect thereon
(including any Interest Margin).
"Denomination Date" means in relation to any
Borrowing in an Alternative Currency, the date that is
three Banking Days prior to the date such Borrowing is
made.
"Deutschemarks" and the sign "DM" means
lawful money of Germany.
"Dollars" and the sign "$" mean lawful money
of the United States of America.
"Dollar Equivalent" means, with respect to an
amount of any Alternative Currency on any date, the
amount of Dollars that may be purchased with such
amount of such Alternative Currency at the Spot
Exchange Rate with respect to such Alternative Currency
on such date.
"Election to Participate" means an Election
to Participate substantially in the form of Exhibit C
hereto.
"Election to Terminate" means an Election to
Terminate substantially in the form of Exhibit D
hereto.
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"Eligible Subsidiary" means any Wholly-Owned
Consolidated Subsidiary of the Company as to which an
Election to Participate shall have been delivered to
the Agent and as to which an Election to Terminate
shall not have been delivered to the Agent. Each such
Election to Participate and Election to Terminate shall
be duly executed on behalf of such Wholly-Owned
Consolidated Subsidiary and the Company in such number
of copies as the Agent may request. The delivery of an
Election to Terminate shall not affect any obligation
of an Eligible Subsidiary theretofore incurred. The
Agent shall promptly give notice to the Banks of the
receipt of any Election to Participate or Election to
Terminate.
"Environmental Laws" means any and all
federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, injunctions, permits,
conversions, grants, franchises, licenses, agreements
and other governmental restrictions relating to the
environment, the effect of the environment on human
health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or
wastes into the environment, including without
limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the
clean up or other remediation thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, or
any successor statute including any rules and
regulations promulgated thereunder.
"ERISA Group" means the Company, any
Subsidiary and all members of a controlled group of
corporations and all trades or businesses (whether or
not incorporated) under common control which, together
with the Company or any Subsidiary, are treated as a
single employer under Section 414(c) of the Code.
"Eurocurrency Loan" means any Loan when and
to the extent the interest rate therefor is determined
on the basis of the definition "Fixed Base Rate."
"Event of Default" has the meaning given such
term in Section 9.01.
"Facility Documents" means this Agreement and
the Notes.
"Federal Funds Rate" means, for any day, the
rate per annum (expressed on a 365/366 day basis of
calculation, if the
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rate on Variable Rate Loans is so
calculated) equal to the weighted average of the rates
on overnight federal funds transactions as published by
the Federal Reserve Bank of New York for such day (or
for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"Fixed Base Rate" means with respect to any
Interest Period for a Eurocurrency Loan, the rate per
annum (rounded upwards if necessary to the nearest 1/16
of 1%) quoted at approximately 11:00 a.m. London time
by the principal London branch of the Agent two Banking
Days prior to the first day of such Interest Period for
the offering to leading banks in the London interbank
market of Dollar deposits or deposits in an Alternative
Currency, as the case may be, in immediately available
funds, for a period, and in an amount, comparable to
the Interest Period and principal amount of the
Eurocurrency Loan which shall be made by the Banks and
outstanding during such Interest Period.
"Fixed Charge Coverage Ratio" means, for any
period, the ratio of (i) Consolidated EBITR for such
period to (ii) the sum of (A) Consolidated Interest
Expense for such period, (B) Consolidated Rental
Expense for such period and (C) dividends on preferred
stock of the Company and its Consolidated Subsidiaries
for such period (other than any such dividends paid to
the Company or its Consolidated Subsidiaries).
"Fixed Rate" means, for any Eurocurrency Loan
for any Interest Period therefor, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of
1%) determined by the Agent to be equal to the quotient
of (i) the Fixed Base Rate for such Loan for such
Interest Period, divided by (ii) one minus the Reserve
Requirement for such Loan for such Interest Period.
"Francs" and the sign "FF" means lawful money
of France.
"Funded Debt" means all Debt for money
borrowed which by its terms matures more than one year
from the date as of which such Funded Debt is incurred,
and any Debt for money borrowed maturing within one
year from such date which is renewable or extendable at
the option of the obligor to a date beyond one year
from such date (whether or not heretofore renewed or
extended), including any such indebtedness renewable or
extendable at the option of the obligor under, or
payable from the proceeds of other indebtedness which
may be incurred pursuant to, the provisions of any
revolving credit agreement or other similar agreement.
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"Guarantee" means any obligation, contingent
or otherwise, of any Person directly or indirectly
guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase
or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other
manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided
that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and
other hydro-carbons, or any substance having any
constituent elements displaying any of the foregoing
characteristics.
"Interest Margin" means (a) if the Company's
ratio of Debt to Cash Flow is equal to or greater than
2.25 to 1.00, a rate of 125 basis points over the Fixed
Rate for Eurocurrency Loans; (b) if the Company's ratio
of Debt to Cash Flow is less than 2.25 to 1.00 a rate
of 100 basis points over the Fixed Rate for
Eurocurrency Loans; and (c) if at any time on or after
December 31, 1994, the Company's ratio of Debt to Cash
Flow is less than 2.00 to 1.00, at a rate of 75 basis
points over the Fixed Rate for Eurocurrency Loans. The
above ratio will be tested at the end of the Company's
fiscal year for the year then ended and will be in
effect with respect to any Borrowing, conversion or
renewal made subsequent to the receipt by the Agent of
the certificate described in Section 6.01(e) hereof.
"Interest Period" means, with respect to any
Eurocurrency Loan, the period commencing on the date
such Loan is made, converted from another type of Loan
or renewed, as the case may be, and ending, as any
Borrower may select pursuant to Section 2.07, on the
numerically corresponding day in the first, second,
third, or sixth, or (as available from the Banks)
fourth, fifth, seventh, eighth, ninth or twelfth
calendar month thereafter, provided that each such
Interest Period which commences on the last Banking Day
of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last
Banking Day of the appropriate calendar month.
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"Investments" means any investment in any
Person, whether by means of share purchase, capital
contribution, loan, time deposit or otherwise.
"Lending Office" means, for each Bank and for
each type of Loan, the lending office of such Bank (or
of an affiliate of such Bank) designated as such for
such type of Loan on its signature page hereof or such
other office of such Bank (or of an affiliate of such
Bank) as such Bank may from time to time specify to the
Agent and the Company as the office by which its Loans
of such type are to be made and maintained.
"Lien" means with respect to any asset, any
mortgage, deed of trust, lien (statutory or otherwise),
pledge, charge, security interest or encumbrance of any
kind, or any other type of preferential arrangement
that has the practical effect of creating a security
interest, in respect of such asset. For the purposes
of this Agreement, the Company or any Subsidiary shall
be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement
relating to such asset.
"Lira" means lawful money of Italy.
"Loan" or "Loans" means any loan made by a
Bank pursuant to Section 2.01 or Section 2.02.
"Material Debt" means Debt (other than the
Notes) of the Company and/or one or more of its
Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal
amount exceeding $1,000,000.
"Material Plan" means at any time a Plan or
Plans having an aggregate amount of Unfunded
Liabilities in excess of $500,000.
"Morgan Credit Agreement" means the Credit
Agreement, dated as of May 13, 1993, among the Company,
the banks listed therein and Morgan Guaranty Trust
Company of New York, as Agent, and unless otherwise
provided herein, as amended from time to time.
"Multiemployer Plan" means at any time an
employee pension benefit plan within the meaning of
Section 4001 (a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to
make contributions or has within the preceding five
plan years made contributions, including for these
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purposes any Person which ceased to be a member of the
ERISA Group during such five year period.
"Note" means a promissory note of the
Borrower in the form of Exhibit A hereto evidencing the
Loans made by a Bank hereunder.
"PBGC" means the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of
its functions under ERISA.
"Permitted Long-Term Debt" means Debt (other
than Debt permitted under Section 7.01(b)) of the
Company or any of its Subsidiaries that (a) does not
mature or have any required sinking fund or other
required payments of principal (other than (i)
principal and interest on a standard mortgage basis for
mortgages with terms, at the time such mortgages are
entered into, of greater than 15 years and (ii) the
principal component of rental payments with respect to
not more than $5,000,000 of Capitalized Leases, the
terms of which are not, at the time such leases are
entered into, less than five years), any mandatory
redemptions or redemptions at the option of the holder
thereof or any required increases in the rate of
interest payable with respect thereto, in any such case
prior to the six month anniversary of the Termination
Date or (b) consists of conventional construction loans
incurred to finance the construction of real property
improvements of the Company and its Subsidiaries or (c)
does not exceed $2,500,000 principal amount in the
aggregate.
"Permitted Short-Term Debt" means Debt (other
than the Loans or loans and acceptances made under the
Morgan Credit Agreement or Debt permitted under Section
7.01(h)) of the Company or any of its Subsidiaries
having a maturity, at the time such Debt is incurred,
of not more than one year from the date such Debt is
incurred.
"Person" means an individual, partnership,
corporation, business trust, joint stock company,
trust, unincorporated association, joint venture,
governmental authority or other entity of whatever
nature.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and
either (i) is maintained, or contributed to, by any
member of the ERISA Group for
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employees of any member
of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed
to, by any Person which was at such time a member of
the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.
"Prime Rate" means that rate of interest from
time to time announced by the Agent at its principal
office as its prime commercial lending rate.
"Principal Office" means the principal office
of the Agent, presently located at One Chase Manhattan
Plaza, New York, New York 10081.
"Prohibited Transaction" means any
transaction set forth in Section 406 of ERISA or
Section 4975 of the Code.
"Regulation D" means Regulation D of the
Board of Governors of the Federal Reserve System as the
same may be amended or supplemented from time to time.
"Regulation U" means Regulation U of the
Board of Governors of the Federal Reserve System as the
same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to
any Bank, any change after the date of this Agreement
in United States federal, state, municipal or foreign
laws or regulations (including Regulation D) or the
adoption or making after such date of any
interpretations, directives or requests applying to a
class of banks including such Bank of or under any
United States federal, state, municipal or foreign laws
or regulations (whether or not having the force of law)
by any court or governmental or monetary authority
charged with the interpretation or administration
thereof.
"Reportable Event" means any of the events
set forth in Section 4043(b) of ERISA as to which
events the PBGC by regulation has not waived the
requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such
event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section
302 of ERISA shall be a Reportable Event regardless of
any waivers given under Section 412(d) of the Code.
"Required Banks" means, at any time while no
Loans are outstanding, Banks having at least 51% of
the aggregate amount of the Commitments and, at any
time while Loans are outstanding, Banks holding at
least 51% of the aggregate principal amount of the
Loans.
"Reserve Requirement" means, for any
Eurocurrency Loan for any Interest Period therefor, the
average maximum rate at
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which reserves (including any
marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period
under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding
$1,000,000,000 against, in the case of Eurocurrency
Loans, "Eurocurrency liabilities" (as such term is used
in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member
banks by reason of any Regulatory Change against any
category of extensions of credit or other assets which
include Variable Rate Loans.
"Restricted Payment" means (i) any dividend
or other distribution on any shares of the Company's
capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment (other
than payments for the repurchase of shares of the
Company's common stock from employees or former
employees of the Company or any of its Subsidiaries
pursuant to the 1987 Employee Stock Purchase Plan, the
1991 Employee Stock Purchase Plan or the 1987 Employee
Stock Option Plan, in each case as in effect on the
date hereof (or any successor plans with substantially
similar provisions), in an aggregate amount not to
exceed the proceeds received by the Company after the
date hereof of sales of shares of the Company's common
stock to employees of the Company and its Subsidiaries)
on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Company's capital
stock or (b) any option, warrant or other right to
acquire shares of the Company's capital stock.
"Revolving Credit Loans" means Loans made by
the Banks pursuant to Section 2.01 hereof.
"Spot Exchange Rate" means, on any day, (a)
with respect to any Alternative Currency, the spot rate
at which Dollars are offered on such day by the Agent
in London for such Alternative Currency at
approximately 11:00 a.m. (London time), and (b) with
respect to Dollars in relation to any specified
Alternative Currency, the spot rate at which such
specified Alternative Currency is offered on such day
by the Agent in London for Dollars at approximately
11:00 a.m. (London time). For purposes of determining
the Spot Exchange Rate in connection with an
Alternative Currency Borrowing, such Spot Exchange Rate
shall be determined as of the Denomination Date for
such Borrowing with respect to transactions in the
applicable Alternative Currency that will settle on the
date of such Borrowing.
"Sterling" or "[pound symbol]" means lawful money of the
United Kingdom.
17
"Subsidiary" means, as to any Person, any
corporation or other entity of which at least a
majority of the securities or other ownership interests
having ordinary voting power (absolutely or
contingently) for the election of directors or other
persons performing similar functions are at the time
owned directly or indirectly by such Person.
"Swartz Family" means Sidney W. Swartz, his
estate, his spouse, his lineal descendants, trusts
established for his, her or their benefit, the Swartz
Family Charitable Trust and The Sidney W. Swartz 1982
Family Trust.
"Temporary Cash Investments" means any
Investment in (i) direct obligations of the United
States or any agency thereof, or obligations guaranteed
by the United States or any agency thereof, (ii)
commercial paper rated at A-1 or higher by Standard &
Poor's Corporation or P-1 or higher by Moody's
Investors Service, Inc., (iii) time deposits with,
including certificates of deposit issued by, (x) any
office located in the United States of (A) any bank or
trust company which is organized under the laws of the
United States or any state thereof and has capital,
surplus and undivided profits aggregating at least
$100,000,000 or (B) any Bank or (y) in the case of
Investments made by a Subsidiary of the Company whose
principal place of business is located outside the
United States, any office located outside the United
States of (A) any bank or trust company the long-term
unsecured senior debt of which is rated AA or higher by
Standard & Poor's Corporation or Aa or higher by
Moody's Investors Service, Inc. or (B) any Bank, (iv)
money market funds which invest only in securities
described in clauses (i), (ii) and (iii)(x) above or
(v) repurchase agreements with respect to securities
described in clause (i) above entered into with an
office of a bank or trust company meeting the criteria
specified in clause (iii) above; provided in each case
that such Investment matures within one year from the
date of acquisition thereof by the Company or a
Subsidiary.
"Termination Date" means May 15, 1999;
provided that if such date is not a Banking Day, the
Termination Date shall be the next succeeding Banking
Day (or, if such next succeeding Banking Day falls in
the next calendar month, the next preceding Banking
Day).
"Term Loans" means the Revolving Credit Loans
converted to term loans pursuant to Section 2.02
hereof.
"Total Aggregate Exposure" means, at any
time, the aggregate principal amount outstanding (a)
under the Morgan Credit Agreement (including the face
amount of any Acceptances (as defined therein) not yet
paid or prepaid pursuant to the
18
terms thereof) or (b) under any extensions, renewals or refinancings
of the obligations under the Morgan Credit Agreement.
"Unfunded Liabilities" means with respect to
any Plan at any time, the amount (if any) by which (i)
the value of all benefit liabilities under such Plan,
determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but
unpaid contributions), but only to the extent that such
excess represents a potential liability of any member
of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"Variable Rate" means, for any day, the
higher of (a) the Federal Funds Rate for such day plus
1/4 of 1% or (b) the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and
to the extent the interest rate for such Loan is
determined in relation to the Variable Rate.
"Wholly-Owned Consolidated Subsidiary" means
any Consolidated Subsidiary all of the shares of
capital stock or other ownership interests of which
(except directors' qualifying shares and, in the case
of The Outdoor Footwear Company, shares of non-voting
common stock of The Outdoor Footwear Company issued to
employees thereof under arrangements consistent with
past practice) are at the time directly or indirectly
owned by the Company.
Section 1.02. Accounting Terms. Unless otherwise
specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting
principles as in effect from time to time, applied on a
basis consistent (except for changes concurred in by
the Company's independent public accountants) with the
most recent audited consolidated financial statements
of the Company and its Consolidated Subsidiaries
delivered to the Banks; provided that, if the Company
notifies the Agent that the Company wishes to amend any
covenant in Article 8 to eliminate the effect of any
change in
19
generally accepted accounting principles on
the operation of such covenant (or if the Agent
notifies the Company that the Required Banks wish to
amend Article 8 for such purpose), then the Company's
compliance with such covenant shall be determined on
the basis of generally accepted accounting principles
in effect immediately before the relevant change in
generally accepted accounting principles became
effective, until either such notice is withdrawn or
such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
ARTICLE 2. THE CREDIT.
Section 2.01. The Revolving Credit Loans. (a)
Subject to the terms and conditions of this Agreement,
each of the Banks severally and not jointly agrees to
make loans to the Company and its Eligible Subsidiaries
(as specified in the Borrowing Request with respect
thereto) from time to time from and including the date
hereof to and including the Conversion Date, in an
aggregate principal amount up to but not exceeding at
any one time outstanding, the amount of its Commitment.
The Borrowers shall be permitted to make only six
Borrowing Requests during any calendar year and each
Borrowing under this Section shall be made by the Banks
ratably in accordance with their Commitments. A
conversion under Section 2.06 or a renewal under
Section 2.07 shall not constitute a Borrowing Request
and Loans of multiple types requested on the same day
shall not constitute separate Borrowing Requests. The
Revolving Credit Loans may be outstanding as Variable
Rate Loans or Eurocurrency Loans (each a "type" of
Loan). Eurocurrency Loans may be denominated in
Dollars or in one or more Alternative Currencies and
all Variable Rate Loans shall be denominated only in
Dollars. Subject to the terms hereof, the Borrowers
may borrow, pay or prepay and reborrow Revolving Credit
Loans hereunder prior to the Conversion Date. Each
type of Loan of each Bank shall be made and maintained
at such Bank's Lending Office for such type of Loans.
(b) Notwithstanding anything herein to the
contrary, on the Closing Date, subject to the terms and
conditions of this Agreement, the Borrower shall make
an initial Borrowing as set forth in Borrowing Request
delivered on such date, which shall be for an interest
period ending January 3, 1994 and shall bear interest
at a rate of 4.75% per annum.
(c) Any Revolving Credit Loans may be made in the
Alternative Currency specified in the applicable
Borrowing Request given pursuant to Section 2.05 in an
amount equal to the Alternative Currency Equivalent of
the Dollar amount specified in such Borrowing Request,
as determined by the Agent as of the Denomination Date
for such Borrowing (which determination shall be
conclusive absent manifest error). For purposes of
determining the amount outstanding under any Bank's
Commitment, each Alternative Currency Loan shall be the
Dollar Equivalent for such Loan as of the Denomination
Date.
20
Section 2.02. The Term Loans. (a) On the
Conversion Date the Revolving Credit Loans shall be
converted to Term Loans in an aggregate principal
amount equal to the aggregate principal amount of the
Revolving Credit Loans outstanding on such date. The
Term Loans may be outstanding as Variable Rate Loans or
Eurocurrency Loans. After the Conversion Date all Term
Loans shall remain denominated in the currency in which
they were denominated on the Conversion Date until the
Termination Date.
(b) The Term Loans shall be due and
payable on the Termination Date.
Section 2.03. The Notes. The Loans of each
Bank shall be evidenced by promissory notes in favor of
such Bank in the form of Exhibit A, dated the date of
this Agreement, duly completed and executed by the
applicable Borrower. Each Bank shall, and is hereby
authorized by the Borrowers to, endorse on the schedule
attached to each Note held by such Bank, or otherwise
record in such Bank's internal records, an appropriate
notation evidencing the date, amount and currency of
each Loan evidenced by such Note, and each payment or
prepayment of principal; provided that the failure of
any Bank to make such notation or any error therein
shall not affect the obligations of the applicable
Borrower to repay the Loans made by such Bank.
Section 2.04. Purpose. The Borrowers shall
use the proceeds of the Loans for working capital,
future capital expenditures and for general corporate
purposes of the Borrowers. Such proceeds shall not be
used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within
the meaning of Regulation U.
Section 2.05. Borrowing Procedures. The
applicable Borrowers shall give the Agent notice (a
"Borrowing Request") of each Borrowing to be made under
Section 2.01 as provided in Section 2.09; provided that
not more than six Borrowing Requests shall be given to
the Agent during any calendar year. Not later than
2:00 p.m. New York City time on the date of such
Borrowing, each Bank shall, through its Lending Office
and subject to the conditions of this Agreement, make
the amount of the Loan to be made by it on such day in
the currency in which such Loan is to be made available
to the Agent, at the Principal Office and in
immediately available funds for the account of the
applicable Borrowers. The amount so received by the
Agent shall, subject to the conditions of this
Agreement, be made available to the Borrowers, in
immediately available funds, by the Agent crediting an
account of the Borrowers designated by the Borrowers
and maintained with the Agent at the Principal Office.
21
Section 2.06. Prepayments and Conversions.
(a) Subject to the terms of this Agreement the
Borrowers shall have the right to make prepayments of
principal, or to convert one type of Loan into another
type of Loan, at any time or from time to time;
provided that: (i) the applicable Borrower shall give
the Agent notice of each such prepayment or conversion
as provided in Section 2.09; and (ii) Eurocurrency
Loans may be prepaid or converted only on the last day
of an Interest Period for such Loans.
(b) If at any time the amount of the
Revolving Credit Loans outstanding hereunder exceeds
the Commitments, the Borrowers shall immediately repay
the Loans in an amount equal to such excess. For the
purposes of this clause (b) the amount outstanding
under any Alternative Currency Loan at any time shall
be the Dollar Equivalent thereof as of the Denomination
Date.
(c) The Term Loans shall be prepaid
in twelve equal payments in a principal amount equal to
1/12 of the amount outstanding on the Conversion Date,
on the last day of each February, May, August and
November, commencing on the first such date after the
Conversion Date, with the last such payment to be made
on the Termination Date.
Section 2.07. Interest Periods: Renewals.
(a) In the case of each Eurocurrency Loan, the
applicable Borrower shall select an Interest Period of
any duration in accordance with the definition of
Interest Period in Section 1.01, subject to the
following limitations: (i) no Interest Period may
extend beyond the Termination Date; (ii)
notwithstanding clause (i) above, no Interest Period
shall have a duration less than one month, and if any
such proposed Interest Period would otherwise be for a
shorter period, such Interest Period shall not be
available; (iii) if an Interest Period would end on a
day which is not a Banking Day, such Interest Period
shall be extended to the next Banking Day, unless such
Banking Day would fall in the next calendar month in
which event such Interest Period shall end on the
immediately preceding Banking Day; and (iv) only seven
Interest Periods of each Bank may be outstanding at any
one time.
(b) Upon notice to the Agent as provided in Section
2.09, a Borrower may renew any Eurocurrency Loan on the
last day of the Interest Period therefor as the same
type of Loan with an Interest Period of the same or
different duration in accordance with the limitations
provided above. If the Borrower shall fail to give
notice to the Agent of such a renewal, (a) in the case
of a Eurocurrency Loan denominated in Dollars such
Eurocurrency Loan shall automatically become a Variable
Rate Loan on the last day of the current Interest
Period and (b) in the case of a Eurocurrency Loan
denominated in an Alternative Currency, such
22
Eurocurrency Loan shall automatically become a
Eurocurrency Loan denominated in the same Alternative
Currency having an Interest Period of one month.
Section 2.08. Changes of Commitments. The Company
shall have the right to reduce or terminate the amount
of unused Commitments at any time or from time to time,
provided that: (a) the Company shall give notice of
each such reduction or termination to the Agent as
provided in Section 2.09; and (b) each partial
reduction shall be in an aggregate amount at least
equal to $5,000,000. The Commitments once reduced or
terminated may not be reinstated.
Section 2.09. Certain Notices. Borrowing Requests
issued by a Borrower to the Agent with respect to each
Borrowing pursuant to Section 2.05, and each notice of
prepayment or conversion pursuant to Section 2.06, and
each notice of renewal pursuant to Section 2.07(b), and
each notice of reduction or termination of the
Commitments pursuant to Section 2.08 shall be
irrevocable and shall be effective only if received by
the Agent not later than 11:00 a.m. New York City time,
and (a) in the case of Borrowings and prepayments of,
conversions into and, in the case of Eurocurrency
Loans, renewals of (i) Variable Rate Loans, given on
the day of such Borrowing; or (ii) Eurocurrency Loans,
given three Banking Days prior thereto; (b) in the case
of reductions or termination of the Commitments, given
three Banking Days prior thereto. Each such notice
shall specify the Borrower or Borrowers, the Loans to
be borrowed, prepaid, converted or renewed and the
currency and the amount (subject to Section 2.10) and
type of the Loans to be borrowed, or converted, or
prepaid or renewed (and, in the case of a conversion,
the type of Loans to result from such conversion and,
in the case of a Eurocurrency Loan, the Interest Period
therefor) and the date of the Borrowing or prepayment,
or conversion or renewal (which shall be a Banking
Day). Each such notice of reduction or termination
shall specify the amount of the Commitments to be
reduced or terminated. The Agent shall promptly notify
the Banks of the contents of each such notice.
Section 2.10. Minimum Amounts. Except for
Borrowings which exhaust the full remaining amount of
the Commitments, prepayments or conversions which
result in the prepayment or conversion of all Loans of
a particular type or conversions made pursuant to
Section 3.04, each Borrowing, prepayment, conversion
and renewal of principal of Revolving Credit Loans of a
particular type shall be, (a) in the case of a Variable
Rate Loan in an amount at least equal to $100,000 in
the aggregate for all Banks, (b) in the case of
Eurocurrency Loans denominated in Dollars in an amount
equal to $3,000,000 or any larger integral multiple of
$100,000 and (c) in the case of Eurocurrency Loans
denominated in an Alternative
23
Currency in an amount equal to the Dollar Equivalent of
$3,000,000 or any larger integral multiple of $100,000.
(Borrowings, prepayments, conversions or renewals of or
into Loans of different types or, in the case of Eurocurrency
Loans, having different Interest Periods at the same
time hereunder shall be deemed separate Borrowings,
prepayments, conversions and renewals for the purposes
of the foregoing minimum amounts, one for each type of
Interest Period).
Section 2.11. Interest. (a) Interest shall
accrue on the outstanding and unpaid
principal amount of each Loan for the period from and
including the date of such Loan to but excluding the
date such Loan is due, at the following rates per
annum: (i) for a Variable Rate Loan, at a variable rate
per annum equal to the Variable Rate; and (ii) for a
Eurocurrency Loan, at a fixed rate equal to the Fixed
Rate plus the applicable Interest Margin. If any
principal amount shall not be paid when due (at stated
maturity, by acceleration or otherwise), interest shall
accrue on such amount from and including such due date
to but excluding the date such amount is paid in full
at the Default Rate.
(b) The interest rate on each Variable Rate
Loan shall change when the Variable Rate changes.
Interest on the Loans shall be calculated on the basis
of a year of 360 days for the actual number of days
elapsed. Promptly after the determination of any
interest rate provided for herein or any change
therein, the Agent shall notify the applicable
Borrowers and the Banks.
(c) Accrued interest shall be due and payable
in arrears upon any payment of principal or conversion
and (i) for each Variable Rate Loan, on the last day of
each quarter, commencing the first such date after such
Loan; and (ii) for each Eurocurrency Loan, on the last
day of the Interest Period with respect thereto and in
the case of Eurocurrency Loans having an Interest
Period longer than three months, at the end of each
three month period; provided that interest accruing at
the Default Rate shall be due and payable from time to
time on demand of the Agent.
Section 2.12. Fees. (a) The Company
shall pay to the Agent for the account of each Bank a
commitment fee on the daily average unused Commitment
of such Bank for the period from and including November
23, 1993 to the earlier of the date the Commitments are
terminated or the Conversion Date at a rate per annum
equal to 3/8%, calculated on the basis of a year of 360
days for the actual number of days elapsed. The
accrued commitment fee shall be due and payable in
arrears upon any reduction or termination of the
Commitments, on the last day of
24
each March, June, September and December, commencing on the first such
date after the Closing Date, and on the Conversion
Date.
(b) The Company shall pay to the Agent as
compensation for its services hereunder an agency fee
as set forth in that certain letter dated September 23,
1993 between the Agent and the Company.
Section 2.13. Payments Generally. All
payments under this Agreement or the Notes shall be
made in immediately available funds. In the case of
Loans denominated in Dollars payment shall be made in
Dollars not later than 1:00 p.m. New York City time on
the relevant dates specified above at the Principal
Office for the account of the applicable Lending Office
of each Bank. In the case of Loans denominated in an
Alternative Currency payment shall be made in such
Alternative Currency on the relevant payment date not
later than 1:00 p.m. at the Lending Office designated
by the Agent for the account of the applicable Lending
Office of each Bank. Each such payment made after such
time on such due date is to be deemed to have been made
on the next succeeding Banking Day. The Agent, or any
Bank for whose account any such payment is to be made,
may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any
ordinary deposit account of the Borrower with the Agent
or such Bank, as the case may be, and any Bank so doing
shall promptly notify the Agent and the Company. A
Borrower shall, at the time of making each payment
under this Agreement or any Notes, specify to the Agent
the principal or other amount payable by such Borrower
under this Agreement or the Notes to which such payment
is to be applied (and in the event that it fails to so
specify, or if a Default or Event of Default has
occurred and is continuing, the Agent may apply such
payment as it may elect in its sole discretion (subject
to Section 10.16)). If the due date of any payment
under this Agreement or any Notes would otherwise fall
on a day which is not a Banking Day, such date shall be
extended to the next succeeding Banking Day and
interest shall be payable for any principal so extended
for the period of such extension. Each payment
received by the Agent hereunder or under any Note for
the account of a Bank shall be paid promptly to such
Bank, in immediately available funds, for the account
of such Bank's Lending Office.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) Each Borrower
shall pay directly to each Bank from time to time on
demand such amounts as such Bank may determine to be
necessary to compensate it for any costs which such
Bank determines are attributable to its making or
maintaining any Eurocurrency Loans under this Agreement
or its Notes or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by
such Bank hereunder in respect of any such Loans or
such obligation (such increases in costs and reductions
in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its
25
Notes in respect of any of such Loans (other than taxes
imposed on the overall net income of such Bank or of
its Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal
office or such Lending Office); or (ii) imposes or
modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio
or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or
other liabilities of, such Bank (including any of such
Loans or any deposits referred to in the definition of
"Fixed Base Rate" in Section 1.01); or (iii) imposes
any other condition affecting this Agreement or its
Notes (or any of such extensions of credit or
liabilities). Each Bank will notify the Company of any
event occurring after the date of this Agreement which
will entitle such Bank to compensation pursuant to this
Section 3.01(a) as promptly as practicable after it
obtains knowledge thereof and determines to request
such compensation. Such notice will set forth in
reasonable detail the calculation of any Additional
Costs due hereunder. If any Bank requests compensation
from the Company under this Section 3.01(a), or under
Section 3.01(c), the Company may, by notice to such
Bank (with a copy to the Agent), require that such
Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance
with Section 3.04.
(b) Without limiting the effect of
the foregoing provisions of this Section 3.01, in the
event that, by reason of any Regulatory Change, any
Bank either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the
amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to
which the interest rate on Eurocurrency Loans is
determined as provided in this Agreement or a category
of extensions of credit or other assets of such Bank
which includes Eurocurrency Loans or (ii) becomes
subject to restrictions on the amount of such a
category of liabilities or assets which it may hold,
then, if such Bank so elects by notice to the Company
(with a copy to the Agent), the obligation of such Bank
to make or renew, and to convert Loans of any other
type into, Loans of such type hereunder shall be
suspended until the date such Regulatory Change ceases
to be in effect (and all Loans of such type held by
such Bank then outstanding shall be converted in
accordance with Section 3.04).
26
(c) Without limiting the effect of
the foregoing provisions of this Section 3.01 (but
without duplication), each Borrower shall pay directly
to each Bank from time to time on request such amounts
as such Bank may determine to be necessary to
compensate such Bank for any costs which it determines
are attributable to the maintenance by it or any of its
affiliates pursuant to any law or regulation of any
jurisdiction or any interpretation, directive or
request (whether or not having the force of law and
whether in effect on the date of this Agreement or
thereafter) of any court of governmental or monetary
authority of capital in respect of its Loans hereunder
or its obligation to make Loans hereunder (such
compensation to include, without limitation, an amount
equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have
achieved but for such law, regulation, interpretation,
directive or request). Each Bank will notify the
Company if it is entitled to compensation pursuant to
this Section 3.01(c) as promptly as practicable after
it determines to request such compensation. Such
notice will set forth in reasonable detail the
calculation of any amounts due hereunder.
(d) Determinations and allocations
by a Bank for purposes of this Section 3.01 of the
effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained
pursuant to subsection (c), on its costs of making or
maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it
in respect of Loans or such obligation, and of the
additional amounts required to compensate such Bank
under this Section 3.01, shall be conclusive, provided
that such determinations and allocations are made on a
reasonable basis.
Section 3.02. Limitation of Types of
Loans. Anything herein to the contrary
notwithstanding, if:
(a) the Agent determines (which
determination shall be conclusive) that quotations of
interest rates for the relevant deposits referred to in
the definition of "Fixed Base Rate" in Section 1.01 are
not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the
rate of interest for any type of Eurocurrency Loans as
provided in this Agreement; or
(b) the Required Banks determine
(which determination shall be conclusive) and notify
the Agent that the relevant rates of interest referred
to in the definition of "Fixed Base Rate" in Section
1.01 upon the basis of which the rate of interest for
any type of Eurocurrency Loans is to be determined do
not adequately cover the cost to the Banks of making or
maintaining such Loans;
27
then the Agent shall give the Company and each Bank
prompt notice thereof, and so long as such condition
remains in effect, the Banks shall be under no
obligation to make or renew Loans of such type or to
convert Loans of any other type into Loans of such type
and the Borrowers shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Loans of
the affected type, either prepay such Loans or convert
such Loans into another type of Loans in accordance
with Section 2.06.
Section 3.03. Illegality Notwithstanding
any other provision in this Agreement,
in the event that it becomes unlawful for any Bank or
its Lending Office to (a) honor its obligation or make
or renew Eurocurrency Loans hereunder or convert Loans
of any type into Loans of such type, or (b) maintain
Eurocurrency Loans hereunder or (c) in the case of a
Borrowing denominated in an Alternative Currency, there
shall have occurred a change in national or
international financial, political or economic
conditions (including the imposition of or any change
in exchange controls) or any currency exchange rates
would make it impracticable for any Bank to make Loans
denominated in such Alternative Currency, then such
Bank shall promptly notify the Company thereof (with a
copy to the Agent) and such Bank's obligation to make
or renew Eurocurrency Loans and to convert other types
of Loans into Loans of such type or to make Loans
denominated in such Alternative Currency hereunder
shall be suspended until such time as such Bank may
again make, renew, or convert and maintain such
affected Loans and such Bank's outstanding Eurocurrency
Loans or Alternative Currency, as the case may be,
shall be converted in accordance with Section 3.04.
Section 3.04. Certain Conversions
pursuant to Sections 3.01 and 3.03. If the Loans
of any Bank of a particular type (Loans of such
type being herein called "Affected Type" or "Affected
Loans") are to be converted pursuant to Section 3.01 or
3.03, such Bank's Affected Loans shall be automatically
converted into Variable Rate Loans (and in the case of
Loans denominated in an Alternative Currency, to
Variable Rate Loans denominated in Dollars in the
Dollar Equivalent amount on the last day(s) of the then
current Interest Period(s) for the Affected Loans or,
in the case of a conversion required by Section 3.01(b)
or 3.03, on such earlier date as such Bank may specify
to the applicable Borrowers with a copy to the Agent)
and, unless and until such Bank gives notice as
provided below that the circumstances specified in
Section 3.01 or 3.03 which give rise to such conversion
no longer exist:
(a) to the extent that such Bank's
Affected Loans have been converted to Variable Rate
Loans, all payments
28
and prepayments of principal which
would otherwise be applied to such Bank's Affected
Loans shall be applied instead to its Variable Rate
Loans; and
(b) all Loans which would otherwise
be made or renewed by such Bank as Loans of the
Affected Type shall be made instead as Variable Rate
Loans and all Loans of such Bank which would otherwise
be converted into Loans of the Affected Type shall be
converted instead into (or shall remain as) Variable
Rate Loans; and
(c) if Loans of other Banks of the
Affected Type are subsequently converted into Loans of
another type (other than Variable Rate Loans), such
Bank's Variable Rate Loans shall be automatically
converted on the conversion date into Loans of such
other type to the extent necessary so that, after
giving effect thereto, all Loans held by such Bank and
the Banks whose Loans are so converted are held
pro-rata (as to principal amounts, types and Interest
Periods) in accordance with their respective
Commitments.
If such Bank gives notice to any Borrower (with a copy
to the Agent) that the circumstances specified in
Section 3.01 or 3.03 which gave rise to the conversion
of such Bank's Affected Loans pursuant to this Section
3.04 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a
time when Loans of the Affected Type are outstanding,
such Bank's Variable Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Loans of the
Affected Type to the extent necessary so that, after
giving effect thereto, all Loans held by the Banks
holding Loans of the Affected Type and by such Bank are
held pro-rata (as to principal amounts, types and
Interest Periods) in accordance with their respective
Commitments.
Section 3.05. Certain Compensation.
The Company shall pay to the Agent for the account of
each Bank, upon the request of such Bank through the
Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Bank) to compensate
it for any loss, cost or expense which such Bank
determines is attributable to:
(a) any payment, prepayment, conversion or
renewal of a Eurocurrency Loan made by such Bank on a
date other than the last day of an Interest Period for
such Loan (whether by reason of acceleration or
otherwise); or
(b) any failure by any Borrower to borrow,
convert into or renew a Eurocurrency Loan to be made,
converted into or renewed by such Bank on the date
specified therefor in the
29
relevant notice under Section
2.05, 2.06 or 2.07, as the case may be.
Without limiting the foregoing, such compensation shall
include any losses arising from converting Loans
denominated in an Alternative Currency to the Dollar
Equivalent on the day of payment, prepayment,
conversion or renewal. A determination of any Bank as
to the amounts payable pursuant to this Section 3.05
shall be conclusive absent manifest error.
Section 3.06. Indemnification for Taxes.
(a) All payments hereunder and under any of the
Facility Documents (including, without limitation,
payments on account of principal and interest and fees)
shall be made by the Borrowers without deduction or
withholding for or on account of any present or future
tax, duty, levy, impost, assessment or other
governmental charge imposed by any jurisdiction
("Taxes"). If the Borrowers are required by law to
make any deduction or withholding of any Taxes from any
payment due hereunder or under any of the Facility
Documents, then the amount payable will be increased to
such amount which, after deduction from such increased
amount of all Taxes required to be withheld or deducted
therefrom, will not be less than the amount due and
payable hereunder had no such deduction or withholding
been required. Notwithstanding the foregoing, Taxes
shall not include, and no such additional amounts shall
be payable in respect of
(i) any tax imposed on the overall
net income of the Lending Office of any Bank in respect
of which the relevant payment is made by the
jurisdiction in which such Bank is organized, in which
its Lending Office is located or in which it is managed
and controlled; or
(ii) any such deduction or
withholding which would not have been required to be so
deducted or withheld if the Bank to which such payment
was made had at the date of payment been either:
(A) a Bank carrying on
a bona fide banking business in the United Kingdom
recognized by the Inland Revenue Service and bringing
the interest payable hereunder into account as a
trading receipt of such business; or
(B) resident in a
country with which the United Kingdom has an
appropriate Double Taxation Treaty giving exemption
from United Kingdom taxation on interest and had any
necessary application thereunder been made
(except that this proviso shall not operate
to prevent a Bank receiving such additional amounts to
the extent that such
30
amounts become payable solely as a
result of any revocation or repeal of, or any change
in, or any published change in the interpretation or
application of, any relevant law or the practice of the
Inland Revenue Service or the provisions of a double
taxation treaty since the date of this Agreement.)
(b) If any additional amounts shall become
payable pursuant to Section 3.06(a), the relevant
Borrower and the Bank concerned will discuss in good
faith with a view to determining whether any means (not
being detrimental in the opinion of the Bank to any of
the Bank's interests) exist or may be implemented by
which such amounts may lawfully be mitigated or
reduced, (or the Bank be compensated in some other way)
so as to leave the Bank in the same position in which
it would have been had such Taxes not been payable.
(c) If the Borrowers make any payment
hereunder in respect of which they are required by law
to make any deduction or withholding of any Taxes, they
shall pay the full amount to be deducted or withheld to
the relevant taxation or other authority within the
time allowed for such payment under applicable law and
shall deliver to the Banks as soon as practicable after
they have made such payment to the applicable authority
a receipt issued by such authority or a statement of
the Borrowers confirming the payment to such authority
of all amounts so required to be deducted or withheld
from such payment.
(d) Without prejudice to the provisions of
paragraph (a) of this Section 3.06, if any Bank, or the
Agent on its behalf, is required by law to make any
payment on account of Taxes (other than those referred
to in clause (a)(i) above) on or in relation to any sum
received or receivable hereunder or under any of the
Facility Documents by such Bank, or the Agent on its
behalf, or any liability for such Taxes in respect of
any such payment is imposed, levied or assessed against
any Bank or the Agent on its behalf, the Borrowers will
promptly indemnify such person against such tax payment
or liability, together with any interest, penalties and
expenses (including counsel fees and expenses) payable
or incurred in connection therewith, including any such
Tax of any Bank arising by virtue of payments under
this Section 3.06(c), computed in a manner consistent
with Section 3.06(a). A certificate as to the amount
of such payment by such Bank, or the Agent on its
behalf, absent manifest error, shall be final,
conclusive and binding for all purposes.
Section 3.07. Foreign Subsidiary Costs. (a)
If the cost to any Bank of making or maintaining any
Loan to an Eligible Subsidiary is increased, or the
amount of any sum received or receivable by any Bank
(or its applicable Lending Office) is reduced by an
amount deemed by such Bank to be material, by
31
reason of the fact that such Eligible Subsidiary is incorporated
in, or conducts business in, a jurisdiction outside the
United States of America, the Company shall indemnify
such Bank for such increased cost or reduction within
15 days after demand by such Bank (with a copy to the
Agent). A certificate of such Bank claiming
compensation under this subsection (a) and setting
forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of
manifest error.
(b) Each Bank will promptly notify the
Company and the Agent of any event of which it has
knowledge that will entitle such Bank to additional
interest or payments pursuant to subsection (a) and
will designate a different applicable Lending Office,
if, in the judgement of such Bank, such designation
will avoid the need for, or reduce the amount of, such
compensation and will not be otherwise disadvantageous
to such Bank.
ARTICLE 4. CONDITIONS PRECEDENT
Section 4.01. Documentary Conditions
Precedent. The obligations of the Banks to make the
Loans constituting the initial Borrowing are subject to
the condition precedent that the Agent shall have
received on or before the date of such Loans each of
the following, in form and substance satisfactory to
the Agent and its counsel:
(a) this Agreement duly executed by
the Company;
(b) the Notes duly executed by the
Borrowers;
(c) the Authorization Letter duly
executed by the Company, and as applicable, any
Eligible Subsidiary;
(d) the consents to this transaction
required under the Morgan Credit Agreement and
amendments to the Morgan Credit Agreement satisfactory
to the Agent, in each case duly executed;
(e) satisfactory completion of the Agent's
due diligence;
(f) a certificate of the Secretary
or Assistant Secretary of the Company, dated the
Closing Date, attesting to all corporate action taken
by the Company, including resolutions of its Board of
Directors authorizing the execution, delivery and
performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant
to this Agreement;
32
(g) a certificate of the Secretary
or Assistant Secretary of the Company, dated the
Closing Date, certifying the names and true signatures
of the officers of the Company authorized to sign the
Facility Document to which it is a party and the other
documents to be delivered by the Company under this
Agreement;
(h) a certificate of a duly authorized
officer of the Company, dated the Closing Date,
stating that the representations and warranties
in Article 5 are true and correct on such date as
though made on and as of such date and that no event
has occurred and is continuing which constitutes a
Default or Event of Default;
(i) a favorable opinion of counsel
for the Company, dated the Closing Date, in
substantially the form of Exhibit E and as to such
other matters as the Agent or any Bank may reasonably
request;
(j) such other consents, approvals or
documents as the Agent or any Bank may reasonably
request.
Section 4.02. Additional Conditions
Precedent. The obligations of the Banks to make any
Loans pursuant to a Borrowing (including the initial
Borrowing) shall be subject to the further conditions
precedent that on the date of such Loans:
(a) the following statements shall be true:
(i) the representations and warranties
contained in Article 5, and in the case of a Borrowing
by an Eligible Subsidiary, Section 4.05, are true
and correct on and as of the date of such Loans as
though made on and as of such date; and
(ii) no Default or Event of Default
has occurred and is continuing, or would result from such
Loans; and
(b) the Agent shall have received such consents,
approvals, opinions or documents as the Agent or any Bank
may reasonably request.
Section 4.03. Deemed Representations.
Each Borrowing Request hereunder and acceptance by the
Company or an Eligible Subsidiary of the proceeds of
such Borrowing or Borrowings shall constitute a
representation and warranty that the statements
contained in Section 4.02(a) are true and correct both
on the date of such notice and, unless the Borrower
33
otherwise notifies the Agent prior to such Borrowing,
as of the date of such Borrowing.
Section 4.04. First Borrowing by Each
Eligible Subsidiary. The obligation of each Bank to
make a Loan on the occasion of the first Borrowing by
each Eligible Subsidiary is subject to the satisfaction
of the following further conditions:
(a) receipt by the Agent for the
account of each Bank of a duly executed Note of such
Eligible Subsidiary dated on or before the date of such
Borrowing complying with the provisions of Section
2.03;
(b) receipt by the Agent of an
Authorization Letter duly executed by the Eligible
Subsidiary;
(c) receipt by the Agent of an
opinion of counsel for such Eligible Subsidiary
acceptable to the Agent, substantially in the form of
Exhibit F hereto and covering such additional matters
relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) receipt by the Agent of all
documents which it may reasonably request relating to
the existence of such Eligible Subsidiary, the
corporate authority for and the validity of the
Election to Participate of such Eligible Subsidiary,
this Agreement and the Notes of such Eligible
Subsidiary, and any other matters relevant thereto, all
in form and substance satisfactory to the Agent; and
(e) the representations and
warranties contained in Section 4.05 shall be true and
correct on and as of the date of such Borrowing as
though made on and as of such date and no Default or
Event of Default shall have occurred and be continuing,
or would result from such Loans.
The opinion referred to in clause (c) above shall be
dated no more than five Banking Days before the date of
the first Borrowing by such Eligible Subsidiary
hereunder.
Section 4.05. Representations of Eligible
Subsidiaries. Each Eligible Subsidiary shall be deemed
by the execution and delivery of its Election to
Participate to have represented and warranted as of the
date thereof that:
(a) It is a corporation
duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of
incorporation and is a Wholly-Owned Consolidated
Subsidiary of the Company.
34
(b) The execution and
delivery by it of its Election to Participate and its
Notes, and the performance by it of this Agreement and
its Notes, are within its corporate powers, have been
duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with,
any governmental body, agency or official and do not
contravene, or constitute a default under, any
provision of applicable law or regulation or of its
certificate or incorporation or by-laws or of any
agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or such Eligible
Subsidiary or result in the creation or imposition of
any Lien on any asset of the Company or any of its
Subsidiaries.
(c) This Agreement
constitutes a legal, valid and binding obligation of
such Eligible Subsidiary and its Notes, when executed
and delivered in accordance with this Agreement, will
constitute the legal, valid and binding obligation of
such Eligible Subsidiary, and each is enforceable
against such Eligible Subsidiary in accordance with its
terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally.
(d) Except as disclosed in
such Election to Participate, there is no income, stamp
or other tax of any country, or any taxing authority
thereof or therein, imposed by or in the nature of
withholding or otherwise, which is imposed on any
payment to be made by such Eligible Subsidiary pursuant
hereto or on its Notes, or is imposed on or by virtue
of the execution, delivery or enforcement of its
Election to Participate or of its Notes.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants
that:
Section 5.01. Incorporation, Good Standing
and Due Qualification. Each of the Company and its
Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and
authority to own its assets and to transact the
business in which it is now engaged, and is duly
qualified as a foreign corporation and in good standing
under the laws of each other jurisdiction in which such
qualification is required except where failure to be so
qualified would not have a material adverse effect on
its business, properties, condition (financial or
otherwise) or operation.
Section 5.02. Corporate Power and Authority;
No Conflicts. The execution, delivery and
performance by
35
the Company of the Facility Documents to
which it is a party have been duly authorized by all
necessary corporate action and do not and will not:
(a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws;
(c) violate any provision of, or require any filing
(except for the filing of this Agreement with the
Securities and Exchange Commission and the New York
Stock Exchange), registration, consent or approval
under, any law, rule, regulation (including, without
limitation, Regulation U), order, writ, judgment,
injunction, decree, determination or award presently in
effect having applicability to the Company or any of
its Subsidiaries or affiliates; (d) result in a breach
of or constitute a default or require any consent
(except for those consents which have been obtained or
will be obtained prior to the Closing Date) under any
indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Company is
a party or by which it or its properties may be bound;
(e) or result in, or require, the creation or
imposition of any Lien, upon or with respect to any of
the properties now owned or hereafter acquired by the
Company or any of its Subsidiaries; or (f) cause the
Company (or any Subsidiary or affiliate, as the case
may be) to be in default under any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture,
agreement, lease or instrument.
Section 5.03. Legally Enforceable
Agreements. Each Facility Document to which the
Company is a party is, or when delivered under this
Agreement will be, a legal, valid and binding
obligation of the Company enforceable against the
Company in accordance with its terms, except to the
extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar
laws affecting creditors' rights generally.
Section 5.04. Litigation. There are
no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened, against or
affecting the Company or any of its Subsidiaries before
any court, governmental agency or arbitrator, which, in
any one case or in the aggregate, would have a
reasonable likelihood of having a material adverse
affect on the financial condition, operations,
properties or business of the Company or any such
Subsidiary or the ability of the Company to perform its
obligation under the Facility Documents to which it is
a party.
Section 5.05. Financial Statements.
The consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 1992, and
the related consolidated statements of income and
statements of cash flows and changes in stockholders'
equity of the Company and its Consolidated Subsidiaries
for the fiscal year then ended, and the
36
accompanying footnotes, together with the opinion thereon, of
Deloitte & Touche, independent certified public
accountants, and the interim consolidated balance sheet
of the Company and its Consolidated Subsidiaries as at
September 30, 1993, and the related consolidated
statements of income and statements of cash flows and
changes in stockholders' equity for the nine month
period then ended, copies of which have been furnished
to each of the Banks, fairly present the financial
condition of the Company and its Consolidated
Subsidiaries as at such dates and the results of the
operations of the Company and its Consolidated
Subsidiaries for the periods covered by such
statements, all in accordance with generally accepted
accounting principles (subject to year end adjustments
in the case of the interim financial statements).
Since December 31, 1992, there has been no material
adverse change in the business, financial position or
results of operations of the Company and its
Subsidiaries considered as a whole.
Section 5.06. Taxes. Each of the
Company and its Subsidiaries has filed all United
States Federal income tax returns and all other
material tax returns required to be filed and has paid
all taxes, assessments and governmental charges and
levies thereon to be due, including interest and
penalties, except for those which are being contested
in good faith and by appropriate proceedings diligently
conducted. The federal income tax liability of the
Company and its Subsidiaries has been audited by the
Internal Revenue Service and has been finally
determined and satisfied for all taxable years up to
and including the taxable year ended December 31, 1989.
The charges, accruals and reserves on the books of the
Company and its Subsidiaries with respect to taxes or
other governmental charges are adequate in the opinion
of the Company.
Section 5.07. ERISA. Each member of
the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance in all
material respects with the presently applicable
provisions of ERISA and the Code with respect to each
Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section
412 of the Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section
4007 of ERISA.
37
Section 5.08. Subsidiaries and Ownership of
Stock. Schedule I is a complete and accurate list of
Subsidiaries of the Company, showing the jurisdiction
of incorporation or organization of each Subsidiary and
showing the percentage of the Company's ownership of
the outstanding stock or other interest of each such
Subsidiary. Except as set forth on Schedule I, all of
the outstanding capital stock or other interest of each
such Subsidiary has been validly issued, is fully paid
and nonassessable and is owned by the Company free and
clear of all Liens.
Section 5.09. Credit Arrangements. As of
the Closing Date Schedule II is a complete and correct
list of all Debt of the Company and its Subsidiaries
outstanding (exclusive of Debt outstanding under the
Morgan Credit Agreement) and all Liens existing
securing Debt outstanding.
Section 5.10. No Default on Outstanding
Judgments or Orders. Each of the Company and its
Subsidiaries has satisfied all judgments and neither
the Company nor any of its Subsidiaries is in default
with respect to any material judgment, writ,
injunction, decree, rule or regulation of any court,
arbitrator or federal, state, municipal or other
governmental authority, commission, board, bureau,
agency or instrumentality, domestic or foreign.
Section 5.11. Governmental Regulation.
Neither the Company nor any of its Subsidiaries is
"holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of
1935, or an "investment company" or a company
"controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as
amended, or an "investment advisor" within the meaning
of the Investment Advisors Act of 1940, as amended.
Section 5.12. Environmental Matters. In the
ordinary course of its business, the Company conducts
an ongoing review of the effect of Environmental Laws
on the business, operations and properties of the
Company and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure
of properties presently or previously owned, any
capital or operating expenditures required to achieve
or maintain compliance with environmental protection
standards imposed by law or as a condition of any
license, permit or contract, any related constraints on
operating activities, including any periodic or
permanent shutdown of any facility or reduction in the
level of or change in the nature of operations
conducted thereat, any costs or liabilities in
connection with off-site disposal of
38
wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and
any related costs and expenses). On the basis of this
review, the Company has reasonably concluded that such
associated liabilities and costs, including the costs
of compliance with Environmental Laws, are unlikely to
have a material adverse effect on the business,
financial condition, results of operations or prospects
of the Company and its Consolidated Subsidiaries,
considered as a whole.
Section 5.13. Full Disclosure. All
information heretofore furnished by the Company or any
of its Subsidiaries to the Agent or any Bank for
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such
information hereafter furnished by the Company to the
Agent or any Bank will be, true and accurate in all
material respects on the date as of which such
information is stated or certified. The Company has
disclosed to the Banks in writing any and all facts,
other than general economic conditions, which
materially and adversely affect or may affect (to the
extent the Company can now reasonably foresee) the
business, operations or financial condition of the
Company and its Consolidated Subsidiaries, taken as a
whole, or the ability of the Company or its
Subsidiaries to perform their obligations under this
Agreement and the Notes.
ARTICLE 6. AFFIRMATIVE COVENANTS
So long as any of the Notes shall remain
unpaid or any Bank shall have any Commitment under this
Agreement, the Company shall comply with the following
covenants:
Section 6.01. Reporting Requirements. The
Company shall furnish directly to each of the Banks:
(a) as soon as available and in any
event within 90 days after the end of each fiscal year
of the Company, a consolidated and consolidating
balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year and a
consolidated and consolidating statements of income and
consolidated statements of cash flows and changes in
stockholders' equity of the Company and its
Consolidated Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for
the corresponding date and period in the prior fiscal
year and (i) in the case of the consolidated
statements, all reported on in a manner acceptable to
the Securities and Exchange Commission by Deloitte &
Touche or independent public accountants of nationally
recognized standing, and (ii) in the case of
consolidating statements, all certified as to fairness
of presentation, generally accepted accounting
39
principles and consistency by the chief financial
officer or chief accounting officer of the Company.
(b) as soon as available and in any
event within 45 days after the end of each of the first
three quarters of each fiscal year of the Company, a
consolidated and consolidating balance sheet of the
Company and its Consolidated Subsidiaries as of the end
of such quarter and the related consolidated and
consolidating statements of income and consolidated
statements of cash flows and changes in stockholders'
equity for such quarter and for the period commencing
at the end of the previous fiscal year and ending with
the end of such quarter, all in reasonable detail and
stating in comparative form the respective consolidated
figures for the corresponding quarter and the
corresponding in the previous fiscal year, and
certified by the chief financial officer or chief
accounting officer of the Company (subject to year end
adjustments and the omission of notes permitted by the
applicable regulations of the Securities and Exchange
Commission to be excluded from quarterly reports filed
on Form 10-Q) as to fairness of presentation, generally
accepted accounting principles and consistency;
(c) simultaneously with the
delivery of each set of financial statements referred
to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer
of the Company (i) setting forth in reasonable detail
the calculations required to establish whether the
Company was in compliance with the requirements of
Sections 7.01 through 7.04, inclusive, and Sections
7.06, 8.01 and 8.02 on the date of such financial
statements, (ii) setting forth in reasonable detail the
calculations of the Assets Component, the Borrowing
Base and the Available Amount (each as defined in the
Morgan Credit Agreement) as of the date of such
financial statements and whether the Company is thereby
required to make a mandatory prepayment to comply with
Section 2.13 of the Morgan Credit Agreement and (iii)
stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting
forth the details thereof and the action which the
Company is taking or proposes to take with respect
thereto;
(d) simultaneously with the
delivery of each set of financial statements referred
to in clause (a) above, a certificate of the firm of
independent public accountants which reported on such
statements (i) whether anything has come to their
attention to cause them to believe that any Default
existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant
to clause (c) above;
40
(e) simultaneously with
the delivery of each set of financial statements
referred to in clause (a) above, a certificate of the
chief financial officer or chief accounting officer of
the Company setting forth in reasonable detail the
Company's ratio of Debt to Cash Flow;
(f) within 21 days after
the end of each monthly accounting period of the
Company, a certificate of the chief financial officer
or the chief accounting officer or the Company setting
forth calculations in reasonable detail of the
Company's best estimate of the Assets Component, the
Borrowing Base and the Available Amount (each as
defined in the Morgan Credit Agreement) as of the end
of such month and whether the Company is required to
make a mandatory prepayment to comply with Section 2.13
of the Morgan Credit Agreement;
(g) within five days after
any officer of the Company obtains knowledge of any
Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief
accounting officer of the company setting forth the
details thereof and the action which the Company is
taking or proposes to take with respect thereto;
(h) promptly upon the
mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports
and proxy statements so mailed;
(i) promptly upon the
filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Company shall have filed with the Securities
and Exchange Commission;
(j) if and when any member
of the ERISA Group (i) gives or is required to give
notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the
Plan administrator of any Plan has given or is required
to give notice of any such reportable event given or
required to be given to the PBGC, a copy of such
notice; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of
the
41
Code, a copy of such application; (v) gives notice
of intent to terminate any Plan under Section 4041(c)
of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy
of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate
of the chief financial officer or the chief accounting
officer of the Company setting forth details as to such
occurrence and action, if any, which any member of the
ERISA Group is required or proposes to take;
(k) promptly after the
commencement thereof, notice of all actions, suits, and
proceedings before any court or governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the
Company or any of its Subsidiaries which would have a
reasonable likelihood of having a material adverse
effect on the financial condition, properties, or
operations of the Company or such Subsidiary;
(l) such other information
respecting the condition or operations, financial or
otherwise, of the Company or any of its Subsidiaries as
the Agent or any Bank may from time to time reasonably
request.
Section 6.02. Payment of Obligations. The
Company will pay and discharge, and will cause each
Subsidiary to pay and discharge, at or before maturity
or in accordance with customary trade practices, all
their respective material obligations and liabilities,
including, without limitation, tax liabilities, except
where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will
cause each Subsidiary to maintain, in accordance with
generally accepted accounting principles, appropriate
reserves for the accrual of any of the same.
Section 6.03. Maintenance of Property;
Insurance. (a) The Company will maintain, and will
cause each Subsidiary to maintain, all property useful
and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) The Company will, and will
cause each of its Subsidiaries to, maintain (either in
the name of the Company or in such Subsidiary's own
name) with financially sound and responsible insurance
companies, insurance on all their respective properties
in at least such amounts and against at
42
least such risks (and with such risk retention) as are (i) insured
against under the policies of insurance of the Company
and its Subsidiaries set forth on the schedule
previously provided by the Company to the Banks or (ii)
usually insured against in the same general area by
companies of established repute engaged in the same or
a similar business; and will furnish to the Banks, upon
request from the Agent, information presented in
reasonable detail as to the insurance so carried.
Section 6.04. Conduct of Business and
Maintenance of Existence. The Company will continue,
and will cause each Subsidiary to continue, to engage
in business of the same general type as now conducted
by the Company and its Subsidiaries, and will preserve,
renew and keep in full force and effect, and will cause
each Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence
and their respective rights, privileges and franchises
necessary or desirable in the normal conduct of
business; provided that nothing in this Section 6.04
shall prohibit (i) the merger or consolidation of a
Subsidiary with or into another Person if the
corporation surviving such consolidation or merger is a
Wholly-Owned Subsidiary or the merger of a Subsidiary
into the Company if, in each case, after giving effect
thereto, no Default shall have occurred and be
continuing, (ii) the termination of the corporate
existence of any Subsidiary if such termination is not
materially disadvantageous to the Banks and the Company
in good faith determines that such termination is in
the best interest of the Company or (iii) a sale of
capital stock of a Subsidiary permitted under Section
6.07 (ii).
Section 6.05. Compliance with Laws. The
Company will comply, and cause each Subsidiary to
comply, in all material respects with all applicable
laws, ordinances, rules, regulations and requirements
of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules
and regulations thereunder) except where the necessity
of compliance therewith is contested in good faith by
appropriate proceedings.
Section 6.06. Inspection of Property, Books
and Records. The Company will keep, and will cause
each Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall
be made of all dealings and transactions in relation to
its business and activities; and will permit, and will
cause each Subsidiary to permit, representatives of any
Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make
abstracts from any of their respective books and
records and to discuss their respective affairs,
finances and accounts with their respective officers,
employees and independent public accountants, all at
43
such reasonable times, upon reasonable notice and as
often as may reasonably be desired.
Section 6.07. Maintenance of Ownership of
Subsidiaries. The Company will at all times maintain
direct or indirect legal and beneficial ownership of
the percentage of outstanding shares of each class of
capital stock set forth on Schedule I of each of its
Subsidiaries, except as modified by (i) sales by
Subsidiaries of directors' qualifying shares, (ii) the
sale to one or more third parties in a single
transaction of all of the capital stock of The
Timberland Company of Australia Pty., Ltd. or
Timberland Footwear & Clothing New Zealand Limited;
provided that no transfer of assets of the Company or
any of its other Subsidiaries to The Timberland Company
of Australia Pty., Ltd. or Timberland Footwear &
Clothing New Zealand Limited, as the case may be, other
than sales of inventory in the ordinary course of
business, shall have been made on or prior to the date
of such sale or shall be made in connection with such
sale, (iii) mergers permitted pursuant to the proviso
to Section 7.05 and (iv) grants or sales by The Outdoor
Footwear Company of shares of its non-voting common
stock to its employees consistent with past practice.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or
any Bank shall have any Commitment under this
Agreement, the Company shall not, and will not permit
any Subsidiary to:
Section 7.01. Debt. Incur or at any time be
liable with respect to any Debt except:
(a) Debt outstanding under
this Agreement and the Notes;
(b) Debt outstanding on the date
of this Agreement and identified on Schedule II and
Debt outstanding from time to time under the Morgan
Credit Agreement and extensions, renewals and
re-financings thereof; provided that except in the case
of Debt under the Morgan Credit Agreement, no such
extension, renewal or refinancing shall increase the
principal amount of such Debt or shorten the maturity
thereof or accelerate the amortization thereof; and
provided, further, that in the case of Debt under the
Morgan Credit Agreement, no amendment, extension,
renewal or refinancing of the Morgan Credit Agreement
shall increase the maximum principal amount which may
be borrowed thereunder unless at the time of any such
amendment, extension, renewal or refinancing and after
giving effect thereto, (x) no Default shall have
occurred and be continuing or result therefrom, and (y)
on a pro forma basis, the Company would be in
44
compliance with the covenant contained in Section 8.01
for the 12-month period ended on the last day of the
most recent fiscal quarter (based on the ratio in
effect on the date compliance herewith is determined),
assuming that 75% of the maximum principal amount of
borrowings available under such amendment, extension,
renewal or refinancing was outstanding for such period
at an interest rate equal to the average interest rate
payable in respect of borrowings under such facility
for such period.
(c) Debt of any of the Company's
Subsidiaries owing to the Company or any of its
Wholly-Owned Subsidiaries permitted by Section 7.03;
(d) Debt of the Company owing to
The Outdoor Footwear Company; provided that The Outdoor
Footwear Company is a Wholly-Owned Subsidiary at the
time such Debt is outstanding;
(e) Guarantees by the Company or
any of its Subsidiaries of Debt of employees of the
Company or any of its Wholly-Owned Subsidiaries, in an
aggregate principal amount at any time outstanding not
to exceed $1,000,000;
(f) Debt of the Company or any of
its Wholly-Owned Subsidiaries owing to a Subsidiary of
the Company incurred as a result of the transfer of
funds from an account under the control of such
Subsidiary to an account under the control of the
Company or such Wholly-Owned Subsidiary in connection
with the Company's cash management program;
(g) Permitted Short-Term Debt in an
aggregate principal amount at any time outstanding not
to exceed $17,000,000, provided that for a single
thirty-day period in each twelve-month period beginning
after March 31, 1993, which thirty-day period shall be
designated by the Company by notice to the Agent at
least three Banking Days before the commencement of
such period, the sum of (x) the aggregate outstanding
principal amount of such Permitted Short-Term Debt and
(y) the Total Aggregate Exposure shall not exceed (i)
for the period beginning April 1, 1993 and ending March
31, 1994, $20,000,000, (ii) for the period beginning
April 1, 1994 and ending March 31, 1995, $18,000,000
and (iii) for the period beginning April 1, 1995 and
thereafter $16,000,000; provided that if the Morgan
Credit Agreement (as in effect on the date hereof)
shall be amended in such a way as to modify the
Permitted Short-Term Debt allowed thereunder, the Banks
and the Borrowers will negotiate in good faith with a
view to determining whether conforming amendments to
this Agreement are appropriate.
(h) Debt denominated in Sterling,
Francs or Deutschemarks and having a maturity, at the
time such Debt is
45
incurred, of not more than one year
from the date such Debt is incurred; provided that the
aggregate principal amount of such Debt outstanding at
any time shall not exceed (i) for such Debt denominated
in Sterling, #4,000,000, (ii) for such Debt denominated
in Francs, FF20,000,000 and (iii) for such Debt
denominated in Deutschemarks, DM5,000,000;
(i) Permitted Long-Term
Debt in an aggregate principal amount at any time
outstanding not to exceed 50% of Consolidated Net
Worth; and
(j) Debt not otherwise
permitted under the foregoing clauses of this Section
in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding.
The Company shall not permit Debt incurred or existing
at any time by Subsidiaries (including under the Morgan
Credit Agreement) to exceed $17,000,000 in the
aggregate.
Section 7.02. Restricted Payments. Declare
or make any Restricted Payment unless (i) no Default or
Event of Default has occurred or is continuing under
Section 9.01(a) or Section 9.01(c) with respect to
Article 8 covenants only, and (ii) after giving effect
thereto, the aggregate of all Restricted Payments
declared or made subsequent to December 31, 1990 does
not exceed 25% of consolidated net income (less
consolidated net loss, if any) of the Company and its
Consolidated Subsidiaries for the period from January
1, 1991 through the end of the Company's then most
recent fiscal quarter (treated for this purpose as a
single accounting period). Nothing in this Section
7.02 shall prohibit the payment of any dividend or
distribution within 60 days after the declaration
thereof if such declaration was not prohibited by this
Section 7.02.
Section 7.03. Investments. Make or acquire
any Investment in any Person other than:
(a) Investments in Persons which
immediately before and after giving effect to such
Investment are Subsidiaries of the Company, if,
immediately thereafter, the aggregate amount of all
such investments made after the date hereof does not
exceed $25,000,000 at any one time outstanding;
(b) Temporary Cash Investments;
(c) loans or advances to current
employees of the Company or such Consolidated
Subsidiary having a maturity of less than one year in
an aggregate principal amount at any time outstanding
not to exceed $1,000,000;
46
(d) Investments the sole
consideration for which is newly issued common stock of
the Company or newly issued preferred stock of the
Company that is not subject to mandatory redemption or
redemption at the option of the holder before the
fourth anniversary of the date of issuance thereof;
(e) Investments consisting of Debt
permitted under Section 7.01(d) or 7.01(f); and
(f) any Investment not otherwise
permitted by the foregoing clauses of this Section if,
immediately after such Investment is made or acquired,
the aggregate amount of all Investments permitted by
this clause (f) does not exceed $10,000,000 at any one
time outstanding.
The amount of any Investment shall
be the original cost of such Investment plus the cost
of all additions thereto, without adjustments for
increases or decreases in value, write-ups, write-downs
or write-offs with respect to such Investment.
Section 7.04. Negative Pledge. Create,
assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of
this Agreement securing Debt outstanding on the date of
this Agreement in an aggregate principal amount not
exceeding $15,000,000 and identified on Schedule II;
(b) any Lien existing on any asset
of any corporation at the time such corporation becomes
a Subsidiary and not created in contemplation of such
event;
(c) any Lien on any asset securing
Debt incurred or assumed for the purpose of financing
all or any part of the cost of acquiring or
constructing such asset; provided that such Lien
attaches to such asset concurrently with or within 90
days after the acquisition or construction thereof;
(d) any Lien on any asset of any
corporation existing at the time such corporation is
merged or consolidated with or into the Company or a
Subsidiary and not created in contemplation of such
event;
(e) any Lien existing on any asset
prior to the acquisition thereof by the Company or a
Subsidiary and not created in contemplation of such
acquisition;
47
(f) any Lien arising out of the
refinancing, extension, renewal or refunding of any
Debt secured by any Lien permitted by any of the
foregoing clauses of this Section 7.04; provided that
such Debt is not increased and is not secured by any
additional assets;
(g) Liens arising in the ordinary
course of its business which (i) do not secure Debt,
(ii) do not secure any obligation in an amount
exceeding $10,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or
materially impair the use thereof in the operation of
its business;
(h) Liens on assets of Subsidiaries
securing Debt owing to the Company or to Wholly-Owned
Subsidiaries permitted by Section 7.01; and
(i) Liens not otherwise permitted
by the foregoing clauses of this Section securing Debt
in an aggregate principal amount at any time
outstanding not to exceed $2,000,000.
Section 7.05. Consolidations, Mergers and
Sales of Assets. The Company shall not (a) consolidate
or merge with or into any other Person or (b) sell,
lease or otherwise transfer, directly or indirectly in
one transaction or a series of related transactions,
all or any substantial part of the assets of the
Company and its Subsidiaries, taken as a whole, to any
other Person; provided that a Subsidiary of the Company
may merge with the Company or a Wholly-Owned Subsidiary
of the Company if (i) the Company or such Wholly-Owned
Subsidiary, as the case may be, is the corporation
surviving such merger and (ii) immediately after giving
effect to such merger, no Default shall have occurred
and be continuing.
Section 7.06. No Prepayment of Note
Agreement Debt; Amendments to Debt Documentation. (a)
Voluntarily prepay any Debt outstanding under any of
the Note Agreements, each dated as of September 30,
1989 and between the Company and the Purchaser named in
Schedule I thereto (each a "Note Agreement").
(b) The Company will not consent to
(i) any amendment of the final maturity of any Debt
outstanding under any Note Agreement to a date prior to
the Termination Date, or (ii) any amendment,
modification, supplement or waiver of the covenants or
events of default contained in the Morgan Credit
Agreement in any manner that (A) causes such covenants
or events of default to include additional, greater or
more stringent restrictions on the Company and (B)
could adversely affect the Banks.".
48
Section 7.07. Transactions with Affiliates.
Directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition
of stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchase
or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or
participate in, or effect any transaction in connection
with any joint enterprise or other joint arrangement
with, any Affiliate; provided, however, that the
foregoing provisions of this Section 7.07 shall not
prohibit (a) the Company from declaring or paying any
lawful dividend so long as, after giving effect
thereto, no Default shall have occurred and be
continuing, (b) the Company or any Subsidiary from
making sales to or purchases from any Affiliate and, in
connection therewith, extending credit or making
payments, or from making payments for services rendered
by any Affiliate, if such sales or purchases are made
or such services are rendered in the ordinary course of
business and on terms and conditions at least as
favorable to the Company or such Subsidiary as the
terms and conditions which would apply in a similar
transaction with a Person not an Affiliate, (c) the
Company or any Subsidiary from making payments of
principal, interest and premium on any Debt of the
Company or such Subsidiary held by an Affiliate if the
terms of such Debt are substantially as favorable to
the Company such Subsidiary as the terms which could
have been obtained at the time of the creation of such
Debt from a lender which was not an Affiliate and (d)
the Company or any Subsidiary from participating in, or
effecting any transaction in connection with, any joint
enterprise or other joint arrangement with any
Affiliate if the Company or such Subsidiary
participates in the ordinary course of its business and
on a basis no less advantageous than the basis on which
such Affiliate participates.
Section 7.08 Borrowing Base Compliance.
Incur or at any time be liable for any Debt under the
Morgan Credit Agreement or any renewal extension or
refinancing thereof in excess of the Borrowing Base (as
defined in the Morgan Credit Agreement as in effect on
the date hereof); provided that if the Morgan Credit
Agreement shall be amended in such a way as to modify
the determination of the Borrowing Base as in effect on
the date hereof or to eliminate the Borrowing Base, the
Banks and the Borrowers will negotiate in good faith
with a view to determining whether conforming
amendments to this Agreement, including amendments
replacing this covenant with other covenants, are
appropriate.
ARTICLE 8. FINANCIAL COVENANTS.
49
So long as any of the Notes shall remain unpaid or
any Bank shall have any Commitment under this Agreement
the Company covenants that:
Section 8.01. Fixed Charge Coverage Ratio.
The Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters will not be less than (a)
2.5 to 1.0 prior to the Conversion Date and (b) 3.0 to
1.0 at any time thereafter.
Section 8.02. Minimum Consolidated Tangible
Net Worth. The Company shall maintain at all times
Consolidated Tangible Net Worth of not less than the
sum of (i) $70,000,000 and (ii) 80% of Aggregate
Positive Consolidated Net Income.
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.01. Events of Default. Any of the
following events shall be an "Event of Default":
(a) any Borrower shall: (i) fail to
pay the principal of any Note as and when due and
payable; (ii) fail to pay interest on any Note or any
fee or other amount due hereunder as and when due and
payable and such failure shall continue for two Banking
Days;
(b) any representation or warranty
made or deemed made by any Borrower in this Agreement
or in any other Facility Document to which it is a
party or which is contained in any certificate,
document, opinion, financial or other written statement
furnished at any time under or in connection with any
Facility Document shall prove to have been incorrect in
any material respect on or as of the date made or
deemed made;
(c) any Borrower shall fail to
perform or observe any term, covenant or agreement
contained in Section 6.07, Sections 7.01 to 7.06
inclusive, and Sections 8.01 and 8.02.
(d) any Borrower shall fail to
perform or observe any term, covenant or agreement on
its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this
Section 9.01) in any Facility Document and such failure
shall continue for 30 consecutive days after written
notice thereof has been given to the Company by the
Agent at the request of the Required Banks.
(e) the Company or any Subsidiary
shall fail to make any payment in respect of any
Material Debt when due or within any applicable grace
period;
50
(f) any event or condition shall
occur which results in the acceleration of the maturity
of any Material Debt or enables (or, with the giving of
notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;
(g) the Company or any Subsidiary
shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief
with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other
proceeding shall be commenced against the Company or
any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered
against the Company or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group
shall fail to pay when due an amount or amounts
aggregating in excess of $500,000 which it shall have
become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Material Plan shall be filed
under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007
of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur
a complete or partial withdrawal from, or a default,
within the meaning of Section 4219 (c) (5) of ERISA,
with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of
$500,000;
51
(j) a judgment or order for the
payment of money in excess of $1,000,000 shall be
rendered against the Company or any Subsidiary and such
judgment or order shall continue unsatisfied and
unstayed for a period of (i) in the case of a, judgment
or order rendered by a court, arbitrator or
governmental authority located in the United States, 10
days or (ii) in the case of a judgment or order
rendered by a court, arbitrator or governmental
authority located outside the United States, 30 days;
or
(k) any person or group of persons
(within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) (other
than the Swartz Family) shall have acquired beneficial
ownership (within the meaning of Rule l3d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 50% or more of the outstanding shares of common
stock of the Company or 20% or more of the voting power
to elect a majority of the board of directors of the
Company; or the Swartz Family shall cease to have
beneficial ownership of 50% of the outstanding shares
of common stock of the Company and 51% of the ordinary
voting power to elect a majority of the board of
directors of the Company; or during any period of
twelve consecutive calendar months, individuals who
were directors of the Company on the first day of such
period shall cease to constitute a majority of the
Board of Directors of the Company.
Section 9.02. Remedies. If any Event of
Default shall occur and be continuing, the Agent shall,
upon request of the Required Banks, by notice to the
Borrowers, (a) declare the Commitments to be
terminated, whereupon the same shall forthwith
terminate, and (b) declare the outstanding principal of
the Notes, all interest thereon and all other amounts
payable under this Agreement and the Notes 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 Borrowers; provided
that, in the case of an Event of Default referred to in
Section 9.01(g) or 9.01(h) above, the Commitments shall
be immediately terminated, and the Notes, all interest
thereon and all other amounts payable under this
Agreement shall be immediately due and payable without
notice, presentment, demand, protest or other
formalities of any kind, all of which are hereby
expressly waived by the Borrowers.
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS
AND BORROWERS.
Section 10.01. Appointment, Powers and
Immunities of Agent. Each Bank hereby irrevocably (but
subject to removal by the Required Banks pursuant to
Section 10.09) appoints and
52
authorizes the Agent to act as its agent
hereunder and under any other Facility
Document with such powers as are specifically delegated
to the Agent by the terms of this Agreement and any
other Facility Document, together with such other
powers as are reasonably incidental thereto. The Agent
shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other
Facility Document, and shall not by reason of this
Agreement be a trustee for any Bank. The Agent shall
not be responsible to the Banks for any recitals,
statements, representations or warranties made by any
Borrower or any officer or official of any Borrower or
any other Person contained in this Agreement or any
other Facility Document, or in any certificate or other
document or instrument referred to or provided for in,
or received by any of them under, this Agreement or any
other Facility Document, or for the value, legality,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility
Document or any other document or instrument referred
to or provided for herein or therein, for the
perfection or priority of any collateral security for
the Loans, if any or for any failure by any Borrower to
perform any of its obligations hereunder or thereunder.
The Agent may employ agents and attorneys-in-fact and
shall not be responsible, except as to money or
securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
Neither the Agent nor any of its directors, officers,
employees or agents shall be liable or responsible for
any action taken or omitted to be taken by it or them
hereunder or under any other Facility Document or in
connection herewith or therewith, except for its or
their own gross negligence or willful misconduct or
action not authorized under this Agreement or by the
Required Banks which is in violation of law and results
in a liability of the Banks to any of the Borrowers.
The Company shall pay any fee agreed to by the Company
and the Agent with respect to the Agent's services
hereunder.
Section 10.02. Reliance by Agent. The Agent
shall be entitled to rely upon any certification,
notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel,
independent accountants and other experts selected by
the Agent. The Agent may deem and treat each Bank as
the holder of the Loans made by it for all purposes
hereof unless and until a notice of the assignment or
transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent but
the Agent shall not be required to deal with any Person
who has acquired a participation in any Loan from a
Bank. As to any
53
matters not expressly provided for by
this Agreement or any other Facility Document, the
Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance
with instructions signed by the Required Banks, and
such instructions of the Required Banks and any action
taken or failure to act pursuant thereto shall be
binding on all of the Banks and any other holder of all
or any portion of any Loan.
Section 10.03. Defaults. The Agent shall
not be deemed to have knowledge of the occurrence of a
Default or Event of Default (other than the non-payment
of principal of or interest on the Loans to the extent
the same is required to be paid to the Agent for the
account of the Banks) unless the Agent has received
notice from a Bank or the Company specifying such
Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the
Agent receives such a notice of the occurrence of a
Default or Event of Default, the Agent shall give
prompt notice thereof to the Banks (and shall give each
Bank prompt notice of each such non-payment). The Agent
shall (subject to Section 10.08) take such action with
respect to such Default or Event of Default which is
continuing as shall be directed by the Required Banks;
provided that, unless and until the Agent shall have
received such directions, the Agent may take such
action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Banks; and
provided further that the Agent shall not be required
to take any such action which it determines to be
contrary to law.
Section 10.04. Rights of Agent as a Bank.
With respect to its Commitment and the Loans made by
it, the Agent in its capacity as a Bank hereunder shall
have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not
acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include
the Agent in its capacity as a Bank. The Agent and its
affiliates may (without having to account therefor to
any Bank) accept deposits from, lend money to (on a
secured or unsecured basis), and generally engage in
any kind of banking, trust or other business with, any
Borrower (and any of its affiliates) as if it were not
acting as the Agent, and the Agent may accept fees and
other consideration from any Borrower for services in
connection with this Agreement or otherwise without
having to account for the same to the Banks.
Section 10.05. Indemnification of Agent.
The Banks agree to indemnify the Agent (to the extent
not reimbursed under Section 12.03 or under the
applicable provisions of any other Facility Document,
but without limiting the obligations of the Company
under Section 12.03 or such provisions), ratably in
54
accordance with the aggregate unpaid principal amount
of the Loans made by the Banks (without giving effect
to any participations, in all or any portion of such
Loans, sold by them to any other Person) (or, if no
Loans are at the time outstanding, ratably in
accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out
of this Agreement, any other Facility Document or any
other documents contemplated by or referred to herein
or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses
which the Company is obligated to pay under Section
12.03 or under the applicable provisions of any other
Facility Document but excluding, unless a Default or
Event of Default has occurred, normal administrative
costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of
the terms hereof or thereof or of any such other
documents or instruments; provided that no Bank shall
be liable for any of the foregoing to the extent they
arise from the gross negligence or willful misconduct
or actions not authorized under this Agreement or by
the Required Banks which are in violation of law and
result in a liability of the Banks to any Borrowers of
the party to be indemnified.
Section 10.06. Documents. The Agent will
forward to each Bank, promptly after the Agent's
receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other
Facility Document to be delivered to the Agent for such
Bank.
Section 10.07. Non-Reliance on Agent and
Other Banks. Each Bank agrees that it has,
independently and without reliance on the Agent or any
other Bank, and based on such documents and information
as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or
any other Bank, and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any
other Facility Document. The Agent shall not be
required to keep itself informed as to the performance
or observance by the Company or its Subsidiaries of
this Agreement or any other Facility Document or any
other document referred to or provided for herein or
therein or to inspect the properties or books of the
Company or any Subsidiary. Except for notices, reports
and other documents and information expressly required
to be furnished to the Banks by the Agent hereunder,
the Agent shall
55
not have any duty or responsibility to
provide any Bank with any credit or other information
concerning the affairs, financial condition or business
of the Company or any Subsidiary (or any of their
affiliates) which may come into the possession of the
Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility
Document or any document or instrument referred to
herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document
or instrument referred to herein or therein, to anyone.
Section 10.08. Failure of Agent to Act.
Except for action expressly required of the Agent
hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder
unless it shall have received further assurances (which
may include cash collateral to the extent permitted by
law) of the indemnification obligations of the Banks
under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of
taking or continuing to take any such action.
Section 10.09. Resignation or Removal of
Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign
at any time by giving written notice thereof to the
Banks and the Company; provided that the Company and
the other Banks shall be promptly notified thereof.
Upon any such resignation, the Required Banks shall
have the right to appoint, with the consent of the
Company, which consent shall not be unreasonably
withheld, a successor Agent, which shall be a
commercial bank organized or licensed under the laws of
the United States of America or of any state thereof,
with an office in New York, New York and having a
combined capital and surplus of at least $100,000,000.
If no successor Agent shall have been so appointed by
the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent
gives notice of resignation, then the retiring Agent
may, on behalf of the Banks and without the consent of
the Company, appoint a successor Agent, which shall be
a commercial bank organized or licensed under the laws
of the United States of America or of any state
thereof, with an office in New York, New York, and
having a combined capital and surplus of at least
$100,000,000. The Required Banks or the retiring
Agent, as the case may be, shall upon the appointment
of a successor Agent promptly so notify the Company and
the other Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation, the provisions of this Article 10 shall
continue in
56
effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was
acting as the Agent.
Section 10.10. Amendments Concerning Agency
Function. The Agent shall not be bound by any waiver,
amendment, supplement or modification of this Agreement
or any other Facility Document which affects its duties
hereunder or thereunder unless it shall have given its
prior consent thereto.
Section 10.11. Liability of Agent. The
Agent shall not have any liabilities or
responsibilities to any Borrower on account of the
failure of any Bank to perform its obligations
hereunder or to any Bank on account of the failure of
any Borrower to perform its obligations hereunder or
under any other Facility Document. This Section 10.11
shall not be construed to relieve the Agent of any
liability it may have as a Bank when acting in its
capacity as a Bank hereunder.
Section 10.12. Transfer of Agency Function.
Without the consent of the Company or any Bank, the
Agent may at any time or from time to time transfer its
functions as Agent hereunder to any of its offices
wherever located, provided that the Agent shall
promptly notify the Company and the Banks thereof.
Section 10.13. Non-Receipt of Funds by the
Agent. Unless the Agent shall have been notified by a
Bank or the Company (either one as appropriate being
the "Payor") prior to the date on which such Bank is to
make payment hereunder to the Agent of the proceeds of
a Loan or any Borrower is to make payment to the Agent,
as the case may be (either such payment being a
"Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume
that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be
required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Agent, the
recipient of such payment (and, if such recipient is a
Borrower and the Payor Bank fails to pay the amount
thereof to the Agent forthwith upon demand, such
Borrower) shall, on demand, repay to the Agent the
amount made available to it together with interest
thereon for the period from the date such amount was so
made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period.
Section 10.14. Withholding Taxes. Each Bank
represents that it is entitled to receive any payments
to be made to it hereunder without the withholding of
any tax and will furnish to the Agent such forms,
certifications, statements and
57
other documents as the Agent may request
from time to time to evidence such
Bank's exemption from the withholding of any tax
imposed by any jurisdiction or to enable the Agent to
comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing,
if any Bank is not created or organized under the laws
of the United States of America or any state thereof,
in the event that the payment of interest by any
Borrower is treated for U.S. income tax purposes as
derived in whole or in part from sources from within
the U.S., such Bank will furnish to the Agent and the
Company Form 4224 or Form 1001 of the Internal Revenue
Service, or such other forms, certifications,
statements or documents, duly executed and completed by
such Bank as evidence of such Bank's exemption from the
withholding of U.S. tax with respect thereto. The
Agent shall not be obligated to make any payments
hereunder to such Bank in respect of any Loan or such
Bank's Commitment until such Bank shall have furnished
to the Agent the requested form, certification,
statement or document.
Section 10.15. Several Obligations and
Rights of Banks. The failure of any Bank to make any
Loan to be made by it on the date specified therefor
shall not relieve any other Bank of its obligation to
make its Loan on such date, but no Bank shall be
responsible for the failure of any other Bank to make a
Loan to be made by such other Bank. The amounts
payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be
entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for
any other Bank to be joined as an additional party in
any proceeding for such purpose.
Section 10.16. Pro Rata Treatment of Loans,
Etc. Except to the extent otherwise provided: (a)
each Borrowing under Section 2.05 shall be made from
the Banks, each reduction or termination of the amount
of the Commitments under Section 2.08 shall be applied
to the Commitments of the Banks, and each payment of
commitment fee accruing under Section 2.12 shall be
made for the account of the Banks, pro-rata according
to the amounts of their respective unused Commitments;
(b) each conversion under Section 2.06 of Loans of a
particular type (but not conversions provided for by
Section 3.04), shall be made pro-rata among the Banks
holding Loans of such type according to the respective
principal amounts of such Loans by such Banks; (c) each
prepayment and payment of principal of or interest on
Loans of a particular type and a particular Interest
Period shall be made to the Agent for the account of
the Banks holding Loans of such type and Interest
Period pro-rata in accordance with the respective
unpaid principal amounts of such Loans of such Interest
Period held by such Banks.
58
Section 10.17. Sharing of Payments Among
Banks. If a Bank shall obtain payment of any principal
of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien,
counterclaim, or by any other means, it shall promptly
purchase from the other Banks participations in (or, if
and to the extent specified by such Bank, direct
interests in) the Loans made by the other Banks in such
amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the
Banks shall share the benefit of such payment (net of
any expenses which may be incurred by such Bank in
obtaining or preserving such benefit) pro-rata in
accordance with the unpaid principal and interest on
the Loans held by each of them. To such end the Banks
shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
Each Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Loans made by
other Banks may exercise all rights of setoff, banker's
lien, counterclaim or similar rights with respect to
such participation (or direct interest). Nothing
contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness of
any Borrower.
ARTICLE 11. GUARANTY.
Section 11.01. The Guaranty. The Company
hereby unconditionally guarantees the full and punctual
payment (whether at stated maturity, upon acceleration
or otherwise) of the principal of and interest on each
Note issued by any Eligible Subsidiary pursuant to this
Agreement, and the full and punctual payment of all
other amounts payable by any Eligible Subsidiary under
this Agreement. Upon failure by any Eligible
Subsidiary to pay punctually any such amount, the
Company shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this
Agreement.
Section 11.02. Guaranty Unconditional. The
obligations of the Company hereunder shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension,
renewal, settlement, compromise, waiver or release in
respect of any obligation of any Eligible Subsidiary
under this Agreement or any Note, by operation of law
or otherwise;
(b) any modification or
amendment of or supplement to this Agreement or any
Note;
59
(c) any release,
non-perfection or invalidity of any direct or indirect
security for any obligation of any Eligible Subsidiary
under this Agreement or any Note;
(d) any change in the
corporate existence, structure or ownership of any
Eligible Subsidiary, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting
any Eligible Subsidiary or its assets or any resulting
release or discharge of any obligation of any Eligible
Subsidiary contained in this Agreement or any Note;
(e) the existence of any
claim, set-off or other rights which the Company may
have at any time against any Eligible Subsidiary, the
Agent, any Bank or any other Person, whether in
connection herewith or any unrelated transactions;
provided that nothing herein shall prevent the
assertion of any such claim by separate suit or
compulsory counterclaim;
(f) any invalidity or
unenforceability relating to or against any Eligible
Subsidiary for any reason of this Agreement or any
Note, or any provision of applicable law or regulation
purporting to prohibit the payment by any Eligible
Subsidiary of the principal of or interest on any Note
or any other amount payable by it under this Agreement;
or
(g) any other act or
omission to act or delay of any kind by any Eligible
Subsidiary, the Agent, any Bank or any other Person or
any other circumstance whatsoever which might, but for
the provisions of this paragraph, constitute a legal or
equitable discharge of the Company's obligations
hereunder.
Section 11.03. Discharge Only upon Payment
in Full; Reinstatement in Certain Circumstances. The
Company's obligations hereunder shall remain in full
force and effect until the Commitments shall have
terminated and the principal of and interest on the
Notes and all other amounts payable by the Company and
each Eligible Subsidiary under this Agreement shall
have been paid in full. If at any time any payment of
the principal of or interest on any Note or any other
amount payable by any Eligible Subsidiary under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or
reorganization of any Eligible Subsidiary or otherwise,
the Company's obligations hereunder with respect to
such payment shall be reinstated at such time as though
such payment had been due but not made at such time.
Section 11.04. Waiver by the Company. The
Company irrevocably waives acceptance hereof,
presentment, demand,
60
protest and any notice not provided for herein,
as well as any requirement that at any time any action be
taken by any Person against any Eligible
Subsidiary or any other Person.
Section 11.05. Subrogation. The Company
irrevocably waives any and all rights to which it may
be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the
rights of the payee against an Eligible Subsidiary with
respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by an Eligible Subsidiary in
respect thereof.
Section 11.06. Stay of Acceleration. In the
event that acceleration of the time for payment of any
amount payable by any Eligible Subsidiary under this
Agreement or its Notes is stayed upon insolvency,
bankruptcy or reorganization of such Eligible
Subsidiary, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall
nonetheless be payable by the Company hereunder
forthwith on demand by the Agent made at the request of
the Required Banks.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. No
amendment or waiver of any provision of this Agreement
nor consent to any departure by any Borrower therefrom,
shall in any event be effective unless the same shall
be in writing and signed by the Agent and the Required
Banks, and then such waiver or consent shall be
effective only in the specific instance and for the
specific purpose for which given. Notwithstanding the
foregoing, no amendment, waiver or consent shall,
unless in writing and signed by the Agent and all the
Banks, do any of the following: (a) increase the
Commitments of the Banks or subject the Banks to any
additional obligations, (b) reduce the principal amount
of, or interest on, any Loan or any fees or other
amounts payable under any Facility Documents, (c)
postpone any date fixed for any payment of principal
of, or interest on, any Loans or any fees or other
amounts payable under any Facility Documents, (d)
change the percentage of the Commitments or of the
aggregate unpaid principal amount of Loans, or the
number of Banks which shall be required for the Banks
or any of them to take any action under any Facility
Documents or (e) amend this Section 12.01; provided
further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition
to the Banks required hereinabove to take such action,
affect the rights or duties of the Agent under any
Facility Documents. No failure on the part of the
Agent or any Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further
exercise thereof or the exercise of any
61
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to
the contrary notwithstanding, the obligations of the
Company and its Subsidiaries under this Agreement and
the Notes shall be subject to the limitation that
payments of interest shall not be required to the
extent that receipt thereof would be contrary to
provisions of law applicable to a Bank limiting rates
of interest which may be charged or collected by such
Bank.
Section 12.03. Expenses; Indemnification.
The Company shall reimburse (a) the Agent on demand
for all costs, expenses, and charges (including,
without limitation, fees and charges of external legal
counsel for the Agent and costs allocated by its
internal legal department) incurred by the Agent in
connection with the preparation, performance, or
administration of this Agreement or the Notes and (b)
the Agent and the Banks on demand for all costs,
expenses, and charges (including, without limitation,
fees and expenses of counsel) in connection with the
enforcement of this Agreement. The Company agrees to
indemnify the Agent and each Bank and their respective
directors, officers, employees and agents from, and
hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by
any of them arising out of or by reason of any
investigation or litigation or other proceedings
(including any threatened investigation or litigation
or other proceedings) arising out of this Agreement or
any actual or proposed use by the Company or any
Subsidiary of the proceeds of the Loans, including
without limitation, the reasonable fees and
disbursements of counsel incurred in connection with
any such investigation or litigation or other
proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of
the Person to be indemnified).
Section 12.04. Survival. The obligations of
the Borrowers under Sections 3.01, 3.05 and 12.03 shall
survive the repayment of the Loans and the termination
of the Commitments.
Section 12.05. Assignments; Participations.
This Agreement shall be binding upon, and shall inure
to the benefit of, the Borrowers, the Agent, the Banks
and their respective successors and assigns, except
that neither the Company nor any Eligible Subsidiaries
may assign or transfer its rights or obligations
hereunder. Each Bank may assign all or any part of any
Loan to another bank or other entity with the consent
of the Company, in which event the assignee shall have,
to the extent of such assignment (unless otherwise
provided therein), the same rights, benefits and
obligations as it would have if it were a
62
Bank hereunder. Each Bank may sell participations in, all
or any part of any Loan to another bank or other
entity, in which event, the participant shall have no
rights under the Facility Documents and all amounts
payable by any Borrower under Article 3 shall be
determined as if such Bank had not sold such
participation. Such Bank shall deliver a notice to the
Company and the Agent of any such participation which
shall set forth the participant and the amount of such
participation. The agreement executed by such Bank in
favor of the participant shall not give the participant
the right to require such Bank to take or omit to take
any action hereunder except action directly relating to
(i) the extension of a payment date with respect to any
portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant,
(ii) the reduction of the principal amount outstanding
hereunder or (iii) the reduction of the rate of
interest payable on such amount or any amount of fees
payable hereunder to a rate or amount, as the case may
be, below that which the participant is entitled to
receive under its agreement with such Bank. Such Bank
may furnish any information concerning the Borrowers in
the possession of such Bank from time to time to
assignees and participants (including prospective
assignees and participants); provided that such Bank
shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in
writing to maintain the confidentiality of such
information.
Section 12.06. Notices. Unless the party to
be notified otherwise notifies the other party in
writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be
given to the Agent by telephone, confirmed by telex,
telecopy, facsimile or other writing, and to the Banks
and to the Borrowers by ordinary mail, telex or
facsimile addressed to such party at its address on the
signature page of this Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit
in the mails with first class postage prepaid,
addressed as aforesaid; and (b) if given by telex or
facsimile, when the telex or facsimile is transmitted
to the telex or facsimile number as aforesaid; provided
that notices to the Agent and the Banks shall be
effective upon receipt.
Section 12.07. Setoff. The Borrowers agree
that, in addition to (and without limitation of) any
right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its
option, to offset balances (general or special, time or
demand, provisional or final) held by it for the
account of any Borrower at any of such Bank's offices,
in Dollars or in any other currency, against any amount
payable by the Borrowers to such Bank under this
Agreement or such Bank's Note which is not paid when
due (regardless of whether such balances are then due
to any Borrower), in which
63
case it shall promptly notify the Company and the Agent thereof;
provided that such Bank's failure to give such notice shall not
affect the validity thereof. Payments by the Borrowers
hereunder shall be made without setoff or counterclaim.
Section 12.08. Jurisdiction; Immunities.
(a) The Borrowers hereby irrevocably submit to the
jurisdiction of any New York State or United States
Federal court sitting in New York City over any action
or proceeding arising out of or relating to this
Agreement or the Notes, and the Borrowers hereby
irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in
such New York State or Federal court. The Borrowers
irrevocably consent to the service of any and all
process in any such action or proceeding by the mailing
of copies of such process to the Company at its address
specified on the signature pages hereof. The Borrowers
agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any
other manner provided by law. The Borrowers further
waive any objection to venue in such state and any
objection to an action or proceeding in such state on
the basis of forum non conveniens. The Borrowers
further agree that any action or proceeding brought
against the Agent shall be brought only in New York
State or United States Federal court sitting in New
York County. The Borrowers, the Agent and the Banks
waive any right they may have to jury trial.
(b) Nothing in this Section 12.08 shall affect the
right of the Agent or any Bank to serve legal process
in any other manner permitted by law or affect the
right of the Agent or any Bank to bring any action or
proceeding against the Borrowers or any of their
property in the courts of any other jurisdictions.
(c) To the extent that any Borrower has or
hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether from
service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise)
with respect to itself or its property, each Borrower
hereby irrevocably waives such immunity in respect of
its obligations under this Agreement and the Notes.
Section 12.09. Judgment Currency. If for
the purpose of obtaining judgment in any court it is
necessary to convert a sum due from any Borrower
hereunder or under any of the Notes in Dollars into
another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent
could purchase dollars with such other currency at the
Agent's New York office on the Banking Day preceding
that on which final judgment is given. The obligations
64
of each Borrower in respect of any sum due to any Bank
or the Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than
Dollars, be discharged only to the extent that on the
Banking Day following receipt by such Bank or the Agent
(as the case may be) of any sum adjudged to be so due
in such other currency such Bank or the Agent (as the
case may be) may in accordance with normal banking
procedures purchase Dollars with such other currency;
if the amount of Dollars so purchased is less than the
sum originally due to such Bank or the Agent, as the
case may be, in Dollars, each Borrower agrees, to the
fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the
case may be, against such deficiency, and if the amount
of Dollars so purchased exceeds (a) the sum originally
due to any Bank or the Agent, as the case may be, and
(b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate
payment to such Bank under Section 10.07, such Bank or
the Agent, as the case may be, agrees to remit such
excess to the appropriate Borrower.
Section 12.10. Confidentiality. The Agent
and each Bank shall keep confidential any information
provided by any Borrower and clearly identified as
confidential; provided that nothing herein shall
prevent the Agent or any Bank from disclosing such
information (i) to its officers, directors, employees,
agents, attorneys and accountants in connection with
the entry into and administration of this Agreement and
the extensions of credit hereunder, (ii) upon the order
of a court or administrative agency, (iii) upon the
request or demand of any regulatory agency or authority
having jurisdiction over such party, (iv) which has
become publicly available without breach of any
agreement among the parties hereto, (v) as necessary
for the exercise of any remedy hereunder or under any
Note, or (vi) subject to provisions similar to those
contained in this Section, to any prospective
participant or assignee.
Section 12.11. Table of Contents: Headings.
Any table of contents and the headings and captions
hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
Section 12.12. Severability. The provisions
of this Agreement are intended to be severable. If for
any reason any provision of this Agreement shall be
held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof
in any jurisdiction.
65
Section 12.13. Counterparts. This Agreement
may be executed in any number of counterparts, all of
which taken together shall constitute one and the same
instrument, and any party hereto may execute this
Agreement by signing any such counterpart.
Section 12.14. Integration. The Facility
Documents and the fee letter between the Company and
the Agent dated September 23, 1993, set forth the
entire agreement among the parties hereto relating to
the transactions contemplated thereby and supersede any
prior oral or written statements or agreements with
respect to such transactions.
Section 12.15. Governing Law. This
Agreement shall be governed by, and interpreted and
construed in accordance with, the law of the State of
New York.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and
year first above written.
THE TIMBERLAND COMPANY
/s/ Carden N. Welsh
By _____________________________
Name: Carden N. Welsh
Title: Treasurer
Address for Notices:
The Timberland Company
11 Merrill Industrial Drive
Hampton, NH 03842-5050
Attention: Nancy A. Wels
Telefax No.: (603) 926-9239
AGENT:
THE CHASE MANHATTAN BANK, N.A.
66
/s/ Gaspare Galante Jr.
By ______________________________
Name: Gaspare Galante Jr.
Title: Second Vice President
Address for Notices:
Gaspare Galante
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
Susan Timmerman
The Chase Manhattan Bank of
Connecticut, N.A.
999 Broad Street
Bridgeport, Connecticut 06604
Telephone: (203) 368-5119
Telefax: (203) 382-6573
Lucy Dorazio
The Chase Manhattan Bank, N.A.
4 Chase Metrotech
Brooklyn, New York 11245
Telephone: (718) 242-7945
Telefax: (718) 242-6900
BANKS:
THE CHASE MANHATTAN BANK, N.A.
67
/s/ Gaspare Galante Jr.
By ______________________________
Name: Gaspare Galante, Jr.
Title: Second Vice President
Lending Office for Variable Rate Loans:
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
Lending Office for Eurocurrency Loans:
The Chase Manhattan Bank, N.A.
International Banking Facility
4 Chase Metrotech
Brooklyn, New York 11245
Address for Notices:
Susan Timmerman
The Chase Manhattan Bank of
Connecticut, N.A.
999 Broad Street
Bridgeport, Connecticut 06604
Telephone: (203) 368-5119
Telefax: (203) 382-6573
Lucy Dorazio
68
The Chase Manhattan Bank, N.A.
4 Chase Metrotech
Brooklyn, New York 11245
Telephone: (718) 242-7945
Telefax: (718) 242-6900
FLEET NATIONAL BANK OF
MASSACHUSETTS, N.A.
/s/ Joan S. Parsons
By _____________________________
Name: Joan S. Parsons
Title: Vice President
Lending Office for Variable Rate Loans:
Fleet Bank of Massachusetts, N.A.
75 State Street
Boston, Massachusetts 02109
Attn: Roseanne Secondino
Telephone: (617) 346-1859
(617) 346-1879
Telefax: (617) 346-1833
Lending Office for Eurocurrency Loans:
Fleet Bank of Massachusetts, N.A.
75 State Street
Boston, Massachusetts 02109
69
Attn: Roseanne Secondino
Telephone: (617) 346-1859
(617) 346-1879
Telefax: (617) 346-1833
Address for Notices:
Joan Parsons
Fleet Bank of Massachusetts, N.A.
75 State Street
Boston, Massachusetts 02109
Telephone: (617) 346-1872
IBJ SCHRODER BANK AND TRUST COMPANY
/s/ Brian MacConnell
By _____________________________
Name: Brian MacConnell
Title: VP
Lending Office for Variable Rate Loans:
IBJ Schroder Bank and Trust Company
One State Street
New York, New York 10004
Attn: Gary Conga
Telephone: (212) 858-2872
(212) 858-2222
Telefax: (212) 858-2768
70
Lending Office for Eurocurrency Loans:
IBJ Schroder Bank and Trust Company
One State Street
New York, New York 10004
Attn: Gary Conga
Telephone: (212) 858-2872
(212) 858-2222
Telefax: (212) 858-2768
Address for Notices:
Brian MacConnel
IBJ Schroder Bank and Trust Company
One State Street
New York, New York 10004
Telephone: (212) 858-2197